Wike Seeks Upward Review Of Revenue Allocation To States

Rivers State Governor, Chief Nyesom Wike, has urged the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) to reduce revenue accruable to the Federal Government from the federation account to 40percent, and increase those of states and local government councils to 40 and 20per cent, respectively.
The governor said the current revenue sharing formula that allows the Federal Government to take 52.68percent, and the states and local government councils to take 26.72percent and 20.60percent, respectively was unacceptable.
Wike made the assertion when members of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) led by its Chairman, Chief Elisa Mbam paid him a courtesy call at the Government House, Port Harcourt, last Wednesday.
The governor observed that despite the changes that the country had been through in the past 29 years, it was regrettable that it has continued to use the 1992 revenue formula prescribed by the military.
Wike faulted the use of 1992 population figure, public school enrolment and public hospital bed spaces, land mass as formula for allocation of revenue.
He argued that a more equitable formula should also take into cognisance current population figure as well enrolment in private schools and number of bed spaces in private hospitals.
“Using the same formular of 1992 as a basis for revenue allocation in this country is so unfortunate. And to worsen the situation under a democratic dispensation, since 1999 till now, our country has not reviewed the revenue allocation formula.”
Wike urged the commission to reduce the revenue accruable to the Federal Government to 40percent because it has abdicated its responsibility of providing security and basic infrastructure to the federating states.
“You people should reduce the percentage of the Federal Government. Give them 40percent. Give the states 40percent, give local government 20percent. In that way, most of the responsibilities that belong to the Federal Government will now be taken away and given to the states.”
He noted that the current centralised federal system in operation in Nigeria has made it impossible for most states to look inwards and harness their potentials.
According to him, the country’s vast resources, will continue to amount to nothing if the states are not allowed to use their resources to drive and determine their development.
“We cannot talk about operating a federal system without having a fiscal federalism. It is practically impossible. Let’s cancel that word federalism, we are operating a unitary system. But you cannot be saying we are operating a federal system, at the same time operating a centralised system.”
The governor expressed reservation about the willingness of the present Federal Government to implement the recommendations of the revenue mobilisation and fiscal commission, which is currently holding public hearing on new revenue sharing formula across the six geopolitical zones.
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Chairman, Chief Elisa Mbam, explained that one of the major mandate of the commission is to review from time to time the revenue allocation formula to conform with changing realities.
Mbam explained that it has become necessary to review the current formula because the last review was done in 1992.
He observed that there has been a lot of changes in the political and socio-economic situation of the country.
According to him, the data that will be collated from the states will help the commission to arrive at a fair revenue formula.
“We believe that what we will get from states will help us to come up with a revenue formula that will be fair, just and equitable.”
He commended Wike for his developmental stride, and urged other states to emulate Rivers State.
Later during the South-South Zonal Public Hearing, the State Chief Executive, Chief Nyesom Wike, restated that the present revenue allocation formula cannot meet the present realities of our dear nation and the socio-economic development of all levels of Government.
Wike made this assertion during the South–South Zonal Public Hearing on the Review of the Current Revenue Allocation Formula at Hotel Presidential in Port Harcourt, yesterday.
Speaking through his Deputy, Dr. Ipalibo Harry Banigo, Wike said “it is very clear to anyone who cares to know that the Federal Government is overburdened and overloaded and cannot efficiently deliver a federal system as we envisage it in our Federation”.
According to the governor, the states needs to be encouraged to be able to build up their own potentials, adding that It was all part of encouraging inclusiveness and encouraging a sense of belonging.
The governor further said “in Rivers State, we are building 10 overhead bridges because we envisage the future, it is futuristic, we have a city with so much traffic and these 10 overhead bridges are a must, apart from the infrastructure that is going on in all our communities and 23 local government areas.”
Wike, who noted that bridges, jetties and educational Institutions all fall under the laps of the states, called for the reduction of the allocation of the Federal Government and an increase of the allocation to the states and local governments, stressing that this is what equity is all about.
Wike, who expressed delight that the commission had gone round and done sensitization, collected various data and indices, expressed the hope that all these would not be thrown away at the end of the day, and prayed that the feelings and aspirations of the Nigerians of today would garner their efforts and bring it to fruition.
In his address, the Chairman, Revenue Mobilization Allocation and Fiscal Commission, Engr. Elias Mbam, disclosed that the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) by virtue of Paragraph 32(b) Part 1 of the Third Schedule to the 1999 Constitution of the Federal Republic of Nigeria (As Amended) is empowered “to review from time to time the Revenue Allocation Formula and Principles in operation to ensure conformity with changing realities, provided that any Revenue Formula which had 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”.
According to him, the commission has embarked on the process of reviewing the existing Vertical Revenue Allocation Formula, adding that the review became necessary because a lot of socio- economic and political changes have taken place since the last review in 1992.