Review of Revenue Sharing Formula for States, LGs Commences by RMAFC


The Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr. Mohammed Bello Shehu, said the process of reviewing the horizontal revenue allocation formula for sharing of federation account revenues between states and local government councils, in line with the principles, factors, and proxies stated in the constitution has commenced by the commission.

Speaking at the opening of a tooling programme to Addressing officials of the states and local government councils on data generation and management during the opening of a tooling program, Mr. Shehu said the commission has already concluded the vertical revenue allocation formula used in sharing FAAC revenue among the federal, states, and local governments.

He said the report has been submitted to President Muhammadu Buhari for consideration and now awaits onward transmission to the National Assembly for enactment into law.

The workshop was set up to help educate stakeholders on the rollout of the commission’s proprietary software for the collection of data on the indices that will be used for the horizontal revenue allocation formula for the country.

This came as the National President of the Association of Local Governments of Nigeria (ALGON), Hon. Kolade Alabi, said the RMAFC is a key player in rescuing the local councils from going extinct. He said the commission must monitor the direct disbursements to local governments and also see to it that such funds get to the latter’s accounts.

Represented at the occasion by ALGON Deputy National President, Mr. Aminu Maifata, Alabi also called on RMAFC to increase revenue that is allocated to the grassroots.

The Benue State Commissioner for Finance/Chairman, Federation Account Allocation Committee (FAAC), Mr. David Olofu, also called for an increase in revenue allocation to the sub-national governments, saying that states with additional responsibilities should likewise have additional resources to work with.

While tasking the commission to ensure that the vertical review was pursued to a logical conclusion, Olofu noted that with increased funding, the states can better address issues in their jurisdictions on their own, without waiting for a higher intervention.

Shehu, however, said that there was an attempt to review the existing horizontal indices in 2018 but was futile due to some observed anomalies. He said, “In the spirit of fairness, equity, and justice, which is the hallmark of the commission, a sensitisation and advocacy exercise to the 36 States of the Federation and the FCT to explain the reasons why the 2018 exercise could not be implemented, was carried out from September 1 to October 6, 2020.

“It was in the course of the exercise that stakeholders observed that one of the reasons for the anomalies was the lack of proper understanding of the commission’s requirements on credible data generation and management.

“Consequently, the issue was discussed at the RMAFC plenary where members agreed that the tooling programme was necessary and should be organised to enlighten stakeholders. The need for the programme was also discussed and agreed at the Federation Allocation Account Committee (FAAC) plenary.”

The RMAFC boss concluded by saying that the officials will be trained on the intricacies and technicalities involved in data gathering and management used the horizontal revenue allocation formula template to make data access for the purpose of the horizontal formula review easy and seamless.












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