Amid the debate on the best way revenue should be shared among the federal, state and local governments, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Elias Mbam, has asked state governors, as well as local government chairmen, to pay more attention to creative ways to generate revenue rather than dissipate energy on how it should be shared.
While speaking on Wednesday as a guest on NTA’s ‘Good Morning Nigeria’ breakfast programme, Mbam berated the states and LGAs for not doing enough to explore the natural resources in their respective domains but always agitating for new revenue allocation formula without a focus on how to increase the ‘cake’.
Recall that recently there have been calls for a review of the current revenue allocation formula which sees more funds allocated to the federal government. According to the current sharing arrangement, the Federal Government gets a total of 52.68 per cent, states get 26.72 per cent while LGs get 20.60 per cent of the country’s monthly revenue allocated by the RMAFC.
Justifying the current revenue sharing formula, the RMAFC boss said landmass, population size and the duties of each of the three tiers of government are important factors be in determining a revenue allocation formula for the country. According to him, the last review was done in 1992 and a new review of the sharing formula has not been possible to date because of the lack of political will.
“We are concerned more in increasing the size of the cake than dissipating our energy in sharing of the cake and the Commission has swung into action on this, it has carried out sensitisation in all the zones, in telling states and local governments to diversify, telling them what they can do, what is available in their areas to diversify because the ultimate way you can increase the revenue is to diversify from oil and gas and we have quite a lot of them.
“There is no state or zone that doesn’t have one form of solid mineral or the other, why can’t we develop our solid mineral sector? Why has agriculture gone back? When we were small, local authorities collect bicycle licenses and things like that but now, the local governments have gone to sleep, they do not do anything, they just come here (Abuja) and collect the cheques, the states are the same thing.
“We should encourage people who generate revenue…The Commission has intensified its activities in sensitisation, asking governments to diversify, and right now, most of our officers are in the field, identifying what is available and what could be done so that it would yield more revenue,” he said.
He, however, expressed optimism that a new revenue allocation formula would be submitted to President Muhammadu Buhari on or before December 31, 2021.
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