RMAFC: Nigeria Revenue Allocation Formula Review Completed

• The RMAFC has completed its review of Nigeria's Revenue Allocation Formula.
• The commission has enacted the Judicial Office Holders (Salaries and Allowances) Act, 2025, following its review of remuneration for judicial office holders.
• An executive bill on the Political and Public Office Holders (Salaries and Allowances) Act, 2026 is expected to be transmitted to the National Assembly as part of the RMAFC's ongoing review of remuneration for executive and legislative office holders.

Remuneration reforms must be matched with accountability and performance. Improved pay should translate into improved service delivery.

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has completed its review of Nigeria's Revenue Allocation Formula, marking a significant step towards a more equitable and sustainable revenue-sharing system. The review was conducted in collaboration with the three tiers of government, technical stakeholders, and other relevant institutions across the country. This exercise involved an assessment of fiscal responsibilities, revenue trends, and comparative federal systems, resulting in a harmonised report and legislative proposals ready for transmission to the appropriate authorities. The new framework aims to address long-standing concerns over the adequacy of remuneration for public office holders and balance improved compensation with accountability and performance.

The RMAFC has also made significant progress in its review of remuneration for judicial office holders, culminating in the enactment of the Judicial Office Holders (Salaries and Allowances) Act, 2025. Furthermore, the review of remuneration for executive and legislative office holders is at an advanced stage, with an executive bill on the Political and Public Office Holders (Salaries and Allowances) Act, 2026 expected to be transmitted to the National Assembly. The commission's chairman emphasized that salary increases must be accompanied by better service delivery, as improved remuneration should not be treated as an end in itself.

In addition to its revenue allocation and remuneration reviews, the RMAFC has intensified its monitoring of oil and gas production data to ensure accurate application of the 13 per cent derivation principle. The commission has deployed verification exercises, geospatial mapping, and collaboration with relevant agencies to address discrepancies in oil well attribution and ensure that states receive their rightful revenues. Notably, the reallocation of 17 oil wells from Imo State to Rivers State, as directed by a Supreme Court judgment, is one of several interventions aimed at enhancing revenue transparency and fairness.

Lawyers should watch for the potential impact of the new Revenue Allocation Formula on their clients' businesses, particularly those operating across state lines or relying heavily on government contracts. They may need to advise clients on how to navigate any changes to revenue sharing and remuneration for public office holders.

Source: Original reporting via The Revenue Mobilisation Allocation and Fiscal Commission