Imperative of a new revenue sharing system

of the consolidated revenue fund is fair and justiciable to various state of the Nigerian public. The agency should also be applauded for quick response to the yearnings of Nigerians for an immediate review of the current Revenue Allocation Formula among the three tiers of government in Nigeria.

The 36 States of the federation have a combined share of 26.72% while the 774 Local Government Areas in the country take 20.6%. Furthermore, oil and solid minerals producing states in the South-South region, share 13% of all related revenue in accordance with the principle of derivation. Fifty percent each of the allocation shall be made in direct proportion to the State’s territorial spread and inverse proportion to the Mean Annual Rainfall in each State headquarters, using the most current live year figures, the same year for all the States. Section 162 of the Constitution provides inter-alia.

Financial resources are then allocated to different tiers of government in accordance with their specific requirements. It then becomes a challenge where the federation exists almost as a unitary state and the governments of the sub-national governments are agents of the central government; depending on it for survival, rather than as semi-autonomous federating units.

Notwithstanding the overwhelming evidence of these socio-economic and socio-demographic challenges in the country since 1992, the revenue allocation formula has not been changed. Rather the current formula has encouraged a ‘bloated’ Federal Government with significant wastages, leakages, red-tapes and bottlenecks processes, cost inefficiencies and mismanagement of scarce national resources – thereby resulting in complete distraction from core responsibilities of national concerns.

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