The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has begun the process for review of the Revenue Allocation Formula (RAF) between the federal, states, and local governments.
The development was announced on Monday by RMAFC Chairman, Mohammed Shehu, at a news conference in Abuja.
Shehu disclosed that the review became imperative given current economic realities since the last review in 1992.
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He said the review is meant to produce a fair, just, and equitable revenue-sharing formula that reflects the current responsibilities, needs, and capacities of the three tiers of governments in line with the constitutional roles.
Under the revenue allocation formula, the Federal Government gets a share of 52.6 per cent, 26.7 per cent for the state governments, and 20.6 per cent is allocated to the local governments.
One per cent each was also allocated to the Federal Capital Territory, ecological fund, natural resources, and the stabilisation fund under the vertical revenue allocation.
“In line with this constitutional responsibility and in response to the evolving socio-economic, political, and fiscal realities of our nation, the commission has resolved to initiate the process of reviewing the revenue allocation formula to reflect emerging socio-economic realities.
“As you may be aware, since that time, Nigeria has undergone profound transformations demographically, economically, and constitutionally,” Shehu stated.
“It will involve broad-based consultations with critical stakeholders, including the presidency, national assembly, state governors, ALGON, the judiciary, MDAS, civil society organisations, traditional rulers, the organised private sector, and development partners.
“The commission is also committed to integrating cutting-edge research, empirical data, and international best practices in its analysis,” Shehu added.
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