The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has begun the review of the revenue allocation formula to produce a fair, just and equitable revenue sharing formula for the nation.
Mohammed Bello, chairman of the commission, announced this at a news conference on Monday in Abuja.
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Mr Bello said that the aim of the review was to produce a fair, just and equitable revenue sharing formula that reflects the current responsibilities, needs and capacities of the three tiers of government, in line with constitutional roles.
He said that the aim was also aligned with the country`s current socio-economic realities.
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According to him, the allocation formula was last overhauled in 1992, saying that there had been several executive adjustments since 2002, but a full-scale overhaul had not been undertaken until now.
“As you may be aware, Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution of the country (as amended) mandates the commission to “review, from time to time, the formulae, and principles in operation to ensure conformity with changing realities,” he said.
“In line with this constitutional responsibility and in response to the evolving socio-economic, political and fiscal realities of our nation, the commission has resolved to initiate the process of reviewing the formula to reflect emerging socio-economic reality.
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“As you may be aware, since that time, Nigeria has undergone profound transformations demographically, economically, and constitutionally.”
Mr Bello said that the recent constitutional amendments by the 9th National Assembly had devolved certain responsibilities from the Exclusive to the Concurrent Legislative list.
He said that the responsibilities involved placing electricity, railways, and prisons on the concurrent list, which had placed financial and administrative burdens on sub-national governments.
He noted that the situation has made it essential to re-evaluate the structure of fiscal federalism to foster economic growth in individual states.
He added that it would enable them to become independent from the central government and ensure equity, responsiveness and sustainability.
Mr Bello said that the review was both a constitutional responsibility and a timely necessity.
He added that the commission would carefully assess the needs, service delivery obligations, fiscal performance and developmental disparities.
Let me state clearly that this review will be inclusive, data-driven and transparent, he said
“It will involve broad-based consultations with critical stakeholders, including the presidency, National Assembly and state governors.
“As well as Association of Local Government of Nigeria (ALGON), the judiciary, MDAs, civil society organisations, traditional rulers, the organised private sector and development partners.
“The commission is also committed to integrating cutting-edge research, empirical data and international best practices in its analysis,’’ he said.
Kabir Mashi, chairman of the formula committee, said the commission produced a report on the Vertical Revenue Allocation Formula in April 2022.
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Mr Mashi said that the report was jettisoned on the basis of the fact that the constitutional amendment by the 9th National Assembly in 2023 affected the responsibilities of the various tiers of government.
“Hence, the need for a fresh review of the revenue allocation formula in its entirety to reflect the current socio-economic challenges in the country, as well as the new economic policies of the current administration.
“Today’s gathering marks a pivotal step in the evolution of our fiscal federalism and intergovernmental fiscal relations.
“It provides an opportunity for us to intimate you of our activities so as to understand the approach and offer your perspectives on this vital matter,’’ he said.
Mr Mashi said that the commission was determined to conduct the review through a process that is inclusive, transparent, evidence-based and fully aligned with the spirit and letters of the Nigerian Constitution.
He said, however, that the committee is expected to submit its full report by December 2025.
(NAN)
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