Current revenue allocation formula is legal, says RMAFC

The current allocation formula for the three tiers of governments as well as other sundry allocation modules have the backing of an extant law, passed by the National Assembly, the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), said on Monday.

The commission was reacting to a story published by the Daily Trust, where it was reported that some states and local governments concoct their own revenue allocation formulae, rendering the illegality of the whole allocation process, because the President never submitted it to the National Assembly.

However, spokesperson of the commission, Ibrahim Mohammed, said in a statement that there was the need to set the record straight and accounted on how successive failures of the National Assembly members to pass the reviewed documents led to the present logjam.

He said it could be “recalled that the first Revenue Allocation Formula duly passed by the NASS was in 1982 during the Second Republic of former President Shehu Shagari.

“After the military take-over, the Act was amended by Decree No 106 of 1992, which continued to operate up to 1999. It is instructive to note that with the return of democratic rule in 1999, all laws were considered as existing laws as provided for by Section 313 of the 1999 Constitution and therefore Acts of National Assembly, which apply to the extent that they conform to the provisions of the Constitution.

“Following the Supreme Court ruling in AGF vs Abia and 36 others, which voided some of the provisions of CAP 16 as (amended), Mr. President as the relevant authority invoked his power under the provision of section 315 Sub Sections 1 and 4 to issue the Modification Order to bring the voided provisions into conformity with the provisions of the 1999 constitution.”

Mohammed further said the President and the Governors had met and resolved some grey areas in the provision of the Modification Order, which informed the implementation directives released by the Minister of Finance on 15th January, 2004, the formula currently in operation.

“Furthermore, the Commission had in August, 2001 reviewed the Revenue Allocation Formula and submitted its Report and recommendations to President Olusegun Obasanjo. The advice and recommendations were promptly forwarded to the 4th National Assembly for deliberations. 

“However, the Commission had cause to withdraw its recommendations to make some necessary adjustments because the Supreme Court Judgment of 5th April, 2002 had actually affected some of the recommendations as proposed by the Commission in its 2001 Report.

“After the review, the Report was subsequently re-submitted to President Obasanjo in December, 2002 which was also forwarded to the 4th National Assembly. Unfortunately, the 4th National assembly could not conclude deliberations on the matter up to the end of the first tenure of President Obasanjo in May, 2003,” he said.

He added that “Again, the 5th National Assembly could not conclude deliberations on that sensitive matter up to the end of the Obasanjo administration in May, 2007.

"When the 6th National Assembly came, the Commission was informed that all bills including that of the Revenue Allocation Formula not passed by the 5th National Assembly have elapsed and therefore, should be re-submitted.”

The development made the RMAFC to prepare another revenue Allocation Formula Report in December 2013, which was also communicated to former President, Goodluck Jonathan in January, 2014.

“However, the Commission was not granted audience to submit its recommendations to President Jonathan up to the end of his tenure in May, 2015. The current administration has also been informed of this development,” he said.