States justified to demand review of revenue sharing formula, says RMAFC ex-acting chairman

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Shettima Abba-Gana

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has said that state governments are right to demand for a review of the revenue sharing formula of the Federation Account.

According to the News Agency of Nigeria (NAN), the out-gone Acting Chairman of RMAFC, Mr. Shettima Abba-Gana, said this in Abuja. Abba-Gana said reviewing the formula would not the solution to states’ and local councils’ quest for increasing their revenue.

“Reviewing the formula is not an easy process and I am not particularly sure whether the review of the revenue sharing formula is the best solution for states.“This is because the formula itself is based on a foundation and that is the constitution that has given the federal exclusive functions and states and local councils concurrent functions.

“Unless you move functions from one tier to another, it will be very difficult to just transfer funds boldly to another tier,” he said.

According to him, the magnitude of what the states are requiring may not be necessarily easy without some constitutional amendments to look at what the concurrent and exclusive functions of the federal, states, local councils are.

Abba-Gana, however, said that what the RMAFC always advocated was getting more revenue that would be enough for the three tiers to share.He added that even the Federal Government itself requires more funds, especially with the current security situation in some parts of the country and the demand for infrastructure, which also requires funding.

“So, what the RMAFC has always advocated for is to get more revenue. We have always been pushing that the Product Sharing Contracts (PSCs) be reviewed to increase government’s take.“We have always pointed out that production from Joint Venture Contracts (JVCs) have gone down from one million barrels per day to about 800,000 barrels per day.

“It is the most profitable venture and that one has gone down. We need to get it back to be able to improve the funding to the Federation Account, which definitely will benefit all tiers of government,” he stressed.The former acting chairman said that through the review of the PSCs and enhancement of the JVCs and the states doing some more work on their internally-generated revenue (IGR), it would uplift revenue across board.This, he said, was more important than trying to share from a cake that is presently not enough or shrinking.



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