RMAFC Begins Process to Review Revenue Sharing Formula for States, LGs

•ALGON seeks increased allocation, representation at FAAC

•States with more responsibilities should get additional resources, says FAAC chair

James Emejo in Abuja

The Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr. Mohammed Bello Shehu, yesterday said the commission has commenced the process of reviewing the horizontal revenue allocation formula for sharing of federation account revenues between states and local government councils in line with the principles, factors, and proxies stated in the constitution.

Speaking at the opening of a tooling programme to enlighten official of the states and local government councils on data generation and management, Shehu also said the commission had already concluded the vertical revenue allocation formula used in sharing FAAC revenue among the federal, states, local governments.

He said the report had since been submitted to President Muhammadu Buhari for consideration and onward transmission to the National Assembly for enactment into law.

But he declined to disclose the details of the report which he said Buhari was still awaiting the outcome of the ongoing constructional amendments as initiated by the National Assembly.

The workshop also serves to educate the stakeholders on the rollout of the commission’s proprietary software for the collection of data on the indices to be used for the horizontal revenue allocation formula for the country.         

This came as the National President, Association of Local Governments of Nigeria (ALGON), Hon. Kolade Alabi, said the RMAFC has a role to play in rescuing the local councils from extinction.

He said the commission must monitor direct disbursements to local governments as well as ensure that such funds get to the latter’s accounts.

Represented at the occasion by ALGON Deputy National President, Mr. Aminu Maifata, Alabi also called on the commission to increase revenue allocations to the grassroots.

He also stressed the need to have ALGON represented in FAAC in the interest of fairness to the body.

This came as the Benue State Commissioner for Finance/Chairman, Federation Account Allocation Committee (FAAC), Mr. David Olofu, also sought increased revenue allocation to the sub-national governments, stressing that states with additional responsibilities should have more resources to work with.

While tasking the commission to ensure that the vertical review was pursued to a logical conclusion, Olofu noted that with increased funding, the states can better address issues in their jurisdictions.

Shehu, however, pointed out that there was an attempt to review the existing horizontal indices in use in 2018 but the indices could not be implemented due to some observed anomalies.

He said, “In the spirit of fairness, equity, and justice, which is the hallmark of the commission, a sensitisation and advocacy exercise to the 36 States of the Federation and the FCT to explain the reasons why the 2018 exercise could not be implemented was carried out from September 1 to October 6, 2020.

“It was in the course of the exercise that stakeholders observed that one of the reasons for the anomalies was the lack of proper understanding of the commission’s requirements on credible data generation and management.

“Consequently, the issue was discussed at the RMAFC plenary where members agreed that the tooling programme was necessary and should be organised to enlighten stakeholders. The need for the programme was also discussed and agreed at the Federation Allocation Account Committee (FAAC) plenary.”

The RMAFC boss added that the officials would be trained on the intricacies and technicalities involved in data gathering and management relating to the proxies and factors used on the horizontal revenue allocation formula template to make data access for the purpose of the horizontal formula review easy and seamless.