Nigeria’s Revenue Allocation Formula Under Review, as RMAFC Chairman seeks stakeholders understanding frm Stakeholders
Oru Leonard
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), has commenced a review of Nigeria’s revenue allocation formula, over three decades after the last adjustment in 1992. This move aims to produce a fair, just, and equitable revenue-sharing formula reflecting the current responsibilities, needs, and capacities of the three tiers of government.
The Chairman of the Commission, Dr. Mohammed Bello Shehu, during a press conference held at Abuja today on the review of the revenue allocation fomular (RAF), has urged stakeholders and the general public to understand on the need to review the allocation fomular.
He said the current revenue allocation formula stands at 52.6% for the Federal Government, 26.7% for state governments, and 20.6% for local governments, with 1% each allocated to the Federal Capital Territory, ecological fund, natural resources, and stabilization fund.
He disclosed that the review may potentially increase the share of funds going to state governments to between 30% and 40%, with stakeholders supporting more resources for sub-national governments, especially for infrastructure projects.
“The review will be inclusive, data-driven, and transparent, involving broad-based consultations with critical stakeholders, including the presidency, national assembly, state governors, Association of Local Government of Nigeria (ALGON), and civil society organizations”
Speaking, the Federal Commissioner and Chairman of the Revenue Formula Committee, Kabir Muhammad Mashi, also reaffirmed the Commission’s readiness to deliver an impactful outcome.
He disclosed that although RMAFC had earlier produced a report in 2022, it was overtaken by constitutional amendments in 2023 that shifted responsibilities among the tiers of government.
“Hence, the need for a fresh review of the revenue allocation formula in its entirety to reflect the current socio-economic challenges in the country, as well as the new economic policies of the present administration,” Mashi explained.
He described the initiative as a defining moment in Nigeria’s fiscal federalism and intergovernmental relations, adding that the committee is expected to submit its final report by December 2025.
Stakeholders and guests including Professor Uche Uwalaka, a renowned financial and stock market expert from the Nassarawa State University Keffi pledge their support to the review while bringing up ways to checkmake the lack of accountability by most state governors.
RMAFC is mandated by the 1999 Constitution to review revenue allocation formulae and principles periodically to ensure conformity with changing realities.
The review is necessitated by Nigeria’s evolving socio-economic, political, and fiscal realities, including recent constitutional amendments that devolved certain responsibilities from the Exclusive to the Concurrent Legislative List. This has placed financial and administrative burdens on subnational governments, making it essential to reevaluate the structure of fiscal federalism.
The review aims to foster economic growth in individual states, enabling them to become more independent from the central government while ensuring equity, responsiveness, and sustainability. The Commission will carefully assess the needs, service delivery obligations, fiscal performance, and developmental disparities of each tier of government.
