Business

New Revenue Formula Proposes Reduction of FG’s Allocation By 3.33%, States to Increase By 3.07%

Published

3 years ago

April 8, 2022

By Derrick Bangura

Speaking yesterday at the State House, Abuja, while receiving the report by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), from its Chairman, Elias Mbam, Buhari stressed that for the nation to have a lasting review of the present revenue allocation formula, there must first be an agreement on the responsibilities to be carried out by all the tiers of Government.

In particular, he noted that the proposal seeks a 3.33% reduction in the current federal government’s allocation and on the other hand an increase of 3.07 per cent and 0.44 per cent for the states and local governments on the other hand.
He added that with regards to the Special Funds, the report by the RMAFC proposed an increase of 0.2 per cent for the Federal Capital Territory (FCT) and a decrease of 0.38 per cent for the Development of Natural Resources.
The president recounted that the federal government also made its input into the process of reviewing the vertical revenue allocation formula based on existing constitutional provisions for roles and responsibilities for the different tiers of government.

“We must note the increasing visibility in Sub-national level responsibilities due to weaknesses at that level, for example: Primary Health Care; Basic Primary Education; Levels of insecurity, and; Increased remittances to State and Local Governments through the Value Added Tax sharing formula, where the Federal Government has only 15 per cent and the States and Local Government share 50 per cent and 35 per cent respectively”.
Buhari said he would have gone ahead to present the revenue allocation report to the National Assembly as a Bill for enactment.

He, however, explained that since the review of the vertical revenue allocation formula was a function of the roles and responsibilities of the different tiers of government, “I will await the final outcome of the constitutional review process, especially as some of the proposed amendments would have a bearing on the recommendations contained herein.”
He listed some of the recommendations in the report to include: ‘‘Establishing local government as a tier of government and the associated abrogation of the state/local government account; moving airports; fingerprints, identification and criminal records from the exclusive legislative list to the concurrent legislative list, empowering the RMAFC to enforce compliance with remittance of accruals into and disbursement of revenue from the Federation Account as well as streamlining the procedure for reviewing the revenue allocation formula.’’
The president assured members of the Commission that the federal government would immediately subject the report to its internal review and approval processes, while awaiting finalisation of the efforts by the National Assembly.
According to him, this strategy, rather than issuing an Executive Modification order, as was done in 1992, was more in line with entrenching our democratic tenets.

He commended the RMAFC for a job painstakingly done, pledging his unwavering commitment and support to them in carrying out their constitutional mandates.
The president also thanked Nigerians, especially the state and local governments, for making their inputs through the broad stake-holder engagement processes that produced the report.
‘‘I am aware that the present revenue allocation formula has not been reviewed since the last exercise carried out in 1992.
‘‘Considering the changing dynamics of our political-economy, such as privatisation, deregulation, funding arrangement of primary education, primary health care and the growing clamour for decentralisation among others; it is necessary that we take another look at our Revenue Sharing Formula, especially the vertical aspects that relate to the tiers of government.
‘‘This becomes more compelling as we need to reduce our infrastructural deficit, make more resources available for tackling insecurity, confront climate change and its associated global warming and make life more meaningful for our rapid growing population.’’

Buhari said as an advocate for grassroots development, he has always remained committed to ensuring that all tiers of Government are treated fairly, equally and justly in the sharing of national resources.
‘‘I want to let you all know that I have keenly followed most of the discussions held in the geo-political consultative process and one thing that struck me clearly was the agreement that a review of our vertical revenue formula cannot and should not be an emotional or sentimental discussion and it cannot be done arbitrarily.

‘‘All over the world, revenue and resource allocation have always been a function of the level of responsibilities attached to the different components or tiers of government.

‘‘I am, therefore, happy to note that the discussions were held along these lines and rested squarely on roles and responsibilities as spelt out in the 1999 Constitution (as amended).
‘‘However, I also note that in reaching the final decisions at most of these engagements, not much emphasis was placed on the fact that the Second Schedule of the Nigerian constitution contains 68 items on the Exclusive Legislative List and the remaining 30 items on the Concurrent List requiring both the Federal and State Government to address.”
Earlier in his remarks, the Secretary to the Government of the Federation, Boss Mustapha, said the RMAFC followed due process in undertaking the exercise, and sought the opinion of the federal government before finalising the report.
Giving a synopsis of the report, Mustapha said it was in four volumes, including a summary in the main report.
He added: ‘‘Volume 1 contains the various memoranda submitted by the Federal and State Governments as well as the FCT. Volume 2 details the presentation from the academia, civil society, professional bodies, traditional rulers, individuals, as well as women and youth council.
‘‘To complete the inclusiveness of the stakeholder participatory processes adopted, Volume 3 is a research that captures the body of knowledge that supported the review while Volume 4 is a further distillation of submissions by the State and Local Governments as well as NGOs and Area Councils of the FCT.”
Also speaking, RMAFC Chairman Mbam said the leading philosophy behind the proposed review was guided by the need for distributive justice, equity and fairness as enshrined in relevant Sections of the 1999 Constitution (as amended).
He added that the principles took into cognisance the indivisibility of the country, public opinion and weighted Constitutional responsibilities and functions of the three levels of Government.

He announced that the proposed vertical revenue allocation formula advised 45.17 per cent for the federal government, 29.79 per cent for state governments and 21.04 per cent for the local governments.
Under Special Funds, he said, the Report by the Commission recommended one per cent for Ecology, 0.5 per cent for Stabilisation, 1.3 per cent for Development of Natural Resources and 1.2 per cent for the FCT.

In arriving at the new vertical revenue allocation formula, Mbam told the president that the Commission had wide consultation with major stakeholders, public hearing in all the geo-political zones, administered questionnaires and studied some other federations with similar fiscal arrangements like Nigeria to draw useful lessons from their experiences.
According to the RMAFC chairman, the Commission also visited all the 36 States and the FCT, the 774 local government areas to sensitise and obtain inputs from stakeholders.

He added that literature reviews were conducted on revenue allocation formula in Nigeria dating back to pre-independence period while the Commission received memoranda from the public sectors, individuals and private institutions across the country.
Explaining the major reasons for the exercise, Mbam noted that since the last review was conducted in 1992, 29 years ago, the political structure of the country has changed with the creation of six additional States in 1996, which brought the number of States to 36.
Correspondingly, he said, the number of local governments councils also increased from 589 to 774.

‘‘There have been considerable changes arising from the policy reforms that altered the relative share of responsibilities of the various tiers of government such as deregulation, privatisation and the lingering controversies over funding of primary education, primary healthcare.”
The RMAFC chairman noted that while Section 32(b), Part 1 of Third Schedule of the 1999 Constitution 9 (as amended) empowers the Commission to review from time to time the revenue allocation formulae; the inadequate and decaying infrastructure, as well as heightened widespread internal security challenges across the country also necessitated the exercise, among others.

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Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa

Published

2 months ago

October 28, 2024

Matthew Eloyi

Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.

The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.

Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.

The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.

Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.

A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.

He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.

This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.

“We must invest in power because it is the biggest determining factor for industries to thrive.

“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.

“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.

Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.

He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.

A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.

Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.

He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.

“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.

Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.

Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.

He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.

“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.

“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.

Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.

He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.

Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.

“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.

While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.

In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.

This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.

“It empowered the state houses of assembly to enact laws on power.

“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.

“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.

According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.

“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.

“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.

Business

Mercedes urges delay of EU tariffs on Chinese electric vehicles

Published

2 months ago

October 21, 2024

Matthew Eloyi

Mercedes urges delay of EU tariffs on Chinese electric vehicles

The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.

“We need more free trade instead of new trade barriers.

“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.

“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.

At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.

Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.

The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.

But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.

The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.

Business

ACCI moves to promote business connections, balance work-life

Published

2 months ago

October 16, 2024

Matthew Eloyi

ACCI moves to promote business connections, balance work-life

The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.

The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.

Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.

He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.

“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.

“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.

“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.

“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.

According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.

“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.

“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.

“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.

“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.

The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.

Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.

He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.