RMAFC Targets Higher Allocation for States, LGAs as Review of Revenue Sharing Formula Commences
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has commenced a fresh review of Nigeria’s revenue allocation formula in line with the recently amended constitution, which devolves more powers and responsibilities to states and local governments.
At a press briefing in Abuja, RMAFC Chairman, Mohammed Bello Shehu, said the constitutional changes had transferred significant responsibilities — including electricity, railways, and correctional centres — to sub-national governments. He explained that this shift had placed additional financial and administrative burdens on states and local councils, making the review of the current sharing formula both necessary and urgent.
“This situation has made it essential to re-evaluate the structure of fiscal federalism in order to foster economic growth in individual states, enabling them to become less dependent on the central government, while ensuring equity, responsiveness, and sustainability,” Shehu said.
He recalled that the last comprehensive review of the formula was conducted in 1992, with subsequent executive orders between 2002 and now introducing only slight adjustments.
“As you may be aware,” Shehu noted, “Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution (as amended) mandates RMAFC to review, from time to time, the revenue allocation formula and principles in operation to ensure conformity with changing realities. In line with this responsibility, and in response to evolving socio-economic, political, and fiscal conditions, the commission has resolved to initiate a fresh review process.”
According to him, the review aims to produce a “fair, just, and equitable revenue-sharing formula that reflects the current responsibilities, needs, and capacities of the three tiers of government — federal, state, and local — in line with their constitutional roles.”
Shehu disclosed that the commission would thoroughly assess the obligations of each tier of government, their performance in service delivery, fiscal capacity, and existing developmental gaps across the federation.
Currently, revenue allocation stands at 52.68 per cent for the federal government, 26.72 per cent for states, and 20.60 per cent for local governments. However, Shehu hinted that the new formula may favour “increased allocations to both states and local governments” to help them meet their expanded constitutional mandates.
The review process, he added, will be completed within the year and will involve extensive consultations across the 36 states and the Federal Capital Territory to ensure inclusiveness and stakeholder buy-in.
