In line with its statutory mandate, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has commenced the process of reviewing the revenue allocation formula for Nigeria’s three tiers of government.
The Chairman of the Commission, Mr. Mohammed Shehu, who made this disclosure at a media briefing in Abuja, said the review had become imperative after over three decades after the last review the current economic realities in the country.
According to the RMAFC chairman, the commission’s latest initiative is also expedient in view of the recent constitutional amendments, which devolved certain responsibilities to the states, thereby placing new financial burden on them.
He explained: “The recent Constitutional amendments-by-the 9th National Assembly, which devolved certain responsibilities from the Exclusive to the Concurrent Legislative List, such as generation, transmission, and distribution of electricity; railways; and prisons (correctional centres), have placed financial and administrative burdens on subnational governments.
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“This situation has made it essential to reevaluate the structure of fiscal federalism in order to foster economic growth in individual states, enabling them to become independent from the central government and ensuring equity, responsiveness, and sustainability”, the chairman added.
Shehu promised that the review exercise would be inclusive, data-driven, transparent, and involve broad-based consultations with critical stakeholders, including the Presidency, National Assembly, State Governors, Association of Local Governments of Nigeria (ALGON), the Judiciary, MDAS, Civil Society Organisations (CSOs), traditional rulers, the organised private sector (OPS), and development partners.
He recalled that the last revenue allocation review was done in 1992 under which the Federal Government receives a 52.6% share, state governments get 26.7% of the federally collected revenue while the local governments get 20.6%.
The RMAFC chairman maintained that the planned review, which is in line with the statutory mandate of the commission as enshrined in the 1999 Constitution, would help to create a fair and equitable revenue-sharing formula that reflects the current responsibilities of all three tiers of government.
He clarified: “As you may be aware, Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution of the Federal Republic of Nigeria (as amended) mandates the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) to “review, from time to time the revenue allocation formulae and principles in operation to ensure conformity with changing realities.”
“In line with this constitutional responsibility and in response to the evolving socio-economic, political, and fiscal realities of our nation, the commission has resolved to initiate the process of reviewing the revenue allocation formula to reflect emerging socio-economic realities.
“The commission is also committed to integrating cutting-edge research, empirical data, and international best practices in its analysis”, Shehu assured.
