AFRREV IJAH: An International Journal of Arts and Humanities

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Oil Economy and the Revenue Allocation Debacle in Nigeria

K I Ebienfa, I Kumokou


This paper delves into one of the most controversial issues in the political economy of Nigeria. Equitable revenue allocation in Nigeria is one perennial problem which has not only defied all past attempts at permanent solution, but has equally evoked high emotions on the part of all stakeholders. The paper argue that the displacement of agricultural products by oil as the focal point of national revenue, and the attendant relegation of the principle of derivation in revenue allocation, is the root cause of the revenue allocation debacle in Nigerian federalism. The focus on revenue sharing rather than revenue generation is the root cause of political, economic and social decay in the country and has equally led to the proliferation of unviable state andlocal governments. The paper conclude that, the drive for financial autonomy and sustainable development cannot be realized if the derivation percentage is not reversed and increased to eradicate the over dependent posture of the federating units on the over bearing centre.

Keywords: Revenue Allocation; Derivation Principle; Oil; Federalism.

AJOL African Journals Online