By Abiola Olawale
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has initiated a massive overhaul of Nigeria’s Revenue Allocation Formula (RAF).
The agency said the review of the allocation formula is aimed at addressing economic disparities among Nigeria’s three tiers of government.
This was made known by RMAFC Chairman Mohammed Shehu during a press conference in Abuja on Monday.
Shehu said the review seeks to create a fairer, more equitable revenue-sharing framework among the federal, state, and local governments.
The New Diplomat reports that the current revenue-sharing formula, unchanged since 1992, allocates 52.6% of federally collected revenue to the federal government, 26.7% to state governments, and 20.6% to local governments, with an additional 1% each for the Federal Capital Territory, ecological fund, natural resources, and stabilization fund.
However, many individuals have argued that Nigeria’s demographic, economic, and constitutional transformations over the past three decades have purportedly rendered the existing model outdated.
Speaking on the development, Shehu quoted Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which mandates the RMAFC to “review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities”.
He continued: “In line with this constitutional responsibility and 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.”
According to him, the recent constitutional amendments by the Ninth National Assembly, which devolved certain responsibilities from the Exclusive List to the Concurrent Legislative List, such as generation, transmission, and distribution of electricity; railways and prisons (correctional centres), have placed financial and administrative burdens on sub-national governments.”
He promised that the commission would carefully assess the needs, service delivery obligations, fiscal performance, and developmental disparities, adding that the review would 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.
“The commission is also committed to integrating cutting-edge research, empirical data, and international best practices in its analysis,” he added.
