RMAFC’s Recent Promotion to the Super League

Postscript by Waziri Adio

The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) crept into the news last week after it announced a plan to review Nigeria’s revenue allocation formula and the salaries of political office holders. Predictably, the second part of the proposal has generated significant interest from the public. The focus is not misplaced. Even when RMAFC is within its constitutional mandate to undertake the proposed actions, Nigerians also have the right to ask questions about how their resources are administered. But these intended actions are not the only things that should interest Nigerians about RMAFC. The recent change in how the commission is funded deserves close scrutiny too.

Quietly and unknown to many, RMAFC was recently promoted to the league of public institutions that, colloquially, are called “juicy agencies.” I prefer to call them “Super Agencies.” These are the few agencies that are bestowed portions of or commissions from certain revenue handles. The intention is always from a good place: to ensure that the affected organisations have predictable and adequate resources to fund their critical operations. But the application usually throws up a plethora of unintended consequences. From relative lack, these agencies suddenly get awash with more money than they need, and which they find ways to burn anyway. Inevitably, they turn to theatres of waste, patronage and graft.

I want to state upfront that, though many Nigerians might not know what it does or might not be directly affected by its work, RMAFC is an important institution to the Federation. It is one of the 14 executive bodies incorporated in the Third Schedule of the 1999 Constitution. It is charged by its establishment law and the constitution with tracking “accruals to and disbursements of revenue from the Federation Account” and with reviewing, regularly, the revenue allocation formulas and principles to ensure that they are in line with prevailing realities. These are important functions in a federal system. RMAFC is our permanent revenue commission, heir to the eight ad-hoc revenue commissions that we had between 1946 and 1980. RMAFC is important to federal finance, resource mobilisation and accountability. To effectively discharge its functions, RMAFC should have adequate and predictable resources. This might not have been so.

The financial lot of the commission has been altered by three recent developments, though this may not necessarily be to the best interests of all concerned. This first one is that the National Economic Council (NEC) approved that RMAFC should be allocated a fraction of non-oil revenue of the Federation every month to fund its operations. According to Professor Charles Soludo, the governor of Anambra State, who briefed the press on 12th December 2024 about NEC’s decision on this issue, the council noted the onerous responsibilities placed on the commission and its need for alternative and improved funding. NEC, a constitutional body like RMAFC, is charged with advising the president on the economy but it is also a powerful platform for inter-governmental relations and for building consensus among the beneficiaries of the Federation Account. NEC also approved for the law setting up RMAFC to be sent to the National Assembly for repeal and re-enactment. The significance of this should not be missed because the legislators represent the states.

The second development, according to a syndicated article by a commissioner of RMAFC, is that a new law for the agency was signed on 2nd April 2025. I have not read this new law nor have I seen a release by the Presidency on its signing. I know there have been various attempts to repeal or amend the RMAFC law, notably in 2016, 2018 and 2023. We have to take the commissioner at his words, especially because the chairman of the commission, Mr. Mohammed Bello, recently thanked legislators for helping to pass the new law. In Section 14, the new law reportedly provides for parts of the commission’s funding to come from a first-line charge from the Federation Account. So, this provides a cover for the earlier approval by NEC, though it is not clear if the law mentioned a percentage.

Presumably, it is based on this law that the Federation Account Allocation Committee (FAAC) started transferring 0.5% of non-oil component of Statutory Revenue to RMAFC since April this year. By the way, I have taken the time to watch the briefing by Governor Soludo after the NEC meeting of December 2024 and I have read reports of the coverage of that briefing. The figure that Soludo kept mentioning was 0.05% of non-oil revenue, which is not exactly the same as 0.5%. Maybe one zero got mixed up somewhere. But it seems the memo that FAAC got was 0.5% of non-oil revenue and that is what it has been applying. It is important to state here that even 0.05% of non-oil revenue would still have been a major improvement on RMAFC’s prior funding, and may be about right.

The third development is that, on 22 July 2025, the two chambers of the National Assembly approved the sum of N105.14 billion as the 2025 budget of RMAFC. The entire sum was projected to come from what the commission would get as statutory transfer from 0.5% of Federation’s non-oil revenue, broken down as follows: N37.20 billion from January to June 2025 and N67.94 billion from July to December 2025. Not surprisingly, RMAFC intends to spend the entire sum, allocated as follows: N20.6 billion for personnel; N8.9 billion for overhead; and N71.5 billion for capital. If there was any hope that RMAFC might be an exception to the feverish urge to splurge by suddenly over-resourced agencies, that hope flew out of the window with the commission’s revised budget for 2025, approved by the same set of legislators who had been passing its previous budgets.

To start with, the commission’s initial budget for 2025 was N5.6 billion. In what planet would the revised budget of a public institution be about 20 times of its initial budget for the same year? The original budget of RMFAC for 2025 was as follows: N3.6 billion for personnel, N1.1 billion for overhead and N916 million for capital. The RMAFC management didn’t shudder to think about the incongruity of the personnel budget rising by 472% (from N3.6 billion to N20.6 billion), the projection for overhead going up by 709% (from N1.1 billion to N8.9 billion) and the capital budget leaping by 7,705% (from N916 million to N71.5 billion) for the same year. But more troubling is that the legislators, who in theory are there to provide necessary checks, went along with the cruise. This goes to illustrate the point that trusting supervisory and oversighting institutions to provide the desired restraint on the super agencies is an unrealistic expectation.

For additional context, the total approved budgets for RMAFC in the five years between 2020 and 2024 was N13.37 billion: N2.35 billion in 2020; N2.22 billion in 2021; N2.82 billion in 2022; N2.71 billion in 2023; and N3.27 billion in 2024). The commission proposed and the legislators approved a one-year budget that is eight times its total approved budget for five years. If a credible case had been made that RMAFC was underfunded in the past and that this affected its effectiveness, the sensible thing would have been to establish the extent of its reasonable funding gap and see how to bridge it while ensuring greater predictability. This approach probably would have led to a maximum of a five-fold jump in budgetary allocation for the commission, and even with that there would have been legitimate concerns about operational and absorptive capacity. But they went for the easy option of a revenue earmark, the dream of most government agencies, and RMAFC joyfully ended up with a 2025 budget that is 32 times its approved budget for the preceding year, 2024. What an amazing grace!

My sense is that when NEC went for this earmark option, scant mind was paid to what the seemingly insignificant percentage would translate to in practical terms. Someone should have asked for the basis of whatever percentage was being considered, run or asked their aides to run the numbers on the actual non-oil revenue for a month, and compared the result with the previous allocation to the agency or its reasonable needs. It is most likely that the governors and others at NEC just thought 0.5% of non-oil revenue will not hurt anyone (well, this is assuming it was 0.5% that they signed off on and not 0.05%). Well, non-oil revenue is now a major feature of Statutory Revenue, as oil revenue continues to underperform. (For July 2025, for example, mineral revenue underperformed by 76% while non-mineral revenue over-performed by 40%.)

Crucially, while half a percentage is paltry by itself, it swells into significance when applied to trillions of Naira. And this is how it has played out. According to FAAC documents, RMAFC received N4.6 billion for April this year, N5.7 billion for May, N12.5 billion for June and N10.5 billion for July. That’s a total of N33.3 billion in just four months in 2025. In these four months, RMAFC has received about 250% of its approved budgets for five full years. It is conceivable that the commission did not receive the entire N13.37 billion for the five years, because of how it was previously funded. The genius of being attached to a portion of Federation’s revenue and as a first-line charge is not just the certainty of getting funded as long as the Federation earns non-oil revenue but also of over-abundant resourcing as non-oil revenue continues to grow in size and significance without any link to needs or efforts of the beneficiary. It is the sweetest of spots. RMAFC is just the latest in a growing league of agencies to crack the code to such a jackpot.

But revenue distribution is always a zero sum. What is available to an agency in excess of its needs is what is not available to fund critical needs elsewhere. And as usual, we create new problems in solving old ones because of inadequate rigour and unwillingness to learn from even our own experience. Ill-considered decisions come with costs. The brunt of the predictable profligacy, the misallocations, the diversions and the capture in these agencies is borne, at the end of the day, by the citizens and the country. This is why it is important to course-correct early with RMAFC before it yields to predictable patterns and to have a practical strategy for addressing the distorted resourcing and the pernicious latitude of a few agencies at the expense of the collective.