- The Senate initiated a constitutional amendment to increase the Federal Government’s share of revenue from the Federation Account
- Lawmakers said the current revenue-sharing formula was outdated and no longer reflected federal responsibilities
- The proposal sparked debate amid concerns over fiscal federalism and the impact on state and local governments
The Senate on Tuesday initiated 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 proposed constitutional amendment comes amid renewed national debate on fiscal federalism, following criticisms from labour unions, civil society organisations, and opposition figures that increased allocations to states over the years have not translated into improved welfare for citizens.
Under the current revenue-sharing formula, the Federal Government receives 52.68 per cent of total federation revenue, the 36 states share 26.72 per cent, while the 774 local government councils receive 20.60 per cent.
Despite already receiving the largest portion, the Senate, through a bill sponsored by Senator Sunday Karimi (APC, Kogi West), is seeking an upward review of the Federal Government’s allocation. The bill, which passed first reading in the plenary, seeks to amend relevant sections of the Constitution governing revenue allocation among the three tiers of government.
According to the sponsor, the proposed alteration is intended to address mounting financial obligations and to expand the Federal Government's national responsibilities.
“The proposed alteration seeks to increase federal government revenue allocation to address mounting financial obligations and national responsibilities across Nigeria,” Karimi stated.
He argued that the current revenue-sharing formula is outdated and unsustainable, stressing that it places excessive financial pressure on the Federal Government, particularly amid rising infrastructure decay and worsening insecurity across the country.
“The current revenue sharing formula is outdated and unsustainable because it places excessive financial pressure on the Federal Government amid rising infrastructure decay and insecurity nationwide,” the senator said.
Karimi noted an urgent need to adjust the formula to give the Federal Government a larger share of federation revenue, enabling it to discharge its statutory responsibilities effectively.
“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 added.
He explained that funding constraints had continued to hamper the maintenance and construction of federal roads nationwide, as well as efforts to combat banditry, terrorism, and other security challenges.
“Responsibilities borne by the Federal Government, particularly the construction and maintenance of federal roads nationwide, have become overwhelming under the existing revenue formula, aside from the enormous responsibilities on internal security,” Karimi said.
Expressing optimism, the lawmaker said a higher allocation to the Federal Government would strengthen the country’s capacity to tackle insecurity and reverse infrastructure decay, while ensuring more effective delivery of public services.
The bill is expected to generate intense debate among stakeholders, especially state governments and advocates of stronger fiscal decentralisation, as it proceeds through the legislative process.
Tinubu presents N1.767 trillion loan proposal to address 2024 budget deficit
Meanwhile, TheRadar earlier reported that President Bola Tinubu presented a new external borrowing request to the National Assembly, seeking authorisation for N1.767 trillion under the 2024 Appropriation Act.
The loan, if granted, will help cover part of the N9.7 trillion budget deficit for the year. The request was presented to the lawmakers at the Tuesday, November 19 plenary.