Courtesies,
I
would like to begin by thanking His Excellency, the Executive Governor of Kano
State, Mallam Ibrahim Shekarau, for accepting on behalf of the Government of
Kano State to declare open, this Programme, which is being organized to
familiarize Members of the Commission, particularly the first time comers to the
Commission, on the activities of the Revenue Mobilisation Allocation and Fiscal
Commission. I also most
sincerely thank His Excellency, for agreeing to host the Programme in this both
cosmopolitan as well as ancient
city of Kano, which has a long history of trans-Saharan trade and is well known
for its hospitality to all and sundry. When
the idea of this Retreat was foisted, a number of venues were considered.
However, Kano became the first venue of choice not only because of its
serene atmosphere, but more particularly, because the Commission has always
enjoyed the co-operation of the Kano State Government in most of its activities
since the Commission was
inaugurated by His Excellency, President Olusegun Obasango, in September, 1999.
The Commission also considers recent developments in Kano State, an
epitome of the type of development the Commission would like to see in other
States, particularly, in the areas of frugal use of resources and
diversification of its economy. We
congratulate the Kano State Government. This
is one State where the ‘talakawas’ (common man on the street) reap the
benefits of democratic governance. Because
of this conception, the Commission would very much appreciate if His Excellency
would facilitate our visiting typical development sites such as water supply,
hospital sites, primary and secondary school sites.
Your Excellency will note that the Commission uses these as proxies in
revenue allocation to States and Local Governments. These visits are scheduled for Wednesday afternoon when the
Commissioners will be divided into three groups: with the first group to sample
social developments in water, electricity and township roads; the second group
will take medical sector in hospitals, dispensaries etc. while the third group
will sample developments in the education sector as represented by secondary and
primary schools. During
our one-week stay in the State, Members would also find time to visit one or two
historical sites of ancient Kano to appreciate what has made Kano city play the
dual role of being both a cosmopolitan and yet an ancient city and possibly the
largest city in sub-Saharan Africa.
2.
Let me explain that the Revenue Mobilisation Allocation and Fiscal
Commission is one of the fourteen (14) Federal Executive Bodies listed in
Section 153(1) of the 1999 Constitution of the Federal Republic of Nigeria, to
provide mechanisms for checks and balances in our democratic experiment.
Such other bodies include the Independent National Electoral Commission (INEC),
the National Population Commission (NPC), the National Judicial Council (NJC),
the Code of Conduct Bureau (CCB), etc. These
bodies are all independent of control by any of the three tiers of Government
(Federal, State or Local) in the country, though they source their funds from
the Consolidated Revenue Fund of the Federal Government of Nigeria (FGN), as a
tier of Government. Since he who
pays the piper would like to dictate the tune, the Commission, as well as other
such bodies already mentioned, has attempted on a number of occasions to
distance itself from this bootstrap of the Federal Government, by asking that
its budget be made a first charge on the Consolidated Revenue Fund of the
Federal Government. The Commission hopes that this financial independence would
be achieved in not too distant future and will be supported by the State
Governments.
3.
The Revenue Mobilisation Allocation and Fiscal Commission with its
frontline role in the fiscal management of the country was inaugurated by His
Excellency, President Olusegun Obasanjo, on the 20th September, 1999.
In line with paragraph 31, Part I, of the Third Schedule to the 1999
Constitution of the Federal Republic of Nigeria, which prescribed the
composition of the Commission, the Commission is made up of an Executive
Chairman and 37 Members, one from each State of the Federation and the Federal
Capital Territory.
4.
Unlike in the past, when Ad-hoc Committees and Commissions were set up to
review fiscal arrangements in the country, the Revenue Mobilisation Allocation
and Fiscal Commission was established by Decree No. 49 of 1989 (now Act).
This was later amended by Decree No. 98 of 1993 (now Act).
At that time, it was called and addressed as the National Revenue
Mobilisation Allocation and Fiscal Commission.
The Commission’s role was incorporated into the 1999 Constitution by
paragraph 32, Part I, of the Third Schedule to the 1999 Constitution of the
Federal Republic of Nigeria. The Commission is specifically empowered to:
(a)
monitor the accruals to and disbursement of revenue from the Federation
Account;
(b)
review, from time to time, the revenue allocation formulae and principles
in operation to ensure conformity with changing realities;
Provided
that any revenue formula which has been accepted by an Act of the National
Assembly shall remain in force for a period of not less than five years from the
date of commencement of the Act;
(c)
advise the Federal and State Governments on fiscal efficiency and methods
by which their revenue
can be increased;
(d)
determine the remuneration (salaries and allowances) appropriate for
political office holders, including the President, Vice-President, Governors,
Deputy Governors, Ministers, Commissioners, Special Advisers, legislators and
the holders of the offices mentioned in sections 84 and 124 of this
Constitution; and
(e)
discharge such other functions as are conferred on the Commission by this
Constitution or any Act of the National Assembly.
5.
As could be seen from the foregoing, the constitutional functions of the
Commission are not only sensitive and challenging, but also critical to the
practice of true fiscal federalism in Nigeria.
I, however, do not intend, at this stage, to dwell on the way and manner
the Commission is organized to carry out these functions.
This is the subject of another paper to be delivered in the course of
this Retreat. Suffice it to mention
that the Commission is run on the Committee system, along the line of the
National Assembly and that no decision in the Commission is valid, unless
approved by all the Commissioners sitting in a Plenary Session and presided-over
by the Chairman of the Commission.
6.
I would also like to state at this stage, for general information, that
the laws establishing this Commission made it a statutory Member of the
following agencies:
(i)
Federation Accounts Allocation Committee (FAAC);
(ii)
Local Government Joint Accounts Allocation
Committees of all States of the Federation and the Federal Capital Territory;
(iii)
Joint Tax Board (JTB);
(iv)
Ecological Fund Committee; and
(v)
National Council on Statistics.
The same laws equally
empower the Commission to demand and obtain regular and relevant information,
data or returns from any Government: Federal, State and Local and their agencies
and more particularly:
(i)
The Nigerian National Petroleum Corporation (NNPC);
(ii)
The Nigerian Customs Service;
(iii)
The Federal Board of Inland Revenue;
(iv)
The Central Bank of Nigeria; and
(v)
The Federal Ministry of Finance.
7.
Your Excellency, Distinguished Ladies and Gentlemen, it would not be out
of place to state that within the period, the Commission by the grace of God
recorded a number of far-reaching achievements.
A measure of transparency has been injected into the monitoring of
accruals into, and disbursement of revenue, from the Federation Account.
The current remuneration of public and political office holders,
throughout the country in terms of salaries, allowances and other benefits being
enjoyed by such officers is the outcome of the remuneration package engineered
by the Commission. Though, it can
be said that at present, the revenues from the Federation Account are still
being shared in accordance with a Revenue Allocation Modification Order as
validated by Mr. President, under Section 315 of the 1999 Constitution of the
Federal Republic of Nigeria. This
is not to say that the Revenue Mobilisation Allocation and Fiscal Commission has
not been up and doing in its responsibility of fashioning out for the country, a
new Revenue Allocation Formula, as expected of the Commission by Paragraph
32(b), Part I, of the Third Schedule to the Constitution.
Indeed, three attempts were made by the Commission between 2002 and
December 2003, to submit its Reports on a new Revenue Allocation Formula.
Each of the attempts was thwarted by certain
problems beyond the control of the Commission.
For reasons which would be explained in one of the papers to be
delivered, it was only in September 2004, that the Commission submitted its
Addendum to its December 2003 Report to Mr. President, who has fortunately,
tabled it in form of proposals to
the National Assembly for debate. I
urge Your Excellency to get your colleagues, the Executive Governors of the
remaining States in the Federation to impress on the National Assembly, the
urgent need to pass into law, the new Revenue Allocation Bill.
8.
Your Excellency, one crucial issue, which seem to have generated
controversy in recent times in Nigeria’s fiscal finances between the
Commission and some State Governments is the management of State Joint Local
Government Accounts. There has been
allegations that some States are tampering with the statutory allocations to
Local Governments from the Federation Account, thereby leaving them with little
or nothing to settle their recurrent expenditure, much less the capital
expenditure. Admittedly, the
Revenue Mobilisation Allocation and Fiscal Commission was at the fore front of
those that urged States to enact laws that should facilitate the opening of
their respective State Joint Local Government Accounts and the establishment of
State Joint Local Government Allocation Committees for such Accounts.
This was done with the understanding that it would provide opportunities
for States to make their own contributions to the finances of Local Governments
in their domain as required by Section 162(7) of the 1999 Constitution which
states that “each State shall pay to Local Government Councils in its area of
jurisdiction, such proportion of its total revenue
on such terms and in such manner as may be prescribed by the National
Assembly”. The Commission is
aware that only few States have been paying some portion of their revenues to
local councils as determined not by the National Assembly but by their
respective Houses of Assembly. There
are, indeed, several other areas of the Constitution where the Commission has
been facing serious problems of misinterpretation of the Constitution by some
State Governments particularly the provisions of Section 162(3), (5), (6), (7)
and (8), which border on the distribution of Pool accounts.
For example, it is still not clear from the provisions of Section 162(7)
the definition of total revenue from where State Governments are to pay
proportions of their revenues to their Local Government Councils.
Kano State, I am reliably informed, has not been found guilty of these
offences for which I heartily congratulate the State Government.
9.
Let me state that what we are gathered here to do, for the next seven (7)
days or so, is not a Seminar or a Workshop.
We are gathered principally, to enlighten ourselves on the operations and
fundamental responsibilities of the Commission.
The new Members would have the opportunity to know what the Commission
has been set up to do, while the returning Members will have the opportunity to
refresh their minds. Generally, it
is expected that at the end of the Programme, a great measure of esprit de’
corps would have been established among the Members themselves and between
the Members on the one hand, and the staff of the Commission on the other. I, therefore, urge all present to give maximum attention and
co-operation to the Resource persons as information gathered in the course of
the topics to be presented are expected
to facilitate Plenary Session discussions and eventual decisions that might
arise from them.
10.
I would like to give you a synopsis of the papers that would be presented
during the period of our stay here, by the Resource Persons, who are drawn from
the Commission. The papers to be presented centre on issues pertaining to the
Constitutional responsibilities and administrative powers of the Commission,
including Welfare Issues and the financial position of the Commission.
Issues pertaining to the Constitutional position for the monitoring of
accruals into the Federation Account, revenue generation, collection and
remittance would be examined. Also
to be considered, include the modalities for the monitoring of disbursements
from the Federation Account and the beneficiaries and procedures for the
determination of remuneration packages. There
would be the equally important issue on the modalities for the formulation of a
Revenue Allocation Formula and the role of the Commission in the preparation of
budgets.
11.
Considering the over-dependence on one export commodity since the
exploration of oil in this country, discussion would also be centred on issues
pertaining to the diversification of the Nigerian economy, including the role
expected of Federal, State and Local Governments. This would be closely followed
by the vexing issues of payment of external debts, and the efforts so far made
by the Federal and State Governments. Discussions
would also carry us to the issue pertaining to the Horizontal Revenue
Allocation, the effect of creation of additional Local Governments to the
Nigerian economy and the attitudes of State Governments on the operation of
State Joint Local Government Accounts Allocation.
As the work of the Commission concerns the sharing of revenue, the
Programme would focus on issues pertaining to the disbursements of derivation
funds including boundary disputes between beneficiary States and also disputes
emanating from the location of Oil fields/wells.
12.
At the final stage, I would elucidate on my vision of the Commission in
the next five years, focusing on the problems and prospects of the oil and gas
sector; the role of NNPC in the National economy and the issue of the ownership
of the Nigerian Oil and Gas Sector; the JVCC; the funding of the NLG; National
debts and new loans; economic diversification; the need to revise the
remuneration packages; how to disburse funds arising from derivation and the
need to maintain the philosophy of the Commission of impartiality, transparency,
equity and justice.
13.
I cannot conclude this address without a word of immense gratitude to His
Excellency, Chief Olusegun Obasanjo, GCFR, President, Commander-in-Chief of the
Armed Forces of the Federal Republic of Nigeria.
Since the inauguration of the Commission in September, 1999, he has
remained a bastion of strength to the Commission.
On many occasions, when we found ourselves stranded, he has always come
to our assistance without undue pressure. That
he has found some of us worthy of appointment for a second tenure is evidence of
the trust and confidence he has always had on the Commission.
This is in spite of the fact that we have, as a Commission, often been
blunt in telling him the truth, no matter its bitterness.
We are indeed very grateful to His Excellency for his large heartedness.
I also want to place on record, our gratitude to His Excellency, Vice-President
Atiku Abubakar who has also played the role of a second father to the
Commission. We hope that we shall
continue to justify the confidence reposed on us by both His Excellency, the
President and his Vice-President by our appointment to this important body which
is the nucleus of the Nation’s fiscal federalism.
I need not remind us that the whole nation is watching us, and we must
not let them down. It is for us to
make history, the history that would be recorded with dignity and integrity.
14.
I also want again to thank His Excellency, Governor Ibrahim Shekarau for
being such a generous host without which the success of the Retreat would have
been impossible. We urge your Excellency to also extend our gratitude to his
Royal Highness the Emir of Kano, Alh. Ado Bayero for having accepted us in
audience.
15.
I wish all of us, the best in the task ahead of us.
You are welcome.
Chairman