Nigerian govt considering review of revenue sharing formula

Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).
Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).

The federal government has said it is considering the review of the revenue sharing formula for the three tiers of government.

The Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Elias Mbam, disclosed this in Abuja on Tuesday.

Mr Mbam said the review of the revenue allocation between the federal, state and local governments has become necessary due to the current economic realities.

He spoke after he received an Award of Excellence from the Nigeria Civil Service Union.

Under the current revenue sharing formula, the federal government takes about 52.68 per cent, the 36 state governments and the Federal Capital Territory get 26.72 per cent and the 774 local governments share 20.60 per cent.

Also, the nine oil producing states of the Niger Delta receive 13 per cent revenue as derivation to compensate for ecological damage of oil production in the region.

This formula was designed during the President Olusegun Obasanjo Administration.

However, following years of demands for a review of the formula, the RMAFC in 2013 resolved to undertake a review to achieve a balanced development of the country.

To achieve that objective, the commission embarked on a nationwide consultation to the 36 states and also met with notable persons, including traditional rulers on the issue.

By December 2014, the commission came out with a proposed new revenue formula, which was submitted to the government.

The report was, however, not implemented.

More than five years later, the RMAFC chairman said the commission plans to constitute a standing committee next week to start work once again on the review of the revenue sharing formula.

Mr Mbam said the commission would also pursue the diversification of the nation’s revenue base for a more sustainable growth and economic development.

“My agenda is to expand the sources of revenue for the federation. I will like to expand the cake that we are sharing so that people will get reasonable quantity.

“I intend to do this through diversification in the areas outside oil and gas. That includes solid minerals, agriculture and manufacturing.

“So, we will encourage states and let them know what is available outside oil and gas, so they can develop this aspect of the economy to their own benefit,” he said.

Mr Mbam also spoke on the significance of revisiting the issue of financial autonomy for local government areas. He said this would enable the bulk of Nigerians at the grassroots to get the best out of democracy.

Coronavirus factsheet


PT Mag Campaign AD

Support PREMIUM TIMES' journalism of integrity and credibility

Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.

For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.

By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.


TEXT AD: To advertise here . Call Willie +2347088095401...

BE THE FIRST TO KNOW! Subscribe to our newsletter

* indicates required


Now available on

  Premium Times Android mobile applicationPremium Times iOS mobile applicationPremium Times blackberry mobile applicationPremium Times windows mobile application

All rights reserved. This material and any other material on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from PREMIUM TIMES.