Revenue Allocation in Nigeria

This chapter provides an understanding of how over-centralisation of Nigeria’s federal system impact on resource distribution in the oil-rich federation. The aim is to establish the extent to which Nigeria’s revenue allocation system or fiscal federalism can be said to conform with or deviate from existing theories and practices. In Nigeria, the sharing of centrally-generated revenues is entrenched in the federal constitution, yet revenue allocation has not ceased to be a contentious issue because of the response of the federating units to the character of the economy which breeds an over-centralised federal system. In line with the central argument of the study, this chapter examines the political economy of revenue allocation with the aim of demonstrating how the domestic political economy shapes federalism in Nigeria.