NIGERIA will have a new revenue allocation formula before the end of the administration of President Muhammadu Buhari in 2023.
The sharing formula will be determined by Nigerians, says the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr. Mbam.
In the current formula, which came into being in 2003, the Federal Government takes 52.68 per cent of the nation’s revenue; states, 26.72 per cent and local governments, 20.60 per cent. Thirteen per cent is allocated as derivation to oil mineral producing states.
Mbam told reporters in Abuja that RMAFC was proposing a review that would be sent to the National Assembly for consideration after evaluating the inputs and submissions by Nigerians.
He explained that a committee working on the new formula would seek inputs from relevant stakeholders, including Federal Government through the SGF, states, the judiciary, local governments and civil societies organisations.
The work of the committee, he said, “may not be noticed from outside because they have to do some studies on fiscal matters and areas that will be considered in arriving at the appropriate revenue sharing formula.”
He added that, after the preliminary work, the committee ”will come out with invitation for memorandum and progress to the point where they will require the inputs of the relevant stake holders.”
Mbam sad: “We expect that we will be able to finish on time. We also hope that it will be concluded by this present National Assembly. The input of majority of Nigerians will be sought. He pleaded with Nigerians to reduce over politicising the revenue formula.
”If we cannot finish this early enough for them (National Assembly) to consider within three years, then, something must have been difficult or unusual. We started the review immediately after the inauguration of this National Assembly. So, we still have three and a half years.
”We will also hold a public hearing on it. So, this is the situation now. It may be difficult to give a time frame because so many variables are not within our control. But, we will do our best to get it done within a reasonable time.”
When the proposal gets to the National Assembly, the legislators would, in reviewing it, take into consideration, “the allocation principles, especially those of population, equality of states, internal revenue generation, landmass, terrain as well as population density, provided that the principle of derivation shall be constantly reflected in any approved formula.”
On the botched attempt to draw up a new revenue formula during the Goodluck Jonathan administration, Mbam said that “it was inconclusive and not rejected.”
He said: ”When I came this time around, I said this inconclusiveness, will to be concluded. But, if you look at what obtained in 2014 and now, a lot has changed.”
”The security and environmental challenges are not the same. There are so many issues which need to be considered in addition to what they were then and now.
We felt that we needed to constitute another committee that will look at all the variables.”
When asked his position on the planned review of public office holders salaries, Mbam said: ”We will determine what it will be. So, don’t ask me whether it will be down or up. I won’t say but let the process flow and at the end, the result will come out.”
The committee is also expected to address the issue of monetisation. On this, Mbam said: “We intend to invite memoranda that will include what is operating now; if it should be continued; and what aspect of it should be reviewed. These are the reasons we will seek input from you.”