Federal government nigeria new revenue sharing formula sample

The Nigerian federal government has introduced a new revenue sharing formula, which is expected to take effect from 2023. The new formula is designed to allocate revenue more equitably among the three tiers of government - federal, state, and local governments.

Here is a sample of the new revenue sharing formula:

Federal Government: 42.5% of total revenue

• This includes:
  • 30% for recurrent expenditure (salaries, overheads, etc.)
  • 5% for capital projects (infrastructure development, etc.)
  • 7.5% for debt servicing (loans, etc.)

State Governments: 26.5% of total revenue

• This includes:
  • 18% for recurrent expenditure (salaries, overheads, etc.)
  • 4% for capital projects (infrastructure development, etc.)
  • 4.5% for debt servicing (loans, etc.)

Local Governments: 31% of total revenue

• This includes:
  • 20% for recurrent expenditure (salaries, overheads, etc.)
  • 5% for capital projects (infrastructure development, etc.)
  • 6% for debt servicing (loans, etc.)

Other allocations:

• 1% for the Federal Capital Territory (FCT)
• 1% for the Niger Delta Development Commission (NDDC)
• 1% for the North-East Development Commission (NEDC)

Key changes:

• The new formula increases the allocation to local governments from 20% to 31%, in line with the recommendations of the 2014 National Conference.
• The formula also increases the allocation to states from 20% to 26.5%, to enable them to fund more development projects.
• The federal government's allocation remains at 42.5%, but with a greater emphasis on debt servicing and capital projects.

It's worth noting that this is just a sample and the actual revenue sharing formula may vary depending on the specific revenue generated by the federal government.