Abuja: The Federal Government has taken a significant step towards reforming the nation’s revenue sharing system, engaging with key stakeholders to develop a more responsive and adaptable model. Dr Mohammed Shehu, Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), disclosed this at a Panel Discussion on the Review of the Revenue Allocation Formula, held recently in Abuja.
According to News Agency of Nigeria, Shehu emphasized the need to strengthen the fiscal foundations of the federation to enhance equity and ensure that national prosperity is fairly shared among the tiers of government. He noted that the current revenue sharing formula, approved in 1992, no longer reflects the economic, demographic, and constitutional realities of today. He highlighted the necessity of a bold, data-driven, and inclusive review of the formula to address changes such as the diversification of the economy, population growth, expanded expenditure patterns, and constitutional amendments that have altered the governance structure.
Shehu explained that the panel discussion aims to stimulate informed dialogue among stakeholders from government, academia, development partners, and civil society. The dialogue seeks to restructure Nigeria’s revenue sharing system to reflect current socioeconomic realities and align with global best practices. The expectations from the discussion include examining emerging fiscal pressures, developmental disparities among government tiers, and exploring innovative approaches for revenue allocations.
The commission, since the commencement of the review exercise, has engaged experts, MDAs, and international development partners to strengthen the analytical basis of the proposed formula. Preliminary models have been developed, and policy workshops conducted to keep commission members informed about the technical aspects of the review. Shehu stressed the importance of a transparent, evidence-based, and inclusive process that aligns with constitutional provisions and builds national consensus.
The Minister of Budget and Economic Planning, Sen. Abubakar Bagudu, highlighted the need to address insecurity challenges across the country, advocating for increased funding to improve safety and economic stability. Hajia Hadiza Usman, Special Assistant to the President on Policy Coordination, conveyed President Bola Tinubu’s directive to review the structure and ensure a revised formula that aligns with international best practices and holds the commission accountable for resource mobilisation and allocation clarity.