RMAFC begins revenue allocation review

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has commenced the review of Nigeria’s revenue sharing formula among the three tiers of government, with a new framework expected before the end of 2025.

Speaking at a press briefing in Abuja on Monday, the Executive Chairman of RMAFC, Dr. Mohammed Bello Shehu, said the review is in line with Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution (as amended), which mandates the Commission to “review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities.”

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“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,” Dr Bello said.

He recalled that the last comprehensive review of the formula was carried out in 1992, noting that since then, Nigeria has witnessed profound demographic, economic, and constitutional changes that necessitate an update.

Although successive administrations issued executive orders between 2002 and to date to adjust allocations, he stressed that these piecemeal modifications fall short of addressing present realities.

Citing recent constitutional amendments by the 9th National Assembly, which devolved responsibilities such as electricity generation and distribution, railways, and correctional centres to the Concurrent Legislative List, Dr. Bello noted that subnational governments now face increased financial and administrative burdens.

“This situation makes it essential to re-evaluate our fiscal federalism structure in order to empower states to drive economic growth, reduce dependence on the centre, and promote equity, responsiveness, and sustainability,” he explained.

According to him, the objective of the review is to deliver a fair, just, and equitable sharing formula that reflects the current needs, responsibilities, and capacities of the federal, state, and local governments in line with their constitutional roles.

Dr. Bello assured that the process will be inclusive, data-driven, and transparent, with consultations involving the Presidency, National Assembly, state governors, ALGON, judiciary, MDAs, civil society organisations, traditional rulers, the private sector, and development partners.

He added that the Commission will integrate cutting-edge research, empirical data, and international best practices in its assessment.

He further advocated the implementation of the Oronsaye report, which recommends streamlining government agencies, including returning the Salaries and Wages Commission to RMAFC, saying such measures would free up funds to support living wages for public servants.

Meanwhile, stakeholders are already making their positions known.

The Association of Capital Market Academics of Nigeria (ACMAN) has urged that the new formula allocate more revenue to the states, given their increasing responsibilities.

President of ACMAN, Professor Uche Uwaleke, however, cautioned that any additional funds should be ring-fenced for critical infrastructure and development projects to ensure accountability and impact.

The review process, once concluded, is expected to reshape the fiscal framework guiding resource distribution in Nigeria, a move observers believe could significantly influence state-level development and fiscal independence.