Reps to Investigate Revenue Allocation Data, Says Nigeria Still Uses 1992 Model

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CEM REPORT, FINANCE | The House of Representatives Committee on Finance is to launch an investigation into the legitimacy and structure of data provided to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) by the 36 states and 774 Local Government Areas (LGAs) of the federation that was used to compute the revenue allocation.

The resolution was adopted sequel to the adoption of a motion sponsored by Hon. Mark Gbillah at plenary yesterday.

Gbillah while moving the motion noted that the Commission was responsible for the provision of a horizontal and vertical revenue allocation formula which includes the collection, verification, maintenance and usage of data utilized for the computation of indices for disbursement of revenue from the federation account.

He decried that the country was still utilizing the same vertical and horizontal revenue allocation formula and allocation principles instituted during a military regime three decades ago in 1992 when 6 States and 185 LGAs were created and the population rose from 88 million to over 200 million.

He expressed worry that the formula may not provide for the current national clamour for restructuring, devolution of powers and true federalism amid the obvious changing realities of insecurity and socio-economic hardships across the country.

Additionally, he expressed concerns that RMAFC’s new proposal to the President in April 2022 for a revenue allocation formula was for vertical revenue allocation alone.

He alleged that the proposal utilised the over 30 years old allocation principles and recent data that is inaccurate and unverified with no consideration being made at the moment for the more contentious horizontal allocation formula which determines the actual impact on the lives of Nigerians in the federating units.

The House in adopting the motion further mandated its Committee of Finance to investigate the indices computed for each of the 36 states and 774 LGAs including the parameters utilized to compute the indices by RMAFC from 2012 to 2021.

Furthermore, the committee has been mandated to investigate the indices utilised by the Accountant General of the Federation for revenue disbursement including the 13 percent derivation, to the 36 states and 774 LGAs and the actual amounts disbursed to them from the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance from 2012 to 2021

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The lawmakers would further look into the violation or otherwise by the Federal Ministry of Finance, CBN and other members of the FAAC in the administration of the federation account considering provisions of Section 162(3)(4)(5) and (7) of the 1999 Constitution (as amended) and report back within 8 weeks for further legislative action.

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