FISCAL ALLOCATION IN NIGERIA: POLITICS OF DERIVATION PRINCIPLES
Abstract:ABSTRACT
Fiscal allocation in Nigeria has been one of the
most intractable and controversial issues. This paper seeks to explore this
interesting subject as it analysis the derivation principle with respect to the
actual expectations from it, and then present the advantages and challenges. While adopting the
Political Economy approach, the study sought to analyse the realities and
challenges facing Nigeria; living in an inter-dependent world and how Nigeria
ensures and maintains an inter-dependent economy in her relationship with the
various competing tiers of government within the polity. The study discovered
that the structure of Nigeria’s federalism, the major source of Nigeria’s
revenue i.e., oil affects and determines the way and manner in which the fiscal
allocations and reallocations are made...this invariably affects the pace of
growth and development in the Country. The study recommended that there is need
for a review of the present fiscal allocation formula and each tiers of the
federating unit should have equal representative in the review committee.
Secondly, Investment should be made in agriculture which is one of the key
sectors that sustained the economy of Nigeria before the discovery of oil in a
commercial quantity.