By Joel Ajayi

After more than three decades, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has officially commenced a comprehensive review of Nigeria’s revenue allocation formula, aiming to align it with the country’s current socio-economic realities.

The last major review of the revenue allocation formula was carried out in 1992. Although there have been several executive adjustments since 2002, a full-scale overhaul had not been undertaken—until now.

Speaking at a press conference on Monday to formally launch the 2025 Revenue Allocation Formula Review, the Chairman of the Commission, Dr. Mohammed Bello Shehu, emphasized that the review is both a constitutional responsibility and a timely necessity.

He stated that the aim of the review is to establish a fair, just, and equitable revenue-sharing formula that reflects the current responsibilities, needs, and capacities of the Federal, State, and Local Governments.

“It is with a profound sense of responsibility and constitutional duty that I welcome you to this important press conference, which marks the formal launch of the review of the current Revenue Allocation Formula (RAF) for sharing revenue among the three tiers of government in Nigeria,” he said.

Dr. Shehu referenced Paragraph 32(b), Part I of the Third Schedule of the 1999 Constitution (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.”

He noted that the ongoing review is driven by Nigeria’s evolving economic, political, and constitutional landscape. Notably, recent amendments by the 9th National Assembly transferred several key responsibilities—such as electricity generation and distribution, railways, and correctional services—from the Exclusive to the Concurrent Legislative List.

This devolution of powers, he explained, has placed greater financial and administrative responsibilities on subnational governments, making it necessary to reevaluate the existing fiscal framework.

“The Commission will embark on a thorough, data-driven, and inclusive process,” Dr. Shehu added. “This will involve broad consultations with critical stakeholders, including the Presidency, National Assembly, State Governors, ALGON, the Judiciary, MDAs, civil society organizations, traditional rulers, the organized private sector, and development partners.”

He also noted that RMAFC will integrate cutting-edge research, empirical data, and international best practices into its analysis. The review will assess service delivery obligations, fiscal performance, developmental disparities, and economic capacities at all levels of government.

 “Ultimately, our objective is to create a more balanced and sustainable fiscal federalism—one that fosters economic independence at the subnational level while ensuring equity and accountability in revenue distribution.”

Dr. Shehu also appealed for the cooperation of all stakeholders, emphasizing that the review is in the national interest and intended to benefit all Nigerians, not just select segments of the country.
In his remarks, the Federal Commissioner representing Katsina State and Chairman of the Revenue Formula Committee, Kabir Muhammad Mashi, OON, reaffirmed the Commission’s readiness to carry out a successful and impactful review.

Mashi disclosed that while the Commission had produced a report on the Vertical Revenue Allocation Formula in April 2022, it was shelved due to the 2023 constitutional amendments, which significantly altered the responsibilities of the various tiers of government as outlined in the First and Second Schedules of the Constitution.

“Hence, the need for a fresh review of the revenue allocation formula in its entirety—to reflect the current socio-economic challenges in the country, as well as the new economic policies of the current administration,” he said.

He described the event as a pivotal moment in the evolution of Nigeria’s fiscal federalism and intergovernmental fiscal relations.

“It provides an opportunity for us to brief you on our activities so far, to explain our approach, and to receive your valuable input on this vital national matter,” Mashi said. “The Commission is determined to carry out this review through a process that is inclusive, transparent, evidence-based, and fully aligned with the spirit and letters of the 1999 Constitution (as amended).”

Meanwhile, the committee is expected to submit its full report by December 2025.

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