BY AZUBUIKE OKEH
Recently, Uyo, Akwa Ibom capital, played host to a three-day retreat organised by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).
Held from April 28 to 30, the retreat aimed to recalibrate Nigeria’s approach to fiscal responsibility, transparency, and economic diversification.
The retreat, themed “Understanding the Role of RMAFC and Other Stakeholders in Nation Building”, marked an important moment for the newly appointed commissioners.
At the event, they were urged to adopt a digitised, transparent approach to revenue mobilisation in a rapidly changing global economy.
Historically, the issue of fiscal federalism has been a long-standing concern in Nigeria.
Since the country’s independence, the allocation of resources between the federal, state, and local governments has been a contentious issue.
The introduction of the Fiscal Responsibility Act in 2007 and the Treasury Single Account (TSA) system were attempts to address these issues.
Alas, there are still gaps in their implementation.
Nigeria’s fiscal policy has long been dominated by over-reliance on oil revenues.
Analysts say that the historical overdependence on crude oil, which accounts for about 70 per cent of government revenue, has made the country vulnerable to price volatility on the global market.
According to them, this structural challenge has been compounded by weak financial management systems and persistent revenue leakages due to corruption and inefficiency.
It may be recalled that the creation of RMAFC in 1989 was meant to address these issues by ensuring more equitable revenue distribution among the states, local governments, and the federal government.
However, Nigeria’s fiscal history has been marked by challenges in implementing a fair and transparent revenue-sharing formula, often creating tension between federal and state governments.
The retreat brought together key figures, including Vice President Kashim Shettima, Akwa Ibom Governor Umo Eno, economic experts, and members of RMAFC’s policy advisory team.
In a speech delivered on his behalf by Mr Ibrahim Natagwandu, his Technical Adviser on Public Debt Management and Revenue Mobilisation, Shettima emphasised the importance of fiscal discipline and transparency in managing Nigeria’s revenues.
He pointed out that, as custodians of revenue allocation, RMAFC commissioners must ensure fairness and equity across Nigeria’s three tiers of government.
“As commissioners in RMAFC, you are stewards of a system that ensures equity across the federation, and you must uphold the values of transparency and excellence,” Shettima said.
During the retreat, Dr Mohammed Shehu, Chairman of RMAFC, reflected on the Commission’s commitment to a new, technology-driven strategy for revenue mobilisation.
He stressed that the country can no longer rely solely on traditional sources of revenue, such as oil and gas.
Instead, diversification into sectors like agriculture, tourism, and solid minerals must be prioritised. “Our task is to build a robust and diversified economy.
Diversification is essential for meeting the growing financial demands of governance and national development,” Shehu said.
He also called on the new commissioners to embrace their roles with integrity and patriotism.
He outlined this as an important moment for the commission, which seeks to promote a transparent and accountable fiscal system that ensures efficient revenue collection and allocation.
According to Shehu, this approach is integral to achieving sustainable development and fiscal balance across the federation.
At the retreat, RMAFC reiterated its commitment to ensuring that fiscal federalism is not just a constitutional ideal, but a functional mechanism for development.
The commission also made a strong case for the financial autonomy of local governments.
A recent landmark ruling by the Supreme Court in July 2024 granted local councils’ autonomy over their allocations from the Federation Account, and RMAFC is advocating for constitutional amendments to reflect this change.
“We believe that for fiscal federalism to be truly effective, local governments must have direct access to their revenue allocations.
This is a crucial step in empowering local communities and fostering equitable development,” Shehu stated.
As part of its strategy to modernise revenue collection, RMAFC has begun integrating technology into its operations.
Shehu revealed that the commission had already initiated the process of reconciling and verifying revenue collections by various government agencies.
This move is intended to close financial loopholes and improve overall accountability.
Additionally, the commission is working on developing a new revenue allocation formula to better reflect Nigeria’s current socioeconomic landscape.
Shehu however announced that the process of establishing a new formula for the allocation of federal revenue to the three tiers of government is in an advanced stage.
The retreat concluded with a communiqué signed by Shehu and RMAFC Secretary Mr Joseph Nwaze.
The communiqué called on the federal government to implement a five-year periodic review of Nigeria’s revenue allocation formula to ensure it remains responsive to the changing needs of the country.
The commission also urged for constitutional reforms that would allow local governments to receive their allocations directly from the Federation Account, in line with the Supreme Court’s ruling.
“The recommendations from this retreat reflect the commission’s commitment to building a more transparent, accountable, and effective fiscal system for Nigeria,” the communiqué stated.
The discussions at the RMAFC retreat underline the need for a more diversified and transparent approach to revenue generation in Nigeria.
While the country faces major fiscal challenges, the commission’s efforts to modernise its operations and foster innovation in revenue mobilisation are steps in the right direction.
Analysts agree that for Nigeria to achieve sustainable development, it must overhaul its fiscal systems, promote greater accountability, and invest in sectors beyond oil.
All in all, the RMAFC retreat, with its emphasis on transparency, fiscal responsibility, and innovation, represents an important moment in the country’s continued efforts to strengthen its fiscal governance and lay the foundation for a more prosperous future.
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