How nigerias governments share the money

In Nigeria, the government's revenue is shared among three tiers of government: the Federal Government, State Governments, and Local Governments. The sharing formula is outlined in the Nigerian Constitution and is guided by the Fiscal Responsibility Act (FRA) of 2007.

Here's a breakdown of how the money is shared:

  1. Federal Government: The Federal Government receives the largest share of the revenue, typically around 52-55%. This includes revenue from:
    • Crude oil sales
    • Non-oil revenue (e.g., taxes, customs duties)
    • Grants and aids
    • Interest on loans
  2. State Governments: State Governments receive around 26-28% of the revenue. This includes revenue from:
    • Allocation from the Federation Account (see below)
    • Internal revenue (e.g., taxes, fees)
    • Grants and aids
  3. Local Governments: Local Governments receive around 13-15% of the revenue. This includes revenue from:
    • Allocation from the State Governments
    • Internal revenue (e.g., taxes, fees)
    • Grants and aids

The Federation Account is a key mechanism for sharing revenue among the three tiers of government. The account is managed by the Federal Ministry of Finance, and it receives revenue from the following sources:

  1. Crude oil sales
  2. Non-oil revenue (e.g., taxes, customs duties)
  3. Grants and aids
  4. Interest on loans

The Federation Account is then distributed among the three tiers of government based on the following formula:

  1. Federal Government: 52.68%
  2. State Governments: 26.72%
  3. Local Governments: 20.6%

In addition to the Federation Account, each State Government also receives a share of the revenue from the Value Added Tax (VAT), which is a consumption tax on goods and services. The VAT revenue is shared among the states based on a formula that takes into account the population and economic activities of each state.

It's worth noting that the revenue sharing formula has been a subject of controversy and debate in Nigeria, with some arguing that it is unfair and does not reflect the true economic contributions of each tier of government. There have been several attempts to reform the formula, but so far, no consensus has been reached.