NOSA EGHAGHA
The House of Representatives has
mandated its Committee on Finance to investigate accuracy of data provided to Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), by the 36 states and 774 Local Government Areas of the federation used to compute the indices utilised for vertical and horizontal revenue allocation, including 13 per cent derivation from 2012 to 2021 and the current nature of maintenance of the data.
The Committee is to also probe the indices computed for each of the 36 states and 774 Local Government Areas of the federation by RMAFC from 2012 to 2021 transmitted to the Accountant General of the Federation for revenue disbursement to the states from 2012 to 2021, including the parameters utilised to compute the indices.
The House further asked the panel to investigate the indices utilised by the Accountant General of the Federation for revenue disbursement to the 36 states and 774 Local Government Areas of the federation from 2012 to 2021 including details of the actual amounts disbursed to each state for this period.
The is to equally ascertain the actual amounts disbursed to the 36 states and 774 Local Government Areas of the federation from 2012 to 2021 from the Central Bank of Nigeria (CBN), and the Federal Ministry of Finance.
These resolutions were sequel to the adoption of a motion moved by Mark Gbillah at plenary on Tuesday.
Moving the motion, Gbillah said paragraph 32 of Part 1 of the Third Schedule to the Constitution of the Federal Republic of Nigeria, 1999 (as amended), and Section 6 of the RMAFC, 2004 outline the powers of the commission which amongst others include “review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities.”
According to him, paragraph 32(b) of Part 1 to the Third Schedule to the 1999 constitution (as amended) further states that “provided that any revenue formula which has been accepted by an Act of 188 the National Assembly shall remain in force for not less than five years from the date of commencement
of the Act.”
The lawmaker said the House is aware that: “in performing its statutory mandate, the RMAFC is responsible for the provision of a horizontal and vertical revenue allocation formula, the collection, verification, maintenance and usage of data utilised for the computation of indices for disbursement of revenue from the federation account with regards to the horizontal and vertical revenue allocation formula and indices for disbursement of 13 per cent derivation funds by the Accountant General of the Federation.
“This data is required to be obtained from the 36 states and 774 Local Government Areas of the federation by RMAFC.
“Worried about Nigeria’s current utilisation of 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 Local Government Areas were created and Nigeria’s population rose from 88 million to over 200 million.
“Also worried that RMAFC’s new proposal to the President in April 2022 for a revenue allocation formula is for vertical revenue allocation alone and is alleged to have utilised the over thirty (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 federation units and which is also alleged to currently being implemented with inaccurate and unverified data from which flawed indices are computed and utilised by the Accountant General for revenue disbursement.
“Also aware that the last time RMAFC claimed to have undertaken a comprehensive review of the vertical and horizontal revenue allocation formula which entailed collection and verification of data from the 36 States and 774 Local Government Areas of the federation was in 2012, which exercise was fraught with speculations about the accuracy and comprehensiveness of the exercise considering allegations that several states were not visited at all because of the lack of RMAFC’s capacity to do so.
“Consequently, there are doubts about the comprehensiveness of the recent exercise embarked upon by RMAFC in 2021 (almost 10 years later) that culminated in the submission of the new revenue allocation formula proposal to the President in April, 2022.
“Concerned that the inability of RMAFC and the Presidency to provide a new and acceptable vertical and horizontal revenue allocation formula for adoption and enactment by the National Assembly at the intervals envisioned by the constitution appears to have resulted in the administration of the Federation Account by the Federal Ministry of Finance (FMF), RMAFC and other Federation Account Allocation Committee (FAAC) members in breach of statutory provisions of Section 162(3)(4)(5) and (7) of the 1999 Constitution (as amended).
“Also concerned about allegations that certain states unduly influence RMAFC and the Accountant General of the Federation to their advantage in the provision and utilisation of data and computation of indices and the utilisation of indices for revenue disbursement respectively and the agitation by several states in the country about being shortchanged in revenue allocation.”
While adopting the motion, the House also mandated the Committee on Finance to investigate: “allocation principles utilised by RMAFC in the proposal of new vertical allocation formula and consider efficacy and suitability of same in line with current and changing realities and the proposed principles for a new horizontal allocation formula.
“Total remittance to the federation account by related agencies of the Federal Government from 2012 to 2021, the “cost of the collection” deducted for the entire period, statutory backing for same and utilisation from 2012 to 2021.
“The violation or otherwise by the Federal Ministry of Finance, CBN and other members of 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.”
