Creating an independent agency to take charge of the Federation Account would help minimize the mutual suspicion and tension between the three tiers of government over the management of federal revenues, the Chairman, Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, Elias Mbam, has said.
At the moment, the Federation Account, which holds the pool of all revenues generated from all government economic activities in the country, is currently managed by the Office of the Accountant-General of the Federation, OAGF, who is the accountant to the Federal Government.
The States and Local Governments are only entitled to revenues declared by the OAGF and shared monthly as statutory allocations during the meeting of the Federation Accounts Allocation Committee, FAAC, based on stipulated sharing formula.
The members of the committee, which has the minister of state for finance as chairman, are made up of mainly state commissioners of finance and their accountant general counterparts.
Over the years, there has been palpable tension among the three tiers of government as they hold each other in suspicion over issues of accountability and transparency in the management of the account.
But, Mr. Mbam told a delegation of the Oversight Constitutional Implementation Committee of the National Assembly of Kenya during a visit to the Commission in Abuja on Wednesday that establishing an independent authority charged with the sole responsibility of managing the account would help resolve, the issues.
According to the chairman, the concentration of the functions of being both the accountant of the Federal Government and manager of the Federation Account in the OAGF was fuelling tension and crisis of confidence among the three tiers of government.
“The operation and management of the Federation Account itself has been an area of concern for a long time,” the RMAFC Chairman said. “Currently, the account is managed by the Accountant-General of the Federation, who doubles as the Accountant-General of the Federal Government.”
The position of the commission, Mr. Mbam told his visitors, is for the Federal Government to have its Accountant-General separate from that of the Federation Account, who would function as an independent manager to promote transparency, accountability, checks and balances.
He said this arrangement would engender trust among the three tiers of government and other beneficiaries from the Federation Account.
Besides, the RMAFC boss said there was need for amendment of the constitution to grant independence to that local governments in the allocation of revenues share from the Federation Account.
He said the current practice where Local Governments were not allowed to participate in the meeting of the FAAC and are operating joint accounts with state governments had often been subjected to manipulation.
“While statutory allocation from the Federation Account due to the federal and state governments are credited to them directly, that of local governments is expected to be paid into the respective state/local government joint accounts established by Section 162 (6) of the 1999 Constitution,” he noted.
These joint accounts, he pointed out, were often subjected to manipulation by the states’ supervisory authorities, thereby rendering the local governments financially incapacitated, without the financial capacity to handle their developmental roles at the grassroots.
He said the Commission’s disposition was that for statutory allocations to local governments to be paid directly to them, the amendment of relevant provisions of the constitution was required accordingly.
Mr. Mbah identified lack of power to enforce the provisions of the law and sanctions as well as the absence of financial autonomy as some of the hindrances to the Commission’s functions.
He said the constitutional powers and functions of the Commission were so important to achieving effective fiscal practices in the country.
The RMFAC boss expressed regrets that the constitution and the enabling laws of the Commission only restricted it to advisory role only, pointing out that the sensitive nature of the its role in Nigeria’s fiscal management required a large measure of independence, including financial autonomy.
Though he said the Commission, by law, was not responsible to any other organ of government in the appointment, promotion and discipline of its staff, it was, however, still dependent on budgetary allocations, which are, most times, grossly inadequate, to protect its independence and fund its operations.
On the expected new revenue sharing formula, Mr. Mbam said it was awaiting presentation to President Goodluck Jonathan before being forwarded to the National Assembly for approval as required by Section 162 (1) of the 1999 Constitution.
The Kenyan delegation was led by the Chairman, Constitution Implementation Oversight Committee of the National Assembly, Njoroge Baiye.
Mr. Baiye said the delegation was in Nigeria to understudy the country’s management of the Federation Account.