The federal government through the Revenue Mobilisation Allocation And Fiscal Commission (RMAFC) has stated that the current review process is needed to assure fairness and also to ensure conformity with changing realities, provided that the revenue formula has been accepted by an Act of the National Assembly.
This was disclosed by the RMAFC Chairman, Mr Elias Mbam, on Monday at the two-day South-West Zonal Public Hearing on the review of the vertical revenue allocation formula in Lagos.
He added that despite the changing realities of Nigeria’s economic landscape, the last review of revenue allocation was conducted in 1992.
What the RMAFC said on revenue allocation
“The last review of the revenue allocation formula was in 1992. Since then, a lot of socio-economic changes have occurred, hence, necessitated the need for a review to reflect changing realities.
“RMAFC by virtue of paragraph 32(b), part 1 of the third schedule to the 1999 constitution of the Federal Republic of Nigeria (as amended) is empowered to review from time to time the revenue allocation formula and principles in operation.
“This is to ensure conformity with changing realities, provided that any revenue formula which had been accepted by an Act of the National Assembly shall remain in force for a period of not less than five years from the date of commencement of the Act.”
The Commission added that the review process will see the participation of multiple stakeholders, Civil Society Organisations (CSOs ), academia and the general public in a bid to visit all the States and Local Governments as part of the process to ensure that the Nigerians were carried along.
“In addition, relevant data has been collected from relevant government agencies,” he said.
What you should know
Recall Nairametrics reported in August that the Federal Government announced that it is ready to review the vertical revenue allocation formula it currently operates towards the 3 tiers of government in the country.
This was disclosed through the Revenue Mobilisation Allocation And Fiscal Commission which stated that the current revenue allocation formula stands at 52.68% for the Federal Government, including special fund for the FCT; Ecological, Stabiliation and Natural Resources Development Funds, with just 26.72% for the states and 20.6% for Local Government Areas.
They stated that the model needs to be reviewed citing other unsuccessful attempts due to change of governments, absence of the National Assembly, among others.