The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has officially begun a comprehensive review of Nigeria’s Revenue Allocation Formula (RAF), more than three decades after the last adjustment.
Speaking at a press conference in Abuja on Monday, RMAFC Chairman, Mohammed Shehu, explained that the review was necessary to reflect Nigeria’s evolving economic and constitutional realities. The current formula, introduced in 1992, allocates 52.6% of federally collected revenue to the Federal Government, 26.7% to states, and 20.6% to local governments, with one per cent each reserved for the Federal Capital Territory, ecological fund, natural resources, and stabilisation fund.
Shehu noted that since the last review, Nigeria has undergone profound demographic and economic changes. He cited constitutional amendments by the Ninth National Assembly that devolved key responsibilities—such as power generation, railways, and correctional services—from the federal to the state level. This, he said, had created new financial and administrative burdens on state governments, making a fresh formula urgently needed to ensure fairness, equity, and sustainability across all tiers of government.
The RMAFC boss assured that the review would be inclusive, transparent, and data-driven, incorporating empirical research, fiscal performance analysis, and global best practices. Broad-based consultations will be held with stakeholders including the Presidency, National Assembly, state governors, the judiciary, local government councils (ALGON), civil society groups, traditional rulers, the private sector, and development partners.
According to Shehu, the ultimate goal is to produce a just and equitable revenue-sharing arrangement that promotes economic growth, strengthens sub-national independence, and ensures efficient service delivery across the federation.
