Nigeria has completed a long-awaited review of its revenue allocation formula, paving the way for a new framework governing how federally collected revenues are shared among the federal, state, and local governments.
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) said the review followed extensive consultations with the three tiers of government, technical experts, and other institutions and was designed to make revenue distribution more equitable and sustainable.
Mohammed Shehu, the commission’s chairman, disclosed the development during an interactive session with members of the Nigerian Guild of Editors in Lagos. He said the exercise had assessed fiscal responsibilities, revenue trends, and comparative federal systems before producing a harmonised report and legislative proposals ready for transmission to the relevant authorities.
The review comes as Nigeria’s fiscal system faces mounting pressure from rising expenditure, uneven revenue generation, and demands from states and local governments for greater financial capacity.
Shehu said the new framework was intended to reflect changing economic and governance realities while creating a fairer basis for distributing national resources.
RMAFC also said it had completed its review of remuneration for judicial officeholders, resulting in the enactment of the Judicial Office Holders (Salaries and Allowances) Act, 2025.
The review of pay and allowances for executive and legislative officeholders is at an advanced stage, with the commission expecting an executive bill on the Political and Public Office Holders (Salaries and Allowances) Act, 2026, to be sent to the National Assembly.
Shehu said higher remuneration should be accompanied by greater accountability and improved performance.
“Remuneration reforms must be matched with accountability and performance. Improved pay should translate into improved service delivery,” he said.
The commission has also stepped up monitoring of oil and gas production to ensure that states receive the revenues due to them under the 13% derivation principle.
Shehu said RMAFC had used verification exercises, geospatial mapping, and cooperation with relevant agencies to resolve discrepancies in oil-well attribution. Among its interventions was the reallocation of 17 oil wells from Imo State to Rivers State in compliance with a Supreme Court judgment.
Similar interventions have been undertaken in Cross River, Akwa Ibom, Imo, and Anambra states, while improved reporting of gas production has enabled Enugu and Kogi states to benefit from derivation revenues.
RMAFC has strengthened its collaboration with the Nigerian Upstream Petroleum Regulatory Commission, Nigerian National Petroleum Company Limited, Nigerian Midstream and Downstream Petroleum Regulatory Authority, National Boundary Commission, and the Office of the Surveyor-General of the Federation.
Shehu said the partnerships were intended to improve revenue monitoring, resolve attribution disputes, and strengthen compliance.
The commission is also working with the Ministry of Defence over crude oil theft, pipeline vandalism, and production losses, which Shehu described as significant threats to public revenue.
RMAFC is seeking to diversify its focus beyond petroleum, exploring partnerships with the Federal Airports Authority of Nigeria and the National Space Research and Development Agency. Satellite and geospatial technologies are being considered as tools for identifying additional revenue opportunities.
Shehu said the measures formed part of a wider effort to improve data integrity, strengthen institutional cooperation, and ensure a more equitable distribution of national income.
The commission has also invested in its institutional infrastructure, including the rehabilitation of critical facilities, improved security systems, and the renovation of its headquarters. Staff welfare has been addressed through enhanced healthcare, training, and capacity-building programmes.
Shehu said the meeting with editors was intended to improve public understanding of RMAFC’s constitutional responsibilities and strengthen transparency around its reforms.
RMAFC is responsible for monitoring revenues accruing to and disbursements from the Federation Account, reviewing the revenue allocation formula and determining appropriate remuneration for political and public officeholders.
The completion of the formula review now leaves the federal government and National Assembly to consider the proposed changes, potentially opening a new chapter in the distribution of Nigeria’s federally collected revenues.
