•Is the Presidency seeking to wish away the revised revenue formula?
Why has the Presidency hedged so blatantly in receiving the report of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) on the proposed revised national revenue formula? For a report which has been ready since the beginning of the year, it is either that President Goodluck Jonathan has no interest in it or that he does not understand the import of activating such a crucial national document.
According to media reports, after two years of gruelling work which included touring all the zones of the federation and parleying with stakeholders across the country, the RMAFC had concluded work on the revised national revenue allocation since last December and has since conveyed the report to the Federal Executive Council (FEC).
However, the commission has not been able to formally present it to the president even though it is an agency under the Presidency. Unlike the just concluded National Conference which was able to hand in its report to the president almost immediately, RMAFC has been unable to be scheduled for a presentation. A formal presentation is necessary in this part of the world because, without it, a report is practically non-existent.
This has set observers worrying that something must be amiss. The reason is that it is a well known fact that at the heart of Nigeria’s structural and fiscal imbalance is the subsisting lopsided and inequitable federal revenue sharing formula. Though Nigeria supposedly practises federalism in which the federating units are deemed to be equal partners, over the years, the reality has been an aberration in which the centre has become a much too dominant member.
Though the constitution stipulates at least a five-yearly review of the revenue formula, the last exercise was 22 years ago, while two modifications were effected in 2002 and 2004 to align relevant sections of the Federation Account Act to the 1999 constitution. But the constitution, having envisaged the need for justice, equity and fairness in the distribution of the resources accruing from the federation, entrenched the need for periodic review in order to capture any emerging economic and socio-political dynamics that may be thrown up from time to time.
However, it is only understandable that since RMAFC is under the ambit of the Federal Government and the current formula seems quite favourable to it, it would be convenient to keep it so. This must explain why for more than two decades, what ought to be a routine constitutional obligation enshrined to keep the system fit and healthy was jettisoned by successive administrations. The Federal Government being the first tier and wielding some administrative influence over the commission had ensured that this unsavoury status-quo remained.
There is no doubt that the current sharing formula is not sustainable. It allows 52.68 per cent of revenue for the Federal Government; 26.72 per cent to be shared by the 36 states and 20.60 for the 774 local government areas. The Federal Government, with more than half of national revenue – a hefty chunk by all standards – must have grown used to spending big and living large, thus would naturally loath to be pruned down. But the obvious result of this current state of affairs is stunted growth and warped development. One example is the fact that the Federal Government has in the last decade, consistently devoted three quarters of its annual budget to recurrent expenditure whereas the reverse is the case for most states which spend at least 60 per cent of their budget on capital expenditure.
Though we acknowledge that the states control the local governments and this third tier has gotten the short end of the stick, all these only lend credence to the call for urgent review of the current formula. We urge the president to hasten to receive the report of the review of the revenue sharing formula and set all necessary machinery in motion for its speedy implementation in the national interest.
