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Nigeria: RMAFC In Preliminary Review Of Political Office Holder’s Salary, Revenue Sharing Formula, Other Financial Entitlements – ICIR


Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr. Elias Mbam, on Wednesday, November 4, informed the House of Representatives Committee on Finance that the agency has commenced preliminary processes in its plan to review of the remuneration of political office holders in the country.

Mbam also said the RMAFC has started preliminary procedures for the review of the country’s revenue sharing formula.

Mbam, who appeared before the committee to defend the RMAFC’s 2021 budget, noted that the two reviews were at a preliminary stage which involve ‘literature’ review, collection of relevant data and engagement with stakeholders.

However, Mbam had, earlier in January 2020, also said the RMAC had commenced ‘preliminaries’ in the review of the salaries, allowances and other financial entitlements of the President, Vice President, governors, members of the National Assembly and other category of political office holders.Mbam told journalists on January 27, 2020 that the review of the remuneration of political office holders would be done in 2020.

The planned review is aimed at aligning the remuneration of the political office holders to ‘current realities’ in the country.

Mbam had observed that the salaries and allowances of political office holders could go up, or go down, after the review.

Speaking on the matter on January 27, he said, “It is the intention of the Commission to review remuneration of public office holders this year and the process will determine whether it will be a reduction or an increase.

That is part of our primary responsibilities.“It is one of the areas we intend to address this year, so that the remunerations will reflect current realities. I don’t want to pre-empt what will be the result.

It is a process and the process, if followed appropriately, will arrive at the appropriate answer. The preliminaries has commenced.”About 10 months later, Mbam’s comments at the National Assembly on November 4 suggests that the RMAFC has not made much progress with the ongoing review.If the review is to actually align the remuneration of political office holders to ‘current realities’, as suggested by Mbam, then it is expected that official financial benefits accruing to persons holding political offices in the country would be slashed.

Nigeria’s political office holders are reputed to be among the highest-paid in the world, despite the country’s rating as a ‘Lower Middle Income Country’ by the World Bank.Also, Nigeria is currently battling severe revenue challenges, largely due to the sharp decline in the price of crude oil. In recent years, the Federal Government have been borrowing to fund annual budgets.

Perks enjoyed by political office holders contribute a large proportion to the high cost of governance in the country.For instance, a breakdown made available by the RMAFC indicate that Nigeria’s President and Vice President earn N3.5m and N3.03m as basic salary, per annum, respectively.

Also, the annual basic salary of some other political office holders are – minister, N2.02m, minister of state, N1.95m, Special Adviser, N1.94m, governor, N2.22m, deputy governor, N2.11m, and commissioner, N1.33m.

In addition to the the basic salary, the President is entitled to allowances such as hardship allowance, which is 50 per cent of his salary, about N1.757m, and consistency allowance – 250 per cent of his salary, which amounts to about N8.786m.

In the same vein, the President’s gratuity is 300 per cent of his salary, amounting to N10,544,115. The President is also entitled to a leave allowance of 10 per cent of his salary, as well as a vehicle loan which amounts to 400 per cent of the salary.

The vice president, governors, members of the National Assembly and some other category of political office holders also receive similar allowances in different amounts.

Other regular allowances enjoyed by political office holders such as the President, Vice President, governors and members of the National Assembly include Personal Assistant, constituency, vehicle fuelling/maintenance, domestic staff, entertainment, recess, newspaper/periodicals and utilities.Such category of political office holders are also provided with house maintenance, furniture, wardrobe, duty tour, accommodation, estacode and medical allowances, among others.

When all the allowances are summed up, the President’s monthly pay will amount to N1,171,568.33, and N14,058,820 per annum, while the Vice President will earn N1,010,524.17 monthly, and N12,126,290 yearly.

The RMAFC had reviewed the salary structure in 2007.Mbam had also, on January 27, 2020, said the RMAFC was engaged with the preliminary processes in the review of the revenue sharing formula.

The commission commenced the current review of the revenue sharing formula with the inauguration of 18 standing committees, comprising 12 constitutional committees and six in-house committees, on August 15, 2019.

Noting that committees set up by the RMAFC were still researching and reviewing ‘literature’, Mbam had said, “It is after this review that we will invite stakeholders like the Federal Government, state governments, LGAs, National Assembly, state assemblies, civil society organisations and other Nigerians.

After that we will go into public hearings. We have not dropped the review – we are still on preliminaries.

According to the current revenue sharing formula, the Federal Government takes the lion share – 52.68 percent – from the Federation Account.

The 36 states collect 26.72 percent, while the 774 local government areas receive 20.60 percent.

After the RMAFC announced plans to review the formula in 2019, the governors had declared their intention to demand that the states be allocated 42 percent of the federal revenue.

The governors also said they will push for the slash of the Federal Government’s share to 37 percent.However, months after it announced the commencement of the ‘preliminaries’ of the review, the RMAFC is yet to issue invitations for memorandum, or hold public hearings on the subject.

Not much has been heard of the planned reviews of the remuneration of political office holders and the revenue allocation sharing formula, until Mbam told the National Assembly, on November 4, 2020, that the assignments are still at preliminary stage.

The House of Representatives Committee on Finance frowned at the slow pace of work on the review of the revenue sharing formula, noting that Nigerians desire a new revenue sharing formula which would not place most of the country’s revenue in the hands of the Federal Government.

Asking the RMAFC to expedite action on the review of the revenue sharing formula, chairman of the committee, Mr James Faleke, told Mbam, “Let us make it very clear, Chairman; the Revenue Mobilisation Allocation and Fiscal Commission is purely established to mobilise revenue for Nigerians and a very core responsibility is the issue of new revenue formula.“If you are unable to do this core responsibility, then Nigerians will not be happy with us.

Nigerians are saying that the money at the centre is too much. Where you just sit down and you see the Federal Government sponsoring a lot of projects like N-Power, N-Agric that they have no business with, it shows us that that there is so much money at the centre to the detriment of the states.

Please take this your function as very critical. If by next year we are not getting anywhere towards a new bill, this committee might be forced not to consider your budget.”Speaking with The ICIR on Thursday, November 5, the National Coordinator of the Human Rights Writers Association of Nigeria, Mr Emmanuel Onwubiko, noted that systemic challenges might be undermining the RMAFC’s ability to effectively undertake the reviews.

Onwubiko said, “The RMAFC is one of those commissions that ought to be constitutionally independent but something is wrong somewhere. It is either that it is being deliberately starved of funds or the people heading the RMAFC are careful not to step on the toes of more powerful ‎institutions.

The RMAFC is supposed to have oversight powers over all tiers of government and curtail leakages in the revenue of the government. The RMAFC should be a very strong institution but in Nigeria, such institutions are deliberately undermined.

The problems affecting Nigeria in terms of systemic distortion in the country’s structure are also the same factors that have affected the functions of that agency.”Stressing the need for an urgent review of the remuneration of political office holders, the HURIWA National Coordinator added, “It is a notorious fact that Nigerian legislators are the highest paid in any part of the world.

How can you have less than 500 Nigerians in the National Assembly earning more than what can be used to fund strategic sectors of the economy? And you have a situation where the agency that should allocate the remuneration of these political office holders being systematically sabotaged. It is unfortunate.”However, spokesman of the RMAFC, Mr Chris Nwachukwu, told The ICIR that the reviews are still on course.

Responding to observations that the RMAFC is dragging its feet on the reviews, Nwachukwu said, “The committee (set up by the RMAFC) is still working, until they finish up their work.

Like the chairman told the House of Representatives committee yesterday, it is not a process that is to be rushed. It takes time.

The committee is on the process and they are still working.”Attempts by the RMAFC to review the country’s revenue sharing formula in 2013 ended on an ‘inconclusive’ note, even after the commission had undertaken a tour of the 36 states.

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