ISSUES IN THE REVENUE SHARING FORMULA

President Muhammadu Buhari received a report on the review of the revenue sharing formula, conducted by the Revenue Mobilisation Allocation Fiscal Commission (RMAFC) in 2021. The RMAFC proposed a formula where the federal government would receive 52.68%, states 26.72%, and local governments 20.60% of the revenue.

However, many believe this formula does not go far enough in devolving financial resources to the state and local levels. The current revenue allocation formula, established in 1992 during the military era, has been a contentious issue, with calls for a more equitable distribution of resources.

Despite attempts to review the formula over the years, progress has been hindered by fears of losing a share of the national revenue. The need to improve revenue generation across the board is crucial, as Nigeria's revenue percentage of GDP is one of the lowest in the world.