BY COBHAM NSA, ABUJA – The Federal Government is committed to address growing agitations for a new revenue sharing formula among the three tiers of governments in line with current economic realities in the country.
This fresh commitment is coming five years after proposals for a new sharing formula by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) failed to gain traction in December 2014.
Chairman of RMAFC, Mr Elias Mbam, who gave this assurance in Abuja, said the review proposal is already on the table to accommodate demands by States and Local Governments for more accruals from the Federation Accounts.
Speaking with journalists after receiving an Award of Excellence from the Nigeria Civil Service Union (NCSU), Mr Mbam said the Commission will set up a standing committee by next week to recommence review work on the existing revenue sharing formula.
He said the Commission is also determined to pursue robust diversification of the nation’s revenue sources for a more sustainable economic growth and development.
According to the RMAFC boss; “My agenda is to expand the sources of revenue for the federation. I will like to expand the cake that we are sharing so that people will get reasonable quantity.
“I intend to do this through diversification in areas outside oil and gas and that includes solid minerals, agriculture and manufacturing.
“So we will encourage states and let them know what is available outside oil and gas so they can develop this aspect of the economy to their own benefit.”
Mr Mbam also hinted on revisiting issues around financial autonomy for Local Government Councils to ensure majority of Nigerians at the grassroots derive adequate democracy dividends.
The existing revenue formula allocates 52.68 per cent to Federal government; 26.72 per cent to State Government; with 20.60 per cent going to the Local government councils
Also, 13 per cent of the statutory oil and gas revenue is allocated as derivation income to oil producing states and communities to mitigate the environmental challenges occasioned by oil production activities.
Designed during the former President Olusegun Obasanjo administration, the RMAFC, in 2013, moved to review the sharing formula for balanced development across the nation. That process had the Commission undertaking nationwide consultations in the 36 states and holding robust engagements with many stakeholders for inputs on the new sharing formula
However, by December 2014, the RMAFC came up with a new formula that failed to enjoy Federal Government’s support due to obvious, but unexplained reasons.