Business
States, LGs Demand Higher Revenue Allocation
State and local governments have dema ded an increase in their shares of the Federal Allocation from the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).
They made the demand, Monday, during a programme organised by RMAFC in Abuja.
Making the demand, the National Deputy President of the Association of Local Governments of Nigeria (ALGON), Shehu Jega, stressed the need for higher allocation to local governments.
He also demanded for representation in the Federation Account Allocation Committee.
Speaking on behalf of the National President of ALGON, Kolade Alabi, at the event, Jega noted that the RMAFC has a significant role to play in saving the local governments from extinction.
“First of all, ALGON is expressing profound appreciation for this opportunity to be part of this exercise, which has never happened before.
“ALGON wishes to tell the RMAFC that it has a great important role to play in rescuing local government system from extinction – extinction in the sense that local government system needs increase in the revenue sharing formula.
“After that allocation, it has to be monitored to ensure that each local government council in the country gets its allocation straight to its account.
“Also, for fairness, local government council needs to be represented in FAAC. We are 774 in the country and we are not represented there”, he said.
Earlier, the Benue State Commissioner of Finance, David Olufu, urged for more allocations for states, noting that the majority of the projects reside in the sub-nationals.
“The Federal Government should get less allocation than the states because the sub-nationals have a lot to do,” he said.
Also speaking at the programme, the Chairman of RMAFC, Mohammed Shehu, disclosed that the commission had commenced the process of reviewing the horizontal revenue allocation formula.
He said the Commission plans to train selected officials in data collection and management as it prepares for the allocation review process.
“Considering the above, the commission deems it necessary to organise a programme to enlighten the officials of states and local governments on the electronic platform for data collection for the review of the current indices used in the horizontal allocation formula” he said.
Shehu noted that the 1999 constitution empowers the commission to review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities, provided that any formula which has been accepted by an Act of the National Assembly shall remain in force for a period of not less than five years from the date of commencement of the Act.
He also noted that the data collection and review process may take about three months.
On his part, the Federal Commissioner and Chairman, Indices and Disbursement Committee of RMAFC, Dr Chris Akomas, explained that the attempt to review the horizontal indices in 2018 was hampered by some anomalies, which included the lack of proper understanding of the Commission’s requirements on credible data generation and management.
He noted the tooling programme would enlighten State and Local Government Council Officials on data gathering and management, particularly with the use of the RMAFC Electronic DATA Collection System.
The programme was meant to enlighten state and local government officials on data management and electronic data collection.
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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