The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has revived the push for a new revenue allocation formula, two years after presenting its recommendations to former President Muhammadu Buhari without implementation.
The commission, now under new leadership, is set to brief the press on Monday on fresh policy directions regarding the proposed formula, which seeks to reduce the Federal Government’s share of national revenue while increasing allocations to states and local councils.
Under the reviewed formula, the Federal Government would receive 45.17 per cent, states 29.79 per cent, and local governments 21.04 per cent.
This represents a cut from the existing template, designed during ex-President Olusegun Obasanjo’s administration, which allocates 52.68 per cent to the centre, 26.72 per cent to the states, and 20.60 per cent to the 774 local councils.
The commission also recommended adjustments to special funds: one per cent for Ecology, 0.5 per cent for Stabilisation, 1.3 per cent for Development of Natural Resources, and 1.2 per cent for the Federal Capital Territory.
RMAFC’s 2022 submission to Buhari, led by its then Chairman, Engr. Elias Mbam, followed extensive consultations across Nigeria’s geopolitical zones, public hearings, and comparative studies of other federal systems. However, the outgoing administration failed to act on the report.
Presidency insiders suggest the renewed push may have been influenced by President Bola Tinubu’s directive last week ordering key revenue-generating agencies—including the Nigeria Customs Service, Federal Inland Revenue Service, Nigerian National Petroleum Company Limited, and the Nigerian Maritime Administration and Safety Agency—to cut their deductions and remittances.
The directive, announced by Finance Minister and Coordinating Minister of the Economy, Wale Edun, is aimed at boosting public savings, curbing leakages, and redirecting funds to growth-driven projects.
Tinubu specifically queried NNPC’s controversial 30 per cent management fee and 30 per cent frontier exploration deduction under the Petroleum Industry Act.
The Economic Management Team, chaired by Edun, is expected to present actionable recommendations to the Federal Executive Council on the matter in the coming weeks.
Observers say the convergence of RMAFC’s long-pending formula and Tinubu’s fiscal reforms could trigger one of the most significant overhauls of Nigeria’s revenue-sharing framework in two decades.
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