The Nigerian government through Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has announced the commencement of a comprehensive review of Nigeria’s revenue-sharing formula, aimed at increasing allocations to the states. The announcement was made by Chairman Mohammed Bello Shehu at a press briefing held at the Yar’Adua Centre, Abuja, on Monday.
According to sources within the Commission, the new formula could raise the total allocation to states to between 30% and 40%, compared with the current distribution of 52.68% to the Federal Government, 26.72% to states, and 20.60% to local governments. Stakeholders at the briefing emphasized the need for more resources at the sub-national level to support infrastructure development, including electricity provision.
The Federal Government has already begun relinquishing 5% of its tax revenue to states, as stipulated in the recently enacted national tax laws. Dr. Shehu stated that the review is designed to produce a fair, equitable, and transparent formula that reflects the current responsibilities, needs, and capacities of all three tiers of government.
“The review will be inclusive, data-driven, and transparent. It will involve consultations with key stakeholders, including the Presidency, National Assembly, state governors, ALGON, the judiciary, MDAs, civil society organizations, traditional rulers, the organized private sector, and development partners,” he said.
The last comprehensive review of Nigeria’s revenue allocation formula was carried out in 1992, although several executive orders have since modified the formula to reflect evolving socio-economic realities. The Commission affirmed its commitment to integrating empirical data, cutting-edge research, and international best practices into the review process.
