The Nation Newspaper

Tag: RMAFC

  • RMAFC explains delay in submitting new revenue formula

    RMAFC explains delay in submitting new revenue formula

    The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has explained why it has not submitted a new revenue formula to President Bola Ahmed Tinubu.

    Its Chairman Mohammed Bello Shehu told The Nation that it had become necessary to adapt to the prevailing socio-economic conditions and the need for a thorough scientific analysis before proceeding.

    Shehu noted the significant changes in dynamics and circumstances over the past two years, which have necessitated a fresh approach to determine a new revenue formula.

    He said: “We cannot just submit what we have done before because the dynamics and the atmosphere have changed from two years ago to what it is now.”

    The RMAFC boss who further explained that it must secure the buy-in of the Tinubu Administration, expressed optimism that the the commission will complete the process by the end of the year.

    He identified the imminent expiration of tenures for about 20 RMAFC commissioners another critical factor contributing to the delay.

    Read Also: Tinubu calls for punishment of civil servants receiving salaries abroad

    Shehu noted that whether these members will be granted a second tenure remains uncertain, complicating the reconstitution of the committee responsible for working on the new revenue formula.

    “We still have to get better information and do the proper analysis scientifically so we cannot rush now into it,” Shehu insisted.

    Addressing the contentious issue of local government autonomy, the RMAFC boss pointed to constitutional provisions that complicate the matter.

    He explained that state assemblies are constitutionally empowered to oversee local governments, leading to issues with joint accounts.

    Referencing the Abia vs. the Federation lawsuit, Shehu noted that the Supreme Court’s decision stripped the RMAFC of its role in joint local government accounts.

    Shehu noted that former President Muhammadu Buhari’s Executive Order (EO) aimed at enhancing local government autonomy, which faced strong opposition from state governors.

    The opposition from the chief executives of the states led to the non-implementation of the (EO).

    He suggested that the National Assembly should address the contradictory demands of the constitution to resolve these issues.

    Shehu also noted that constitutional amendments require the approval of two-thirds of both the national and state assemblies.

    He criticised the current state of local government areas, which he described as non-functional due to the overbearing influence of governors.

    The RMAFC helmsman lamented the decline in initiatives at the local government level, comparing the present situation to 13 years ago when they built roads and schools.

    “Now, governors have completely overshadowed local administration”, he added.

    Drawing a contrast between governorship and local government polls, Shehu observed that while state election often show competitive results, local government polls show the sitting governors’ parties winning overwhelmingly.

    “Where you have semblance of fair elections, it is better for our democracy,” he concluded.

  • RMAFC backs local govt autonomy

    RMAFC backs local govt autonomy

    The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has called for the complete autonomy for local government councils across the country.

    The commission said it was lending its support to Federal Government’s legal efforts to free the local governments from the control of state governments by enforcing the Constitution’s provisions.

    In a statement, RMAFC Chairman Mohammed Bello Shehu said the local governments, as the third tier of government, should operate independently of state and federal governments to ensure effective grassroots governance.

    Read Also: RMAFC backs FG on full autonomy for local governments

    He noted that the Nigerian Constitution recognises federal, state, and local governments as distinct tiers, each drawing funds from the Federation Account.

    Shehu criticised the dominance of state governments over local governments, saying this undermines their political, administrative, and financial independence.

  • RMAFC backs FG on full autonomy for local governments

    RMAFC backs FG on full autonomy for local governments

    The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has called for the complete autonomy of Local Government Councils (LGCs) in Nigeria.

    The commission supports the federal government’s legal efforts to free LGCs from the control of state governments by enforcing the constitution’s provisions.

    In a statement, RMAFC chairman, Mohammed Bello Shehu, noted that local government councils, as the third tier of government, should operate independently of State and Federal governments to ensure effective grassroots governance.

    He noted that the Nigerian Constitution recognizes federal, state, and local governments as distinct tiers, each drawing funds from the Federation Account.

    Shehu criticised the dominance of State governments over LGCs, which undermines their political, administrative, and financial independence.

    Read Also: RMAFC, NJC, NBA back 300% salary raise for judicial officers

    This control he said hinders LGCs’ ability to provide quality infrastructure and social services, as intended by the Constitution. He also highlighted that State control makes it difficult for citizens to elect their local leaders, affecting governance closest to the people.

    The RMAFC boss believes that “granting full autonomy to LGCs will reduce poverty, curb rural-urban migration, and deliver more democratic benefits to the populace. It will also attract qualified candidates for council elections, improving governance across all levels”.

    “Full autonomy will promote good governance, transparency, and accountability at the local level,” Mr. Shehu stated. Security challenges like banditry, kidnappings, terrorism, and electoral violence would be minimized if local government funds are directed towards rural development.”

    He added that this autonomy would enhance agricultural productivity, increase income, curb rural-urban migration, create wealth, and generally improve the socio-economic conditions of rural communities.

    Shehu insisted that granting full autonomy to LGCs could help address the current security issues across the country by enabling effective local governance.

    He emphasized that LGCs should be able to recruit and manage staff, raise finances, make by-laws, and operate without State government interference, ensuring complete bureaucratic autonomy.

    He elaborated on the importance of financial autonomy, which includes the freedom to impose local taxes, generate revenue, allocate resources, and authorize budgets independently.

    He noted that the constitution clearly mandates a democratically elected local government system and does not provide for any other governance system at the local level.

    RMAFC’s position is that LGCs should receive their statutory allocations directly from the Federation Account. The Commission supports the Federal Government’s lawsuit seeking to direct funds standing to the credit of LGCs directly to their coffers from the Federation Account.

    Shehu stated that RMAFC would continue to be a strategic partner in efforts to strengthen local government councils in Nigeria.

  • RMAFC, NJC, NBA back 300% salary raise for judicial officers

    RMAFC, NJC, NBA back 300% salary raise for judicial officers

    President Bola Tinubu’s proposed 300 percent increase in the salaries and allowances of judicial office holders has received the backing of the Revenue Mobilisation and Fiscal Allocation Commission (RMAFC) and  Justice Minister  Lateef Fagbemi (SAN).

    Also in support of the planned review are the Finance Minister and Coordinating Minister for the Economy  Wale Edun, the  National Judicial Council (NJC), and the  Nigerian Bar Association (NBA). 

    They okayed the plan during a one-day public hearing on  “A Bill for an Act to prescribe the salaries and allowances and fringe benefit of judicial office holders in Nigeria and related matters, 2024.” by  the Senate Committee on Judiciary, Human Rights and Legal Matters in Abuja yesterday

    Fagbemi in his presentation, urged the committee to note that efforts to improve the remuneration of judicial officers in the country have a chequered history.

    He said: “I wish to remark that the judicial office holders (salaries and allowances, etc.) Bill 2024 is quite innovative, aside from the increment in the basic salary, it also took cognizance of certain peculiarities of the administrative structure and operation of the judiciary.

    Read Also: Iran to hold memorial ceremonies for late president today

    “This bill will birth an appropriate and commensurate remuneration that will ensure judicial independence and integrity.

    “The present-day but sad reality is that the judiciary has stagnated on the same salary scale for over 16 years, this is totally unacceptable and quite antithetical to any meaningful judicial reform.

    “I strongly commend this bill for your kind consideration and do urge the Senate to support and ensure the passage of this Bill in the national interest of promoting the rule of law.”

    Fagbemi added that the Justice Ministry, the judiciary, and other key stakeholders were also interested in ensuring a holistic review of our justice system.

    This, according to him, explains why he is ‘’taking immediate/urgent steps to establish a Working Group on the review of the 1999 Constitution and other relevant laws.

    The working group will, among others, ‘’focus on the key provisions aimed at achieving the judiciary that responds to evolving justice needs of Nigerians.’’

    “At the appropriate time, and I promise, very soon, we will come up with proposals for Constitutional and statutory reforms of the judiciary in particular, and the administration of the justice system in general,” the minister promised.

    The Chief Justice of Nigeria(CJN)  Kayode Ariwoola, represented by Borno State  Chief Judge  Kashim Zannah, said Nigerians would continue to suffer from the nation’s judiciary system until salaries, allowances, and other benefits of judges are increased.

    “When judges are well compensated, yes, they do their best. But actually, as clearly demonstrated, the real interest that is being looked at is the interest of these citizens because they will be the ones who suffer the consequences of a deprived judiciary,” said Ariwoola, who is also NJC chairman.

    The CJN  equated the condition of judges to that of a patient in an intensive care unit that needs serious medical attention.

    He said: “In a nutshell, what we are saying is this: The situation of judges across Nigeria is like one in a critical condition in the ICU.

    “The schedule to the bill would stabilise the patient. The one contained in the appropriation door would have him moved from the ICU to the general ward. When a patient is in that condition, you don’t start physiotherapy at the ICU.

    “You make sure he is stabilised, moved to the general ward, gains some strength, and then you now look at physiotherapy and all other therapists. That, in a nutshell, is our presentation…

    “Do move quickly, move the patient out of the ICU to the general ward, and then we will come. In fact, our starting point will now be a reference to the chairman’s very own observation about gratuities and allowances.

    “But for now, let’s stabilise the patient, move him out of ICU, and then we can talk about the rest later.”

    RMAFC’s Chairman Mohammed Shehu narrated how they worked on the proposal by the President that was transmitted to the National Assembly for consideration. 

    He said the commission which is statutorily charged with the responsibility of monitoring accruals to and disbursement of revenue from the Federation Account, said supported the proposal based on current realities.

    Shehu said: “We completed our work on the review of salaries of judicial officers but the fuel subsidy removal on May 29, 2023, and the changes in the economic situation rendered that report completely unimplementable. So, we went back to the drawing board.

    “The Attorney-General contacted the commission on the directives of the President, and he directed the commission to go back and look at that report that we submitted to the former president(Muhammadu Buhari) and consider the new situation.

    “And that was what we did. We looked at the consumer price index and inflation rate. We also did a comparative analysis of countries like Ghana, Ethiopia, India,   Rwanda, the UK(United Kingdom), and the United States and we discovered that the Nigerian judiciary generally is really at the bottom of the rung.

    ‘’When we presented our recommendation, Mr  President looked at it and asked a number of questions– whether we have done an analysis of the affordability of the changes that are going to be in the law? whether the system can afford it. and whether it is sustainable.

    ‘’I said yes.

    Edun, who also supported the bill, said: I have listened to the Attorney-General. I cannot but follow him. He is the authority in government law.

    “I cannot but follow him in commending this bill and requesting its swift passage to the benefit of the judiciary in particular and Nigerians in general.” 

    The President of the NBA, Yakubu Maikyau, said the proposed increase would help strengthen the independence of the judiciary.

  • RMAFC, JAMB pioneers computer-based staff promotion exams

    RMAFC, JAMB pioneers computer-based staff promotion exams

    The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has modernised its human resource practices by conducting the first-ever computer-based promotion exams for its staff.

    This innovative approach which was implemented in collaboration with the Joint Admissions and Matriculation Board (JAMB), aims to ensure a transparent and efficient assessment process.

    The exams were conducted on Thursday at the JAMB Professional Test Centre in Bwari, Abuja, for officers on grade levels 14, 15, and 16 seeking promotion to the next higher levels. 

    Ntufam Eyo Whiley, Commissioner representing Cross River state and chairman of the RMAFC’s Personnel Matters Committee, explained the rationale behind the computer-based testing (CBT).

    He stated that “the essence of the CBT exams was to test the staff’s ability to discharge their duties in light of the organisation’s sensitive role.” 

    Read Also: N7.3trn accrued to Federation Account in H2 of 2023, says RMAFC

    The RMAFC plays a critical role in “revenue monitoring, evaluation, and implementation of policies.”  Therefore, ensuring staff competence is essential.

    Nwaze Joseph Okechukwu, Secretary to the Board of the Commission, expressed satisfaction with the exercise and highlighted the role of the Commission’s current Chairman, Mr. Muhammed Bello Shehu. 

    He stated that the “decision to replace the orthodox method of conducting promotion exams” with a CBT format is an initiative aimed at “moving the organisation to greater heights.” 

    This shift towards computer-based testing reflects a commitment to modernization and transparency within the RMAFC.

    Funmilola Fauziya P-Usman, acting director of the ICT Department at JAMB, commended the collaboration with the RMAFC. 

    She stated: “Exam delivery is our business, and that’s what we’ve been doing for years.” 

    JAMB’s expertise in conducting standardized tests proved valuable in ensuring the smooth execution of the RMAFC’s promotion exams.

    Bashiru Aliyu, a participant, expressed his “pride” in taking part in the computer-based exam and his confidence in his performance.  

    Brenda Happiness, another participant, commended the “pleasant experience” and expressed her support for the continued use of CBT exams for future promotions.

  • ‘N7.3tr accrued to Fed Account in H2 of 2023’

    ‘N7.3tr accrued to Fed Account in H2 of 2023’

    The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has revealed that a total sum of N7,314,129,314,386.08 ($17.9 billion) accrued into the Federation Account between July and December 2023. This figure is higher than the N5,244,037,636,561.60 ($12.8 billion) realized in the first half of the year.

    In a press statement signed by RMAFC Chairman, Mr. Mohammed Shehu, the Commission disclosed that the figures were captured in the monthly report to the Federation Account Allocation Committee (FAAC) by the Central Bank of Nigeria (CBN) in its “CBN Federation Account Component Statement”.

    Out of the total gross revenue inflows, N1,692,591,243,111.06 ($4.2 billion) was transferred to the Exchange Gain Differential Account, leaving a balance of N5,475,345,228,675.47 ($13.4 billion) for distribution.

    From the said amount, N3,267,312,106,993.25 ($8 billion) was deducted as approved statutory deductions by the Office of the Accountant General of the Federation (OAGF), resulting in a net balance of N2,208,033,121,682.22 ($5.4 billion) for distribution to the three tiers of government.

    According to Shehu, of the N3.267 trillion statutory deductions, N2.251 trillion ($5.5 billion) was transferred to the Non-Oil Excess Account as savings, leaving a net statutory deduction of N1.016 trillion ($2.5 billion) with further augmentations for sharing among the three tiers of government from some “reserve accounts” held by the Federal Ministry of Finance/OAGF.

    Read Also; JAMB: 577 blind candidates to write 2024 UTME

    The statement also revealed that during the July to December 2023 period, a net sum of N4,000,616,207,152.95 ($9.8 billion) was shared among the three tiers of government. This amount is higher than the N3,069,594,889,669.74 ($7.5 billion) shared in the first half of the year.

    Shehu emphasised that the statutory deduction in the second half of the year constituted 44.12 per cent of the total gross inflow into the Federation Account for the six-month period, which was higher than the 42.31% deductions made in the first half, inclusive of the transfer to the Non-Oil Excess Account.

    With regards to remittances by Revenue Generating Agencies (RGAs), the statement disclosed that the Nigerian National Petroleum Company Limited (NNPCL) remitted N874,645,145,704.30 ($2.1 billion) in the second half of the year, compared to zero remittance in the first half.

    Similarly, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) remitted N1,568,961,616,920.99 ($3.8 billion), while the Federal Inland Revenue Service (FIRS) remitted N3,653,693,895,023.45 ($8.9 billion). The Nigeria Customs Service (NCS) contributed N1,216,828,656,737.34 ($3 billion) to the Federation Account.

    The significant increase in revenue generation and remittances by these agencies highlights the progress made in boosting national income and supports the government’s efforts to improve the country’s fiscal position.

    In a related development, the RMAFC Chairman has pushed for a Performance-Based cost of collection for revenue agencies.

    Shehu is advocating for a system that ties the cost of collection received by revenue-generating agencies (RGAs) to their actual revenue performance.

    This proposal, outlined by the RMAFC Chairman aims to incentivize RGAs to be more proactive in generating revenue for the Federation Account. 

    Shehu explained the rationale behind the proposal. “We strongly advocate that payment of the cost of collection to RGAs should be tied to revenue performance,” he stated. 

    Under this system, each agency would receive a cost of collection that reflects the amount of revenue generated compared to their targets set in the Appropriation Act.

    The Federal Inland Revenue Service (FIRS) received a total of N118.7 billion for Value Added Tax (VAT) and Petroleum Profit Tax and Company Income Tax (PPT/CIT) collections, while the Nigeria Customs Service (NCS) received N85.2 billion. 

    The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) received N62.8 billion, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) received a refund of N108.3 billion related to gas flared penalties.

    The RMAFC commended the performances by some RGAs. The FIRS was praised for exceeding revenue targets in peak filing months (June, July, August 2023) while achieving average performance in other months.  The Ministry of Mines and Steel Development was also lauded for exceeding targets in most months, with a particularly impressive 496 percent performance in July 2023.

    However, the report noted some shortcomings. NUPRC and NCS surpassed targets in only a few months, while underperforming in others. The RMAFC urged these agencies to improve consistency in achieving revenue targets.

    The report highlighted a positive trend in VAT collection. The second half of 2023 saw a significant increase, generating N2.15 trillion compared to N1.49 trillion in the first half. This represents a growth of 30.58 per cent.  The Electronic Money Transfer Levy (EMTL) witnessed a marginal rise in the second half, with N86.8 billion collected compared to N83.0 billion in the first half.

    The RMAFC expressed concern about the practice of some RGAs, including the NNPCL, financing “FGN Priority Projects” by withholding funds from the Federation Account. The commission emphasized that all NNPCL Joint Venture Profit Tax (PPT) should be channeled through the FIRS and deposited into the Federation Account.

    Shehu underscored the importance of boosting national revenue. “At the moment,” he declared, “the Nigerian economy requires some pragmatic measures to bring it back on track.”

    The RMAFC pledged its continued commitment to reviewing Federation Account activities and advocated for measures to curb revenue leakages.

    The commission also expressed support for President Bola Ahmed Tinubu’s Renewed Hope Agenda and urged collaboration to achieve sustainable economic growth. 

    By implementing performance-based cost collection and addressing leakages, the RMAFC hopes to empower RGAs and bolster national revenue, paving the way for a more robust Nigerian economy.

  • N7.3trn accrued to Federation Account in H2 of 2023, says RMAFC

    N7.3trn accrued to Federation Account in H2 of 2023, says RMAFC

    The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has revealed that a total sum of N7,314,129,314,386.08 ($17.9 billion) accrued into the Federation Account between July and December 2023.

    This figure is higher than the N5,244,037,636,561.60 ($12.8 billion) realized in the first half of the year.

    In a press statement signed by RMAFC chairman, Mohammed Bello Shehu, the Commission disclosed that the figures were captured in the monthly report to the Federation Account Allocation Committee (FAAC) by the Central Bank of Nigeria (CBN) in its “CBN Federation Account Component Statement”.

    Out of the total gross revenue inflows, N1,692,591,243,111.06 ($4.2 billion) was transferred to the Exchange Gain Differential Account, leaving a balance of N5,475,345,228,675.47 ($13.4 billion) for distribution.

    From the said amount, N3,267,312,106,993.25 ($8 billion) was deducted as approved statutory deductions by the Office of the Accountant General of the Federation (OAGF), resulting in a net balance of N2,208,033,121,682.22 ($5.4 billion) for distribution to the three tiers of government.

    According to Shehu, of the N3.267 trillion statutory deductions, N2.251 trillion ($5.5 billion) was transferred to the Non-Oil Excess Account as savings, leaving a net statutory deduction of N1.016 trillion ($2.5 billion) with further augmentations for sharing among the three tiers of government from some “reserve accounts” held by the Federal Ministry of Finance/OAGF.

    The statement also revealed that during the July to December 2023 period, a net sum of N4,000,616,207,152.95 ($9.8 billion) was shared among the three tiers of government. This amount is higher than the N3,069,594,889,669.74 ($7.5 billion) shared in the first half of the year.

    Shehu emphasized that the statutory deduction in the second half of the year constituted 44.12% of the total gross inflow into the Federation Account for the six-month period, which was higher than the 42.31% deductions made in the first half, inclusive of the transfer to the Non-Oil Excess Account.

    With regards to remittances by Revenue Generating Agencies (RGAs), the statement disclosed that the Nigerian National Petroleum Company Limited (NNPCL) remitted N874,645,145,704.30 ($2.1 billion) in the second half of the year, compared to zero remittance in the first half.

    Similarly, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) remitted N1,568,961,616,920.99 ($3.8 billion), while the Federal Inland Revenue Service (FIRS) remitted N3,653,693,895,023.45 ($8.9 billion). The Nigeria Customs Service (NCS) contributed N1,216,828,656,737.34 ($3 billion) to the Federation Account.

    The significant increase in revenue generation and remittances by these agencies highlights the progress made in boosting national income and supports the government’s efforts to improve the country’s fiscal position.

    In a related development, the RMAFC Chairman has pushed for a Performance-Based cost of collection for revenue agencies.

    Mohammed Bello Shehu is advocating for a system that ties the cost of collection received by revenue-generating agencies (RGAs) to their actual revenue performance.

    This proposal, outlined by the RMAFC Chairman aims to incentivize RGAs to be more proactive in generating revenue for the Federation Account. 

    Shehu explained the rationale behind the proposal.

    “We strongly advocate that payment of the cost of collection to RGAs should be tied to revenue performance,” he stated. 

    Under this system, each agency would receive a cost of collection that reflects the amount of revenue generated compared to the targets set in the Appropriation Act.

    The second press release detailed the cost of a collection distributed to various RGAs. The Federal Inland Revenue Service (FIRS) received a total of N118.7 billion for Value Added Tax (VAT) and Petroleum Profit Tax and Company Income Tax (PPT/CIT) collections, while the Nigeria Customs Service (NCS) received N85.2 billion. 

    The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) received N62.8 billion, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) received a refund of N108.3 billion related to gas flared penalties.

    The RMAFC commended the performances of some RGAs. The FIRS was praised for exceeding revenue targets in peak filing months (June, July, and August 2023) while achieving average performance in other months.  The Ministry of Mines and Steel Development was also lauded for exceeding targets in most months, with a particularly impressive 496 percent performance in July 2023.

    However, the report noted some shortcomings. NUPRC and NCS surpassed targets in only a few months while underperforming in others. The RMAFC urged these agencies to improve consistency in achieving revenue targets.

    The report highlighted a positive trend in VAT collection. The second half of 2023 saw a significant increase, generating N2.15 trillion compared to N1.49 trillion in the first half. This represents a growth of 30.58 percent.

    The Electronic Money Transfer Levy (EMTL) witnessed a marginal rise in the second half, with N86.8 billion collected compared to N83.0 billion in the first half.

    The RMAFC expressed concern about the practice of some RGAs, including the NNPCL, financing “FGN Priority Projects” by withholding funds from the Federation Account. The commission emphasized that all NNPCL Joint Venture Profit Tax (PPT) should be channeled through the FIRS and deposited into the Federation Account.

    Read Also: RMAFC: high cost of governance stifling growth

    Shehu underscored the importance of boosting national revenue. “At the moment,” he declared, “the Nigerian economy requires some pragmatic measures to bring it back on track.”

    The RMAFC pledged its continued commitment to reviewing Federation Account activities and advocated for measures to curb revenue leakages.

    The commission also expressed support for President Bola Ahmed Tinubu’s Renewed Hope Agenda and urged collaboration to achieve sustainable economic growth. 

    By implementing performance-based cost collection and addressing leakages, the RMAFC hopes to empower RGAs and bolster national revenue, paving the way for a more robust Nigerian economy.

  • RMAFC begins review of new revenue formula

    RMAFC begins review of new revenue formula

    • Agency to address political, public office holders’ remuneration in phases

    The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has begun work on a new revenue formula.

    The commission said the remuneration of political and public office holders would be reviewed in batches.

    RMAFC Chairman Muhammad Shehu announced this while speaking with The Nation yesterday in Abuja.

    He said: “We are working on the new one altogether. The last time it was submitted, nothing was done. But we are going to work it out. It is our hope that may be before the end of the year, we will be able to finalise it.”

    A member of the RMAFC, who also spoke in confidence with our correspondent, said: “Consultations are ongoing to feel the pulse of Nigerians on what they expect of the new revenue formula.”

    The current revenue formula is shared in accordance with the vertical formula, as determined by RMAFC and approved by the National Assembly.

    The formula allocates 52.68 per cent, 26.72 per cent, and 20.60 per cent to the federal, state and local governments.

    Read Also: RMAFC: high cost of governance stifling growth

    There are two types of revenue allocation in Nigeria: vertical allocation, which is the sharing of revenue among the three tiers of government; and horizontal allocation, which is the allocation of revenue between state governments and among local governments within states.

    The formula, which has been enmeshed in controversy since 1946, is currently pinned on five principles: (One) equality of states, 40 per cent; (Two) population, 30 per cent; (Three) landmass/terrain, 10 per cent; (Four) internal revenue effort, 10 per cent; (Five) social development effort, 10 per cent.

    The immediate administration of President Muhammadu Buhari agreed to receive less federation revenue with a proposal to collect 50.65 per cent, down from the present 52.68 per cent.

    Former Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, said the allocations to state governments should also be reviewed downwards 25.62 per cent, while local government allocations should be increased to 23.73 per cent and Derivation Allocation retained at 13 per cent.

    Mustapha had argued that a lot of the resources allocated to the Federal Government were spent on providing services that were the responsibilities of state governments.

    Commenting on how the proposed new remuneration of judges was achieved, Shehu said: “The remuneration of the judges is still the function of the Revenue Mobilisation, according to Section 84 of the Constitution. But before it can become a law, it has to become an Act.

    “Before, in the 2008 Act, everything was together: the judiciary, the legislature, and others. But what we did was that we separated. We have done the Judiciary and we have agreed. They made recommendations that we have looked at. We came up with our own, which is the one the President agreed with.”

  • RMAFC: high cost of governance stifling growth

    RMAFC: high cost of governance stifling growth

    • Commission backs Tinubu for adopting Oronsanye Report

    The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has warned the Federal Government about the high cost of governance in the country.

    The commission attributed the high cost of governance to a number of factors, including the expensive presidential system, a bloated bureaucracy with overlapping ministries, and widespread corruption.

    In a statement yesterday in Abuja, RMAFC Chairman Mohammed Bello Shehu said these issues drain public resources and hinder economic development.

    The commission boss noted that the excessive spending on administration far outpaces investments in crucial areas, like infrastructure and industrial expansion.

    This imbalance, he added, hurts the real sectors of the economy, ultimately impacting the lives of everyday Nigerians.

    Shehu highlighted several other contributors to the high cost of governance.

    These, he said, include inefficient public service delivery due to poor infrastructure; high security costs arising from insurgencies, kidnappings, and other security threats; excessive payouts in salaries, severance packages, and allowances; extravagant spending by government officials; crippling burden of domestic and foreign debts as well as weak institutions that struggle to enforce regulations.

    But the RMAFC chairman expressed the hope that a positive change would soon appear on the horizon.

    He hailed the Tinubu administration for embracing the Oronsanye Report, a blueprint for prudent streamlining of government agencies.

    Read Also: No Nigerian should be in captivity, Speaker Abbas tells security agencies

    According to him, the report’s full implementation can significantly reduce administrative costs and free up funds for vital infrastructure projects that benefit Nigerians directly.

    Shehu also lauded Federal Government’s current economic and monetary reforms, saying the focus on maintaining stable prices and exchange rates is essential for sustainable economic growth and protecting Nigerians’ livelihoods.

    The policies, the RMAFC boss said, would help in curbing inflation’s damaging effects.

    Price stability, he stressed, would enable Nigerians to plan their finances more effectively and protect the purchasing power of the naira.

    A stable exchange rate, Shehu added, fosters investor confidence and minimises uncertainties in the foreign exchange market.

    He said these factors, in turn, attract foreign investment, improve financial inclusion, and create a more predictable environment for businesses.

  • High cost of governance stifling Nigeria’s growth, RMAFC warns

    High cost of governance stifling Nigeria’s growth, RMAFC warns

    • …backs Tinubu for adopting Oronsanye Report

    The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has issued a strong warning about the high cost of governance in Nigeria.

    It attributed the high cost of governance to several factors, including the expensive presidential system, a bloated bureaucracy with overlapping ministries, and widespread corruption.

    RMAFC chairman, Mohammed Bello Shehu, in a statement issued in Abuja on Sunday, March 10, said the issues are draining public resources and hindering economic development.

    He pointed out that the excessive spending on administration far outpaces investments in crucial areas like infrastructure and industrial expansion.

    According to him, the imbalance hurts the real sectors of the economy, ultimately impacting the lives of everyday Nigerians.

    Shehu highlighted several other contributors to the high cost of governance to include inefficient public service delivery due to poor infrastructure; high security costs arising from insurgencies, kidnappings, and other security threats; excessive payouts in salaries, severance packages, and allowances; Extravagant spending by government officials; crippling burden of domestic and foreign debt and weak institutions that struggle to enforce regulations.

    The RMAFC chairman expressed hope for positive change.

    He commended the Tinubu administration for embracing the Oronsanye Report, a blueprint for streamlining government agencies.

    He believes the report’s full implementation can significantly reduce administrative costs, freeing up funds for vital infrastructure projects that benefit Nigerians directly.

    Shehu also applauded the government’s current economic and monetary reforms. He praised the focus on maintaining stable prices and exchange rates, which he sees as essential for sustainable economic growth and protecting Nigerians’ livelihoods.

    These policies, he argues, will help curb inflation’s damaging effects.

    Read Also: BREAKING: Tinubu swears in Akawor as Commissioner of the RMAFC

    Price stability allows Nigerians to plan their finances more effectively and protects the purchasing power of the Naira.

    A stable exchange rate fosters investor confidence and minimizes uncertainties in the foreign exchange market. This, in turn, attracts foreign investment, improves financial inclusion, and creates a more predictable environment for businesses.

    The RMAFC also commended the ongoing reforms in the Bureau De Change (BDC) market. These reforms aim to establish transparent operations in line with international best practices. This will increase trust among businesses, regulators, and the public. A well-organized BDC market with clear procedures plays a crucial role in maintaining a credible foreign exchange system.

    The RMAFC chairman urged the government to strengthen cooperation between monetary and fiscal authorities. He believes that by working together and implementing the Oronsaye Report alongside ongoing structural reforms, Nigeria can achieve a more stable exchange rate, control inflation, and create a more business-friendly environment for all.

    Shehu further advised that the committee overseeing the Oronsaye Report’s implementation consider agencies established since the report’s initial publication in 2014 to ensure a comprehensive overhaul that maximizes savings for infrastructure development.

    He called on the federal government and states to use the increased allocations from the Federation Accounts Allocation Committee (FAAC) wisely.

    “These additional funds should be used to provide adequate support to the Nigerian people, particularly those struggling with the effects of subsidy removal,” he said.