The Federal Government has started reviewing Nigeria’s revenue allocation formula to better reflect current economic realities.
The Chairman of the Revenue Mobilisation Allocation and
Fiscal Commission (RMAFC), Mohammed Bello Shehu, announced this during a press
conference at the Yar’Adua Centre in Abuja. He mentioned that the new formula
might increase the share of funds going to state governments.
Currently, the revenue is shared as follows:
Federal Government – 52.68%
State Governments – 26.72%
Local Governments – 20.60%
According to sources, the new plan could raise the states’
share to between 30% and 40%. Stakeholders at the meeting supported giving more
money to state and local governments, especially for infrastructure and
electricity projects.
The Federal Government has also started giving 5% of tax
revenues directly to states, based on new national tax laws.
Shehu explained that the goal is to create a fair and
balanced formula based on the actual duties, needs, and abilities of the three
tiers of government.
He emphasized that the review would be inclusive, based on
data, and open. Consultations will be held with key groups, including the
presidency, National Assembly, state governors, local government
representatives, the judiciary, government agencies, civil society groups,
traditional rulers, private sector players, and international partners.
The last full review of the revenue allocation formula was
done in 1992. Since then, changes have only been made through executive orders.
The Commission aims to use solid research and international best practices in
this new review process.
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