Nigeria’s three-tier government revenue-sharing formula
The Revenue Mobilization Allocation and Fiscal Commission (RMAFC), has from inception, been playing a stabilizing role in superintending the sharing of revenue both vertically amongst the three tiers of government and horizontally amongst states and local governments using a just, equitable and fair revenue Allocation Formula. While there is little friction in the sharing perhaps […]
The Revenue Mobilization Allocation and Fiscal Commission (RMAFC), has from inception, been playing a stabilizing role in superintending the sharing of revenue both vertically amongst the three tiers of government and horizontally amongst states and local governments using a just, equitable and fair revenue Allocation Formula.
While there is little friction in the sharing perhaps because of the subsisting formula, the political economy involved in the actual disbursement is such that the federal government, being the biggest partner, wants to exercise suzerainty over the states and local governments by controlling the largest chunk of the revenue to take care of foreign affairs, defence and national security as well as natural disasters. Perhaps, this is why the federal government, as a big brother, keeps the Ecological Funds, Stabilization Fund, Natural Resources Fund and lately, the Sovereign Wealth Fund and Subsidy Reinvestment and Empowerment as special intervention funds.
The tendency of the federal government to keep these special funds has been a source of worry and contention to the states and local governments which oftentimes a became a matter for litigation between the latter and the former.
While the constitutional provision guiding the sharing of revenue clearly prescribes equity, justice and fairness, state governments country do not follow these principles in the control and management of states and local governments joint accounts as governors employ subterfuge by following their whims and caprices in the disbursement of monthly allocation to their local governments. Thus, local council chairmen have become minions in the hands of their governors that sometimes they are forced to genuflect before a mere Commissioner of Local Government and Chieftaincy Affairs who usually presides over the sharing of revenue on behalf of the governor.
No wonder the portfolio of the Commissioner for Local Governments and Chieftaincy Affairs is now the juciest and most important at the state levels because the occupier is seen as the defacto governor even more important than the Deputy Governor, Speaker and Secretary to the State Government.
The propensity of elected executives at all tiers of government to control funds is not to enable them deliver democracy dividends but to be able to effectively checkmate the constitutional powers of recalcitrant chief executives as happened to Lagos state’s Bola Tinubu under Chief Olusegun Obasanjo’s rule and as most Governors do nowadays to the Local Government Chairmen in their States.
The execution of capital projects as small as a borehole or culvert in a rural area in some states must receive the blessing of the state chief executive. In some states even payment of teachers and health workers’ salary even though they are not contractors, is often highly politicized. The usual story is that the state has yet to receive its monthly allocation even though the governor might comfortably be sitting on it and spending as he pleases while people and projects continue to suffer.
It is instructive to note that the effective control of state funds especially during election periods can make or mar the chances of many incumbents. For example, non release of salaries and allowances for the legislators in time of electioneering campaign led to the loss of many seats at the National and State Houses of Assembly by incumbents who were denied access to campaign funds in past elections.
The continued operation and management of States and Local Governments Joint Accounts by state governors which they often misuse for personal aggrandisement and political mischief, should be properly looked into with a view to free the funds for real development in the rural areas.
The Exclusive and Concurrent Lists in the constitution ought to be finetuned to pave way for the principle of Collective Responsibility which will make the provision of infrastructure a Shared Responsibility amongst the three tiers of government. The provision of security votes should also be abolished to stop its abuse by chief executives who misappropriate it for personal gains. Budget tracking and fiscal efficiency should be properly carried out by the regulatory and anti-corruption agencies supported by civil societies and the mass media to ensure good governance, transparency and accountability.
Ibrahim Mohammed wrote from Plot 19, Lagos Street, Garki II, Abuja