Senate proposes new revenue sharing formula favoring the Federal Government
The Senate has suggested revising the current revenue- sharing arrangement among the three tiers of government to allocate more funds to the Federal Government.
This proposal was included in a constitutional amendment bill, which passed its first reading during a plenary session in Abuja.
The bill, titled “Constitution of the Federal Republic of Nigeria, 1999 (Alteration) Bill, 2026, ” was sponsored by Senator Karimi Sunday Steve (APC, Kogi West).
This comes at a time when there is increasing demand for a new revenue formula to enhance funding for states and local governments.
Under the current sharing formula, the Federal Government receives the largest portion- 52.68. 68 percent.
The 36 states share 26.72. 72 percent, while the remaining 20. 60 percent goes to the 774 local governments.
However, Senator Karimi, defending his bill on Tuesday, argued that the Federal Government should receive a larger share, citing that the central government has become overwhelmed with responsibilities.
He pointed to the poor condition of many ‘Trunk A’ federal roads nationwide, noting that repairs have not happened despite years of contract awards due to lack of sufficient funding.
He also mentioned increasing insecurity, which he said has put additional strain on the Federal Government’ s financial capacity.
“There is too much burden on the Federal Government. Most roads are completely unusable. All roads leading to states, known as Trunk federal roads, are in poor condition.
Apart from roads, a lot of money is being spent on fighting insecurity, which further burdens the Federal Government. The money available to the government is no longer enough to cover its responsibilities,” the lawmaker said.
He added, “What this bill seeks is to adjust the revenue allocation so that the Federal Government gets a slight increase.
“We cannot keep pretending. Things are not well with Federal Government finances.”
Karimi also claimed that some states could not properly account for funds received from the Federation Account.
“So, we need to increase the revenue to the Federal Government.
“The states are receiving money, but no one is asking how they spend it. I am not saying all states are mismanaging, but in most states, there’ s nothing to show for the money they receive,” the senator stated.
The bill now awaits its second reading, during which lawmakers are expected to debate its pros and cons before deciding whether to refer it for public hearing or discard it.
