Elizabeth Christopher
The Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, has officially launched the review process of Nigeria’s current Revenue Allocation Formula, RAF.
The review marks the first formal overhaul of the RAF since 1992, although multiple executive adjustments have been made between 2002 and now. The current revenue sharing formula allocates 52.68% to the federal government, 26.72% to state governments, and 20.60% to local governments.
Speaking at a press conference held in Abuja, the Chairman of RMAFC, Dr. Mohammed Bello Shehu emphasized that the review would be inclusive, data-driven, and grounded in international best practices
“The aim of this review is 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 Governments in line with their constitutional roles.”
Dr. Shehu noted that the Commission is constitutionally empowered under Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution (as amended) 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.”
He noted that significant amendments to the Constitution, especially those devolving responsibilities like electricity distribution, railways, and corrections facilities from the exclusive to the Concurrent Legislative List, have placed new administrative and financial burden on subnational governments.
“These transformations demand a re-examination of our fiscal federalism. States and Local Governments are now assuming larger roles in service delivery and economic development, and they must be adequately resourced to meet these responsibilities,” Shehu stated.
Shehu added that the RMAFC plans to integrate empirical research, economic data, and comparative studies to design a more equitable system.
“The Commission will carefully assess the needs, service delivery obligations, fiscal performance, and developmental disparities. Let me state clearly that this review will be inclusive, data-driven, and transparent. 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.”
He reiterated the Commission’s commitment to bring onboard a template that would promote the development of the country.