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On Tuesday, 3 February, 2026, the Nigerian Senate concluded the First Reading of a bill to alter the current revenue allocation formula in favour of the Federal Government.
Currently, the central government receives 52.68 per cent while all the 36 state governments get 26.72 per cent and the 774 Local Government Areas share the balance of 20.60 per cent.
The sponsor of the bill, Senator Sunday Karimi, representing Kogi West Senatorial District, made a case for increase of the share of the Federal Government from the Federation Account in the following words:
“The proposed alteration seeks to address mounting financial obligations and national responsibilities across Nigeria. The current revenue-sharing formula is outdated and unsustainable because it places excessive financial pressure on the Federal Government amid rising infrastructure decay and insecurity nationwide.”
“Responsibilities borne by the Federal Government, particularly the construction and maintenance of federal roads across the country, have become overwhelming under the existing revenue formula, aside from the enormous responsibilities on internal security. So what is needed now is an adjustment in the revenue allocation formula to increase the Federal Government’s allocation.”
It may be recalled that the Federal Government used the insecurity card to raise its revenue when former President Muhammadu Buhari requested the Nigeria Governors’ Forum to use the auspices of the National Economic Council to divert $1 billion from the Excess Crude Account to buy 12 American Super Tucano military aircraft and procure other military hardware in 2018.
We note the ginormous increase in revenue to all tiers of government, including the Federal Government, after the removal (or reduction) of subsidies on petrol, foreign exchange and electricity.
And just like the Federal Government, states and local governments construct roads, invest in agriculture, provide social services like schools and hospitals. Therefore, it is unclear what makes the Federal Government special among the tiers of government in Nigeria.
Clearly, the sponsor of the bill is unaware of the huge financial burdens that state governments carry while trying to augment the resources that the Federal Government allocates to state police commands.
Indeed, items like the police, aviation, mines and minerals should be transferred to the Concurrent Legislative List. After all, some states have built airports, and even established airlines that effectively compete with privately-owned airlines.
We are concerned that whilst Nigerians argue for a significant trimming of the size of the usually extravagant Federal Government, with its duplication of departments and agencies, some legislators, possibly out of sycophancy or in order to ingratiate themselves with the powers that be, are thinking of ways of bloating the already oversized federal bureaucracy.
Even educational textbooks on Government and Civic Studies traditionally designate defence against external aggression, customs, immigration, postal services, interstate highways, central banking and minting of currency as the main responsibilities of federal governments.
Time, technology and realistic appraisal of classical economic theories have shown that the given wisdom that government must inhabit the commanding heights of a nation’s economy belongs to antiquity or the expired political and economic requirements of a defunct socialist-Marxist era.
Although we recognise the necessary interventions of central governments in some strategic aspects of the national economy – agricultural extension services, petroleum refineries, air and sea ports and mining – modern governments should restrict themselves to regulation and not dabble into operations.
We dare say that any effort to increase the allocation of the Federal Government beyond the current 52.68 per cent of the Federation Account is an indirect, nay unconstitutional attempt to further consolidate the argument that the Nigerian federal system is actually unitary in reality.
It amounts to a revival of the centrist system of the military regimes that controlled sub-national governments from a Supreme Military Council that was secretive and arbitrary in operation.
As a testament to erosion of the federal principle, we recall that following military interventions in political governance between 1966 and 1999, items in the Exclusive Legislative List increased disproportionately from 45 in the 1963 Constitution to 68 in the current 1999 Constitution while those in Concurrent Legislative List remained virtually unchanged – from 29 items to 30!
There is no doubt that this bill will only exacerbate the current tension between those calling for a return to true federalism, when the nation witnessed significant economic development and those opposed to it.
Public supply is fundamental to governance, especially in a federation. The federating states should not become appendages of the central government. Raising the allocation of the central government will amount to funding the lopsided features of Nigeria’s federalism.
To be continued
