The Federal Government, FG, has tasked the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) with conducting a thorough and comprehensive review to create a new revenue allocation formula that is both workable and widely accepted.
The Secretary to the Government of the Federation (SGF), George Akume, gave the charge while receiving a high-level delegation from the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), led by its Chairman, Mohammed Shehu, in Abuja.
Akume expressed confidence in the Commission’s capacity to deliver on its mandate of developing a comprehensive revenue allocation formula.
He assured the delegation of his Office’s readiness to provide the necessary support to ensure the successful completion of the project.
He further stressed that the proposed revenue allocation formula must prioritise irreducible minimum allocations to certain Ministries, Departments, and Agencies (MDAs), particularly the Ministry of Defence, given its crucial role in maintaining peace and safeguarding the nation’s territorial sovereignty.
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In response, Shehu assured the SGF that the Commission was already working on a new revenue allocation formula.
He added that a draft copy would soon be forwarded to the SGF’s Office for input before being transmitted to the National Assembly for final approval.
This came after RMAFC initiated a new process to adjust the country’s revenue-sharing formula, a system that has not undergone a comprehensive review in over 30 years.
Shehu announced that the last full review of the formula was conducted in 1992.
Subsequent changes have only been minor modifications made through executive orders since 2002.
Currently, the FG receives the largest portion of the federation account’s revenue at 52.68%.
The states get 26.72%, while the local governments receive 20.60%.
In 2022, the RMAFC proposed a new formula that would reduce the federal government’s share to 45.17%.
The proposal also suggested increasing the allocations for states and local governments to 29.79% and 21.04%, respectively.
Shehu described the current review as “long overdue,” citing significant changes in Nigeria’s demographics, economy, and political structure since the last major adjustment.
