Prime Minister Datuk Seri Anwar Ibrahim announced on May 30 that Sabah’s interim special grant would increase from RM600 million to RM1.5 billion as negotiations continue on the state’s 40% revenue entitlement under the Malaysia Agreement 1963 (MA63) [1, 2, 3, 4].

Speaking at the 2026 state-level Kaamatan Festival in Sabah, Anwar reaffirmed that the 40% entitlement is a settled policy and pledged to implement it. "No argument, that is a policy that must be implemented, period," he said [1]. He added, "I also do not want to be known as a leader that breaks his promise to the people," underlining his commitment to honoring Sabah’s special grant entitlement as set out in the Federal Constitution and MA63 [5, 6, 7, 8, 4].

The Prime Minister tasked Second Finance Minister Datuk Seri Amir Hamzah Azizan and Treasury Secretary General Datuk Johan Mahmood Merican to lead the ongoing federal-state negotiations on the 40% revenue sharing mechanism [2].

Sabah’s Chief Minister Datuk Seri Hajiji Noor welcomed the increased interim grant, calling it "proof of a responsible federal government fulfilling its promises" [3]. Gabungan Rakyat Sabah (GRS) secretary general Datuk Armizan Mohd Ali also confirmed the federal government’s commitment to review and enhance Sabah’s special grant despite ongoing legal proceedings [5, 6, 7, 8].

Anwar highlighted the state’s rapid economic and tourism growth, which has outpaced earlier projections. He said, "Under normal projections, there would be no need to expand infrastructure at such a pace. However, Sabah’s growth has surpassed normal projections and recorded development that is truly commendable" [9, 10, 11, 12]. In response, the federal government will fast-track infrastructure upgrades, especially at Kota Kinabalu International Airport (KKIA) [9, 10, 11, 12].

The 40% entitlement claim for Sabah is linked to Articles 112C and 112D of the Federal Constitution and provisions under MA63 [5, 6, 7].

The interim special grant increase will remain in place while the mechanism for implementing the 40% entitlement is finalized through ongoing talks between the federal and state governments [2, 4].

Prime Minister Anwar’s presence at the Kaamatan Festival on May 30 also reinforced his message of unity and development for Sabah as the negotiations move ahead [1, 2, 9, 10, 4, 11, 12].