CHALLENGES OF ACCEPTABLE OIL REVENUE SHARING FORMULA IN NIGERIA

The issue surrounding oil revenue sharing formula in Nigeria is multifarious which this paper sought to examine its challenges in Nigeria. To achieve this the paper used both quantitative and qualitative secondary data to examine indices of sharing the oil revenue, the daunting challenges its post and ways of solving the problems. However, rentier state theory was used as a theoretical frame work. From the findings, it was gathered that several factors are responsible for the challenges in oil revenue sharing formula in Nigeria, for instance, non-oil producing states are a hindrance to oil revenue sharing formula; the activities of the host states have also not helped matters. In view of the findings, it was recommended amongst others that: the federal government should emphasised the use of derivation principle in revenue allocation sharing formula. Also, the domineering and exploitative attitude of the federal government over revenue allocation in Nigeria should be check-mated by the National Legislative body. To further address the issue of the imbalance in revenue sharing in Nigeria, the federal government should be ready to make some sacrifices by relinquishing a little part of its; lion's share from the federation account to states and local governments, to enable them attend to their numerous responsibilities.