Fiscal Federalism And Challenges of Revenue Allocation in Nigeria- An Analysis of The Role of Revenue Mobilization Allocation And Fiscal Commission

ABSTRACT   

The Nigerian federation which is made up of thirty-six states and 774 local government councils has since its gradual evolution as a colonial federal state in 1954 been contending with issues of revenue generation and allocation. Various efforts were made through Commissions, Decrees and Committees to address the fiscal dimensions of the Nigerian federal system. However, the issues remained controversial, contentious, conflictual, and threatening to the foundation and survival of the Nigerian State for over fifty years. It is against this background that, the study examined fiscal federalism and challenges of revenue allocation in Nigeria with particular focus on the role of the Revenue Mobilization Allocation and Fiscal Commission (RMAFC). The study was premised on the First-Generation theory of fiscal federalism while utilizing both primary and secondary data from questionnaires, interviews and existing literature respectively; tables with simple percentages and the chi-square were used as tools for data analysis. The findings revealed that: the commission is not accorded appropriate power to carry out its statutory functions,- there is need to balance the federal structure to ensure more resources at the lower levels for effective grassroots and overall national development; there is also no adequate co-operation between the commission and the sub-national units. Therefore, it is recommended that the RMAFC should be appropriately empowered to monitor and work out formal mechanisms for fiscal equalization both vertically and horizontally. Above all, there should be a revision of the legislative list in favour of sub-national governments. Similarly, the tax powers should be correspondingly reviewed and a machinery created that would strengthen the relationship between the commission and the constituent units of the federation.