- Federal Govt To Get 45.17%, States 29.79%, LGs 21.04%
- Review Long Overdue Given Nigeria’s Shifting Economic, Political Realities-RMAFC
The Nigerian government through the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has commenced the process for review of the Revenue Allocation Formula (RAF) between the federal, states, and local governments, TheMatrix Newspaper has gathered.
Mohammed Shehu, Chairman of RMAFC, made this known at a press briefing on Monday, August 18, 2025 in Abuja.
He noted that the last comprehensive review of the RAF was carried out in 1992, with subsequent modifications through executive orders from 2002 to date.
Under the existing arrangement, the federal government receives 52.68 percent of revenue from the federation account, while states and local governments get 26.72 percent and 20.60 percent, respectively.
In 2022, RMAFC submitted a proposal for a new law that aimed to reduce the federal government’s share to 45.17 percent, increase the shares of states and local governments to 29.79 percent and 21.04 percent, respectively.
During the press conference, Shehu described the exercise as “long overdue” given the country’s shifting economic and political realities.
Speaking further, he quoted Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which mandates the RMAFC to “review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities”.
“In line with this constitutional responsibility and 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.
“As you may be aware, since that time, Nigeria has undergone profound transformations demographically, economically, and constitutionally.
“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 economic growth and ensure sustainability” he said.
According to him, the recent constitutional amendments by the Ninth National Assembly, which devolved certain responsibilities from the Exclusive List 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 sub-national governments.
The situation, he explained, made it essential to reevaluate the structure of fiscal federalism to foster economic growth in individual states, enabling them to become independent from the central government and ensuring equity, responsiveness, and sustainability.
He promised that the commission would carefully assess the needs, service delivery obligations, fiscal performance, and developmental disparities, adding 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.
The chairman emphasised that the commission aims to produce a fair, just, and equitable revenue sharing formula that reflects the current responsibilities, needs, and capacities of the three tiers of government in line with their constitutional roles.
While receiving a delegation from RMAFC led by its chairman, in Abuja, on Monday, George Akume, the Secretary to the Government of the Federation (SGF), asked the commission to ensure due diligence in reviewing the revenue allocation formula for the country.
In a statement by Segun Imohiosen, director, information and public relations to the SGF, Akume said he was confident in the capacity of the commission’s management to deliver on its mandate of producing a comprehensive revenue sharing framework.
The SGF assured the delegation of his office’s support in finalising the exercise, while stressing that the formula must prioritise “irreducible minimum allocation” to some ministries, departments, and agencies (MDAs), particularly the ministry of defence, because of its critical role in safeguarding peace and protecting Nigeria’s territorial sovereignty.
