RMAFC calls for five-year review cycle of revenue allocation formula
By Matthew Denis
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has put forward a proposal advocating for the review of Nigeria’s revenue allocation formula every five years, in line with the provisions of the 1999 Constitution.
This proposal was unveiled during a three-day retreat held in Uyo, Akwa Ibom State. Addressing participants on Tuesday, the Chairman of the Commission, Dr Mohammed Shehu, represented by Mr Ismail Agaka, Chairman of the Public Affairs and Communication Committee, called attention to the pressing need to revise the current formula to better reflect prevailing economic conditions.
Dr Shehu remarked that the revenue-sharing framework has remained static for over 16 years, despite substantial changes in the country’s fiscal environment. He maintained that a timely update of the formula is both a constitutional obligation and a necessary step toward equitable resource distribution.
A major recommendation from the retreat involved amending Section 162(2) of the Constitution to establish a clear deadline by which the President must submit the Commission’s revenue allocation proposal to the National Assembly.
The retreat also urged the revision of Section 162(6) to enforce direct disbursement of funds to local governments from the Federation Account, consistent with the Supreme Court’s ruling of 11 July 2024, which upheld local government financial autonomy.
Another significant proposal was the inclusion of Local Government Chairmen and Councillors among the officeholders eligible for remuneration packages as determined by the RMAFC. The communique from the retreat, signed by the Commission’s Secretary, Mr Nwaze Okechukwu, read:
“There is an urgent need to revisit the revenue allocation formula to account for evolving national circumstances, in accordance with the spirit of the 1999 Constitution, especially given that the current framework has been in use for nearly 16 years.
“Presently, Local Government Chairmen, Councillors, and other political and public office holders are excluded from the list of beneficiaries entitled to remuneration packages determined by the RMAFC.
“In line with constitutional provisions, the RMAFC’s advice on the remuneration of political, public, and judicial office holders is binding on both Federal and State governments.”
To boost transparency and efficiency, the Commission also recommended the creation of a National Revenue Dashboard to digitally interface with all revenue-generating bodies, enabling real-time tracking of inflows.
Additionally, the retreat proposed a structural reorganisation that would see the Office of the Accountant General of the Federation separated from the Office of the Accountant General of the Federal Government. The former would be repositioned under the RMAFC to serve as an independent federal oversight body.
Reaffirming its constitutional role, the Commission committed to strengthening its oversight of revenue accruals to the Federation Account. It also pledged to upgrade fiscal management processes through strategic advisories covering revenue generation, expenditure control, and debt sustainability.
