Funds, politics delay new revenue formula

BY EMMA UJAH, ABUJA BUREAU CHIEF
ABUJA—Paucity of funds and high level politics have continued to delay the new Revenue Sharing Formula among the three tiers of government in the federation.

Investigations showed that the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, has been unable to submit a new formula to President Goodluck Jonathan as it has been bogged down by inadequate funding and the fight among several interests over higher revenue.

The current sharing formula is as follows: Federal Government, 52.68 per cent; the 36 states, 26.72 per cent; while the 774 local governments are given 20.60 per cent.

As learnt, the on-going bickering between Northern politicians and their counterparts in the South over revenue allocation has not helped the cause of the new formula. It was gathered that the Federal Government which takes more than a half of the Federation Account revenue has always equally and subtly discouraged a new formula in which it would be allocated less revenue.

The commission’s Chairman, Engr. Elias Mbam, admitted that his team was unable to deliver on its promise of presenting a reviewed sharing formula, early this year.

His words: “It is true that I promised that by the end of first quarter 2012 we should have a new revenue formula ready for presentation to Mr. President. It is also true that I said all things being equal and I was very emphatic. Unfortunately, you know very well that we have had a number of challenges, including national challenges. Even the budget year was moved from December to March and so many other challenges which you know as much as I do.

“So, I am saying that at the end of the first quarter I will brief you on the progress so far. It may be difficult to assure you now that it will be ready in a week’s time. But I can assure you that I will brief you on progress so far made. We have really made reasonable progress. We don’t want to start by shouting. There has been a lot of job behind the scene”.

But this issue is very sensitive”.

The issue has a lot of implications in the unity and peace of this country”.

“We are conscious of that and we are very careful in all our actions and inactions. So, we don’t also want to be joined in the politics of the review exercise. We want to retain our image as an unbiased umpire and we will be fair and devoid of any political consideration in terms of politics of any section of the country. We keep to that and we will not be dragged into the politicization of the review of the revenue allocation formula”, the chairman had told newsmen in Abuja in March this year.

Not only was the commission unable to conclude work on the new formula at the end of the second quarter of the year, there is no guarantee that a new formula can be presented to the president this year.

While political leaders from the South are clamouring for Fiscal Federalism, which they argue will provide more funds for that part of the country and encourage a rapid national economic transformation as all states will work hard to raise their revenue profiles; some Northern politicians argue that their region has been unfairly treated by been allocated meager revenue in comparison with the South.

As learnt, the commission has concluded its verification of data as provided by the states and the local governments and therefore can comfortably conclude it sharing on horizontal basis, that is among the states and the local governments.

A sourced said that officials of the commission travelled to all countries such as Brazil, Malaysia and Turkey with similar federal system of government, as well as, carried out an extensive study of fiscal federalism and the history of revenue sharing in the country since independence, in order to arrive at a formula that complies with international best practice and that can guarantee peace among the federating states.

However, the vertical sharing: the percent to each tier of government, has remained problematic as the federal government is said to have put up a strong argument on why its share should not be reduced.

It was gathered that the commission which called for memoranda from members of the public, three months ago, has been inundated with various arguments why the 52.68 per cent share of the federal government must be reduced to provide more funding for the two lower tiers of government.

Some argued that there is too much slush funds at the federal government level thereby encouraging corruption, as well as, been the cause of the excessive struggle for power in the centre.

It was also argued that the federal government has burdened itself with some ministries agencies which should be the business of states and local governments.

Specifically mentioned are the Ministries of  Agriculture, Water and Rural Development, Health, Mining, and police Affairs which are  argued should to be left at the state level for greater efficiency.

However, It was learnt that the memorandum submitted by the federal government represents a strong case for higher allocation as the federal claims to have a better structure for a transparent utilization of public funds in the interests of all members of the Nigerian public.