Revenue Allocation System in Nigeria Pre- Independence.

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Introduction

Nigeria is Africa’s leading producer of oil and the seventh largest producer of crude oil in the world, and equally endowed with other numerous natural resources. But rather than utilizing its resources for maximum development, the country is unfortunately bedevilled with how to efficiently and effectively distribute oil revenues in an equitable manner. The revenue allocation phenomenon in Nigeria is basically the issue of distribution of national (resources) revenue, mobilized by the central federal government. And as far as the revenue allocation debacle is concerned, the haggling is between those who bake the national cake (major contributors to national revenue) and those at the helm of affairs to allocate it. There exist two fundamental dimensions of revenue allocation or sharing in Nigeria. The first dimension is based on the institutions and tiers of government which the federal government is at the helm of affairs. While the second dimension is the issue of individuals and groups appropriating national revenue for themselves by corrupt and unjust means. It is important to note that, revenue allocation in Nigeria is defined by an inordinately strong political content, as evidenced in the tendency for major constitutional developments and political transactions to be accompanied by political pressures for revenue sharing reforms and fiscal adjustments. Therefore the questions that beg for answers are: What is the character of revenue allocation in Nigerian federalism. What is the rationale behind vehement agitations for increased revenue allocations in some parts of the country, e.t.c. This paper seeks to unravel the politics of revenue allocation in Nigeria, identify the major players, losers and gainers, and how national revenue is personalized in Nigeria body polity.

BRIEF HISTORICAL BACKGROUND OF REVENUE ALLOCATION IN NIGERIA

Revenue allocation in Nigeria a central theme in governance has a chequered historical antecedent. Many Commissions/Committees have been set-up at different times in the Nigerian national history and they were saddled with the responsibility of examining various fiscal issues and recommend the best principles and formulas in sharing national revenues to meet-up the challenges of the time. Some of these Commissions/Committees include; the Phillipson Commission (1946), the Hicks-Phillipson Commission (1951), the Chicks Commission (1953), the Raisman Commission (1958), the Binns Commission (1964), the Dina Interim Committee (1968), the Aboyade Technical Committee (1977), the Okigbo Commission (1980), the Revenue Mobilization Allocation and Fiscal Commission (1989) and various military decrees (revisions) particularly 1970, 1971, 1992, etc. It is worthy of note that all the Commissions/Committees listed above were adhoc in nature except for the Revenue Mobilization Allocation and Fiscal Commission which was established as a legal and permanent entity to deal with fiscal matters on a more regular basis as the need arises.

THE VARIOUS PRINCIPLES RECOMMENDED BY THE COMMISSIONS/COMMITTEES. 1.Basic Needs
2.Minimum Material Standards
3.Balanced development
4.Derivation
5.Equality of access to development opportunities,
6.Independent revenue/tax effort
7.Absorptive capacity
8.Fiscal efficiency
9.Minimum responsibility of Government
10.Population
11.Social Development Factor
12.Equality of States
13.Landmass and Terrain
14.Internal revenue generation effort.
These principles have continued to serve as the yardstick for revenue allocation up to this day.

Federalism and revenue allocation

Federalism simply refers to a system of government where there is constitutional division of powers between two or more levels of government. Revenue allocation in federal systems of government involves two basic schemes. The first implies the vertical sharing between the federal or inclusive government and other tiers of government. The subject...
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