The Urgency of Reevaluating Fiscal Federalism in Nigeria
Nigerians have strongly reacted to the recent alcohol ban in Niger State, with many expressing their disapproval and calling for changes in revenue allocation. This issue is not novel, as previous bans in Northern Nigeria have ignited debates on how the government manages revenue and resources. In this article, the complexities of Fiscal Federalism in Nigeria and the necessity for a reevaluation will be explored.
The current legislative framework of Nigeria spans across different lists, necessitating immediate amendments to clearly define government control. The allocation of resources and benefits across regions has resulted in disparities, leading to the establishment of various development commissions. There are increasing calls for legislative changes to address these issues and create a more equitable resource governance structure.
The article also examines the flaws in the current revenue allocation principles, which are overseen by the Revenue Mobilization and Fiscal Allocation Commission. It suggests that the criteria for revenue allocation should be based on derivation from royalties, taxes, profits from minerals, mine resources, and IGR, rather than traditional metrics such as land mass and population size. The need for a more just and sustainable revenue distribution framework is evident as only six Nigerian states are considered financially viable.
The author, Kelvin Ayebaefie Emmanuel, an Economist and Board Member at Obsidian Archenar Nigeria, provides a comprehensive analysis of the challenges within Nigeria’s fiscal federalism. He emphasizes the need for legislative amendments and specialized funds to address regional disparities and promote economic development and equitable growth across states. The article concludes by highlighting the urgency of reevaluating Nigeria’s Fiscal Federalism and hints at a forthcoming second part that will provide additional insights on this important topic.
Be sure to watch out for the second part of this thought-provoking article, which promises to offer further analysis and recommendations to address the complex issues surrounding Fiscal Federalism in Nigeria.
