Volume 2, Issue 2, June 2018, Page: 39-47
Fiscal Federalism and Imbalance in Revenue Allocation in Nigeria: Implications for Socio-economic Development
Asadu Ikechukwu, Department of Public Administration and Local Government, Faculty of Social Sciences, University of Nigeria, Nsukka, Nigeria
Nwofia Johnson Emeka, Social Sciences Unit, School of General Studies, University of Nigeria, Nsukka, Nigeria
Received: Sep. 2, 2017;       Accepted: Sep. 23, 2017;       Published: Jun. 2, 2018
DOI: 10.11648/j.ipa.20180202.11      View  689      Downloads  46
Abstract
Imbalances in Nigeria’s federal arrangement have been a constant source of conflict in Nigeria’s politics. Fundamentally, the federal structure was adopted to accommodate Nigeria’s multi-ethnic nationalities. The dissatisfaction among the federating units underlies an unending search for an acceptable revenue sharing formula contention. The problem identified is that the current formula gives more revenue to the Federal government rather than to the State and Local Governments that have greater base and responsibilities for the provision of social welfare to the people. The arrangement stifles the sub national governments’ ability to provide social welfare and accomplish other statutory responsibilities, aggravates crises of relative deprivation, accentuates corruption and intensifies ethnic politics. Being ex-post facto, the paper uses qualitative expository analysis to examine the nature and character of Nigeria’s fiscal relations and the implications for socio-economic development. The finding is that Nigeria, being a consumptive mono economy, is overly susceptible to external shocks. The country therefore, needs to allocate more revenue to the sub-national governments in order to encourage an integrative, bottom-up, people-oriented development. It recommends that the vertical revenue allocation formula be restructured in the following proportions: federal 35%; state 40%; local government 25%. Moreover, derivation principle should be given primacy in horizontal allocation formula to encourage competition among the tiers of government. The economy should be diversified to reduce over-dependence on federal allocation while the fight against corruption should be sustained.
Keywords
Federal, Federalism, Fiscal, Fiscal Federalism, Fiscal Relations and Revenue Allocation
To cite this article
Asadu Ikechukwu, Nwofia Johnson Emeka, Fiscal Federalism and Imbalance in Revenue Allocation in Nigeria: Implications for Socio-economic Development, International and Public Affairs. Vol. 2, No. 2, 2018, pp. 39-47. doi: 10.11648/j.ipa.20180202.11
Copyright
Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Reference
[1]
Wheare, K. C. (1963). Federal Government (4th ed.). London: Oxford University Press.
[2]
Sagay, I. (2008). How a true federalism should run. The Nation, Lagos Vintage Press Limited.
[3]
Tamuno, T (1998). Nigeria federalism in historical perspective. In Amuno, K., Agbaja, A. & Herault, G. (eds) Federalism and political restructuring in Nigeria. Ibadan: Spectrum Book Limited.
[4]
Olukoshi, A. O. and Agbu, O. (1998). The deepening cost of Nigeria federalism and the future of nation-state. In Olukoshi, A.O. and Lisa, l. (eds) Challenges to the Nation State. Uppsla: Nordiska Afrika Institute.
[5]
Suberu, R. T. and Agbaje, A. (1998). The future of Nigeria’s federation. In Amuno, K. Agbaja, A. and Herault, G. (eds.) Federalism and Political Restructuring in Nigeria. Ibadan: Spectrum Book Limited.
[6]
Okoli, F. C. (2014). Federalism and intergovernmental relations: The structure of the administrative state. In Oguonu, C.N. (ed.) Management and Development: A Contemporary Reading in Public Administration. Abuja: Premium Publishing House.
[7]
Eminue, O (2003) Revenue allocation among federal, state and local government (1990-1998). In Ekpo, E. Akpan C. and Ubok-Udom, E. (ed) Issues in Fiscal Federalism and Revenue Allocation in Nigeria. Ibadan: University of Uyo.
[8]
Lukpata, V. I. (2003). Revenue Allocation Formula in Nigeria: A continuous search. International Journal of Public Administration and Management Research, 2 (1) 68 – 73.
[9]
Anorey, N. (2006). Types of federalism. Berlin: Max Planck Encyclopedia of Comparative Constitutional Law.
[10]
Ikeji, C. (2011). Politics of revenue allocation in Nigeria: A reconsideration of some contending issues. Journal of Policy and Strategic Studies 1(1) 32–48.
[11]
Janda, K., Berry, J.M. & Goldmam, J. (2008). The challenge of Democracy, Government in America. Boston New York: Houghton Miffing Company.
[12]
Halberstam, D. (2012). Federalism: Theory, policy, law. In Michel Rosenfeld and András Sajó (eds.) The Oxford Handbook of Comparative Constitutional Law. Oxford: Oxford University Press.
[13]
Hueglin, T. O. & Fenna, A. (2015). Comparative federalism: A systematic inquiry (2nd ed). Toronto: University of Toronto Press.
[14]
Ola, R. & Offiong, O. (1999). Public Finance Management in Nigeria. Lagos: Amfitop Book.
[15]
Aluko, M. (2005). “The Latest Revenue Allocation Formula in Nigeria. A Quick Inspection”.hptt/www.nigeriavillagesquare.com
[16]
Adebayo, A. G (1993). Embattled Federalism: History of Revenue Allocation in Nigeria, 1946-1990. New York, Peter Lang.
[17]
Bashir, K. A. (2008). “The Mechanics of Revenue Allocation: Understanding the need for Effective Data Collection and management”, workshop paper.
[18]
Fadahunsi, A. (1998). The Nigerian nationalities and fiscal federalism. A paper presented at a seminar on devolution of power in a federal state held on 20/04/2016 organized by Friendrich Ebert Foundation, University of Lagos.
[19]
Joseph, R. J., Taylor, S. D. & Agbaje, A. (1996). Nigeria. In Kesselman, M., Krieger, J. & Joseph, W.A. (Eds). Comparative Politics at the Crossroads. Toronto: D.C. Heath.
[20]
Olowononi, G. D. (1998). Revenue Allocation and Economics of Federalism. In Amuno, K. Agbaje, A. and Herault, G. (eds.) Federalism and Political Restructuring in Nigeria. Ibadan: Spectrum Book Limited.
[21]
The vanguard (2016), Effects of recession on Nigeria’s economy, 23 April.
[22]
Ikeanyibe, O. M. (2014). An overview of monetary and fiscal policies in the first decade of the 21st century in Nigeria. In Oguonu, C. N. (ed.) Management and Development: A Contemporary Reading in Public Administration. Abuja: Premium Publishing House.
[23]
Okigbo, P. C. (1965). Nigeria Federal Finance. London: Longman.
[24]
Nwokedi, C. R. (2001). Revenue Allocation and Resource Control in Nigerian Federation. Enugu: Snap Press Ltd.
[25]
Dunmoye, R. A. (2002). “Resource Control: When way forward” The Nigerian Social Scientist 5 (1). pp. 49-53.
[26]
Dike C. (2005) Trends in Intergovernmental Relation: A pangenetic approach” Aba: Chedal Global Print Ltd.
[27]
Ekpo, H. A. (2004). Intergovernmental Relation and Fiscal Federalism in Nigeria. UWO conference paper, New York. June 8–12.
[28]
Elaigwu, J (2007). Federalism in Nigeria: Facing the challenges of the future. Bonlevard: Alon publishing House.
Browse journals by subject