Tag: RMAFC

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has started consultation with former elder statesmen in continuation of  its advocacy and mass mobilisation on the ongoing review of the existing Revenue Allocation Formula.

The consultations took off yesterday with a visit to former Head of State General Yakubu Gowon (Rtd) in Abuja.

The Chairman of the commission, Elias Mbam, led the delegation which included other members and senior officials of the commission.

Mbam, who addressed reporters at the end of the visit, said the aim of the meeting was to enable the commission to tap from the wealth of experience of former leaders, and also get their input into the proposed revenue formula.

He said it has become expedient for the commission to widen the scope of its consultation with critical stakeholders to promote national buy-in.

Mbam said the commission has so far held consultative meetings with critical stakeholders, such as members of the Fourth Estate of the Realm, the three levels of government, comprising governors, speakers of state Houses of Assembly, Chief Judge, as well as local council chairmen and their counsellors.

Earlier, Mbam told Gowon that the Commission would also pay similar visits to his successors, to get their views on the exercise to enrich the evolving formula.

Responding, Gowon thanked members of the commission for the visit and assured them of his continued support for the commission on its quest to get a new revenue formula for the country.

He said an equitable revenue sharing formula would ensure even development of the country, promote national unity, cohesion and peaceful coexistence.

•Edo urges Jonathan to compel RMAFC to 

Following the footsteps of their compatriots in Edo State, oil producing communities in Ondo State have written to President Goodluck Jonathan and threatened to embark on mass action if their request for the direct payment of 13 per cent derivation funds is ignored.

The signatories to the Ondo State oil producing communities letter to President Goodluck Jonathan include Elder Thompson Shawana, Chief Adewale Omojuwa, Comr. Samuel Ebiwanno, Chief Mrs. Funke Oyekanmi, High Chief A.O Sofiyea (Regent and Tarabiritorhu of Arogbo-Ibe), Chief T.O Ikuesan Dr Soji Omowole, Dr Roju Malumi Hon. Tunde Aiyemo, High Chief R.A Bekewe (Ibe-pereatorhu of Arogbo-Ibe).

The Ondo group stated in their letter that the 13 per cent derivation fund belongs exclusively to the oil and gas producing communities which are the sources of the derivation.

In the letter which reads in part, they argued that “the oil facilities, flow stations etc are located in the oil and gas producing communities where oil exploration, exploitation and production are being carried out leading to monumental degradation, pollution, health hazards among others causing abject poverty in these communities.”

As a result the letter noted that the current handling of the “13 per cent derivation fund is illegal, unconstitutional and inconsistent with the principles of derivation to continue paying the funds to the governors”, while it is supposed to be compensation and reparation for loss of fishing rights and loss of productive farmlands.

The 13 per cent being managed by the governors in the oil and gas producing states they wrote “is an aberration. Thus it is clearly an implementation tragedy to pay the funds to any of the state governments’ accounts.”

The Ondo State oil producing communities further stated in their letter that in pursuance of their cause, they have written to “the Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the Fiscal Responsibility Commission (FRC), and the Executive Secretary of Nigeria Extractive Industry Transparency Initiative (NEITI) on the consequences of any further payment of the 13 per cent fund other than the rightful and legitimate beneficiaries.”

In order to avert crisis, they urged the President to direct the chairman of RMAFC, to commence the process of consultation with the leaders and youth representatives from the oil and gas producing communities of across the country with a view to constitute the National Derivation board.

It would be recalled that oil producing communities from Edo State had written to President Goodluck Jonathan to direct the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) to discontinue forthwith, the payment of the fund to the state governors.

The letter to the President was signed by Mrs. Nowan Uhunmwangho, Elder Peter Agbonkoko, Donyegha Ben, Chief Mrs V. Potoki, Mr. Edwin Ikinbor, Pastor Reuben Milton, Pastor A. B. Imafidon, Brasana Ekomiyenyefa, Olu Oyeh, Comader Segun Imafidon, Karaki Ebi, Victor Omoruyi, Hon. Jackson Ikinbor and Mrs. Queen Donyegha.

discontinue payment of 13% derivation to states

As the constitution amendment gathers steam, oil and gas producing communities are insisting on the retention and payment of 13 percent net derivation direct to the communities as contained in the constitution.

In a memo to the Chairman, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) Engr. Elias Mbam, obtained by The Nation in Abuja, the communities wrote that the provisions of the 1999 Constitution is clear enough on where and who to pay the 13 per cent derivation fund to.

The letter was signed by 13 leaders of the oil and gas producing from Akwa-Ibom State who took their protest to the RMAFC.

According to the memo, “We do not need an amendment of the constitution for administrative implementation of that provision of the constitution, it is clear that 13 per cent derivation fund is first line charge of the Federation Account.”

The fund, they argued, has been in existence before any revenue formula in the country. “The amount due to 13 percent net derivation fund is constitutionally set aside before any FAAC meeting to share the balance of the total oil revenue of 87 per cent.”

The group from Akwa-Ibom which presented the letter to RMAFC reminded the commission that “Revenue Act 1 of 1982 stated clearly that 1.5 per cent derivation fund was for the development of mineral producing areas across the country, the derivation fund would be administered and managed by the Federal Government.”

This, they claimed, was the practice and procedure and wondered why RMAFC changed this and decided to pay the 13 per cent derivation fund “into state government accounts without recourse to procedures, practice and records.”

They emphasised that it was the efforts of oil and gas producing communities during the 1994/95 constitutional conference that led to the increase of derivation fund to 13 per cent thus having it enshrined in the 1999 Constitution.

They alleged that for 13 years, the governors of oil-producing communities have received the 13 per cent derivation fund meant for the development of oil and gas producing areas, but have used the funds to develop their state capitals and non oil producing communities, leaving the actual oil and gas producing communities in abject poverty, hunger and penury.

The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) has called for concerted efforts by all tiers of the government to revive the collapsed industrial sector of the nation’s economy.

Chairman of the commission, Engr Elias Mbam made the call at the Women Development Centre, Abakaliki, Ebonyi state capital where stakeholders from the South-east zone converged for a two day zonal workshop on Economic Diversification and Enhanced Revenue Generation. The theme of the seminar was “Economic Diversification for Sustainable National Development”.

The Chairman lamented the country’s over dependence on the crude oil, which he noted has impacted negatively on other sectors of the economy particularly agriculture and solid minerals.

He therefore called for a shift back to these real sectors, which used to be the mainstay of the nation’s economy prior to the discovery of oil.

His words, “the workshop is aimed at sensitising governments at all levels and other stakeholders on the urgent need to broaden the economic base of the nation by diversifying the sources of revenue in order to meet the increasing expenditure requirements of governance and development”.

“Our economy must be diversified to guarantee the actualisation of the various socio-economic development programmes of government, particularly the transformation agenda of the present administration. At present oil and gas resources drive the nation’s economy”

“These hydrocarbon resources are exhaustible, non renewable and vulnerable to international price volatility and politics. Therefore we must diversify in order to ensure sustainable means of funding our national development and reduce over dependence on oil and gas revenue”

”The country has over 44 minerals in this country located at over 500 locations. We have many abandoned sites and our industrial sector has collapsed. We have to look and pick the gold at our backyard. Agriculture is neglected, before the civil war it was the main stay of our economy”

The RMAFC Chairman also advised the five state governments of the south east geo-political zone to build up the economic capacity of the zone through the promotion of regional collaboration by exploring areas of comparative advantage.

Ebonyi state governor, Martin Elechi regretted that despite the glaring danger posed by total reliance on the oil sector, the country seem unworried and unable to adopt practical strategies to reverse the ugly trend.

“There is therefore the need for all stakeholders to ensure that we do not leave all our eggs in one basket. Diversification increases the economic dependence of the nation and reduces its reliance on vulnerable economic sectors. It also leads to multiple market platforms for export and income generation”, he added.

•December roll-out date confirmed

•Senate to amend budgeting

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) is set to adopt terrain as a formula for sharing revenue for the States and Local Government Councils from the Federation Account.

This policy will be adopted under the Horizontal Revenue Allocation Formula to be included in the on-going review of the current Revenue Allocation Formula

Engr. Elias Mbam, Chairman of the Commission disclosed this yesterday in Abuja at the opening of a 3-Day Multi-Agency meeting.

He also confirmed December as the roll-out date for the new revenue sharing formula as exclusively reported by The Nation yesterday.

Mbam reiterated the Commission’s ardent desire to ensure fair and equitable implementation of all factors under the Horizontal Revenue Allocation Formula.

He charged participants at the meeting to come up with invaluable contributions that will help in resolving all the contending issues as well as address all complaints arising from there.

Earlier in his remarks, the Commission’s Indices and Disbursements Committee Chairman, Sen. Chris Adighije observed that prior to the introduction of Landmass and Terrain as factors on the Horizontal Revenue Allocation Formula, most of the factors used in allocating revenue to the constituent parts of the Federation by the Commission were essentially socio-economic in nature.

He stressed that in applying these twin factors the Commission observed “terrain is a more significant variable of the two since it has primary effect on development costs and sometimes represents a constraint to development, (physical constraints such as steep slopes, rugged terrain and swampy or soft subsoil often present severe construction difficulties).”

On the other hand, he said the size of a State or Local Government area presents not only the total area, which should be developed, but also administrative problems and cost.

Sen. Adighije also explained that the Commission noted that allocation on the Terrain factor was hitherto done on Equality basis instead of the terrain types, which made it possible for some States to earn what they ought not to have earned as the money under the terrain factor is shared on equality basis. He said this is not fair to those States and Local Governments with difficult terrains.

The RMAFC Indices and Disbursements Committee Chair told participants that this anomaly will be corrected soon as the OSGOF has successfully carried out a survey of Terrains for all the States and Local Governments Areas and submitted a comprehensive report to the Commission.

However, according to him, some of the States and Local Governments had written to the Commission to claim that the figures in the said report did not reflect their actual terrain types, which was why RMAFC assembled experts from the OSGOF and the National Boundary Commission and other stakeholders to sort out the grey areas.

In a related development, Mbam, who spoke at a two-day Public Hearing organised by the Senate joint committee on National Planning, Economic Affairs and Poverty Alleviation, and Finance on a proposed review of National Planning and Budgeting Process in the country, noted that his commission was worried that after 14 years, the country has not formulated a new revenue sharing structure.

The Public Hearing resulted from a motion sponsored by Senator Olubunmi Adetunmbi (Ekiti North) on the need for a radical review of the budgeting process in the country.

The RMFAC boss said that the country has continued to operate the revenue sharing formula prepared by the military.

He said that the commission has appealed to the public and stakeholders to make their memoranda, suggestions and presentation on how they wanted a new revenue formula to be fashioned in the overall interest of the country.

The Chairman of the joint committee, Senator Barnabas Gemade, in his opening remarks, expressed the need for a national budget process that is devoid of the current annual incremental envelope system.

The Benue State lawmaker noted that the envisaged budgeting process should be that which will provide alternative planning policies and strategies for the harmonsation of the activities of government agencies and the private sectors.

He said that in the course of debate of Senator Adetunmbi’s motion, a sharp disconnect between the multi-year development plans and the annual national budget under which the Federal Ministry of Finance prepares the budget with little or no regards to ministries, departments and agencies, was discovered.

Gemade, who is also Chairman, Senate Committee on National Planning and Economic Affairs said that the importance of national planning to any nation cannot be overemphasized.

Mr. Martins Oke, who represented the Federal Character Commission, faulted the situation where the Commission is not involved in the budgeting process.

Professor Henry Boyo, a financial analyst, said the need for the current planning and budget process to be overhauled has become over due.

Aside Boyo, other stakeholders at the public hearing include the Vice Chancellor, Various University, Professor Mike Kwanashie, Chukwuma Agu, Institute for Development Studies as well as the Former Director, National Planning Commission, Ayodele Omotosho.

Omotosho in his presentation stated that a budget without a plan is like a river without a course.