The Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, has over the past few years, tried to produce a fair, evidence-based and generally acceptable new revenue allocation formula for the country. Despite all odds, the Commission has assured that it would produce the much expected formula before the year ends. In this interview with TOLA AKINMUTIMI, the Commission’s Chairman, Mr. Elias Mbam, speaks on the ongoing revenue allocation review exercise and other issues that are intended to improve the efficiency of the nation’s fiscal system.
Could you give an insight into the mandate of the Commission?
The Revenue Mobilisation Allocation and Fiscal Commission is one of the 14 Executive bodies established under the 1999 Constitution of the Federal Republic of Nigeria as amended and its responsibilities include, to monitor accruals for and disbursement into the Federation Account and to review from time to time, the revenue allocation formula and its principles in operation to ensure conformity with changing realities. The Commission also advises the Federal and State Governments on fiscal efficiency and how their revenue can be improved. It is also the duty of the Commission to determine remunerations of political office holders from the local government level to national level, whether appointed or elected and any other duties the Acts of the National Assembly directed. These are basically the responsibilities of the Commission.
Given your experience over the years, how would you describe the political environment in terms of its influence on your efforts to make the Commission fulfil its statutory mandate?
If you look closely at the mandate of the Commission, you will understand that it has enormous responsibilities to Nigeria and Nigerians. Our actions and inactions can cause socio-economic challenges and even affect the unity of this country. We are conscious of the sensitivity in discharging the duties of the Commission accordingly. We don’t allow politicking to interfere in the operations of the Commission as we remain an unbiased umpire, making sure that all our affairs are just and equitable to all and in doing that, we don’t join issues with any tier of government. We remain neutral; we say the fact as it is no matter who is affected.
What are we likely to see in the proposed revenue allocation formula that would make some difference from the old formula in real terms?
Well, as I said earlier that one of our responsibilities in the Commission is to review from time to time the revenue allocation formula of all tiers of government and the principle in operation is to ensure its conformity to changing circumstances. If you reflect on when the last review was done, this was in 1992. The 2004 review was simply to bring the Act in conformity with the Constitution. So, if you look at 1992 till date, you can now imagine the number of years and the changes that have taken place since then. So, there is absolute need to review the formula and in addition, Nigerians have been talking of the need to change and we see it clearly.
Accordingly and in line with our responsibilities, the Commission led the process of the review. We started by carrying out literature review of all past fiscal reviews dating back to pre-independence years. We went further and visited other federations that have similar fiscal systems like Nigeria to know what is happening there and to exchange experiences and learn from their successes Then, we carried out series of review of fiscal matters which included looking at expenditure profiles of the three tiers of governments from 2003 to 2012. We also looked at their budget performance, we looked at their responsibilities and their mandate, we looked at the concurrent and exclusive lists. These are part of the study that will guide us in determining what the minimal requirement of each tier of government is in the discharge of their responsibilities and we ensured that Nigerians were carried along in the entire process. We, I mean every member of the Commission, embarked on sensitization exercise in 774 local government areas in 36 states and FCT. We advertised in the national dallies and electronic media, requesting for memoranda.
We carried out intensive consultations which included our leaders and elder statesmen. So, we have gone round the six geo-political zones and had public hearing in all of them and we have received necessary inputs. We are analyzing the inputs and before the end of the month, we hope to put all these analyses into proper perspective and come up with appropriate recommendations on the new formula. That is how far we have gone.
One of the recommendations that ordinary Nigerians would like to see in the revenue sharing formula is improved revenue allocation to local governments. Would you say this expectation would be met in such a way that sub-national governments can impact positively on the welfare of people at the grassroots?
Well, let me say that the purpose of the review is not necessarily to increase or decrease revenue allocation to any tier of government. The new formula will be derived through a process such that what each tier of government gets will be directly proportional to their responsibilities. So, if you now say that the responsibility of the local government is such that they will get more, so be it. We don’t know yet. The date will speak for itself and the process will show it. I told you we have done the expenditure profiles of each tier of government from 2003 – 2012, that is nine years. That is enough for us to establish a fair, minimum requirement and the ratio of their expenditure profiles that will be our guide in this thing. It is not a one-off something. It is derived through a process. So, let us watch and see what the process will result to.
There is this general perception out there that Nigerian legislators are paid too much. Many Nigerians feel that their salaries, allowances and general emoluments should be reviewed to reflect the socio-economic situation in the country such that more money can be available for capital budgets. Are you considering reviewing the salaries and remuneration of political office holders in the near future?
This has been a recurring question and my concern is that each time I answer it, it appears that we don’t take the pain to address the issues. I went to the extent of publishing what we have as remunerations for the legislators severally. It is on our website. And now we have Freedom of Information, FOI, Act. I expect journalists to go to National Assembly and ask for information about remunerations. Our position is clear and what we presented as their remuneration is not in any way related to what I read in newspapers because no Legislator earns, after deductions, up to a million naira per month. So, if somebody pays them more than that, he should be held accountable because the law is very clear. There is the Remuneration Act of 2008. The circular came out 2007 and it became an Act in 2008. So, I will enjoin you to take advantage of FOI Act and go to the relevant offices in the National Assembly and get the correct information but it is not the type that I sometimes read that is published and we need to distinguish between regular and non-regular allowances. For instance, is it fair to say that car allowance which you will pay back is part of your salary? So, when we are presenting issues, we must make sure we are presenting facts. Remove the ones that are non-regular. Everybody in this country that is a public servant has furniture allowance which is not a regular allowance. They also have housing allowance which is also not a regular allowance. But for anybody to add up regular or non-regular allowances and say that is the salary is not correct. Then the question is, are we presenting the facts? So, I think the issues have gone to a level that we should be sure of what we send out to the general public.
You did mention the enormity of your responsibilities as a Commission and one issue that has continued to give serious concern to stakeholders is the level of funding of this Commission. Would you say you are getting enough budgetary allocations to enable you pursue the Commission’s mandate more efficiently?
I thank you very much for this spirit of patriotism. Funding is our major challenge as a Commission. We have made representations even to the National Assembly. The solution to that is that we should be on first line charge. I believe that the review going on in National Assembly will address that because once we are not on first line charge and we go through the usual envelope, and anything you see in the envelope you are constrained to use, it will not augur well for our operations if you look at our responsibilities. Right now, I can tell you if this place is well funded so many challenges we are faced with will not be there because the Commission would have addressed them. But now, it looks as if we don’t know what we are doing. There is no way you will send somebody to Port Harcourt, for instance, without a transport fare. So, you can only wish and probably call somebody there and ask if we can we any information, which is not the same thing as going there. So, you have really hit the nail on the head. We need to be properly funded for us to provide the needed services.
The petroleum industry accounts for the largest chunk of Nigeria’s revenue earnings. What is the position of the Commission on the Petroleum Industry Bill now before the National Assembly, especially in view of its potential revenue and other fiscal benefits for the country?
Well, we sent memorandum in respect to the PIB to the National Assembly. We have total support for it, because until that Bill is passed, the challenges of the NNPC will be difficult to solve and we will continue to favour the International Oil Companies to the detriment of Nigerians. So, we really need to pass this bill early enough. But beyond that, this country really needs to diversify beyond oil and gas. We need to look beyond oil and there are so many areas that have great potentials. A mono-product based economy can never ensure macroeconomic stability. There is no state in this country that does not have one form of solid minerals or the other. Why can’t those resources be developed? Why have we thrown away agriculture? The Tourism industry that we have, why can’t we develop it? So, we should go beyond oil and gas while the PIB should be passed. But every state, every local government and indeed every tier of government should think of how to diversify this economy.
Sir, we know your passion for urgent development of the non-oil sector to ensure structural balance in the productive sectors of the economy. But then, one challenge that seems to be hampering development of the non-oil sector, particularly the solid minerals, is lack of adequate fiscal incentives. What do you think should be done to attract investments into this viable, yet largely untapped sub-sector?
Well it’s very simple. What we need to do is not necessarily to preach. There are things you must put on ground. If you don’t have basic infrastructure, nobody is coming to invest. Power is critical, security and transportation. I regard these as next tripartite necessity for diversification. The next is incentives from government. The government has to provide enabling environment. When these things are there, then you will be talking about tax reliefs, waivers, but not the abused ones because sometimes you look at your fiscal decisions that will promote well being of your country. Take for instance we have privatised power; we really need to provide enough gas to support power supply across the value chain. If we do not develop the gas sector, the new power generating companies will find it difficult to generate power. So, we as part of government collaborate with relevant agencies that are involved and tell them what to do.Violators of Remuneration Act should be held liable –RMAFC by ngcareers