New revenue formula will separate LG account from state’s – says RMAFC Chairman

The new formula will separate the contentious state and local council joint accounts.

Mbam, who was fielding questions from newsmen in Abakaliki recently, said: “I promise the nation that the new revenue formula will be ready for presentation to Mr President in the first quarter of 2012.’’


He said that the Commission is conscious of the sensitivity of the matter to the citizenry and is therefore, carrying out detailed consultations, studies and researches in fiscal matters.


“We are not reviewing the revenue allocation formula simply to allocate more money to states or local governments.


“We don’t just allocate money we look at the responsibilities and apportion what we feel will be reasonable for the discharge of those responsibilities, and that will determine what goes to each tier of government.

“The committee set up to review the allocation is working assiduously to ensure that a comprehensive and detailed consultations, studies and researches are made. This is what is delaying the new formula.”

Mbam explained that the review of the revenue formula was a constitutional issue, adding that the commission is empowered to review the revenue formula from time to time in conformity with changing realities.

“It is provided in the constitution that the Commission should review from time to time, the revenue formula and principles of operations to conform to changing realities.

“That includes the parameters to be used. It talked about 13 percent derivation, population density, landmass and equality of states.”

“We are also going to carry out similar studies in federations outside Nigeria practicing the same system of government with us and see why their own is succeeding and why ours is having problems.”

On the issue of states and local governments’ joint account, Mbam said that the system should be abolished and that local government funds be paid directly into their accounts.

“The Commission is of the view that the joint states and local governments account should be abolished. The local governments should be allocated funds directly to their accounts in other to reduce or forestall possible abuses and leakages.

“Indeed, time has come for the country to have a new revenue allocation formula backed by legislation.’’

The chairman disclosed that the Commission is preparing a roadmap, with a view to make it a research centre for fiscal matters, in addition to its constitutional role to allocate money to all tiers of government. (NAN)

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