• Thu. Mar 30th, 2023

    Why new revenue allocation formula is delayed – RMAFC

    A new revenue allocation formula being proposed for the country is being delayed by the absence of an amendment to the 1999 Constitution, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has said.

    The Chairman of the Commission, Muhammed Bello Shehu disclosed this on Monday in Abuja at the programme on tooling to enlighten State and Local Government officials on data management and electronic data collection.

    Shehu said since April 2022 RMAFC submitted the proposed revised revenue formula to President Muhammadu Buhari for approval.

    However, the RMAFC Chairman said President Buhari decided to withhold the submission of the draft of the new revenue formula to the National Assembly until the completion of the ongoing review of the 1999 Constitution.

    He said the President said he was awaiting the outcome of the constitution amendment process initiated by the National Assembly.

    After the review exercise, he said the President has assured that he would forward the proposed new revenue formula to the National Assembly for consideration and enactment into law.

    While the country was waiting the vertical revenue formula to be transmitted to the National Assembly by the RMAFC, Shehu said the relevant data would be collected and analyzed for the horizontal revenue formula.

    “We (the Commission) will finalise this by the end of March 2023,” he said.

    Shehu did not disclose details of the review to be carried out until it was transmitted to the National Assembly.

    The RMAFC is empowered by the Constitution to review, from time to time, the country’s revenue allocation formulae and principles in operation to ensure conformity with changing realities in the country’s socio-economic system.

    He, however noted that any formula that has been accepted by an Act of the National Assembly shall remain in force for a period of not less than five years from the date of Commencement of the Act.

    The Revenue Allocation Formulae are categorized into Vertical (involving the revenue sharing arrangement among the three tiers of government in the federation), and Horizontal (the sharing arrangement among States and Local Government Councils, including Federal Capital Territory (FCT).

    Pursuance to the above Constitutional mandate, Shehu said the Commission carried out the review of Vertical Allocation Formula and submitted the recommendations to the President for onward transmission to the National Assembly to legislate and come up with a new Revenue Allocation Formula.

    Last Monday’s tooling programme organised to enlighten the officials of the States and Local Government Councils on the electronic platform for data collection for the review of the current indices used in the horizontal Allocation Formula.

    Earlier, the Chairman of the Indices and Disbursement Committee of the RMAFC, Chris Akomas, said aan attempt was made to review the existing horizontal indices in use in 2018, but could not be implemented due to some observed anomalies.

    He said it was later discovered 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.

    He said RMAFC members agreed that the “Tooling Programme” had become necessary and should be organized to enlighten Stakeholders.
    Under the “Tooling Programme”, States and Local Government Councils officials would be enlightened on data gathering and management.

    The officials, he said, would be trained on the intricacies and technicalities involved in data gathering and management as they relate to the proxies and factors used on the horizontal revenue allocation formula template, ” Akomas said.

    The RMAFC Electronic Data Collection System (RMAFC EDCS) was unveiled during the programme, to enable the Commission migrate efficiently and effectively from the manual/analogue collection of the relevant data to digitalization via an electronic method for the collection and supply of the required information.

    Therefore this “Tooling Programme” will ensure the Commission and the sub-nationals (our Stakeholders) will be on the same page as it concerns data integrity.

    At the end of the programme, he said participants/delegates would become the Database Establishment Committees of their respective States and Local Government Councils and to transform into Database Management Committees after the establishment of the Database for their States and LGCs respectively.

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