The federal government has begun a comprehensive review of Nigeria’s revenue allocation formula.
The move would adjust the sharing of federally collected revenue among the three tiers of government to reflect the current economic realities.
Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mohammed Bello Shehu, stated this at a press briefing held at the Yar’Adua Centre in Abuja on Monday, where he outlined the principles and objectives guiding the process.
According to the commission, the proposed new formula would increase the percentage of federal revenue accruing to states of the federation.
There are indications, according to sources familiar with the discussions that, the government is considering increasing state allocations to between 30 and 40 per cent, which would be a significant improvement from the current arrangement.
As at the present, the formula allocates 52.68 per cent to the federal government, 26.72 per cent to states, and 20.60 per cent to local governments, an arrangement in place since 1992.
Stakeholders who were at the briefing stressed that additional revenue to states should be strategically deployed, particularly in infrastructure development such as electricity provision, road networks, and healthcare delivery.
The federal government had already ceded 5 per cent of its share of tax revenue to states, in accordance with provisions in the recently signed national tax reforms.
Speakers at the forum, however, warned that greater allocations should strengthened accountability frameworks at the state and local government levels, in order to prevent wastages and ensure citizens benefit directly from the increased revenues.
RMAFC chairman Shehu explained that the vital aim of the review was to produce a fair, just, and equitable sharing formula that aligns with the evolving responsibilities, fiscal needs, and service delivery obligations of the federal, state, and local governments as defined by the 1999 Constitution.
He said that the commission was determined to balance developmental disparities across regions while promoting fiscal efficiency.
“Let me state clearly that this review will be inclusive, data-driven, and transparent. It will involve broad-based consultations with critical stakeholders, including the Presidency, National Assembly, State Governors, the Association of Local Governments of Nigeria (ALGON), the Judiciary, Ministries, Departments and Agencies (MDAs), civil society organisations, traditional rulers, the organised private sector, and international development partners,” Shehu said.
Salary increase for president, governors, ministers, living wage for workers
The commission also disclosed that it would also assess the remuneration framework for political officeholders and public servants with a view to introducing upward adjustments.
This includes salaries of the president, governors, ministers, and directors-general, among others.
“We will do justice to Nigerian workers. We have to pay individual workers a living wage. Development must be inclusive, and it cannot be achieved if the majority of our workers are underpaid,” Shehu explained.
He stressed the importance of repositioning the local government system as the true centre of grassroots development.
“We have to go back to the era where the centre of development becomes the local government. The real development should be back in the local government area,” he stated.
