Their powers and functions were shared to them by the constitution. The ordinary least square ols technique is adopted. The term was introduced by the germanborn american economist richard musgrave in 1959. The problem of redistribution is that with free migration and local competition communities will not. At its most basic level, fiscal federalism attempts to define the division of governmental functions, and the financial relationship between, different levels of. In 2017, governor of rivers state of nigeria, ezenwo nyesom wike said that he believes true fiscal federalism will strengthen the. Fiscal federalism in the nigerian context involves the allocation of expenditure and taxation powers shared among the federal, state and local governments. The problem confronting fiscal federalism in nigeria. As a subfield of public economics, fiscal federalism is concerned with understanding which. Therefore, the problem with federalism in nigeria is the mixapplication or nonapplication of this clause especially as it has to do with power distribution awa, 1977. Before we start discussing federalism in nigeria, it is pertinent to know what federalism really is.
Among the different levels of government, fiscal arrangement ought to be worked out properly to ensure fiscal balance in the context of macro economic development and stability. Kupoluyi department of political science and public administration babcock university,ilishanremo, ogun state abstract. In nigeria for instance, the federal system comprises federal, state and local governments while in the united states, federal system includes the federal. Current structure of fiscal federalism in nigeriaa legacy of military rule. Topics covered include the distribution of taxation powers among different levels of government. Federalism is a political concept in which power to govern is shared between national, and subnational governments creating what is often called a federation arowolo. Dickson abstract the objective of this paper is to investigate the effects of fiscal federalism on economic welfare in nigeria between 1970 and 2009 using an econometric approach. Fiscal federalism and issues of resource control in nigeria.
Our central argument is that nigerias fiscal federalism has not spurred the desired development as envisaged by the architects of the system. Pdf fiscal federalism, which mirrors the amount of fiscal autonomy and responsibility accorded to subnational government, has been an important. The reality is that nigeria is a federation on paper, but a unitary state in practice. Read all the latest news, breaking stories, top headlines, opinion, pictures and videos about fiscal federalism from nigeria and the world on today. Theory and dimensions dare arowolo lecturer, department of political science and public administration, adekunle ajasin university, nigeria abstract the dynamism and complexity of nigerias federalism has attracted academic scrutiny. Theory and dimensions with abstract, chapter 15, references and questionnaire. Federalism can be seen as a system of government in which governmental powers that exist in a country are shared between central government and other component units i. Fiscal federalism, governance and internally generated revenue. Fiscal federalism and issues of resource control in nigeria nenyiaba, c. Fiscal federalism and economic development in nigeria. Economic policy options for a prosperous nigeria pp 221243 cite as. Taxation, revenue allocation, and fiscal federalism in nigeria 31 total nigerian government revenues were collected by the federal government.
Stateregion and local government, but in 1954 there were only the central and regional government in nigeria. Resource allocation and management as well as fiscal federalism decentralization have remained contentious issues in a federal state such as nigeria. The evolution, development and practice of federalism in. An overview of core issues by kayode oladele according to professor akpan ekpo, a onetime vice chancellor of university of uyo, during his 2004. As a subfield of public economics, fiscal federalism is concerned with understanding which functions and instruments are best centralized and which are best placed in the sphere of decentralized levels of government oates, 1999. Apr 23, 2012 the centralization of nigerias fiscal federalism began with the report of the dina commission 1968 which argued that an appropriate revenue allocation system should result in a more equitable distribution of revenue among the states to achieve a balanced development of the federation. Fiscal federalism in nigeria research paper 2971 words. Given the territorially delineated cleavages abounding in nigeria and the historical legacy of divisions among ethnic groups, regions, and sections, the federal imperative was so fundamental that even military governmentscharacteristically unitarian, hierarchical, and centralistattached importance to the continuation of a federal system of government. Examining weak subnational finances in nigerian states chukwuma agu african institute for applied economics,enugu, nigeria abstract one of the most crucial challenges to nigerias ailing fiscal federalism is the inability of states to raise, retain and manage revenue. This is because it has generated so many problems capable of threatening the corporate existence and continuity of the nigerian state. Fiscal federalism is part of broader public finance discipline. The clamour for the adoption of true fiscal federalism in nigeria has been a burning issue in several quarters in the last three decades and has been documented in several articles, amongst which is the empirical study of arowolo 2011. Federalism, regional redistribution, and country stability.
Federalism is a system of government whereby power is constitutionally shared between the central government and other component units e. Fiscal federalism and challenges of development in nigeria. The relative roles of the three tiers of governmentthe federal. The practice of fiscal federalism in nigeria has been inhibited by several factors which include, the dominance of the federal government in the revenue sharing, the protracted period of interregnum rule of the military, and overreliance on the revenue from the federation account. Fiscal federalism and resource control in nigeria ngozi nwogwugwu, phd. Comparative perspectives from canadian fiscal federalism olumide victor ekanade 0 1 2 recommended citation 0 redeemers university, ogun state nigeria 1 commons, other international and area studies commons, and the political economy commons 2 part of the african.
Fiscal federalism, governance and internally generated. Nigeria can be said to be operating the federal system of government, whereas in actual practice, the country is tending towards a unitary system. Each level of government, therefore, should be free to take decisions and. Taxation, revenue allocation and fiscal federalism in nigeria. Challenges of fiscal federalism in nigeria and solutions. This paper examines the connection between fiscal federalism and insecurity in nigeria. The guardian nigeria newspaper brings you the latest headlines, opinions, political news, business reports and international news. Faculty of management sciences, nnamdi azikiwe university, awka, anambra state, nigeria. Fiscal federalism and local government finance in nigeria. This paper examined the evolution, structure, and practices of federalism in nigeria to synthesize the extent to which fiscal federalism in conjunction with agitations for resource control has. Questioning nigerias fiscal federalism and resource. D eme okechukwu innocent emeh, ikechukwu eke jeffry department of public administration and local government, university of nigeria, nsukka.
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. Get free research paper on fiscal federalism and nigerian federalism our project topics and materials are suitable for students in nigeria with case studies in pdf, doc. An analysis of issues and challenges 40 research centre for management and social studies evolution of nigerias fiscal federalism nigerias fiscal federalism is anchored on economic, political, constitutional, social and cultural development. In other words, it is the study of how competencies expenditure side and fiscal instruments revenue side are. Pdf a comparative study of fiscal federalism in nigeria. Fiscal federalism in nigeria the question of an acceptable formula for revenue sharing among the component tiers of the nigerian nation is one of the most protracted and controversial debates in the political and macroeconomic management of the economy. The paper discusses fiscal federalism in nigeria, and the implication to the economy of states. In a true federalism, the fiscal powers of all tiers of government relates to the duties and responsibilities assigned to them by the constitution. A brief tour through the history of nigerian federalism reveals sharp turning points in federal and regional fiscal relations, based alternately on principles of derivation, national interest, and the centripetal forces of military governments3. In this thesis, i will argue that the lack of fiscal autonomy for the. Federalism is a means of ensuring peace, stability and mutual accommodation in countries that have territorially concentrated differences of identity, ethnicity, religion or language. Fiscal federalism has occupied the front burner of political discourse in nigeria, since the return to civilian rule. This study, using content analysis, examined the impact of fiscal federalism and the struggles of ethnic minority groups in the niger delta on the trajectories of the national question in nigeria. The country having experienced fiscal federalism for over 50 years is still beset with problems.
Conceptual issues fiscal federalism is a byproduct of federalism. Federalism, nigerian fiscal federalism, derivation principle and. Gdp, inflation and exchange rate in nigeria between 1970 and 2010. Akindele and olaopa2002 held that fiscal federalism was deeply rooted in the federal system of government. Fiscal federalism news latest breaking stories and top. It involves the financial relationship among the three tiers of government. Fiscal federalism, which mirrors the amount of fiscal autonomy and responsibility accorded to subnational government, has been an important subject in the policy equation of many developing, transition, and developed countries. Pdf the paper posits that fiscal federalism is a particular pattern of constitutional division of revenue. It is important to realize that this historic and presentday contradiction exists due to the consequences of the development of any principle of income acquisition. Fiscal federalism, financial relations between units of governments in a federal government system. Reasons for the adoption of federalism in nigeria legit. The problem confronting fiscal federalism in nigeria fiscal federalism has always been a matter of argument in nigeria since its inception. Nigeria is a federation consisting of states and federal capital territory, federal government, 36 states and 774 local governments.
This is not unexpected as the federal government is solely responsible for the collection of mining rights and royalties, petroleum profit tax nigerias major. The practice of fiscal federalism in nigeria has been inhibited by several. Policy fiscal federalism and nigeria s development. Many scholars have identified strong links between fiscal federalism and different types of conflicts that. The importance, how to, effect causes relationship, comparison, history, role, solutions are discussed. Federalism, especially in large or diverse countries, can also improve service delivery and democratic resilience, ensure decisions are made at. The federal government may receive 56% of the share of fiscal revenues, but it collects above 95% of the major fiscal taxes on behalf of the states, including the value added tax, and then redistributes according to the revenue distribution template. Fiscal federalism has always been a matter of argument in nigeria since its inception. Current structure of fiscal federalism in nigeriaa legacy of military rule 4. The relationship between the principle of derivation and resource control sam ugwu chijioke ph. The dynamism and complexity of nigerias federalism has attracted academic scrutiny. A comparative introduction is a concise introduction to the ways in which the worlds federations manage their finances. Fiscal federalism in nigeria an analysis of issues and challenges.
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