Categories: BusinessOn the Go

FG to review revenue sharing formula to suit ‘current economic realities’

The federal government says it will set up a committee to review the revenue sharing formula for federal, states and local governments due to current economic realities.

Elias Mbam, chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), made this known after he received an award of excellence from the Nigeria Civil Service Union.

According to the current revenue allocation formula, the federal government gets 52.68%, states get 26.72% and local governments, 20.60%.

Also, 13% 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.

“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 a reasonable quantity,” he said.

“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.”

The formula was designed during former President Olusegun Obasanjo’s administration.

In 2013, the RMAFC 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 has not been implemented.

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