The Nation Newspaper

Tag: RMAFC

RMAFC hails NIPC over reform

THE Revenue Mobilisation Allocation and Fiscal Commission has hailed the Nigeria Investment Promotion Council (NIPC) for its reform programmes.

It said the programmes were capable of transforming the council into a world-class agency.

The reforms, according to the RMAFC, would enable the NIPC to enforce the rule of law and minimise leakages in its activities.

RMARC Chairman Mr. Elias Mbam spoke during the presentation of Status Report on the administration of fiscal incentives by the members of the commission’s Non-Oil Monitoring Committee in Abuja.

Mbam said: “Nigeria at the moment cannot sit back and watch a few unscrupulous elements in our midst fiddle with our common patrimony by taking undue advantage of some fiscal policies, including the Pioneer Status Incentive, waivers and concessions and tax holidays designed by government to encourage and promote economic activities in priority areas and growth drivers of the economy”.

According to him, import duty waivers, concessions and exemptions have direct bearing on the quantum of revenue accruals into the Federation Account.

He said RMAFC was happy that the Executive Secretary of the NIPC, Mrs. Saratu Umar, was taking bold steps, which have sanitised the granting of the pioneer status incentives.

Mbam advocated a multi-stakeholder approach involving revenue generating agencies and regulatory bodies to stop revenue leakages to boost the country’s dwindling revenue base.

The Chairman, RMAFC Non-Oil Committee, Rev. Ajibola Fagboyegun, also lauded the revenue generating agencies and other stakeholders for their concerted efforts aimed at reducing revenue leakages and boosting remittances into the Federation Account.

May 4, 2015
Open management, please

•Independent manager should take over administration of the Federation Account

The call by the chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr. Elias Mbam, for an independent manager of the Federation Account is well thought out and deserves active consideration by federal lawmakers. Mr. Mbam, who spoke while receiving a Kenyan delegation led by the chairman of the country’s Constitution Implementation Oversight Committee of the National Assembly, Njoroge Baiye, said the creation of such an office would reduce the tension between the three tiers of government. He described the situation whereby the Accountant-General of the Federal Government whose loyalty is to the federal executive is also the accountant managing the Federation Account as the basis for the current mutual suspicion among the governments.

It is difficult to fault the logic. The major agency responsible for collecting the revenue accruing to the Federation Account is the Nigerian National Petroleum Corporation (NNPC). Its leadership is constituted by the Federal Government and reports to the Minister of Petroleum Resources who is a member of the Federal Executive Council. And, in turn, the manager of the account is another key appointee of the Federal Government who reports to the President as the Chief Executive of the Federation. It has thus led to friction and conflict between the state governments and the Federal Government, with the states arguing that the NNPC has continued to under-remit to the Federation Account. In the past two years, in particular, the argument has been recurring and many times, the states refused to accept their allocations. Consequently, salaries have been delayed and capital projects stalled.

We support Mr. Mbam’s call because in this age and time, openness and transparency should be the watchword. The Office of an Independent Accountant-General of the Federation with a guaranteed tenure and in whose appointment the states have a say should be created without further delay. He would feel less obliged to do the bidding of the Federal Government.

Even in developed countries where institutions of state are less susceptible to government manipulation, major national investigations are pulled out from the bureaucracy and handed to independent investigators. A case in point was the investigation of the sexual harassment charge against the United States’ President Bill Clinton. The attorney general had to appoint an independent investigation that indicted the President.

In a federation run in accordance with the principles of federalism as spelt out by Professor K. C. Wheare, no tier of government should be superior to the other. It is yet to be understood even by government officials, that allocations to federating units from the Federation Account are not dole-outs by the Federal Government. The NNPC has no right to withhold remittances and where this is done, it is an infraction of the law and should be so treated.

Consistently, since 1999, the RMAFC has been doing a lot of work, pointing out Federal Government’s wrongdoings; yet, states have continued to complain about deliberate underfunding. Another variant of the complaint is that some states are deliberately starved of funds because they are controlled by the opposition parties, while those belonging to the ruling party enjoy special relationship with the federal executive. Evidence has not been adduced in support of this, but it stemmed out of suspicion and lack of transparency.

We call on the National Assembly to consider the necessary amendment to the constitution that would engender trust among the tiers of government and promote the Rule of Law in all transactions in the country.

November 4, 2014
RMAFC supports creation of two AGs’ offices

In a clear departure from its earlier disposition to the idea of having two Accountants General, one for the federation and another for the Federal Government, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) yesterday spoke in support of getting the two offices separated.

Addressing a delegation of Kenyan Parliamentarians led by Chairman Constitutional Implementation Oversight Committee of the Kenyan Parliament, Njoroge Baiya, RMAFC chair, Elias Mbam said its position is to split the two offices.

He said: “The position of the commission is that while the Fedeal Government should have its own Accountant General, the Federation Account should be independenlty managed by a separate Accountant General of the Federation to promote transparency, accountability, checks and balances.

“This will engender trust among the tiers of government and beneficiaries of the Federation Accountant.”

He said the operation and management of the Federation Account had been an area of concern, arguing that the current development where “the account is managed by the Accountant General of the Federation who doubles as the Accountant General of the Federal Government” is not the best.

Mbam also decried the commission’s lack of powers to enforce its decisions and impose sanctions, lamenting that “the constitution and enabling laws of the commission do not bestow powers of sanctions and enforcement on the commission.This restricts the commission to only advisory role.”

The constitutional powers and function of the commission he said are so enormous and germane to effective fiscal practices in the country that it is regrettable that the commission lacks powers of enforcement and sanctions.

Mbam highlighted other challenges of RMAFC to include absence of financial autonomy, noting that the sensitive nature of its role in fiscal management of the economy requires a measure of independence including financial autonomy.

The commission “is not responsible to any other organ of government in the appointment, promotion and discipline of its staff; it is however still dependent on budgetory allocations which are in most times grossly inadequate to protect its independence and fund its operations.”

Another concern is the payment of statutory allocations to local government. According to him, while “statutory allocation from the Federation Account due to the Federal and state governments are credited to them directly, that of local government are expected to be paid into respective State Joint Account, established by Section 162(6) of the 1999 constitution.”

He said these joint accounts “are often subjected to manipulation by the states supervisory authority, thus rendering the local government financially incapacitated.”

The commission’s disposition he disclosed “is that statutory allocations tolocal govetnments should be paid directly to them. Thus, requiring the amendment of relevant provisions of the constitution accordingly.”

October 23, 2014
New revenue formula awaits Confab outcome

The components of the new revenue formula will depend on the deliberations and decisions reached at the on-going National Conference.

Four months after the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has concluded its work on a new revenue formula, the Presidency is yet to receive it from the Commission.

A Presidency source told The Nation that “it has become politically expedient for the President to wait for the out come of the deliberations and decisions of the Confab with regards to the revenue formula”.

The source said this reason and the fact that the “President has a very tight schedule is what is delaying his receipt of the RMAFC’s new revenue formula”.

A source (Commissioner) at the RMAFC also said: “It is up to the President to fix a time and date when to receive the RMAFC’s new revenue formula.’’

The Commissioner said it was not within the powers of the commission to determine when to submit the formula to the President only that “the constitution charges the RMAFC to come up with new revenue formula from time to time”.

He admitted that members of the commission were still waiting for President Goodluck Jonathan to receive the revenue formula.

However, it is not quite clear what the fall-out will be if the Confab members tinker with the revenue formula.

When asked how this problem will be addressed in the future, a Presidency source said: “A common ground would have to be found to accommodate both the decision of the confab and the revenue formula drawn up by the RMAFC.”

He, however, admitted that that may pose a serious constitutional debate, but he suggested that since the Confab was a temporary arrangement and the RMAFC a permanent constitutional structure, the commission may have to work with what delegates at the Confab decide.

On December 19, last year, the RMAFC said the report on the new revenue formula was ready and waiting to be submitted to the president because the Presidency was yet to schedule an appointment for the submission.

A sources at the commission then said “given the volume of work that went into completing the draft report, the commission would want the world to know when the report is submitted as it was waiting for words from the presidency for the report to be submitted”.

During the preparation of the report, the Federal Government had given a tacit endorsement to the exercise to adjust the old revenue sharing formula but government’s enthusiasm waned over time ”in view of the monumental fiscal challenges it has been contending with in its efforts to match its distributions from the Federation Accounts and a few other revenue sources with growing expenditure needs”.

The source, who is well-informed about the high-level scheming, said though the Executive did not make any formal comment that would suggest that it is against the exercise, “the musings at the highest corridors of power are that if the old formula is tampered with now, any shocks in the global economic system in terms of loss of revenues from crude oil exports, might spell fiscal doom for the Federal Government.”

According to him, “the revenue sharing formula requires a special approach in adopting in view of what it means to the political economy. If you understand what is going on now between some of the states over the issue of loss of oil wells, you will know what it means to change the formula even by the slightest percentage”.

He added: “For the Federal Government that has been battling with deficit financing for years in the face of more needs for funds for capital projects execution, the idea is good but not desirable. The Federal Government is in a dilemma on the issue.”

The Presidency source stated that the the executive was scared of “losing more money to the states and local governments even when it hadn’t enough in its kitty to spend. So, this will now make you understand why the Federal Government may not be too enthusiastic about changing the old formula”.

April 7, 2014
Abubakar wants improved revenues for states, LGs

Former head of state, Gen. Abdulsallami Abubakar (rtd), said the Federal Government should hands off from certain responsibilities that ordinarily are better handled by states and local councils.

He spoke to journalists in Abuja when officials of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) visited him to get his in-put in the proposed new revenue formula.

Abubakar said the federal government is taking on too many responsibilities, adding that there should be a dilution of federal government’s activities particularly in secondary school education which should be left to local governments.

“The earlier we start thinking of rationing what our local governments, state governments and the Federal Government do, I think we are now on a certain point that will help the Revenue Mobilisation Allocation and Fiscal Commission to make their recommendations on the way forward to share this revenue, “ the former head of state advocated.

He also lent his voice to agitations by states and local governments for improved revenue from the expected revenue formula. He said states and local governments should get more allocation from the Federation Accounts in view of their roles in development.

Also speaking at the parley, the Chairman of the RMAFC, Engr. Elias Mbam, said the parley was fruitful as members were better informed on issues that would ultimately determine the outcome of the ongoing exercise.

October 24, 2013
IBB seeks devolution of powers

The former military President, Gen. Ibrahim Babangida (rtd), on Monday called for the devolution of powers between the federal, state and local governments in the spirit of true federalism.

The News Agency of Nigeria reports that Babangida made the call when the Chairman of Revenue Mobilisation, Allocation and Fiscal Commission, Chief Elias Mbam, paid him a visit at his Minna residence.

The former president said that besides proper devolution of powers, there was need for a review of revenue sharing formula in favour of the states and the local government councils.

He said that a greater percentage of revenue should go to the state and local governments because of their closeness to the masses.

The former military president also canvassed for diversification of the economy from the current mono-source – oil, to other revenue alternatives.

Babangida commended the commission for carrying out its assignment diligently in spite of the challenges.

Earlier, Mbam said the visit was part of extensive consultation with all stakeholders before drawing up a new revenue sharing formula.

He noted that the review of the revenue sharing formula was last held during the Babangida regime.

The chairman said the new revenue sharing formula would be ready by December.

October 21, 2013
Dickson to RMAFC: Revisit era of 100% derivation

Bayelsa State Governor, Mr. Seriake Dickson, on Thursday lamented injustice in revenue sharing formula and asked the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) to revisit the era of 100 per cent derivation principle.

Dickson insisted that for Nigeria to practise true fiscal federalism, the era of 100, 50 or 30 per cent derivation formula must be reconsidered by RMAFC.

The governor spoke in Yenagoa at a three-day South-south zonal public hearing on the review of revenue allocation formula organised by the commission.

Though all the governors in the zone were not present at the event held at the state Cultural Centre, they sent representatives.

The Government of Akwa Ibom State received commendations for bankrolling the live broadcast of the event.

Dickson, who was represented by the Secretary to the State Government (SSG), Prof. Edmund Allison-Oguru, recalled that 100 per cent derivation principle formed the basis for revenue sharing when agricultural products were the mainstay of the country’s economy.

He said such percentage was once given to regions that produced cocoa, groundnut, cotton and other agricultural products before the discovery of crude oil in commercial quantities.

He said the formula was later reviewed to 50 and 30 per cent, observing that there was no time such regions were paid below 30 per cent.

While lamenting that the country abandoned agriculture after discovering oil and gas, he said it was only just for the Niger Delta region to enjoy better derivation formula considering the pains of oil exploration.

He said: “It is a well-known fact that the exploration of oil in the Niger Delta region has not only exploited the people of the area but has also made the area toxic resulting into polluted environment which has adversely affected the agrarian and subsistent lifestyle of the people.

“The current 13 per cent derivation principle has become increasingly inadequate to surmount the huge developmental challenges confronting the area.”

He appealed to the National Assembly to expedite the passage of the Petroleum Industry Bill (PIB).

He said when passed into law the bill would help to address the lopsided and disparity in revenue allocation formula especially to the oil-producing states and communities in the region.

He urged other regions to show understanding to the problems of the region by supporting the passage of the bill.

October 10, 2013
Revenue allocation: Ajimobi advocates 30 per cent for Fed Govt

•New formula ready in December, says RMAFC boss

Oyo State Governor Abiola Ajimobi yesterday led calls for a review of the revenue allocation formula to favour states and local governments, saying they have more responsibilities and are closer to the people than the Federal Government.

He advocated the streamlining of the Federal Government’s role to policy formulation, monitoring and as on adviser.

Ajimobi spoke in Ibadan, the state capital, at a public hearing on the review of the revenue allocation formula.

He described as lopsided the current formula, where the Federal Government takes 52.68 per cent, states 26.72 and local governments 20.6.

States are proposing 32.5 per cent for the Federal Government, 41.5 for states and 26 for local governments.

Ajimobi explained that the current formula took its premise from the 1999 constitution and the 2002 Supreme Court judgment on the issue.

He said: “But it is now very evident that the current formula is lopsided. This review is timely to have our fiscal regime conformed to present realities. Challenges at the grassroots are unassailable. There is an urgent need for an equitable revenue sharing formula. A formula that will address the needs of the federating units, strengthen unity and progress is desirable. Projects needed at the state and local governments are frustrated by insufficient funds. States and local governments are strategically positioned to meet the people’s needs.”

The governor criticised the duplication of services by the Federal Government, stressing that it looks as if the Federal Government is competing with states.

He said: “The Federal Government unilaterally took over the responsibilities of the states and local governments after the 1963 constitution. This is due to military incursion and the emergence of oil as a major source of revenue. Control of the police and issuance of driver’s licence are examples. The Federal Government has no business issuing licences. It is for local governments. So also is the Universal Basic Education (UBE), agriculture, VAT, etc. Most of the bad roads in communities belong to the Federal Government. In fact, the current formula was dictated by fiat by the Federal Government. It is inconsistent with the principles of federalism.|

The six states in the Southwest made presentations for “more equitable” distribution of revenue to the three tiers of government.

The Chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Elias Mbam, said the aim of the hearing was to provide a veritable platform for Nigerians to express their views and submit memoranda on the review process.

Urging the people to make the best use of the opportunity, Mbam said the zone was renowned for its intellectual and robust contribution to national debates.

He advised participants to avoid ethno-religious sentiments in their contributions.

Mbam said a new revenue sharing formula would be released in December.

Also at the hearing were top government officials, council chairmen, labour unions and pressure groups, among others.

The hearing continues today.

October 8, 2013
New revenue formula underway —RMAFC boss

Afresh plan by the federal government to introduce a new revenue allocation formula that will ensure equity and fairness to the six geo-political zones in the country that will stop the current grudges on the sharing formula of the nation’s resources will soon be effected.

Mr. Elias Mba, Chairman, Revenue Mobilisation Allocation and Fiscal Commission [RMAC], dropped this hint in Bauchi at the North-east public hearing on the review of the revenue allocation formula in Nigeria held at Zaranda Hotels Bauchi, the state capital, at weekend.

He explained that the public hearing was aimed at reaching out to more Nigerians and provided opportunity to all stakeholders to express their views and contribute to the review process and assist the commission to come up with a new acceptable revenue allocation formula.

Mba expressed optimism that the new formula will be the wishes of the citizenry which will accelerate the socio-economic development of the country.

The RMAFC boss, who disclosed that the commission has held such public hearings in the North central, North west and the South west, said it would visit all the 36 states, and the federal capital territory [FCT] including the 774 local government areas so as to sensitise Nigerians to make inputs into the review process.

The chairman further charged ‘’Nigerians not to lay emphasis on what tends to divide us as a people, your inputs should be guided by fairness, equity and justice. We should therefore apply moderation in our views.”

October 6, 2013
New revenue formula in Dec.

A new revenue sharing formula between the three-tiers of government may be ready before the end of the year, Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Elias Mbam, has said.

Mbam, who spoke in Minna after a meeting with some stakeholders in continuation of his nationwide consultations on the new formula, said the Commission was 90 per cent through with the process of recommending the new formula.

He said: “After wide consultations with some stakeholders, especially former Heads of state and other principal officers of government, we will come out with the formula that will reflect the wishes of Nigerians.

“The essence of this nationwide exercise which is one of the processes of the review, is to have imputs from stakeholders in all sections, particularly with our former leaders who know much about this country than many of us.”

He said that changes in the day-to-day running of the three-tiers of government since the last review of the sharing formula, necessitated the new review as well as the agitation by some other stakeholders for a review to reflect current reality.

The Chairman explained that in order to ensure that everyone was carried along in arriving at the new formula, the Commission visited the 774 local governments in the country, stressing that it has also embark on the review of past literatures to find out why past exercises failed.

While admitting that the present sharing formula is not fair enough, Mbam expressed optimism that at the end of the exercise, the wishes of Nigerians will not only be respected, but reflected in the new formula that will be recommended by the Commission.

He assured that the focus of the review is to ensure that the RMAFC arrived at a reasonable formula that would make it possible for each tier of government to discharge it constitutional responsibilities.

September 10, 2013