The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has officially commenced a comprehensive review of Nigeria’s revenue sharing formula, marking the first major update in over three decades. The new framework is expected to be completed and implemented before the end of 2025.
At a press conference in Abuja on Monday, the Executive Chairman of RMAFC, Dr. Mohammed Bello Shehu, announced that the review aligns with Paragraph 32 (b), Part I of the Third Schedule of the 1999 Constitution (as amended), which mandates the Commission to periodically reassess the nation’s revenue allocation system to reflect current realities.
“In response to evolving socio-economic, political, and fiscal conditions across the country, the Commission has resolved to initiate the process of reviewing the revenue allocation formula to reflect emerging realities,” Dr. Bello stated.
He pointed out that the last thorough review of the formula was conducted in 1992. Since then, Nigeria has experienced significant demographic shifts, economic challenges, and constitutional reforms that now require a more updated and responsive fiscal structure.
Although various executive orders since 2002 have adjusted the formula in piecemeal fashion, Dr. Bello said those modifications are inadequate for addressing the current demands faced by different tiers of government.
He referenced key constitutional changes enacted by the 9th National Assembly that devolved critical responsibilities such as electricity, rail transport, and correctional facilities to the Concurrent Legislative List—transferring them from exclusive federal control to joint jurisdiction. This shift has imposed greater financial and administrative burdens on state governments.
“These developments necessitate a fundamental re-evaluation of Nigeria’s fiscal federalism in order to empower subnational governments, reduce overdependence on the centre, and promote equity, efficiency, and sustainability,” he explained.
The overarching goal of the review, he noted, is to create a fair, just, and balanced revenue sharing model that takes into account the roles, responsibilities, and fiscal capacities of federal, state, and local governments.
Dr. Bello assured that the process would be inclusive, transparent, and evidence-based. Extensive consultations will be conducted with key stakeholders including the Presidency, the National Assembly, state governors, the Association of Local Governments of Nigeria (ALGON), the judiciary, ministries and agencies, civil society groups, traditional institutions, the private sector, and international development partners.
The review will be supported by cutting-edge research, empirical data, and global best practices, he added.
In addition, Dr. Bello called for the implementation of the Oronsaye Report, which proposes the consolidation of government agencies to reduce waste and enhance efficiency. He particularly emphasized returning the Salaries and Wages Commission to the RMAFC—a move he argued would free up resources for improved public sector wages.
Reactions to the review are already emerging. The Association of Capital Market Academics of Nigeria (ACMAN) has urged that more revenue be allocated to state governments, considering their expanding responsibilities. However, the group’s president, Professor Uche Uwaleke, emphasized the need for proper accountability. He recommended that any additional funds be ring-fenced for critical infrastructure and development projects.
Once finalized, the new revenue formula is expected to reshape Nigeria’s intergovernmental fiscal structure, potentially paving the way for stronger subnational economies, improved service delivery, and reduced reliance on federal allocations.
