The Senate has commenced moves to amend the 1999 Constitution to increase the Federal Government’s share of revenue from the Federation Account, arguing that the existing revenue allocation formula no longer reflects the scale of responsibilities borne by the centre.
The move comes amid renewed national debate on fiscal federalism, with labour unions, civil society groups and opposition figures questioning why increased allocations to states have not translated into improved welfare for citizens.
Under the current revenue sharing formula, the Federal Government receives 52.68 per cent of federation revenue, the 36 states share 26.72 per cent, while the 774 local government councils receive 20.60 per cent.
Despite already controlling the largest portion, the Senate is considering an upward review of the Federal Government’s allocation through a bill sponsored by Senator Sunday Karimi (APC, Kogi West).
The bill, which scaled first reading at plenary on Tuesday, February 3, seeks to amend relevant constitutional provisions governing the distribution of revenue among the three tiers of government.
Presenting the bill, Karimi said the current revenue sharing formula had become outdated and unsustainable in view of the growing financial obligations confronting the Federal Government.
“The proposed alteration seeks to increase federal government revenue allocation to address mounting financial obligations and national responsibilities across Nigeria,” Karimi said.
He added that the present arrangement places excessive financial pressure on the Federal Government, particularly amid rising insecurity and widespread infrastructure decay across the country.
According to the lawmaker, a review of the revenue allocation formula has become necessary to enable the Federal Government to meet its statutory responsibilities, especially in the areas of infrastructure development and internal security.
“There is a need for adjustment in the revenue allocation coming to the Federal Government so that we can have a slight increase in what is coming to the Federal Government for it to meet its responsibilities,” he stated.
Karimi noted that funding constraints had continued to hamper the maintenance of federal roads nationwide, as well as efforts to combat banditry, terrorism and other security threats.
He stressed that the scope of responsibilities assigned to the Federal Government had become overwhelming under the current revenue arrangement.
“Responsibilities borne by the Federal Government, particularly the construction and maintenance of federal roads across the country, have become overwhelming under the existing revenue formula, aside from the enormous responsibilities on internal security,” he said.
The senator expressed optimism that increasing the Federal Government’s share of federation revenue would strengthen the country’s capacity to address insecurity and tackle infrastructure challenges nationwide.
With the bill now formally introduced, it is expected to spark intense debate in the coming weeks, particularly among state governments and other stakeholders who have long advocated greater fiscal autonomy for subnational governments.
