Economy
The Promise of a New Revenue Formula
By Salisu Na’inna Dambatta
It is interesting that a new Revenue Sharing Formula by the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) will be worked out soon to replace the 20-year old existing version.
The Chairman of the Revenue Mobilization Allocation and Fiscal Commission, Mr.
Elias Mbam said that in addition to a new sharing formula, the Commission will “expand the sources of revenue for the Federation.”“I intend to do this through diversification in areas outside Oil and Gas, and that includes solid minerals, agriculture and manufacturing.
”There is no doubt that the existing renenue allocation formula has been subjected to criticisms by politicians and development experts who believe that the 52.68 per cent allocated to the Federal Government; the 26.72 per cent to the States and 20.60 per cent for the 744 Local Government Areas in the country is due for retouching.
However, it is important to note that in the Nigerian peculiar way of doing things, every Revenue Allocation formula, from the first one introduced in 1948 (on the recommendation of Hicks Philipson Commission of 1946) as part of the Richardson Constitution for the three regions of Nigeria to the extant version, has always been criticised or opposed by people who expressed their various perspectives on how the formulae should have been formulated.
It is to tamper those varied perspectives with reasoning that a framework, based on over a dozen of factors or indices, was developed to accommodate various interests and address divergent concerns and foster national acceptance for it.
The indices in the framework listed by Victor I. Lukpata, Ph.D of the Department of History and Diplomatic Studies, Federal University Wukari, Taraba State, are: Basic needs; Minimum Material Standards; Balanced Development; Derivation;Equality of Access to Development Opportunities;Independent Revenue/Tax effort;Absorptive Capacity and Fiscal Efficiency. Others are Minimum responsibility of Government; Population; Social Development Factor; Equality of States; Landmass and Terrain and finally, Internal Revenue Generation Effort.
The above principles have continued to serve as the yardstick for revenue allocation up to this day.
Each state of the Federation, the 744 Local Government Areas and the Federal Government get a portion from the Federation Account based on these indices. On its part, the Federal Government gets the portion assigned to it because of the huge responsibilies it bears: ensuring national security, caring for the Armed Forces, the Police Force, Foreign Relations, building and maintenance of the most critical roadways, the railways, internal and international maritime services, Customs, Education, Health, Agriculture and National Food Security and the provision of many more money-guzzling public goods nationwide.
In the process of sharing the revenue, the Federal Ministry of Finance chairs the Federation Account Allocation Committee (FAAC) every month. The Secretariat of FAAC is at that Ministry, but the Department of FAAC is domiciled in the Office of the Accountant-General of the Federation (OAGF).
The Commissioners for Finance of the 36 states, a representative of the Federal Capital Territory, Abuja, are members of FAAC, as are revenue-related entities including the RMAFC, the Nigerian National Petroleum Corporation (NNPC), the Nigeria Customs Service (NCS), the Federal Inland Revenue Service (FIRS).
Much is at stake when it comes to revenue sharing. The quantam of money involved makes it so as the following facts reflect. The sum of N8 trillion was shared in 2018 in spite of the shut-ins in several oil installations. The Federation Account Allocation Committee (FAAC) disbursed a total sum of N6.418 trillion in 2017. It was N5. 1 trillion in 2016 and N6. 011 in 2015 respectly.
Every state in the country, except two, get most of the cash they use in paying for the services and development projects they deliver to the public from FAAC disbursements. Their internal revenue generation ability is limited by many factors, including lack of seriousness.
That lack of seriousness led to paucity of funds in the states to the extent that workers could not be paid their monthly entitlements. The federal government lent the states just over N2 trillion, beside paying them billions of Naira in refund regarding Paris Club debt write-off in favour of Nigeria.
Given the life-line status of shared revenues for the three tiers of Government in the country, a promise to craft a new Revenue Sharing Formula for the country by the RMAFC is an exciting matter. So, the nation is eagerly awaiting the new formula, which will ensure that the Federal
Government gets enough resources to provide the kind of services expected from the Centre.
However, it is possible to expand and further diversify the revenue base. The Federal Inland Revenue Service has demonstrated that by bringing more taxables to the tax net.
Indeed, the FIRS has announced that it is now targeting a tax base of 45 million taxables, according to the Executive Secretary, Joint Tax Board (JTB), Mr Oseni Elamah.
Elama said that as at December, 2018, Nigeria’s tax payers data base expanded from 20 million (in 2015) to 35 million. This is a huge increase by any measure.
The taxpayers base can actually surpass the 45 million target if the over 1,000 uncaptured sources of tax identified by researchers commissioned by the Federal Ministry of Finance are brought into the tax net. This was disclosed by former Minister for Finance, Mrs. Kemi Adeosun in a speech in Kano on July 14, 2016 at a Conference on Taxation and Revenue generation.
“Minister of Finance, Mrs. Kemi Adeosun in Kano said the Federal Government had identified more than 1,000 dormant revenue lines, assuring, however, that such huge dormant revenue opportunities will be maximised,” a medium reported.
The RMAFC should in collaboration with other relevant sister agencies take advantage of the work done earlier in its Chairman’s drive to expand the revenue base for the three tiers of Government. It is a desirable and doable task.
The Muhammadu Buhari-led administration will simply add another important achievement in the huge legacy it will leave behind for the benefit of future generations of Nigeria if the revenue sharing or allocation formula is redesigned and dormant revenue-yielding lines are activated.
Business News
NESG Chairman Urges Shift from Economic Reforms
Chairman, Nigerian Economic Summit Group (NESG), Olaniyi Yusuf has urged the Federal Government to translate economic reforms into tangible results, including job creation, increased productivity and improved living standards.
Yusuf made the call on Monday in Abuja at the 32nd Nigerian Economic Summit (NES32), themed “Growth That Works: Delivering Jobs, Productivity and Shared Prosperity”.
He said Nigeria’s economic reforms had created an opportunity to strengthen the foundations for socio-economic development, in spite of the pressures on households and businesses.
“Our responsibility now is to ensure that reforms translate into stronger enterprises, better jobs, more productive workers, rising incomes, improved living standards and shared prosperity,” Yusuf said.
He said recent measures, including petroleum subsidy removal, foreign exchange reforms, fiscal restructuring and banking sector reforms, were necessary to address economic distortions.
However, he said macroeconomic stabilisation alone would not automatically translate into broad-based economic growth or improved citizens’ welfare.
Yusuf said households needed decent jobs, stronger purchasing power, and improved security and reduced poverty, while businesses required lower production costs, reliable electricity and affordable financing.
According to him, Nigeria must sustain economic stabilisation while prioritising practical measures to improve productivity and expand economic opportunities.
He said the summit’s theme reflected the need to measure economic success by the quality of jobs created, business competitiveness and the extent to which prosperity reached Nigerians.
Yusuf identified productivity, human capital development and resilience as key priorities for achieving sustainable and inclusive economic growth.
He said investments in education, healthcare, nutrition and relevant skills would improve workers’ productivity and prepare young Nigerians for employment.
The NESG chairman also called for improved infrastructure, predictable regulations, fair competition and an efficient legal system to encourage private investment and business expansion.
Yusuf said Nigeria’s economic performance presented a mixed picture, with improvements in some macroeconomic indicators alongside persistent challenges affecting businesses and households.
He noted that real Gross Domestic Product (GDP) grew by 4.43 per cent year-on-year in the second quarter of 2026, compared with 3.89 per cent in the first quarter.
Yusuf, however, expressed concern over persistent food inflation, high production costs, unreliable electricity, expensive financing and inadequate infrastructure.
According to him, a slowdown in inflation does not necessarily mean that goods have become affordable, as households continue to grapple with elevated prices.
Yusuf urged policymakers to prioritise productive investments, effective public expenditure and measures to address poverty, food insecurity and gaps in access to essential services.
He also called for stronger links between education and employment through technical and vocational training, digital skills and industry relevant learning.
The NESG chairman identified agriculture, agro-processing, manufacturing, construction, tourism and digital services as sectors with opportunities to expand productive employment.
He said the private sector remained central to Nigeria’s economic transformation but required an enabling environment to invest, produce and create jobs.
Yusuf urged businesses to invest in technology, workforce skills, local supply chains and export competitiveness, while calling on the government to improve infrastructure and ensure regulatory predictability.
He emphasised the need to assess the actual impact of reforms rather than merely documenting policies introduced or activities undertaken.
Yusuf said commitments arising from the summit should include clear institutional responsibilities, realistic timelines, measurable indicators and periodic reviews to ensure accountability.
He called on the government, businesses, development partners and other stakeholders to work together to translate economic stability into investment, productivity, employment and shared prosperity.
Yusuf said the ultimate test of the summit would be whether its deliberations produced tangible improvements in the lives of farmers, manufacturers, entrepreneurs and young people seeking decent jobs.
He urged participants to develop practical solutions and measurable commitments that would continue to deliver results beyond the summit.
Business News
DBN Signs $61m Credit Deal With AfDB, Unveils Support Initiative Report
By Tony Obiechina, Abuja
The Development Bank of Nigeria Plc (DBN) has launched DAWN: DBN Action for Women in Nigeria, unveiled its Impact Report and presented MSME Data Assets at the seventh edition of Annual Lecture held in Abuja.
DBN, in a statement on Thursday, said while delivering a welcome address, its Managing Director and Chief Executive Officer, Dr Tony Okpanachi, said the central challenge was no longer reforms themselves but ensuring benefits reach businesses at end of the chain.
He asked how to make sure benefits reach traders in Onitsha, fabricator in Aba, farmer in Kebbi and young founder in Yaba, noting that MSMEs accounted for about half of Nigeria’s GDP and more than eight in every ten jobs, adding that when reform works for MSMEs it works for most Nigerians.
He explained that reform becomes prosperity only when entrepreneurs can act on it whether through long tenor loans to buy equipment, banks willing to take risk or skills and records needed to grow.
He said working through Participating Financial Institutions DBN provides longer term funding, partial credit guarantees through subsidiary Impact Credit Guarantee Limited and capacity building including Entrepreneurship Training Programme.
He disclosed that as at December 2025 DBN had disbursed a cumulative N1.4 trillion to MSMEs through 84 Participating Financial Institutions creating about 1.6 million jobs nationwide.
Under the new five year strategy, the Bank aims to reach more than two million MSMEs with deliberate targets for women led businesses, youth led businesses and underserved states.
On DAWN, Okpanachi said finance alone had not enabled enough women-led businesses to scale.
He said initiative brings together financing, guarantees and credit support, technical assistance, outcome linked grants and market linkages delivered through banks, microfinance institutions, fintechs, aggregators, cooperatives and direct channels.
Its priority sectors are agriculture and exports, healthcare, arts and creatives, technology and green business.
He said DAWN is about moving gender focused lending beyond intention and turning access into opportunity.
On the sidelines of the lecture DBN and African Development Bank held a signing ceremony of AfDB DBN 61 million United States dollars Gender Line of Credit development that reinforces Bank commitment to women led enterprises.
Okpanachi urged Participating Financial Institutions to extend lending into sectors and states where access to finance has been limited, policymakers and regulators to measure reform by what changes for business at end of chain and MSMEs to formalise, keep good records and use support now available.
The Vice President as Special Guest of Honour was represented by Dr Fred Iklaga Senior Technical Adviser in the Office of Special Adviser to the President on Economy.
Keynote speakers were Chief Executive Officer of MTN Nigeria, Dr Karl Toriola, and Chairman of Nigeria Sovereign Investment Authority, Dr Segun Ogunsanya.
Fireside chat featured Chief Executive Officer of Sterling Bank Abubakar Suleiman, manufacturing and trade entrepreneur Mrs Omoyemi Chukwurah and by video Kola Masha of Babban Gona.
The Secretary to the Government of Federation, represented by Augusta Warren Bekaredebo, said 2026 tax reforms would bring relief to many small businesses expressing optimism that a lot of businesses will be smiling by next year because they will be exempted from tax.
Economy
Reps Summon Telecom Operators over Poor Network Services
By Ubong Ukpong, Abuja
The House of Representatives on Wednesday, summoned telecommunication operators in the country to appear before it over the present poor network services.
The Ad Hoc Committee investigating the persistent poor quality of telecommunication services in Nigeria gave the chief executive officers (CEOs) of major telecom operators seven days to appear before it and explain the deteriorating quality of network services across the country.
The committee issued the ultimatum at a public hearing in Abuja on Wednesday, directing the CEOs of MTN Nigeria, Airtel Nigeria, Globacom (Glo), Mafab Communications Ltd.
and other telecommunications service providers to appear before it on October 28, 2026.The resolution followed the adoption of two motions sponsored by Rep. Sunday Umeha and Rep Afam Ogene after the committee expressed displeasure over the failure of the invited telecom operators, including MTN and Mafab Communications, to honour previous invitations and appear before the lawmakers.
The committee directed the Nigerian Communications Commission (NCC) to ensure that all the affected operators comply with the invitation and appear before it at 2 p.m. on October 28 in Hearing Room 447 of the New Building of the National Assembly Complex, Abuja.
It also directed the operators to submit all relevant documents to the committee on or before the scheduled date and account for the persistent decline in service quality, which has continued to affect millions of subscribers and businesses across the country.
The lawmakers warned that any chief executive who failed to honour the invitation would face a possible summons for arrest to compel their appearance before the committee.
Speaking at the hearing, the committee’s Chairman, Rep. Olumide Osoba (APC-Ogun), said telecommunications services had become indispensable to Nigeria’s economy, extending beyond voice calls and internet access to critical commercial activities, including Point of Sale (POS) transactions.
Osoba noted that businesses, financial transactions and other essential services depended heavily on reliable telecommunications networks, making the persistent decline in service quality a matter of serious national concern.
He said the House constituted the ad hoc committee to investigate the recurring complaints by subscribers and determine the factors responsible for the poor quality of services provided by telecommunications operators.
The chairman, however, expressed concern that the invited chief executives had continued to evade direct engagement with the committee by offering various excuses or sending lower-ranking officials to represent them.
He said the practice undermined the purpose of the parliamentary investigation, stressing that the committee expected the chief executives, who were in a position to explain their companies’ operational challenges and commitments, to appear in person.
Also speaking, Rep. Ibe Osonwa expressed displeasure over what he described as the operators’ disregard for the House, despite the substantial revenue they generated from their operations in Nigeria.
Osonwa said it was unacceptable for companies benefiting from the Nigerian market to ignore invitations from the legislature, particularly when the purpose was to obtain explanations on issues directly affecting their customers and the wider economy.
He stressed that telecommunications operators had a responsibility to account for the quality of services delivered to Nigerians, adding that the House would not overlook any attempt to frustrate its investigation.
In his ruling, Osoba urged the NCC to ensure full compliance with the committee’s resolution, reiterating that the affected telecommunications operators must appear before the lawmakers on October 28 and provide the necessary explanations and documents.


