October 16, 2021


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Elias Mbam and review of revenue allocation formula (1)

President Barack Obama’s mantra for Africa to build strong institutions to ensure competitiveness with the rest of the civilized world got one of its strongest adherents in the person of Engineer Elias Nwalem Mbam, chairman of Nigeria’s key agency of government, the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), who, since his appointment to that office, has strengthened it to one of the most credible and powerful governmental institutions west of the Sahara.

Some analysts have since regarded Engineer Mbam’s reappointment into that sensitive office as one of the smartest moves that the Buhari Administration has made since coming to power.  The man possesses unimpeachable integrity, and is a team builder who readily commands respect.

The RMAFC has its functions well spelt out in Paragraph 32 (a-e) of Part 1 to the Third Schedule of the 1999 constitution of the Federal Republic of Nigeria (as amended), and these powers include, but not limited to monitoring accruals to and disbursement of revenue from the Federation Account, review from time to time, the revenue allocation formulae 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.

Other functions include advising federal and state governments on fiscal efficiency and methods by which their revenue can be increased, and determining the renumeration appropriate for political office holders including the president, vice president, governors, senators, including all holders of offices mentioned in sections 84 and 124 of the 1999 constitution, etc.

Clearly flowing from these indispensable powers, any government worth the name cannot afford to toy with the idea of appointing a non-credible or half-baked individual as head of RMAFC, even more so in a country where revenue allocation has always been an issue with potential to make or mar the federal republic. And it is in that context that we hail the government of the day for considering Engineer Mbam fully worthy of reappointment to head this agency that has the potential to take Nigeria to higher realms.

In his classic, the 48 Laws of Power, Robert Greene makes a case for mastering the art of timing. It is in that context that this column salutes the RMAFC under Engineer Mbam for finding it worthy to review the subsisting revenue allocation formula to get it in tune with practical realities of our everyday life as a nation. The ongoing stakeholder engagement by the RMAFC towards that important purpose is a welcome development. It is hoped that, at the end of the day, tension arising from perceptions of injustice from some quarters would be fully addressed in a way and manner that suggests no victor, no vanquished.

The last time a general review of the revenue allocation formula was carried out was in 1992, 28 years ago. Since then, the political structure of Nigeria has changed with the creation of six additional states in 1996 by the Abacha Administration, which brought the number of states to the present 36. In like manner, the number of local governments was also increased from 589 to 774.

Some of the thorny issues that have always been up for discussion and at times controversy, include funding of primary education and primary health care, coupled with ecological changes like global warming, desertification, flooding and population explosion. Other matters include the key issue of inadequate or decaying infrastructure and heightened, widespread security challenges pervading many parts of the country.

The recent controversy over powers to collect value added tax, between states and the Federal Government has laid bare the inability of the current vertical formula to adequately address the apparent mismatch between statutorily assigned functions and tax powers of each of the three levels of government.

As Engineer Mbam leads the RMAFC in review of the subsisting revenue allocation formula for the country, one of the contentious issues that must be fully addressed is the power or lack of it, of governors to appropriate statutory allocation of all local governments within their states, using the very dubious joint account as a pretext.

We have argued a countless number of times in this column that, for this country to fully stem the tide of insecurity and guard against violent groups springing up in future, the stranglehold that governors have over funds accruing to local governments must be fully released.

That third tier of government is closest to the grassroots, and it is the only one that makes it easier for persons from poor backgrounds to rise to leadership positions, becoming chairmen or councillors. It gives hope to the hopeless, and projects of immediate concern to locals get executed by the local government administrators easily, with closer supervision.

The multiplier effect, in terms of contracts and other opportunities, is such that the economy of our hinterlands gets buoyed up, with labourers, engineers, bricklayers, etc, drawn from the localities where projects are cited. It is very much unlike the present arrangement where just one person, the governor, decides projects for the locals, and even at that, leaving many of such projects not executed or poorly done, to the detriment of the people. There are in fact governors accused of pocketing the funds without discharging even the most basic responsibilities saddled constitutionally for the local governments.

At the ongoing stakeholder engagement being carried out by RMAFC in Asaba, Delta State, Governor Ifeanyi Okowa has pointed out the need for any reviewed formula not to necessarily pass through the President of the country, as presently provided in the Constitution. I am sure the well-respected and diligent governor was making a general statement, not being particular about the current government at the centre.

Indeed, there are people who also believe any future appointment of chairman of RMAFC should not be made by the President, but the National Assembly. But with all due respect to subscribers of these points of view, and given our experience as a country, it would seem to me it is rather hollow, in the sense that, in Nigeria, governors are the ones in real terms controlling most members of the National Assembly from their respective states. And what that means is that, anytime such a vacancy exists, we may not be able to appoint a chairman of the RMAFC, as various shades of interest will make the task almost impossible.

                (To be concluded)

The post Elias Mbam and review of revenue allocation formula (1) appeared first on The Sun Nigeria.

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