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Federal Government commences review of revenue allocation formula

By on February 3, 2013

The Federal Government has commenced the review of existing revenue allocation formula among the three tiers of government, and the new formula is expected to be ready by the end of the year.

Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr. Elias Mbam, revealed this Friday evening in Abakaliki while responding to questions at the Citizens Forum, a town hall meeting organised by the National Good Governance Tour team to end its visit to Ebonyi State and South-eastern geo-political zone.

Mbam also said that the Revenue Allocation Act had taken care of how funds should be shared among states and even Local Governments, adding that any alteration to the existing structure must be subjected to amendment of the Act.

He however urged stakeholders in the polity from Local Government, State Government and the organised private sector to make their input when the Commission shall request for their contribution.

“The Revenue Mobilisation Allocation and Fiscal Commission has commenced the review of revenue allocation formula, this is the time for us to stand up and make inputs on what we want, when the commission will visit the South-east, we should make appropriate presentation. When we call for memorandum, people shouldn’t think it is a federal issue, the LGAs should make input, state government should make input, organised private sector should make input, because once its concluded and it come to law, there is nothing we can do,” he said.

Meanwhile, Minister of Information, Mr. Labaran Maku, has blamed the large structure of government on the provisions of the Constitution.

Responding to questions on why the government had not created a Ministry for the physically challenged, Maku said it would be unwise for government to create ministries for every specific problem.

According to Maku, the existing structure of government would not have been this large if the Constitution did not stipulate that all states of the federation should have a minister.

“If the Constitution did not specify that we should have a minister from every state of the federation, I am sure that we will have less ministries. Ministries are not just setup on the basis of specific problems, if we are going to setup ministries for every single problem, then maybe we will have more than 1,000 ministries.

“Under the present arrangement, people are even saying that the ministries are too many now, what is important is to have departments in various ministries, directed at specific problems that we find in the society,” Maku said.

Mbam, who noted that the existing revenue allocation formula of the country was a product of the 1999 Constitution and other relevant laws, said the formula couldn’t be altered until the Constitution is amended.

“The Constitution provides that there are some indices that must be reflected in the sharing of revenue in this country, that is why we must give oil producing states and other states which their natural resources contributes to the federation account 13 per cent, it is a constitutional issue.

The constitution also provides that we must reflect other indices like population, and you know we do not derive population on our own, we rely on other relevant agencies of government, like the population commission, they provide a statistics based on which the indices is determined,” he said.

According to him, the 1999 constitution had identified some indices that must be reflected in the country’s sharing of revenue, which includes population.

“That law provides that the population must carry 30 per cent, it also provides the percentage that should to the federal government, in other words, the law provides how its going to be shared within states among themselves, within LGA’s among themselves and among the tree tires of government,” Mbam added.