NIGERIAN AND THE CHALLENGES OF FISCAL FEDERALISM

The Nigerian federalism has been facing a lot of challenges on how to share and disburse national in terms of what goes to each of the component units of the federation. Several efforts were made towards having an acceptable revenue allocation formula yet, an acrimonious agitations abound. This is not only in Nigeria but also in so many federal states. In Nigeria, the challenge of fiscal federalism is not only on how to allocate revenue from the central government to units but also, on how to generate the revenues. Today, every component unit of the federation is dissatisfied with the revenue sharing formula. Currently, the 13% derivation allocated to oil producing states from the revenue generated from oil has been contentious even among the beneficiaries, which lead to the agitation for resource control. The intense politics associated with revenue generation and allocation has been a serious challenge to the stability of the nation. What are the factors responsible for this? How can these issues be addressed, so as to achieve a stable federal state in Nigeria? This paper will employ a descriptive and analytical method to interrogate the factors responsible for this ugly challenge. To properly have a grasp of the concept of federalism.