Editorial
Expectations From New Revenue Formula
Thursday, April 7, 2022, the Chairman of Revenue Mobilisation, Allocation and Fiscal Commission
(RMAFC), Elias Mbam, presented the report of the proposed new revenue allocation formula for Nigeria to President Muhammadu Buhari. This is coming 30 years after the last exercise was carried out in 1992, during the military regime of Ibrahim Babangida.
Highlighting the key recommendations in the report, Mbam said the proposed vertical revenue distribution formula suggested 45.17 per cent for the Federal Government, 29.79 per cent for state governments and 21.04 per cent for local governments. Under the current sharing arrangement, the Federal Government receives 52.68 per cent of the revenue share, the states get 26.72 per cent and the local governments 20.60 per cent.
Under the special fund, the commission’s report recommended 1.0 per cent for ecology, 0.5 per cent for stabilisation, 1.3 per cent for natural resource development and 1.2 per cent for the Federal Capital Territory (FCT). According to him, the new sharing formula was reached after extensive consultations with key stakeholders, public hearings across the country, administering of questionnaires, and a study of several other countries with similar fiscal structures to draw useful lessons from.
The commission also visited the 36 states, the FCT, and all the local government areas including the six area councils in Abuja to sensitise and obtain inputs from stakeholders, according to the RMAFC chairman. The chairman added that literature reviews were conducted on the revenue allocation formula in Nigeria dating back to the pre-independence duration.
Memos were reportedly received from the public sector, individuals and private institutions across the country. Mbam further noted that the country’s political structure had altered since the last review in 1992, with the addition of six more states in 1996, bringing the number of states to 36. At the same time, the number of local government councils also increased from 589 to 774.
The revenue allocation formula is the fraction of resources accruing to the federation that goes to each component of the nation. It also specifies the resources conserved in the areas where they are produced, as well as the proportions of the revenue accruing to the collecting agencies of government. The lack of justice and fairness in the distribution of the resources often results in tension and controversies in the polity.
President Buhari’s reaction to the new income distribution formula is commendable. In particular, he said he would await the outcome of the constitutional review process before submitting the report to the National Assembly. He assured the commission’s members that the Federal Government would conduct an internal review and approval process for the report shortly.
Buhari said, ‘‘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, we must take another look at our revenue sharing formula, especially the vertical aspects that relate to the tiers of government.”
If the new revenue-sharing procedure gets approval, the Federal Government will have its allocation reduced by 3.33 per cent. However, the most important issue with Nigeria is not how revenue is shared, but the revenue itself. Nigeria’s revenue to Gross Domestic Product (GDP) is about 8 perc ent while the average for Africa is 18 perc ent. Hence, it is more productive to concentrate efforts on improving revenue generation across the board than the fixation on sharing. We have a huge revenue problem.
The National Assembly should step up efforts to amend the relevant section of the Constitution for quick implementation of the new revenue formula. The Federal Government must immediately subject the report to its review and approval processes. We hail RMAFC for the meticulous work in carrying out its constitutional tasks. Nigerians, particularly state and local governments, are applauded for contributing to this development through the extensive stakeholder engagement processes.
At the height of the negotiating process of the current minimum wage of N30,000, the states (under the aegis of the Nigeria Governors’ Forum), proposed a fresh formulation to give them more resources. Governors cited their inability to pay. However, most of the governors have been reckless with the allocations they have been receiving, resulting in several states owing workers’ salaries and pension arrears. While state and local governments deserve to get more, the derivation on natural resources should also be jacked up with legally binding provisions on regular upward adjustments.
Nevertheless, the new sharing format is not the universal remedy for Nigeria’s stunted economic outlook. For now, Nigeria is a poor country. The World Bank estimates its Gross Domestic Product at $375.8 billion, the largest in Africa, but it is a deceptive narrative. At 200 million, its population far outstrips that of any other country on the continent. Our nation has been described by the World Poverty Clock as the global poverty capital, where 93 million people live below the $1.90 per day threshold.
The continuous sharing of oil resources currently generated will not be of significant help. The three tiers of government will permanently be bogged down in a financial crisis, primarily because Nigeria’s current structure is a dangerous aberration. For the nation to be progressive and dynamic, equity and justice have to be promoted in our federal system. Also, the retrogressive culture of entitlement to oil revenue should end. Ideally, the states should strive to become centres of development.
Across Nigeria today, the consensus is that there is an urgent need to devolve more financial resources from the centre to the states and local governments. This is to ensure that the tiers of government can carry out their functions and improve economic growth and development. While we endorse that agitation, we strongly believe that Nigeria could only attain its dream of development by operating true fiscal federalism, where every tier of government generates its revenue and controls the bulk of it, just as it was in the First Republic.
Last Friday, the National Agency for Food and Drug Administration and Control (NAFDAC) destroyed fake, counterfeit and substandard drugs worth over N1 trillion in Awka, the Anambra State capital. Recall that for one month, NAFDAC shut the Onitsha Drug Market, restricting shop owners from coming to the market, barricading it with military personnel, while officials broke into and ransacked shops in search of fake drugs.
NAFDAC’s Zonal Director for South-East, Dr. Martin Iluyomade, revealed some of the drugs destroyed to include Analgin, Tramadol, and various paediatric pharmaceuticals, which had been stored in prohibited areas or were banned by the World Health Organisation (WHO). Iluyomade said the closure and raids of the markets where the drugs were confiscated was in response to public complaints regarding the prevalence of fake, substandard and counterfeit drugs in the South-East.
He said: “Many of these drugs are banned, such as Analgin and certain paediatric medications, and they were stored in places that violate WHO regulations. It is our responsibility to ensure that these products are safe and fit for human consumption. These drugs were transported in a 140-foot truck, valued at over N1trillion, and were supposed to be stored at specific temperatures. However, they were kept in markets that do not meet the required standards.
“The volume of drugs found in these two markets could destabilise the country, and many of these are narcotic drugs associated with criminal activities. People who consume these drugs are not only harming themselves but also using them to commit crimes, which contributes to the growing insecurity in our country.”
Unfortunately, that is the chilling reality of counterfeit drugs, and it is a problem NAFDAC is relentlessly fighting. This dramatic action underscores the monumental scale of the problem and the unwavering commitment of NAFDAC to protect public health. The massive destruction highlights the pervasive nature of the counterfeit drug trade and the resources NAFDAC dedicates to combatting it.
Counterfeit drugs are dangerous, even deadly. They can contain the wrong dosage, the wrong active ingredients, or even harmful substances. Imagine taking a pill you believe will cure your illness, only to find it contains something entirely different – something that could worsen human condition or even kill. That is the terrifying reality of the counterfeit drug market.
The insidious world of counterfeit medications poses a grave threat, as these fake drugs often harbour toxic fillers or entirely different, untested chemicals. The consumption of such substances can trigger a cascade of adverse reactions, varying from minor allergic responses to catastrophic organ failure, leaving vulnerable individuals severely harmed. In this critical battle for public health, NAFDAC stands as our frontline defender.
Through tireless monitoring, rigorous inspections, and decisive action against those who peddle these dangerous fakes, NAFDAC acts as a vital gatekeeper, ensuring the safety and efficacy of the medications we depend on. Supporting NAFDAC’s mission is paramount, as it directly equates to safeguarding the lives and well-being of our Nigerians by preventing the proliferation of these harmful and potentially lethal counterfeit medications.
Given the breadth and criticality of NAFDAC’s mandate – regulating everything from food and drugs to cosmetics and medical devices – it is imperative that the Federal Government bolsters the agency’s resources and capabilities. This monumental task, encompassing the entire lifecycle of regulated products from importation to usage, demands substantial investment in infrastructure, advanced technological tools, and a highly skilled workforce.
Under-resourcing NAFDAC risks compromising its ability to effectively monitor and enforce regulations, potentially leading to substandard or counterfeit products entering the market, with devastating consequences for public health and safety. Therefore, increased funding, enhanced training programmes, and optimised operational systems are essential to fortify the agency’s effectiveness and ensure it can continue to protect the Nigerian populace.
No doubt, NAFDAC currently faces numerous hurdles in fulfilling its mandate. These challenges range from inadequate funding and outdated equipment to a lack of personnel and poor training. Insufficient funding directly translates to limited capacity for effective inspection, testing, and enforcement. Imagine trying to police a vast country with only a handful of officers – the task becomes virtually impossible. This lack of resources allows substandard and even dangerous products to enter the market, posing serious risks to public health.
The Federal Government must prioritise NAFDAC’s needs and take decisive action to support, equip, and empower this vital agency. NAFDAC is a cornerstone of public health in Nigeria and its health and economic well-being depend on its support. By providing financial, technological, and human resources, the government can strengthen the organisation’s capacity to protect Nigerians and contribute to national development. Tinubu’s administration must ensure that NAFDAC had the tools it needs to succeed. The lives of millions depend on it.
The Nigerian Meteorological Agency’s ominous forecast of severe flooding in nine states as the rainy season draws nearer serves as a reminder of the country’s vulnerability to environmental disasters. With coastal states like Lagos, Ogun, Delta, and Rivers particularly at risk, the immediate need for proactive mitigation measures cannot be overstated.
This warning demands swift and decisive action from state governments, including the activation of urgent environmental interventions and a concerted effort to encourage citizens residing in flood-prone areas to relocate preemptively. Nigeria’s history is unfortunately punctuated by the devastating impacts of floods, a recurring crisis often compounded by inadequate infrastructure, haphazard urban planning, and a frustratingly slow response to impending threats.
The devastating 2024 floods serve as a stark and traumatic reminder of the catastrophic consequences of neglecting proactive flood management. With over 300 lives lost and more than 1.2 million people impacted across 31 states, the scale of the disaster underscores the urgent need for decisive action.
The UN has allocated $5 million to Nigeria to enhance flood preparedness, aiming to strengthen early warning systems, support emergency response initiatives, and provide relief to vulnerable communities. However, the ultimate responsibility for implementing and maintaining effective flood management strategies lies with Nigerian authorities at all levels, requiring a shift from reactive responses to comprehensive preventative measures.
Nigerian governors should take urgent measures, such as alerting residents in flood-prone areas and removing illegal structures blocking waterways to offer a glimmer of hope. The pervasive complacency across some states remains deeply concerning. This reactive approach, waiting for disaster to strike before responding, has repeatedly resulted in devastating consequences and underscores a critical need for a paradigm shift in flood management plans.
Specifically, in states like Rivers which is surrounded by water, a multi-pronged approach is needed, including strengthening infrastructure, enhancing drainage systems, promoting community engagement, and implementing sustainable land-use planning, while also considering nature-based solutions and early warning systems.
The cyclical nature of flooding in the country is exacerbated by human activities. The dangerous practice of constructing buildings on natural waterways and the rampant issue of indiscriminate waste disposal into drainage systems directly contribute to the problem. These actions obstruct the natural flow of water, leading to overflows and ultimately, the widespread flooding that plagues the nation.
The government’s inaction regarding waste management and environmental upkeep is a significant contributor to the looming environmental crisis. The absence of efficient waste disposal systems, coupled with the lack of environmental projects and proper maintenance of vital drainages and waterways, breeds unsanitary conditions and ecological damage.
This negligence carries a high price, manifesting in public health risks, degraded ecosystems, and increased vulnerability to natural disasters. To reverse the trajectory, a comprehensive strategy is paramount. Importantly, regulatory bodies need to step up their enforcement efforts, ensuring strict adherence to environmental regulations and imposing meaningful penalties on those who violate them.
Such measures are vital not only to curb pollution and irresponsible practices but also to send a clear message that environmental accountability will be enforced. There is a pressing need for the government to overhaul waste management systems, ensuring efficient collection and disposal to prevent blockages in drainage channels.
To mitigate future disasters, National Emergency Management Agency (NEMA) and the National Orientation Agency (NOA) are urged to launch comprehensive awareness campaigns to educate the public about environmental degradation risks and promote personal responsibility in flood prevention. This will empower citizens to adopt sustainable practices, reduce flood risks, and protect vulnerable communities.
The September floodings in Borno State, resulting in the collapse of the Alau Dam, highlighted Nigeria’s vulnerability to disasters. To mitigate the impact, the government and citizens should work together to demolish structures obstructing natural waterways, dredge rivers and canals, and equip emergency response units to act swiftly in case of a flood.
Long-term strategies must focus on sustainable urban planning, the construction of dams, and continuous public education on environmental stewardship. Crucially, transparency and accountability of ecological funds are paramount to ensure that allocated resources effectively address the challenges at hand. Nigeria should draw valuable lessons from countries like Denmark and the United States, which have successfully implemented flood mitigation plans.
Increased awareness efforts have already resulted in a noticeable reduction in flood-related incidents in subsequent years, underscoring the efficacy of effective measures. State emergency agencies must collaborate, sharing resources and information to create a unified front against flooding. By embracing a culture of preparedness and environmental consciousness, Nigeria can safeguard its communities and build resilience against future natural disasters.
Governor Siminalayi Fubara has exemplified a proactive and resolute approach in steadfastly advancing the agenda of his administration, even in the wake of the Supreme Court’s ruling, which officially recognised Martins Amaewhule as the legitimate Speaker of the Rivers State House of Assembly. This unwavering commitment to governance and developmental progress underscores the Governor’s dedication to fulfilling his responsibilities to the people of Rivers State, regardless of the prevailing political and legal circumstances.
In meticulously orchestrating and initiating a broad spectrum of project inaugurations in multiple locations within Rivers State, Fubara articulates his resolute determination to honour the assurances given to Rivers people. His strategic focus on delivering tangible developmental projects not only highlights his determination to ensure the continued advancement of the state but also reinforces his vision of sustaining infrastructural growth, social welfare improvements, and economic empowerment.
This proactive stance can be viewed as a strategic move to showcase his administration’s competence and dedication to the public. Through the continuation of infrastructure endeavours and social initiatives, Governor Fubara aspires to reinforce public endorsement and effectively handle the complicated political situation resulting from the Supreme Court’s decision. The commissioning events serve as concrete evidence of the government’s initiatives and achievements, highlighting its commitment to progress.
The announcement of the projects generated widespread excitement throughout the state, with residents eagerly anticipating the institution of major infrastructure developments. The completion of these projects signifies an important milestone for the administration, demonstrating its dedication to fulfilling promises and investing in the state’s future. The Governor’s emphasis on the projects’ potential to drive economic growth, improve public services, and enhance overall quality of life, reflects his administration’s focus on delivering tangible benefits to the people.
The commissioning ceremonies are highly publicised events that attract considerable public attention and participation. This underscores the importance of the projects in enhancing the well-being and infrastructure of key areas in Rivers and Bayelsa States. The projects cover a wide range of sectors including housing, firefighting and emergency response, security, healthcare, education, and judiciary welfare, reflecting a comprehensive development approach essential for community progress.
The allocation of resources across various sectors demonstrates a deliberate strategy to address urgent needs and improve residents’ quality of life. In its efforts to foster safer communities, the government focuses on enhancing security and emergency response measures. Additionally, investments in healthcare and education underline a long-term commitment to human capital growth and well-being.
Among the projects scheduled for commissioning by the state government are the Government House Staff Quarters, the State Fire Service Headquarters with firefighting vehicles, the handover of a helicopter to the Nigerian Air Force, the Borikiri Fire Service Station, and the construction and furnishing of the palace and residence of the Akpor monarch. These projects address critical infrastructure needs and highlight the government’s dedication to enhancing public services and community welfare.
Other projects include the judges’ quarters, Bori General Hospital, Okrika Grammar School, as well as the furnishing, equipping, and electrification of the Nigerian Law School, Yenagoa Campus, and the Rumuodomaya Fire Service Station along with firefighting vehicles. Each of these projects plays a crucial role in improving the quality of life for residents and fostering development across key sectors in the region.
Governor Fubara’s actions speak volumes about his commitment to propelling Rivers State forward. The inauguration of diverse infrastructure projects is a tangible demonstration of his administration’s focus on progress and effective service delivery. This ardent approach extends beyond mere construction; it is a strategic investment in the future. Recall that in December last year, the Governor embarked on a schedule of projects commissioning and flag-offs to advance infrastructure and security across the state.
Through the prioritisation of key industries and allocating resources to essential sectors, the government is laying the groundwork for a more robust and prosperous Rivers State, offering its citizens enhanced opportunities and a higher quality of life. Through these initiatives, Governor Fubara is not just building roads and facilities; he is building trust, fulfilling his promises, and solidifying his leadership as a driver of sustainable development in the state.
The government is clearly committed to improving Rivers State. To say that Governor Fubara is rapidly transforming the state’s landscape with bold development initiatives is simply stating the obvious. In a short period, the Governor has turned the entire state into a vast construction site, with significant projects either underway or already completed — all in spite of the ongoing political challenges.
We join the good people of Rivers State, Nigerians, businesses, and individuals in commending and celebrating the Governor during this remarkable season of project commissioning and inauguration. The projects delivered so far reflect an extraordinary transformation, positioning the state as an attractive destination for investors. This progress stands as a testament to His Excellency’s commitment to leaving Rivers State far better than he found it.