FG Eyes Higher Allocation as Senate Moves to Amend Revenue Sharing Formula

By Adedapo Adesanya

The Senate has proposed a review of the current revenue-sharing formula among the three tiers of government, seeking to allocate more funds to the federal government.

The proposal is contained in a constitutional amendment bill titled Constitution of the Federal Republic of Nigeria, 1999 (Alteration) Bill, 2026, sponsored by Mr Karimi Sunday representing Kogi-West, which passed first reading during plenary on Tuesday.

Coming amid ongoing calls for a new revenue formula to favour states and local governments, the bill argues for an increased federal share from the existing formula.

Under the current revenue sharing formula designed during the President Olusegun Obasanjo administration, the federal government takes about 52.68 percent of the total revenue generation by the nation in a month, the 36 state governments including the Federal Capital Territory, Abuja get 26.72 per cent and the 774 local governments share 20.60 per cent. The oil producing states of the Niger Delta region receive 13 per cent revenue as derivation to compensate for ecological damage of oil production in the region.

Defending the bill, the senator in a media conference on Tuesday stated that the federal government is overburdened by responsibilities such as the rehabilitation of dilapidated Trunk A roads and rising security costs, adding that available funds are no longer sufficient.

Ahead of its second reading, the lawmaker alleged that some states have little to show for funds received from the federation account.

The battle to change the sharing formula has been ongoing for more than 12 years. In 2013, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) resolved to undertake a review to achieve a balanced development of the country.

To achieve that objective, the commission embarked on a nationwide consultation to the 36 states and also met with notable persons, including traditional rulers on the issue.

In December 2014, the commission came out with a proposed new revenue formula, which was submitted to the government. However, the report was not implemented.

Proponents have argued that the review of the revenue allocation among the federal, states and local governments of the federation has become necessary due to the current economic realities the country is facing.