Nigeria’s Revenue Sharing Formula Has Remained Unchanged For 29 Years – PERL

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By; JACOB ONJEWU DICKSON

Despite creation of states and local government areas in Nigeria, the revenue sharing formula has not changed and was last reviewed 29 years ago in 1992.
Istifanus Akau of the Partnership to Engage Reform and Learn (PERL) brought out the reminder, at   a one-day session with stakeholders to influence the consideration and ratification of constitutional amendment in Kaduna on Thursday April 21, 2022.

He argued that in the proposed revenue allocation review, the local government tier of governance, which is closes to the grassroots and should touch more lives, is not Favoured, in spite of its number at 774 LGAs.
Presenting a paper titled, “Nigeria’s Revenue Sharing Formula” he said, “The current sharing formula was done in 1992 over (29 years ago).
“Political structure of the country has changed with creationof 6 additional states in 1996 which brought the number of states to 36
“Corresponding increase in Local Governments   to 774, with additional 185 LGAs,” he said.
According to him,  the review focuses only vertical allocations which covers federal states and LGAs.
“This does not imply reduction in cost Governance,” he added.
He argued that from the proposed Nigeria’s Revenue Sharing Formula
Revenue Mobilization Allocation & Fiscal Commission (RMAFC), LGAs will be getting only 0.44 per cent increase.
From the current formula, Federal Government gets 52 per cent, while the proposed is 45.17 per cent, a reduction of minus 7.51 per cent.
“For the state’s, current allocation is  26.72 per cent, while the proposed is 29.79 per cent.
“For the local government areas, the present allocation is 20.60 per cent, while proposed is 21.04 per cent, signifying a minimal 0.44 per cent,” he said.

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