The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has announced the commencement of a comprehensive review of Nigeria’s revenue allocation formula to align it with the country’s current socio-economic realities.
This is despite stakeholders urging the commission to tie additional funds allocated to the states to specific projects to prevent reckless spending.
Chairman of the RMAFC, Dr Mohammed Bello Shehu, during a press conference on Monday to announce the commencement of the review, stated that the last major review of the revenue allocation formula was conducted in 1992, despite several executive adjustments made since 2002.
Presently, the allocation formula is 52.68 per cent going to the federal government, 26.72 per cent to the states, and 20.60 per cent to local governments.
He said that the review aims to establish a fair, just, and equitable revenue-sharing formula that reflects the current responsibilities, needs, and capacities of the Federal, State, and Local Governments.
He said, “The ongoing review is driven by Nigeria’s evolving economic, political, and constitutional landscape. Notably, recent amendments by the 9th National Assembly transferred several key responsibilities—such as electricity generation and distribution, railways, and correctional services—from the Exclusive to the Concurrent Legislative List.”
He said this devolution of powers has placed greater financial and administrative responsibilities on the federation units, making it necessary to reevaluate the existing fiscal framework.
“The commission will embark on a thorough, data-driven, and inclusive process,” Dr. Shehu noted, adding, “This will involve broad consultations with critical stakeholders, including the Presidency, National Assembly, State Governors, ALGON, the Judiciary, MDAs, civil society organizations, traditional rulers, the organised private sector, and development partners.”
He also noted that RMAFC will integrate cutting-edge research, empirical data, and international best practices into its analysis. “The review will assess service delivery obligations, fiscal performance, developmental disparities, and economic capacities at all levels of government,” he said.
“Ultimately, our objective is to create a more balanced and sustainable fiscal federalism, one that fosters economic independence at the subnational level while ensuring equity and accountability in revenue distribution.”
During the interactive session, Professor Uche Uwaleke of Nasarawa State University called for the ring-fencing of the extra funds that will be allocated to the states, so that the governors do not view them as discretionary funds.
He said such additional funds should be tied to the funding of infrastructure, education, healthcare or other social services.
On his part, the Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, who agrees with Uwaleke, called for the enforcement of local government autonomy as ruled by the Supreme Court; otherwise, any allocation to the local government will still be controlled by the state governors.
It would be recalled that the commission had, in recent times, attempted to review the allocation formula and had actually forwarded it to then-President Goodluck Jonathan towards the end of his administration. But for some reason, the former president did not transmit it to the National Assembly.
Another attempt was made under former President Muhammadu Buhari, sometime between 2021 and 2022; however, he also did not transmit the proposal to the National Assembly before the end of his tenure.
