The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has started reviewing how revenue is shared among the federal, state and local governments. The exercise could see states and local councils take a larger share as their responsibilities continue to grow.
At a press briefing on Monday in Abuja, RMAFC chairman, Mohammed Shehu, said the review had become necessary given recent changes in the constitution that shifted more duties from the federal government to the states.
“The recent constitutional amendments, which devolved responsibilities such as power generation, railways and correctional services to subnational governments, have placed financial and administrative burdens on them. This situation has made it essential to reevaluate the structure of fiscal federalism to foster encourage growth and ensure sustainability,” he explained.
Under the current formula, the federal government gets 52.6% of revenue from the federation account, states take 26.7%, while local governments receive 20.6%.
With the review now underway, states and local governments are expected to get higher allocations, while the federal government’s share is likely to be reduced.
The last major review of the sharing formula was carried out in 1992, more than three decades ago.
Shehu added that the commission will consult widely, engaging governors, the judiciary, civil society groups, development partners and the organised private sector, to ensure the process is inclusive and transparent.
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