Nigeria nears new revenue-sharing formula as RMAFC begins data verification

Nigeria is edging closer to adopting a new revenue allocation formula, as the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) says its ongoing review has reached an advanced stage.

In a statement issued on Thursday by the commission’s spokesperson, Maryam Yusuf, RMAFC disclosed that it has commenced a nationwide data verification exercise to update the indices used in distributing revenue across the federal, state and local governments.

Chairman of the commission, Mohammed Shehu, said the exercise is aimed at ensuring that Nigeria’s revenue-sharing framework reflects current socio-economic realities.

He emphasised that accurate and credible data is essential for fairness, equity and national cohesion, noting that the verification process would strengthen fiscal federalism and support more effective development planning.

According to Shehu, the exercise will review key indicators that determine revenue allocation, including population, landmass, infrastructure, internally generated revenue capacity, as well as access to education and healthcare services.

He added that the process would involve the collection, validation and reconciliation of data across all states and the Federal Capital Territory, using a region-by-region approach. Stakeholder engagement sessions are also expected to be held nationwide to promote transparency and collaboration.

The commission said the exercise comes at a critical point in the review process, describing it as a safeguard to ensure the integrity of the indices that will underpin a new revenue allocation formula.

Nigeria’s current revenue-sharing structure allocates 52.6 per cent to the Federal Government, 26.7 per cent to states, and 20.6 per cent to local governments, with additional one per cent allocations to the Federal Capital Territory, ecological fund, natural resources and stabilisation fund.

A previous review submitted in 2022 under former RMAFC chairman, Elias Mbam, proposed a revised formula of 45.17 per cent for the Federal Government, 29.79 per cent for states, and 21.04 per cent for local governments. However, efforts to implement a new framework have yet to succeed.

With the latest data verification exercise underway, the commission says it is laying the groundwork for a more transparent, equitable and up-to-date revenue distribution system for the country.