The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has begun the review of the current Revenue Allocation Formula (RAF) for sharing revenue amongst the three tiers of government in Nigeria, 33 years after the last review.
RMAFC’s Chairman, Mohammed Shehu, performed the official unveiling of the exercise on Monday at the Shehu Musa Yar’Adua Centre in Abuja.
TheFact Daily reports that under the current revenue allocation formula, the federal Government gets 52.6%, while States and Local Governments get 26.7% and 20.6% shares respectively.
Mr. Shehu explained that Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution of the Federal Republic of Nigeria (as amended) mandates the RMAFC to “review, from time to time the revenue allocation formula and principles in operation to ensure conformity with changing realities.”
He said that the Commission, in line with this constitutional responsibility and in response to the evolving socio-economic, political, and fiscal realities of the nation, has resolved to initiate the process of reviewing the revenue allocation formula to reflect emerging socio-economic realities.
RMAFC boss disclosed that since the last review of the allocation sharing formula in 1992, Nigeria has undergone profound transformations demographically, economically, and constitutionally, necessitating the current review.
According to him, the recent Constitutional amendments-by-the 9th National Assembly, which devolved certain responsibilities from the Exclusive 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 subnational governments.
He said the situation has made it essential to reevaluate the structure of fiscal federalism in order to foster economic growth in individual states, enabling them to become independent from the central government, and ensuring equity, responsiveness, and sustainability
Shehu stressed that the aim of the review was 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 the constitutional roles.
He assured that the Commission would carefully assess the needs, service delivery obligations, fiscal performance, and developmental disparities, reassuring 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.
