The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has commenced a fresh review of Nigeria’s revenue allocation formula, in response to the recently amended constitution which devolved more powers and responsibilities to states and local governments.
Speaking at a press briefing in Abuja yesterday, the Chairman of RMAFC, Mohammed Shehu, explained that the new constitutional provisions had shifted significant responsibilities such as electricity, railways, and correctional centres to sub-national governments.
He said this development has placed “financial and administrative burdens” on states and local governments, making a review of the current revenue-sharing arrangement inevitable.
“This situation has made it essential to re-evaluate the structure of fiscal federalism in order to foster economic growth in individual states, enabling them to become independent from the central government and ensuring equity, responsiveness, and sustainability”, Shehu said.
The RMAFC boss reminded Nigerians that the last comprehensive review of the revenue formula was undertaken in 1992, while several executive orders issued between May 2002 and now have only slightly modified the formula.
