Economic Confidential, August 2008

EDITORIAL SUITE

Revenue Sharing Formula as Nigeria’s Albatross

The proposed Revenue Sharing Formula by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), presently before the National Assembly (NASS), is of slight difference from the percentage shared by the three tiers of government over the years.

Different reasons have been adduced in the past on why the states and local governments ought to be allocated more funds than the federal government. But going by RMAFC’s recommendation of 53.69%, 31.10% and 15. 21% for the F.G, States and L.Gs respectively, nothing have changed.

However, the agitation to what accrues to States and L.Gs appears not to be sonorous as it where; or the argument on the affirmative have completely dwindled, if at all. What is baffling in the RMAFC’s recommended sharing formula is the silence and lack of meticulous discourse over the issue in the polity than the figures of percentages involved.

The public interests may be reawaken when the NASS ratifies the new sharing formula into law. But the present reaction of silence is a worrisome development, than if the garrulous Nigerian nature on national issues was engaged in a debate which most often is rigorous, but lacking the objectivity of proffering solution to a problem.

Again, the apparent lack of interest may not be unconnected with the financial rape perpetrated by government officials in the last 8 years of the former administration.

A betrayal orchestrated in full glare by the former governors and L.G chairmen especially in the Niger Delta region where their monthly allocation is quite sizable. The Economic and Financial Crimes Commission (EFCC), Transparency International and other non-governmental Organizations (NGOs) have repeatedly claimed that billions of dollars was stolen from treasuries of the oil producing states within the aforementioned period.

As much as the onus of proof lies with the accuser, the lack of infrastructural development in Rivers State, the Alamiegsegha’s saga and James Ibori’s continuous battle with EFCC are sort of “Crystal ball” gazers into the fiscal rascality that went on in the eight years of Obasanjo’s rule.

Rivers, Bayelsa, Delta and Akwa Ibom States have the highest monthly allocation from the Federation Account. Using the current disbursement of June and July of 2008 as a glimpse to the whopping sums of money that accrues to these states with no or slight changes from that of the past administration; provides an insight to the grievousness of the perfidy committed and in most cases still ongoing.

In the months of June and July 2008, Rivers State collected a total of N45.9bn, Akwa Ibom N33bn, Delta N23.7bn and Bayelsa N20.9bn. In comparison, the states of Kano , Katsina, Jigawa and Niger who are the highest earners in the Northern states by the monthly allocations of June and July 2008 got the following amounts accordingly: Kano N19.5bn, Katsina N14.1bn, Niger N12.3bn and Jigawa N12bn.

While the four oil producing states of the Niger Delta got a total monthly allocation of N124.5bn for the months of June and July 2008, their counterparts from the North got a total of N57.9bn in the same period.

Nothing is wrong with this lopsided arrangement which is in line with the derivation principles. What incongruously sticks out as a sore thumb is the Niger delta militants’ angst towards the federal government and oil companies, while turning a blind eye to their leaders who do next to nothing to appropriate their allocations and bring about the desired changes. Why Rivers State for example could not be transformed in Odili’s eight years in government house or Alameigsegha’s financial rascality in Bayelsa State cannot be blamed on the federal government? 

The Niger Delta region ought to be developed in terms of good network of roads, electricity, hospitals, schools, pipe borne water etc. Aso rock sources claimed that the financial profligacy and outright theft by government officials in the Niger Delta region in the past eight years are documented in Interpol and other security agencies. A fact that is currently swaying international apathy towards the Nigerian government and casting aspersions, as to the sincerity of the Niger Delta militants’ agitation for better stakes on oil proceeds.

Further revelations asserted that the recent offer by the British Prime Minister Gordon Brown to President Umaru Musa Yar Adua for assistance to quell the Niger Delta crisis is connected to the Interpol documents making the rounds; which indicts the past Niger Delta leaders of gross financial mismanagement and embezzlement of public funds.

While we may have a reservation on the federal Government’s allocation that is above that of the states and local Governments, sanity most be brought to bear in the way the two tiers of government use their allocations to alleviate the living condition of the people.

The recent indictment of some chairmen of Local Government Councils by the EFCC for corrupt practices is an indication of the fiscal misappropriation going on in the country. While this does not exonerate the federal and other arms of Government of similar acts, it constitutes the larger part of the morass deepening the decay of the nation’s systematic match toward self destruction.

No solution appears to be in the horizon neither is the remedy within the revenue sharing formula. If the federal Government gets the highest percent at the end of it all and the power outage continues, NUT strikes do not abate and the price of food continues to skyrocket, the whole issue is of no consequence to the common man. On the other hand, if the states and local government get lower than the recommended percent by RMAFC, but bring about development in the various communities, the people will rally behind them and rise up with one voice to call for a review of the sharing formula with bias to the two tiers of government.

Thomas Usman Wamba

Managing Editor