Fiscal Federation and Revenue Allocation in Nigeria: An Empirical Study

Abstract

Nigeria's politics surrounding the distribution of federal money among the federating units have never been easy. Thus, this study looked into Nigeria's politics around revenue allocation and fiscal federalism in practice. In order to get some results, it used the secondary method of data collection and documentation analysis. The federalism idea served as the study's location and direction. According to the study, the revenue allocation formula is not so much used for allocating shares of the so-called national cake to different segments of the population as it is for preserving political stability, social justice, and fiscal efficiency—all of which are necessary for ensuring growth and sustainable development within the confines of well-defined national objectives. However, the report claimed that throughout time, the Nigerian federal government has usurped most powers and centralized resources at the expense of the federating units. As a result, there have been persistent calls for the federating units to have more authority and resources. These initiatives, which have included the politics of derivation, the reconsideration of the sharing formula, and the struggle for resource control, have frequently been confrontational and violent, dividing the nation along long-standing ethno-regional lines. The report made several recommendations, including the need to diversify the economy, guarantee justice, equity, and accountability, and devolve authority and resources through constitutional frameworks in order to maintain Nigeria's cohesion, stability, and existence.