RMAFC starts overhaul of revenue sharing formula

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has initiated a fresh review of Nigeria’s revenue allocation framework among the federal, state, and local governments, more than 30 years after the last adjustment.

Chairman of the commission, Mohammed Shehu, disclosed this on Monday at a press briefing in Abuja, stating that the review was long overdue given the nation’s evolving economic and political landscape.

He explained that the goal was to design a “fair, just, and equitable” sharing formula that mirrors the responsibilities, financial needs and capacities of the three tiers of government, in line with their constitutional mandates.

Currently, the revenue distribution stands at 52.6 per cent for the Federal Government, 26.7 per cent for states, and 20.6 per cent for local councils. Additionally, one per cent each is reserved for the Federal Capital Territory, ecological fund, natural resources, and the stabilisation fund.

Quoting Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution (as amended), Shehu reminded stakeholders that the RMAFC is mandated to “review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities.”

“In line with this constitutional responsibility and in response to the evolving socio-economic, political, and fiscal realities of our nation, the commission has resolved to initiate the process of reviewing the revenue allocation formula to reflect emerging socio-economic realities.

“As you may be aware, since that time, Nigeria has undergone profound transformations demographically, economically, and constitutionally,” he said.

Shehu highlighted recent constitutional amendments by the Ninth National Assembly, which devolved key responsibilities—including electricity generation, transmission and distribution, railways, and correctional centres—from the Exclusive Legislative List to the Concurrent List. He noted that this development had imposed heavier fiscal and administrative demands on state governments.

This, he stressed, made it critical to re-examine fiscal federalism to promote state-level economic growth, reduce overdependence on the centre, and guarantee fairness and sustainability.

He assured that the commission would conduct a comprehensive and transparent review that takes into account developmental disparities, fiscal performance, service delivery obligations, and sectoral needs.

“It will involve broad-based consultations with critical stakeholders, including the presidency, national assembly, state governors, ALGON, the judiciary, MDAS, civil society organisations, traditional rulers, the organised private sector, and development partners.

“The commission is also committed to integrating cutting-edge research, empirical data, and international best practices in its analysis,” he added.

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