KUALA LUMPUR: The amount of the new special grant for Sabah has been increased by 4.7 folds from RM26.7 million to RM125.6 million for 2022, according to a joint statement by Prime Minister Datuk Seri Ismail Sabri Yaakob and Sabah Chief Minister Datuk Seri Hajiji Noor.

As stated in the statement, the amount will continue to increase every year for the period between 2023-2026 based on the rate mutually agreed by both parties.

The amount was increased after the Federal government and the Sabah government reached an agreement on the review of the special grant to Sabah under Article 112D of the Federal Constitution today, following several discussions and negotiations by the Finance Ministry and the Sabah government, with most of the terms agreed on Feb 14, 2022.

This marked an important review as the last review was done in 1969.

The new agreement also covers other matters, including for the federal government and the Sabah government to continue negotiation on the 40 per cent revenue claim by Sabah.

According to the joint statement, this is to get a new amount for the special grant that can balance Sabah's needs without affecting the federal government's financial position.

"If a new amount agreed by both parties is reached before 2026, then the new amount will be used to replace the special grant payment for Sabah starting 2022," it said.

The statement also stated that the agreement was made without prejudice to the obligations and rights of the federal government and the Sabah government to continue to review the special grant under Article 112D of the Federal Constitution by taking into account the financial position of the federal government and the needs of the Sabah government.

It said the Sabah government also had the right to rely on the original formula as stated in Article 112C and Part IV of the Tenth Schedule of the Federal Constitution.


Implementation of the review on the special grant includes the right of both the Federal government and the Sabah government to refer the matter to an independent assessor (if no agreement is reached) as stated in Article 112D (6) of the Federal Constitution.

The federal government and the Sabah government also agreed to provide the data and information on the financial position of the federal government, as well as the needs of the Sabah government pertaining to the cost of state services, which will be taken into account in the process of reviewing the special grant.

According to the statement, the agreement reached between the federal government and the Sabah government symbolises the spirit of the Keluarga Malaysia, the federal government's commitment under the Federal Constitution and the 1963 Malaysia Agreement to the Sabah government and the state's concern for the role and ability of the federal government to bring development and prosperity.

"Our appreciation to the federal government's delegation led by the Minister of Finance (Tengku Datuk Seri Zafrul Abdul Aziz) and the Sabah government's delegation, led by the Sabah Minister of Finance II (Datuk Seri Masidi Manjun) for this historic achievement," stated the joint statement.

-- BERNAMA