Senate Moves to Review Revenue Allocation Formula, Seeks Bigger Share for FG

Jane Salihu

The Senate has commenced moves to alter Nigeria’s revenue-sharing formula, proposing an increased allocation for the Federal Government to enable it meet what it described as overwhelming national responsibilities.

The move is contained in a constitutional amendment bill sponsored by Senator Sunday Karimi, representing Kogi West Senatorial District.

The proposed legislation, titled “Constitution of the Federal Republic of Nigeria, 1999 (Alteration) Bill, 2026”, passed its first reading during plenary on Tuesday, setting the stage for further legislative consideration. The bill seeks to amend relevant provisions of the constitution to adjust the current revenue allocation formula among the three tiers of government.

Under the existing formula, the Federal Government receives 52.68 per cent of revenue from the Federation Account, while states get 26.72 per cent and local governments receive 20.60 per cent. Senator Karimi’s proposal argues that the current structure is no longer sustainable in view of rising national obligations.

Briefing journalists after plenary, the Kogi West lawmaker said the Federal Government is increasingly overburdened by responsibilities that require substantial funding, stressing that available revenue is no longer sufficient to cope with the demands of governance at the national level.

He pointed specifically to the poor state of Trunk A roads across the country, many of which fall under federal jurisdiction, noting that their rehabilitation has become a major financial drain, which according to him, infrastructure decay has reached an alarming level and requires urgent attention.

Senator Karimi also highlighted the escalating cost of internal security, including the fight against banditry, terrorism, and other forms of violent crime, as a key justification for the proposed upward review of the federal allocation.

“The current revenue-sharing formula is outdated and places excessive financial pressure on the Federal Government amid growing infrastructure challenges and insecurity nationwide,” he said, adding that a slight increase in federal allocation would go a long way in addressing these issues.

He further argued that inadequate funding has negatively impacted the capacity of the military and other security agencies to effectively combat terrorism and other threats, a situation he believes can be improved through better funding.

Ahead of the bill’s second reading, the senator also alleged that some states have little to show for the funds they receive from the Federation Account, insisting that a review of the allocation formula is necessary in the overall interest of national development.