2024 Game-Changer: RMAFC Unveils Bold Plan for New Revenue Sharing Formula Implementation

In a recent disclosure before the House Committee on Finance in Abuja, Mr. Muhammed Bello Shehu, the Chairman of the Revenue Mobilisation and Fiscal Commission (RMAFC), revealed that the commission is set to implement a new revenue-sharing formula for Nigeria in the first quarter of 2024. This significant development comes as the nation grapples with financial challenges and seeks to address the burgeoning debt crisis.

During the hearing, Chairman Shehu affirmed that President Tinubu had been briefed about the impending changes in the revenue-sharing formula. He emphasized that the proposed formula would undergo a rigorous legislative process, requiring approval from the National Assembly before implementation could commence.

“I assure this committee that sometime next year, the commission will forward a new revenue allocation formula to Mr. President, and we believe that he will, in turn, forward it to the National Assembly for you to address this issue. That I can assure you, sir, and the members too,” stated Mr. Shehu.

Highlighting the pressing financial challenges, Chairman Shehu informed the committee that several agencies owe the Federal Government substantial amounts, ranging from N3 trillion to N6 trillion. This revelation underscores the urgency of revisiting and restructuring the current revenue-sharing framework.

Chairman of the House Committee on Finance, Hon James Faleke, expressed his hope for a swift implementation of the new revenue-sharing formula. He criticized the current system, emphasizing that the federal government’s disproportionate share of revenue is unsustainable.

“Where the federal government is having the lion’s share of revenue is not right. That’s why everybody is saying the government has no money, no food, no this and that. If our local government system works well, we shouldn’t be having these impacts at all,” remarked Hon Faleke.

Faleke urged Chairman Shehu to pursue an amendment to the act establishing the RMAFC, addressing its current limitations. “The present act does not give them the power, there’s no biting teeth, and that’s why most agencies flaunt remittances. We can look at it and amend it from our side, but we need to be aware that the act needs to be amended to make it more effective for better revenue for this country,” he added.

The lawmaker’s call for an amendment reflects a broader acknowledgment of the need for systemic changes to enhance revenue collection and distribution across different tiers of government. Faleke’s emphasis on the local government system’s role in alleviating financial burdens echoes sentiments that a well-functioning local government can significantly reduce dependence on the federal government for essential services.

As Nigeria faces economic challenges, the proposed adjustments to the revenue-sharing formula and potential amendments to the RMAFC act stand out as crucial steps toward achieving fiscal sustainability. Infostride News will continue to monitor and report on these developments as the nation navigates its financial landscape.