The Nigerian Senate has initiated steps to amend the 1999 Constitution, aiming to increase the Federal Government’s share of revenue from the Federation Account. This move comes in response to growing concerns that the current revenue-sharing formula does not adequately reflect the expanding responsibilities of the federal government.
This push for constitutional amendments follows a renewed debate on fiscal federalism, sparked by criticism from labor unions, civil society groups, and opposition figures. These groups have pointed to the increasing allocations to states, yet there has been no significant improvement in public welfare. The current formula allocates 52.68% of the federation’s revenue to the Federal Government, 26.72% to the 36 states, and 20.60% to the 774 local government areas. Despite receiving the largest share, the Federal Government faces rising financial pressures, which have led to calls for an upward revision.
Senator Sunday Karimi (APC, Kogi West), the sponsor of the bill, presented it for its first reading on Tuesday. The bill seeks to amend constitutional provisions that regulate revenue allocation among the three tiers of government. According to Karimi, the current formula is outdated and unsustainable. He stressed that the formula places excessive financial strain on the Federal Government, especially in light of the ongoing infrastructure decay and rising insecurity in various parts of 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“The current revenue sharing formula is outdated and unsustainable because it places excessive financial pressure on the federal government amid rising infrastructure decay and insecurity nationwide,” Karimi stated. He further emphasized that there is an urgent need to adjust the formula to enable the federal government to fulfill its statutory duties. The senator pointed out that financial constraints have hindered the maintenance of vital federal roads and limited efforts to tackle banditry and terrorism effectively.
Karimi’s proposal aims to ensure the federal government receives a slightly higher portion of the federation revenue. He believes this adjustment will enhance the country’s capacity to address national security challenges and reverse the steady decline in infrastructure. The senator expressed confidence that increased funding would support the federal government in meeting its obligations, particularly in the construction and maintenance of roads and in providing security.
The push for an increase in the federal government’s allocation comes at a time when the country’s infrastructure challenges are becoming increasingly difficult to manage, particularly in the face of widespread security issues. Critics have long argued that the decentralized allocation model has led to inefficiencies, with many states struggling to deliver basic services despite receiving a significant portion of federal revenue.
The proposed amendments to the revenue-sharing formula are expected to stir further debate, especially among state governors and local government officials who may resist any changes that could reduce their share of the national revenue. However, advocates for the change argue that it is essential for the federal government to have the resources necessary to address the country’s most pressing challenges.
The bill now moves to the next stages of the legislative process, where it will be subject to more debate and scrutiny before any amendments to the constitution can be made.
