FG considers review of Obasanjo’s federation allocation sharing formula


The Federal Government is considering the review of the federation allocation sharing formula for federal, states and the 774 local government areas, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) Chairman Elias Mbam, said in Abuja on Tuesday.

Speaking after receiving an Award of Excellence from the Nigeria Civil Service Union (NCSU) for his contributions towards workers’ welfare in the commission, the RMAFC boss said the proposed review is due to the current economic realities.

In the prevailing formula, the Federal Government gets the lion’s share of 52 per cent, states get 26.72 per cent and local government areas get 20.60 per cent.

Thirteen per cent of the oil and gas federally collected revenue is returned to the oil producing states and communities as derivation revenue to compensate for ecological risks of oil production.

The formula was designed during the administration of former President Olusegun Obasanjo

However, the RMAFC in 2013 saw the need to still review the formula for balanced development, hence, it went on a nationwide consultation to the 36 states and also met with notable figures.

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By December 2014, the commission had come out with a proposed new revenue formula but for some reasons, the content never saw the light of day.

Five years after, the RMAFC chairman has again spoken of plans to raise a standing committee by next week to start work once again on the review of the nation’s revenue sharing formula.

Mbam said that the commission would also pursue for the diversification of the nation’s revenue for a more sustainable growth and economic development.

He said: “My agenda is to expand the sources of revenue for the federation. I will like to expand the cake that we are sharing so that people will get reasonable quantity.

“I intend to do this through diversification in areas outside oil and gas and that includes solid minerals, agriculture and manufacturing.

“So, we will encourage states and let them know what is available outside oil and gas so they can develop this aspect of the economy to their own benefit.”

Mbam also emphasised on the importance of revisiting the financial autonomy of the local government areas which would enable the bulk of Nigerians at the grassroots get the best out of democracy.

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