The Chairman, Revenue Mobilisation Allocation and Fiscal Commission, Mr. Mohammed Bello Shehu believes it is an anomaly for any public servant to earn salaries above that of the President of the Federal Republic of Nigeria or a Governor at the state level. In an exclusive interview with James Emejo, he said his administration will initiate steps through stakeholders’ engagement to review the trend. The revenue mobilisation boss also said the current public outcry over the bogus remuneration packages of political officeholders is largely exaggerated. He spoke about the failure of revenue-generating agencies to remit operating surpluses to the federation account and vowed that the Commission will take a hard stance against such practices going forward. Shehu, among other things, shared his vision to strengthen the commission to deliver on its primary mandate, and why the commission is canvassing for fiscal autonomy. Excerpts.
You have been making a case for fiscal autonomy for the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC). How would you defend this?
Well, I think it is very important because the commission was conceived as a federation commission and not a commission for the Federal Government of Nigeria or a commission for the state governments, or a commission for the local governments. If you read the evolution of the commission from when it was conceived and how it was created by Decree 89 and the amendment that followed around 1989; then the commission became one of the 14 independent commissions to serve the federation – not to serve the federal government – but the federal, states and local governments. Just like the Independent National Electoral Commission (INEC) and the National Population Commission (NPC) – all these ones are commissions for the federation. So also, the Revenue Mobilisation, Allocation and Fiscal Commission is not to allocate to the federal government alone…but allocate to all the tiers of government. If you look at what our constitutional responsibilities are, it is to monitor accruals and disbursements to the ensure federation.
Secondly, is to also review from time to time, the revenue allocation formula. The constitution says after five years, we have the right to go and look at it and see if it needs amendments based on the prevailing reality within Nigeria – that is a national assignment that affects every tier of government. And thirdly, is to advise the federal and state governments on fiscal efficiency and methods through which they can increase their revenues and that’s also a national assignment that covers all tiers of government. And then to determine the remunerations appropriate for political officeholders including the president, governors, national assembly, advisers, speech writers, and every political appointee – director generals. And then when you look at Sections 84 and 124 of the Constitution, there’s another added responsibility concerning the judicial officeholders including the chief justice of the federation, chief judge of the high court, and judges all across Nigeria and so, that is a huge responsibility and then it says any other function(s) conferred on the commission by an Act of the National Assembly.
In addition, we also monitor agencies, we have the right to request any information from any agency of government but specifically, it mentions NNPC, DPR, Customs, FIRS and all the revenue-generating agencies by implication. And so, that’s why it is very important for us to have that independence and where there’s a dispute between the state and the federal government, we should be able to take an independent decision not based on the influence of either the Governors’ Forum or the influence of the president which of course, in the past we have had cases that you can see a little bit of tilting this way or that way – and so, that’s why that independence is very important.
Have you seen or recorded any instances of compromise by your staff as a result of the continued lack of autonomy for the commission so far?
No, I don’t see that and we would always try to be as objective as possible but we feel that financial autonomy is key to that and as a commission, we don’t want to rely on what the federal government gives in the budget – this envelope system – we think we are going to work very hard to make sure that we have some level of financial independence. That will be better for everybody but as it is, we don’t compromise, we look at the issues objectively based on what the law says, and we take appropriate action all the time. And on my watch, this current leadership in the commission, that’s what I would strive for and that’s why I was sworn in with a Holy Quran – in all my activities in life, this is the first time that I took an oath with that Quran…that’s a huge burden and so, I don’t see myself favouring anyone over another.
Some have argued that your commission has not contributed significantly to economic development and is not a revenue-generating agency to warrant a place on the First Line Charge or be allowed financial autonomy – how would you react to this?
Well, RMAFC has contributed tremendously to the growth of the Nigerian economy since its creation. We have consistently over the years worked with other agencies in the monitoring of accruals into the federation account and the disbursements and that disbursement is a huge responsibility year in, year out unfailingly. And you just saw a couple of days ago where the Rivers State Governor, Nyesom Wike was praising Mr president for giving them all their 13 per cent derivatives based on what the constitution says – this is the commission responsible for calculating the indices and meeting at FAAC and agreeing to what the amount is and if there were mistakes, they come back and we look at it…that shows you continuity over the years and we have been doing that.
If for any reason we now say we are not able to do this, some of the states cannot pay salaries and so that’s a huge contribution. On the diversification of the Nigerian economy, the commission had organised and done seminars across Nigeria over the years calling on governments at the sub-nationals to diversify the Nigerian economy. We look at what the states produce, where they have a comparative advantage, we look at it and we get experts and we give them the roadmap on how they can exploit those resources for them to be able to increase their internally generated revenue and that’s just that. In 2008, we had this remuneration package for judicial and political officeholders which is the current law in operation and we do sometimes put our views nationally on the economy in general so we can have better economic activity across Nigeria.
So, the commission has done a lot and we are still doing that – with all the challenges that we face, the commission has done tremendously well and I think when we have that financial independence, the commission will do more, we would train the staff more and expose them to other parts of the world on how we can advise on getting more revenues for the federation. We do sometimes send in forensic experts to go and look into some of the books of some of these agencies and you’ll find that sometimes after FIRS and the accountant general’s office had finished their work, we recover monies.
And we’ve just recovered over N120 billion from agencies and that money would have been lost forever – it was the commission that got the permission of the president and the economic council and sent consultants and some of this money was recovered. And it is still an ongoing exercise. You can imagine if we had that level of independence, training our workers to become like forensic accountants or auditors – that would be huge.
In recent times, revenue-generating agencies have failed to remit operating surpluses to the federation account as required by law. How does your administration intend to handle this breach?
I think we would request the National Assembly to either amend the Acts of those agencies where they make huge amounts of money like N200 billion, N250 billion and then some of them would spend like 95 per cent of that money and then they remit just about five per cent. I think we have to find a system whereby those Acts are amended and make the constitution supreme above their local laws; because the constitution says remit revenues to the federation account – they now counter and say our laws allow us to spend this money and whatever remains is what we remit to the federation. And you can see from every indication that the agencies just try to create a way to spend money not for the good of the system but for the good of that organisation.
So, I would want the National Assembly to really find a way to checkmate this by making the Constitution superior to the laws establishing government agencies – even if it means amending the laws of these organisations – and then make it mandatory for those big sharks like NCC, NIMASA, NPA, Shippers’ Council, as examples – to be remitting whatever they get directly to the federation account, and not to allow them free rein whereby they can be spending that money. And I am not averse to even encouraging them by giving them collection fees and I have spoken about that in the Senate just as you give FIRS.
When you collect, we encourage you, we give you a collection cost – a fee you can deduct. I am not averse to that, if that is workable, the commission would love to do that.
Also, traditionally, we never had any enforcement powers but thank God that now the National Assembly in the new proposed Amendment to the Constitution, there is a provision for some enforcement powers that will come to RMAFC.
My vision is that just like you see EFCC, everybody starts to shiver; that’s eventually what I want to see when agencies see RMAFC in a new jacket that we have come to either get information from you or to shut you down because you have not done this or that. This is my vision on how we can do this to encourage agencies to comply or even find a way whereby if you fail to remit any amount, we must criminalise it if within 12 months you do not remit that to the federation which is really wrong and I think we have to talk to stakeholders and come to an agreement and the commission is always open to that.
There had been growing public outcry and support for the review of the so-called “bogus” remuneration packages for politicians and other public officials amid fiscal challenges and widespread poverty in the country. Will your leadership attempt to assuage the concerns of Nigerians in this direction?
No, I tell you it’s not true. This is just misinformation and misperception and just like a rumour. The money is not much – look at what the president earns in a month, you would laugh when you look at it. The president’s basic monthly salary is just about N300,000 and the annual gross salary is about N14 million. And that is for a whole president of Nigeria – and that translates to N1.17 million monthly and that is the highest public officeholder in Nigeria. Ministers earn about N620,000 – if you add a few allowances for their Personal Assistants (PA), they get about N900,000 monthly. And so also the heads of agencies of government like chairmen of the commission, and director general; of course, with the exception of NPA, Executive Vice Chairman of NCC, and CBN Governor – those ones have a different structure altogether. When a president is leaving office, the severance that he will get for serving Nigeria is N10.5 million and that is all he goes with. Yes, you can argue that he is given some pension and then you have some states that do their own packages with their own state assemblies. But, if you are running a federation, you cannot say Lagos State should not have a package for an outgoing governor, and you cannot compare Lagos State to a state like Zamfara or Yobe. Maybe Lagos is endowed with so many resources and their package may be bigger than that of Yobe.
And even the Senate President, how much does he earn? He also earns about N9 million and that is his basic salary annually, and then his severance is about N7.5 million.
So, Nigerians have to have some understanding of these issues. There is a difference between what they earn and what the National Assembly Commission provides for the upkeep of their entire structure from their constituency to their national office. If you look at places like the US and Malaysia, and some of these other countries, those structures are built-in as an institution but Nigeria did not go that route; Nigeria monetises that and gives that package to either a Senator or a member of the House of Representatives. In other words, all the constituency offices that you have, from the ward of the person who won the election, all the way to the national stage…it is monetised and then given to that particular legislator and that has nothing to do with the commission – it’s not part of the law but their own norm.
So, if Nigerians are averse to that, they can call for a system whereby a proper institutional structure can be put in place. If you win the election, you have nothing to do with those people, you bring the aides and they enter into the payroll and they continue to do the work and when you lose elections, somebody comes in and also inherits that structure without a dime coming to you for that and you continue to get your things. Believe me, the salary of even a member of the House of Assembly is about N9 million annually and you can see that of the judiciary, it is nothing to write home about. The package for the Chief Justice of Nigeria – the severance package is also about N10 million when he leaves office.
And the reason we are reviewing this is not so much because we want to increase; review means you take a holistic look; you look at the prevailing situation, what has happened in the past; are there any groups that you have not captured? It doesn’t mean we want to increase, reduce or leave it the same way but we look at it holistically. Like the judges for instance, when they are appointed judges, they’re given a house – the 300 per cent that is factored in as their housing allowance. The government takes it – once you enter into a government quarter, you can be a judge for 20 years or 30 years, and you will never have the money to build your own house. Is that fair? So, these are the issues. The appointees of the president, ambassadors, non-career ambassadors, and some of these former deputy governors, chief of army staff…what they earn is the salary of a special adviser which is equivalent to a deputy director in the ministry of foreign affairs. And that is what it is today. So, those are the things that we are going to look at. And there is this special outcry, especially that of judicial officeholders – there was even a lawsuit where some group took the government to court and the judge ordered that a judge should earn about N10 million a month or so…that cannot be implemented but it is a court order. But, prior to that, the EFCC chairman in 2018 had a sort of retreat with judges on their own remuneration and other things, and based on that they recommended to Mr. President through the Attorney General; the president had the report and so after the lawsuit came, the president directed some people to look into it. They packaged their own report and sent it to Mr. President but Buhari being a due process person, agreed in principle and he directed us to see the possibility of us implementing that review. So, as we embark on this, that of the judicial officeholders will be the first to come up. The rest is going to come subsequently maybe after the demise of this administration. So, that is the point I want Nigerians to understand. You and I know that somebody in CBN as a director, you don’t even know his salary and he will never tell you; somebody in NCC – you have a middle-level officer earning over N1 million in NCC. I know of workers who work in CBN and the end-of-year package for a middle-level officer is about N5 million to N6 million and every year they get that. So, these are things we need to look at holistically and see how we can bring them in line. I don’t want any Nigerian in the public sector earning above that of Mr. President or Governors. Like people say that governors have security votes and that means you now sanction whatever they do with security votes at their own discretion – and you’re busy crying and saying these people are corrupt. You want us to allow this system to continue like that and I say no, it is not good for us and I think we should look at it holistically. And we are going to engage a lot of Nigerians from labour to pressmen and to ordinary Nigerians. We will engage them to make sure they come and contribute and look at this.
There are also agitations by the sub-national governments for a review of the current sharing template among the tiers of government. Prior attempts by the commission to alter the template hit brick walls. Would you also be looking at this as well? And what are your chances that another exercise will sail through?
Well, we believe that it will sail through. President Muhammadu Buhari is a due process person and he does not have other ulterior interests other than governing Nigeria. And if you look at his trajectory, he is truly a democrat. This revenue allocation formula that you talked about has not been amended for 30 years. And the current revenue allocation formula that we operate was from a modification Act and at some point, it was discovered that even the FCT cannot be paid because FCT is not a state even though it is mentioned as a Federal Capital Territory. So there had to be an amendment out of the 52.26 per cent of the federal government, some funds were set aside – one per cent ecological fund, natural resources development fund which is 1.68 per cent, stabilisation fund 0.5 per cent and FCT 1 per cent- and that’s how FCT gets their payment. And then the states and the local governments.
There had been two attempts, and now we did the third one last year. We went all around and I was the secretary of the commission that time; we went around the country and collected views, we spoke to governors, we had zonal and state hearings and we opened it to the public. And after we did that, we compiled our reports, we went for a retreat and after we compiled, we then sent the report to Mr. President and that’s what the law says, for onward transmission to the National Assembly. Mr. President graciously accepted the report and commended us for doing that and he also promised that he would transmit it to the National Assembly but waiting for the conclusion of the review of constitutional amendments; looking into the concurrent list and exclusive list in the constitution whether it would go up or down. Concurrent list are things that federal, state, and local governments can do and the exclusive list are those items in the constitution that are the exclusive preserve of the federal government.
Once that amendment is done, the president then promised that he would look at it and either agree or call for whatever amendment and transmit it to the National Assembly.
However, some people are of the opinion that maybe the constitution needs to be amended so that this type of submission can just go directly to the National Assembly and it can work it over, and then give it to Mr. President to assent. That is where we are but we have done that part in April this year and we forwarded the report to Mr. President.
What are your priorities as chairman of this commission?
My main concern is looking at all the economic activities and the general economic climate not only in Nigeria but even outside. When the president came, there was a recession twice, there was COVID-19 and there is presently this war in Ukraine. So, this is a phenomenon that has affected almost every country in the world. But the current administration did very well in managing especially COVID-19. There were some predictions that Nigerians would be dying like flies; that we are going to be severely hit by COVID-19, but thanks to the leadership of Mr. President – that prophecy has not happened. As a result, there was a lot of borrowing to sustain our situation. So, we have not done too badly but my main concern as a commission is what we can do to motivate the entire system to generate more revenue, diversify our economy; generate more revenue for the federation, plug leakages and be able to have more money for development.
We need to have a better taxation system; FIRS is trying and they have brought over 30 million Nigerians into the tax net and I think that needs to be increased further so we can have more Nigerians paying taxes. I believe that VAT is 7.5 per cent and is one of the lowest in the world and we can increase that to get more revenue so the government can be able to do more projects. I also believe that other avenues of taxing people on landed properties in Abuja and other places, including land rates are still low and I will want the FIRS and the fiscal policy framework to be able to look at this so we can increase our internally generated revenue. I will also want a situation where customs also should do more; they’re talking about the beverage taxes to increase them, which is good and commendable. I saw the Manufacturers Association of Nigeria (MAN) kicking against that, but the fact of the matter is that it still needs to go up. And I also want a situation where the date will be shared, so the FIRS can go after those who evade taxes and make Nigerians pay taxes because if Nigerians don’t pay taxes, there will not be money for development. And I am also for the removal of the petroleum subsidy because that has been a scam for many years and we can argue on who actually gets the subsidy; 70 per cent of the subsidy is in the South-west. What we need is for the N5 trillion to N7 trillion to be freed over a period. When you free that money, you can use it in building infrastructure. I am also against excessive waivers that are given to some industrialists, year in, year out, and these are subject to abuse.
