Revenue: States with difficult terrains to get more
JUNE 4, 2013
Anambra State Governor, Peter Obi
In the new revenue formula that is currently in the works, states and local government areas with difficult terrains will receive more from the Federation Account.
The Chairman, Revenue Mobilisation, Allocation and Fiscal Commission, Mr. Elias Mbam, disclosed this at the opening of a three-day multi-agency meeting convened by RMAFC in Abuja to advise it on the weight to be assigned to different geographical terrains in the new revenue formula.
Our correspondent learnt that the entire country had been classified into three different geographical terrains for the purpose of the new revenue formula.
These are the wetland dominated by rivers and valleys; the highland dominated by hills and mountains, and the plain land.
It has not yet been determined what weight each of the categories or geographical terrains will carry, but terrain as a factor for the revenue formula will carry a weight of five per cent in the horizontal sharing formula.
The horizontal sharing formula stipulates the plan for sharing revenue among the states, while the vertical sharing formula stipulates the plan for sharing revenue among the three tiers of government.
The factors that determine what each state gets from the Federation Account include population, principle of equality, Internally Generated Revenue, landmass and social development factors.
Terrain has never been used even though it is stipulated by the enabling Act, but it will now count in the new formula.
In the current revenue formula, IGR weighs 10 per cent; population, 30 per cent; principle of equality, 40 per cent; landmass, 10 per cent; and social development factors, 10 per cent. These weights will be re-valued in the new formula.
Those invited to the meeting included the Office of the Surveyor-General of the Federation, National Boundary Commission and Surveyors-General of the 36 states and the Federal Capital Territory.
Mbam explained that the meeting was essentially convened to address complaints made by some of the states and LGAs on the report on terrain types, which was prepared by the Office of the Surveyor-General of the Federation in 2007.
The meeting is also expected to discuss the implication of the ruling of the International Court of Justice as it affects the landmass figures of some states and LGAs.
The ICJ had ruled on the boundary dispute between Nigeria and Cameroon and this will likely affect Cross Rivers State, which lost Bakasi to Cameroon.
The RMAFC boss also said the forum was expected to advise the commission on the appropriate weights to be apportioned to each of the three terrain types from the five per cent allocated to the factor.
The revenue commission had in 2007 requested the Office of the Surveyor-General of the Federation to carry out a survey on terrain types of all states and local governments to enable it apply the terrain factor as stipulated in the subsisting Act.
Mbam reiterated the commission’s quest to ensure fair and equitable implementation of all factors under the horizontal revenue formula.
He called on participants at the meeting to come up with invaluable contributions that would help in resolving all the contending issues as well as address all complaints arising there from.
In his remarks, the Indices and Disbursements Committee Chairman, RMAFC, Senator Chris Adighije, observed that prior to the introduction of landmass and terrain as factors in the horizontal formula; most of the factors used in allocating revenue were essentially socio-economic.
He said, “Terrain is a more significant variable of the two since it has primary effect on development costs and sometimes represents a constraint to development. Physical constraints such as steep slopes, rugged terrain and swampy or soft subsoil often present severe construction difficulties.
“On the other hand, the size of a state or LGA presents not only the total area, which should be developed, but also administrative problems and cost.”
In a goodwill message, Governor of Niger State, Dr. Babangida Aliyu, represented by his deputy, Mr. Ahmad Ibeto, expressed optimism that RMAFC would ensure equity, fairness and justice in carrying out the review of the current revenue formula.
His Anambra State counterpart, Governor Peter Obi, who was represented by his deputy, Mr. Emeka Sibeudu, charged participants to address all the contending issues in a holistic manner in order to guarantee an atmosphere of peace and tranquillity for sustainable national development.
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