The Nigerian government is taking the first step to review the revenue sharing formula for the three tiers of government, comprising the federal government, 36 states and 774 local governments.
The government has resolved to therefore set up a committee to review the revenue sharing formula in line with current economic realities.
The Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr. Elias Mbam, said this in Abuja on Tuesday after receiving an Award of Excellence from the Nigeria Civil Service Union.
According to him, the government envisages a new formulae will ensure that states and local governments receive more money to expand and increase their scope of revenue collection.
The current revenue allocation formula allocates to federal government 52.68 percent, states, 26.72 percent and local government 20.60 percent, while 13 percent of oil and gas federally collected revenue is returned to the oil producing states as derivation revenue to compensate for ecological disasters arising from oil production.
The formula was designed during former President Olusegun Obasanjo’s administration.
However, the RMAFC in 2013 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 never saw the light of day.
Five years on, the RMAFC chairman said the commission was planning to constitute a standing committee by next week to review the revenue sharing formula.
Mbam said the commission would also push for the diversification of the nation’s revenue for a more sustainable growth and economic development.
“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 reasonable quantity.
“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,’’ he said.
MM/GIK/APA