Nigeria’s Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has commenced plans to review the country’s revenue sharing formula, more than three decades after the last adjustment. According to Vanguard, the review is aimed at reflecting Nigeria’s current socio-economic realities and balancing fiscal responsibilities across tiers of government.
At present, the federal government receives 52.6% of revenue allocations, while states and local governments receive 26.7% and 20.6% respectively. An additional 1% is shared among the Federal Capital Territory, ecological fund, natural resources, and stabilisation fund. According to Vanguard, the new review will take into account expanded state responsibilities following constitutional amendments that devolved electricity, railways, and correctional services to concurrent jurisdiction.
RMAFC Chairman Mohammed Shehu said the process will be consultative and data-driven. According to Gazette Nigeria, stakeholders including the presidency, National Assembly, governors, civil society groups, and the private sector will be engaged in shaping the formula.
The commission is also pushing for constitutional changes to ensure regular reviews, proposing that a new formula be submitted to the National Assembly at least once every five years. According to Umpire News, another key recommendation is that local governments should receive allocations directly from the Federation Account, a reform aligned with a recent Supreme Court ruling on local government autonomy.
Analysts say the outcome of the review could significantly alter fiscal flows, enhance state-level financing capacity, and reduce structural dependence on the federal purse, with implications for both public sector planning and private sector investment strategies.
