The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has launched a comprehensive review of Nigeria’s revenue allocation formula, marking the first major overhaul since 1992.
RMAFC Chairman, Mohammed Shehu, announced the move on Monday in Abuja, describing it as “long overdue” in light of the country’s economic, political, and constitutional changes. He noted that the review is aimed at producing a “fair, just, and equitable formula” that aligns with the responsibilities and capacities of the federal, state, and local governments.
Under the current arrangement, the federal government takes 52.68 percent of federally collected revenue, while states and local governments receive 26.72 percent and 20.60 percent, respectively. A 2022 proposal by RMAFC sought to reduce the federal share to 45.17 percent, while raising states’ allocation to 29.79 percent and local governments to 21.04 percent.
Shehu highlighted recent constitutional amendments devolving responsibilities such as power generation, railways, and correctional services to subnational governments, stressing that these shifts have increased their financial and administrative burdens. “This situation has made it essential to reevaluate the structure of fiscal federalism to foster economic growth and ensure sustainability,” he said.
Secretary to the Government of the Federation (SGF), George Akume, who received the RMAFC delegation in Abuja, urged the commission to exercise due diligence in the exercise. He assured the team of his office’s support but emphasised the need for an “irreducible minimum allocation” for key ministries and agencies, particularly the Ministry of Defence, given its role in safeguarding national security.
Akume expressed confidence in RMAFC’s capacity to deliver a workable and widely acceptable formula, adding that the outcome must reflect the nation’s current realities.
Shehu disclosed that the commission is already preparing a draft formula, which will be forwarded to the SGF’s office for review before transmission to the National Assembly for legislative approval.
The last comprehensive revenue formula review was conducted in 1992, with minor adjustments made through executive orders between 2002 and 2022.
