Nigeria’s revenue sharing formula has been a thorny issue for decades, and the Senate is now championing agitations for a review of the “unconstitutional” percentages offered to state and local governments.
The country’s last formula stood at 52.68 percent for the Federal Government, 26.72 percent for the State governments, and 20.60 per cent for the local governments.
Critics of the revenue sharing formula have always called on the federal government to consider a constitutional review of the modus operandi which was enacted in 2002.
At that time, only 13 percent of national revenues from oil and gas was given to the oil-producing states as “derivation revenue.”
The issue of revenue allocation in Nigeria has been a controversial topic which often sparks heated debates among Nigerians at home and in diaspora.
Having noted that it’s wise to handle the emotional debates with caution, the Senate embarked on exhaustive consultations and now says that Nigeria’s current formula “does not reflect the harsh realities of our present day society.
The senate on Wednesday rejected a constitutional review proposal which sought to grant greater powers to the states.
In its statement for disapproving the proposed revenue sharing formula, the Senate said all federating units should be given greater control of Nigeria’s national revenue from natural resources.