RMAFC begins fresh review of Nigeria’s revenue allocation formula after decades

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has commenced a fresh review of Nigeria’s revenue allocation formula, more than three decades after the last major adjustment.

At a press briefing on Monday in Abuja, RMAFC chairman Mohammed Shehu said the last comprehensive review was conducted in 1992, with only minor modifications introduced through presidential executive orders between 2002 and 2022.

Under the existing framework, revenue from the Federation Account is shared as follows: Federal Government: 52.68%; State Governments: 26.72%; Local Governments: 20.60%

In 2022, the commission submitted a proposal to the presidency recommending a reduction of the federal government’s share to 45.17%, while increasing allocations to states and local governments to 29.79% and 21.04%, respectively.

Shehu described the ongoing review as “long overdue,” citing Nigeria’s evolving political, demographic, and economic realities.

“The recent constitutional amendments, which devolved responsibilities such as power generation, railways, and correctional services to subnational governments, have placed additional financial and administrative burdens on them,” Shehu explained.

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He stressed that the commission’s objective is to deliver a revenue sharing formula that is fair, just, and equitable, while reflecting the current responsibilities and capacities of all three tiers of government.

Receiving the RMAFC delegation, George Akume, Secretary to the Government of the Federation (SGF), urged the commission to exercise due diligence in reviewing the formula.

In a statement issued by his spokesperson, Segun Imohiosen, Akume said the revised formula must guarantee “irreducible minimum allocation” to critical ministries, departments, and agencies (MDAs), particularly the Ministry of Defence, which plays a central role in maintaining peace and protecting Nigeria’s sovereignty.

He assured the RMAFC of his office’s support to ensure the process is concluded and forwarded to the National Assembly for legislative approval.

According to Shehu, the commission is already drafting a new allocation formula. Once completed, it will be submitted to the SGF’s office for review before being transmitted to lawmakers for debate and approval.

Observers note that the review could significantly alter Nigeria’s fiscal federalism by giving states and local governments greater financial autonomy to manage devolved responsibilities.

However, experts caution that transparency and accountability in the utilisation of increased allocations remain critical to ensuring that the reforms translate into tangible development outcomes for citizens.