By Danladi Al-Hassan
The Federal Government has disclosed that it will set up a committee to review the revenue sharing formula for federal, states and local governments due to current economic realities.
Elias Mbam, Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), at an event in Abuja
“My agenda is to expand the sources of revenue for the federation. I will like to expand the cake that we are sharing so that people will get a reasonable quantity,” he said.
“I intend to do this through diversification in areas outside oil and gas, and that includes solid minerals, agriculture and manufacturing.
“So, we will encourage states and let them know what is available outside oil and gas so they can develop those aspects of the economy to their own benefit.”
The present formula was designed during former President Olusegun Obasanjo’s administration with the Federal Government getting 52.68%, while states get 26.72% and local governments, 20.60%.
Also, 13% of oil and gas federally collected revenue is shared to the oil-producing states as derivation revenue to compensate for ecological disasters arising from oil production.
In 2013, the RMAFC saw the need to review the formula for balanced development of the country, hence it embarked on a nationwide consultation and met with notable figures on the issue.
In December 2014, the commission came out with a proposed new revenue formula but for some reasons, it has not been implemented.