The Federal Government is set to review Nigeria’s revenue allocation formula, marking the first major overhaul in 33 years.
Mohammed Shehu, Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), announced the initiative in Abuja on Monday, stating the review aims to “reshape fiscal federalism” to accommodate the increased responsibilities of states and local governments.
The last comprehensive review occurred in 1992, with minor adjustments in 2002. Shehu noted the current formula is outdated, especially considering constitutional amendments by the 9th National Assembly that transferred powers over electricity, railways, and correctional centres to the states.
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“These amendments have placed enormous burdens on state governments,” he explained, emphasizing the need to reassess fiscal federalism for equity, responsiveness, and sustainability.
Currently, federally collected revenue is distributed with 52.68% going to the Federal Government, 26.72% to states, and 20.60% to local governments. From the federal share, 4.18% is allocated to special funds. Shehu promised an “inclusive, data-driven, and transparent” review, involving consultations with various stakeholders, including the Presidency, National Assembly, governors, local government councils, the judiciary, ministries, civil society, traditional rulers, the private sector, and development partners.
