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FISCAL FEDERALISM AND RESOURCE CONTROL IN NIGERIA: PROBLEM AND PROSPECT

FISCAL FEDERALISM AND RESOURCE CONTROL IN NIGERIA: THE WAY FORWARD

CHAPTER ONE

INTRODUCTION

BACKGROUND TO STUDY

Federalism has come to be accepted as the most variable formula for coping with
the problems associated with multi-ethnic state. It is a system of government which
presupposes constitutional division of powers among levels of government. Federalism
as practiced in Nigeria is at the best nothing more than mere constitutional design
(merely division of power without practicing the principles of federalism) imposed on
Nigeria by the colonial masters.

Federalism in Nigeria, is a compromised solution to the problems of ethnic
mistrust and mutual suspicion, with the ethnic nationalities that made up the country as a
result of creation of a state out of divers’ ethnic, tribal,, cultural and religious groups.
After creating the country the colonizers introduced a federal system of government
under the Richard constitution of 1946 and liffleton constitution of 1954, in agreement
with the political leaders so as to address the problems which a unitary form of
government may pose to divers’ people of Nigeria.

There are some factors that account
for the introduction of federalism in Nigeria. These include both internal and external
factors. The practice of federal system of government in Nigeria cannot be understood
without tracing the historical evolution of the political history of Nigerian state. Nigeria
is characterized by predominant of tree regions which are: The Hausa and Fulani of the
north, the Yoruba of the west and the Igbo of the east.

The major problems affecting federal practice in Nigeria are: the issue of
resources allocation, sharing and usage of the tax burden, the issue of what criteria
should take procedure over the other in the sharing of federally collected revenue. All
these and more has for long remained problematic as far as federal practice is concern in
Nigeria.

The issue of revenue allocation in Nigeria dated back to the Philipson
commission at 1940, to 1979 constitution that provide the establishment of federal
character principle and inl995 gives way to creation of federal character commission to
ensure the implementation of federal character principle as preserved in the constitution.
The 1999 constitution revealed that revenue allocation is in favor of the federal
government and that of the criteria used in horizontal allocation of revenue among states
has also been faulted.

Problem arises as to which criteria should determine how revenue
is to be divided horizontally. The problems arose between the southerners and
northerners and each are of the opinion of criteria should be taken. The former emphasis
in the principal of derivation, where the later emphasized on social needs. As a result of
this divergent interest between these two sections of the country (southerners and
northerners), revenue allocation has been politicized and this has been attributed to the
cause of the social and political problems confronting the country.

Even with 13%
derivation provided for the oil producing region in section 162, subsection 2 of the 1999
constitution, the problem still remains unsolved, hence the persistence clamor for
resources control by the oil producing communities. To Itse Sagay (200l)”….Federal
system of government as presently practiced in Nigeria is problematic. Sectional
interest: ethnic intolerance, religious bigotry, mutual mistrust and the bone on Nigeria
politics. They also extended to revenue allocation and the causes of the various crises in
the country is simply the issue of resources distribution and allocation”

1.2 STATEMENT OF THE RESEARCH PROBLEM

This study is to examine the problems associated with resources control : the
formula to be used in sharing federally collected revenue, sharing and usage of the tax
burden, control of resources by the federal government, how revenue are to be divided
horizontally and vertically and also the current clamor for resources control by one part
of the country.

1.3 AIMS AND OBJECTIVES OF THE STUDY

 To examine the revenue allocation formula in Nigeria.
 To evaluate the bone of contention of those agitation for resource control in Nigeria.
 To examine the sharing of tax burden between the federal, state and local
government in Nigeria.
 To access feasibility and resources control in Nigeria and the obstacle to its
implementatio

1.4 HYPOTHESIS/ ASSUMPTIONS OF THE STUDY

1. l. The nature of federal system determines how revenue is generated and
allocated.
2. Resources control can only be succeed in a country which adheres to the
principles of true federalism.

1.5 THE SIGNIFICANT OF THE STUDY

The major significant of this study is to contribute to the search for the right
political order i.e. right fiscal order. As was obtained in 1986 by political Bureau which
examined three major problems of this country and reported that: The country is
searching for the right philosophy of government, the right social order and right
economic order. Political bureau 1986 under IBB administration. As the practice of
federalism in Nigeria is problematic. The study will help address the lingering issue of
fiscal federalism in Nigeria. The study will give an objective insight on the issue of
resources control. This will help opponents and proponents alike to see the gain and
advantages of resources control. Equally, the study will help the emerging federal state
who obtained the same or similar problems like Nigeria if any to solve their problems
relating to fiscal federalism.

1.6 METHODOLOGY

There are two methods of collecting data in any research. These include; the
primary method and the secondary methods of collecting data. The primary method deal
with getting information through personnel interview and administrating questioners.
Under this method the researcher obtains his information from respondents, such
interviews or questionnaires could be through mailing, handsets, internet or electronic
device. The secondary method of data collecting deals with getting information about the
research from already documented sources like: literature government publication,
magazines, newspapers, journals, text books and presentations. This method of data
collection is what we will employ in this research.
Resource control is an evolutionary phenomenon; it is an issue that has been in
Nigeria since the introduction of the Richard constitution of 1946. It will only be correct
if we adopt a method that will allow us gather substantive data about the issue. This
method will help us have a clear understanding on the issue of resource control. We will
get our materials from the libraries news papers and internet, the methods of data analysis
will be based on content analysis. We will their extract and synthesize them. We
will/employ the deductive and inductive method f of reasoning in analyzing the data

 

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