Senate Sparks Controversy With Plan To Increase FG’s Cut Of Federation Revenue

The Senate has begun efforts to amend the 1999 Constitution to increase the Federal Government’s share of revenue from the Federation Account, arguing that the current allocation formula no longer reflects the centre’s growing responsibilities.....KINDLY READ THE FULL STORY HERE▶

This move comes amid renewed debate over fiscal federalism, with labour unions, civil society groups, and opposition figures criticizing the fact that higher allocations to states have not consistently translated into improved welfare for citizens.

Under the existing revenue-sharing arrangement, the Federal Government receives 52.68% of federation revenue, the 36 states share 26.72%, and the 774 local government councils receive 20.60%.

Despite already receiving the largest portion, the Senate is considering raising the Federal Government’s allocation through a bill sponsored by Senator Sunday Karimi (APC, Kogi West). The bill, which had its first reading at plenary on Tuesday, February 3, proposes amendments to constitutional provisions regulating revenue distribution among the three tiers of government.

Presenting the bill, Karimi argued that the current formula is outdated and unsustainable given the Federal Government’s expanding financial obligations. He stated, “The proposed changes aim to increase federal revenue to meet mounting financial responsibilities and national duties. The current revenue-sharing formula places excessive pressure on the federal government amid rising infrastructure decay and insecurity nationwide.”

Karimi emphasized the urgent need for a review to enable the Federal Government to fulfill its statutory duties, particularly in infrastructure maintenance and national security. Funding constraints, he noted, have hampered the upkeep of federal roads and efforts to combat banditry and terrorism.

“The responsibilities borne by the Federal Government, especially regarding federal road construction and maintenance, have become overwhelming under the current revenue formula,” Karimi added. He expressed confidence that increasing the federal share would strengthen Nigeria’s capacity to address insecurity and tackle infrastructure challenges.

With the bill now formally read, it is expected to spark significant debate in the coming weeks, particularly among state governments and stakeholders who have long advocated for greater fiscal autonomy.