It has created a scenario whereby the states have become economic extensions of the federal government and has eroded the fiscal autonomy of the federating units. Fiscal federalism in nigeria an analysis of issues and challenges. 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. Issues, challenges and policy options, authoradeleke oluwole.
Buchan fiscal residuum theory was used to explain and analyze issues that relate to federalism, fiscal federalism and the challenges therein. Pdf intergovernmental fiscal relations in nigerias. Despite the number of changes nigeria has made to its tax system in the past, there is still a very long way to go and the current situation of things is a nono. This research is basically designed to ascertain and analyze the various problems of federalism and nationbuilding in nigeria. The ordinary least square ols technique is adopted. It is therefore, imperative to start with an explanation of the concept of federalism. In this article, we identify the challenges of fiscal federalism in nigeria. Nature and challenges of fiscal federalism in nigerian. Fiscal federalism principles, practices and challenges. Revenue allocation in nigeria has been one of the most intractable and controversial issues. Budget, budgeting process, corruption, federalism, fiscal federalism. Finally, the study shall be concluded with alternatives for remediationpolicy options.
An overview of core issues by kayode oladele according to professor akpan ekpo, a onetime vice chancellor of university of uyo, during his 2004. Fiscal federalism and local government finance in nigeria. Attah said that if the government accepts fiscal federalism, most of nigeria s problems would be solved. Fiscal federalism in the nigerian context involves the allocation of expenditure and taxation powers shared among the federal, state and local governments. Resource allocation and management as well as fiscal federalismdecentralization have remained contentious issues in a federal state such as nigeria. According to chris attah, such practice is the panacea to the problems plaguing nigeria and its development. The report also identifies successful governance mechanisms for efficient. To discover if the operation of true federalism in nigeria could help in tackling the problems. Challenges and some options a comparative study a thesis submitted to the law school of addis ababa university for. Fiscal federalism is characterized by fiscal relations between central and lower levels of government. Pdf taxation, revenue allocation and fiscal federalism. The politics of fiscal federalism and the challenges of development.
Fiscal federalism and good governance in nigeria since. Fiscal federalism concerns the sharing of resources among federating units to enable them fulfill their constitutional obligations. Literature and theoretical framework of fiscal federalism 2. If the government just accepts the principle of fiscal federalism, the states should control what they have and pay certain percentages to the. Some of the issues with the practice of fiscal federalism in nigeria include the centralist system of fiscal relations, conflict over sharing principle, over dependence on oil revenue. Federalism in nigeria refers to the devolution of selfgovernance by the west african nation of nigeria to its federated states, who share sovereignty with the federal government. Fiscal federalism and issues of resource control in nigeria. Since it is fundamentally true that the challenges of fiscal federalism are enormous in nigeria, the paper attempts to look into the importance of fiscal federalism for good governance in nigeria. Fiscal federalism and issues of resource control in nigeria nenyiaba, c. The analysis highlights the important role of the central. Against this background, the parties tacitly agreed to drop the fword from the constitution. Consistent with its mission, vision ethiopia creates unhindered forums for scholars, professionals and concerned ethiopians to present their carefully thought policy alternatives for ethiopia.
Ekpo and enamidem ubokudom eds, issues in fiscal federalism and revenue allocation in nigeria, ibadan. Federalism is the bedrock of democratic edifice for a country of nigeria. Akindele and olaopa2002 held that fiscal federalism was deeply rooted in the 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.
Major emerging challenges to fiscal federalism shifting sands in division of fiscal powers globalization and information revolution and their discontents towards an hour glass model of federalism new vision of local governance widening economic and fiscal divide within nations. Definition of fiscal federalism fiscal federalism is the scope and structure in which different government tiers define. This is not unexpected as the federal government is solely responsible for the collection of mining rights and royalties, petroleum profit tax nigerias major. Fiscal federalism, governance and internally generated revenue. This report an outcome of an expert group meeting held on the challenge of local government financing in developing countries documents both the challenges and solutions related to the ability of local governments to mobilize revenues from local resources. It is important to realize that this historic and presentday contradiction exists due to the consequences of. Federalism can be seen as a system of government in which governmental powers that exist in a country are shared between central government. The term fiscal federalism is rooted in a political arrangement called federalism. Faculty of management sciences, nnamdi azikiwe university, awka, anambra state, nigeria.
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. Fiscal federalism is characterised by the fiscal relations between central and lower levels of government. Fiscal federalism and nigerian federalism, which mirrors the amount of fiscal autonomy and responsibility accorded to sub national governments has been an important subject in the policy equation of many developing and developed countries. The fifth conference is a continuation of the dialogue on peace, democracy, unity and transition. In fulfilment of the requirements for the degree of. Taxation, revenue allocation and fiscal federalism in. This report an outcome of an expert group meeting held on the challenge of local government financing in developing countries documents both the challenges and solutions related to the ability of local governments to. T11c problems and prospects of fiscal federalism and nation building in nigeria, job c. Fiscal federalism in nigeria an analysis of issues and. Fiscal discipline and service delivery in nigeria festus o. He says that the practice of fiscal federalism is the panacea to the problems plaguing nigeria.
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, 1976. The challenge of local government financing in developing countries. An analysis of issues and challenges 38 research centre for management and social studies fiscal federalism has a long history in nigeria. A comparative introduction is a concise introduction to the ways in which the worlds federations manage their finances.
This is followed by a discussion of public financial management and fiscal federalism in nigeria, and subsequently, an analysis of the national fra and the subnational fras adopted in several states in nigeria. Before we start discussing federalism in nigeria, it is pertinent to know what federalism really is. In order to appreciate how, for example, total grants to local governments compare with states deficits, it is crucial to examine this study side by side with our previous work ekpo and ndebbio, 1991. Federalism is to this day still a highly loaded and contested political concept in the south african context. The paper noticed that the principle of fiscal autonomy and fiscal. To inquire into the impact of religions and ethnic loyalties and national integration in nigeria. Nigeria can be said to be operating the federal system of government, whereas in actual practice, the country is tending towards a unitary system. These factors and their attendants problems, implications and effects are examined within the purview of fiscal federalism in this paper in line. This paper analyses the consequences of population ageing at the subcentral government scg levels and introduces the scg fiscal vulnerability to ageing. It dates back to 1946, when the richards constitution was introduced.
Over the years fiscal commissions were appointed to work out. It argues that there is the need to find a revenue base in order to maintain the important function of governments at all levels. Examining weak subnational finances in nigerian states chukwuma agu african institute for applied economics,enugu, nigeria abstract one of the most crucial challenges to nigeria s ailing fiscal federalism is the inability of states to raise, retain and manage revenue. It is not a secret at all that nigeria is declining. The challenge of federalism, democracy and development. Attah said that if the government accepts fiscal federalism, most of nigerias problems would be solved. A search for remediation nkwede, joseph okwesili, ph. Federalism and its challenges in nigeria request pdf.
Topics covered include the distribution of taxation powers among different levels of government. Problems facing nigeria s federalism a number of factors make the system so problematic in practice, and few of them will be discussed below. Longterm fiscal challenges the population in oecd countries is ageing rapidly, which will have significant macroeconomic impacts, including on public expenditure and tax revenues. That is, it is manifest by the financial aspects of the devolvement of authority from the national to the regional and local levels. Challenges of fiscal federalism in nigeria and solutions. It involves the financial relationship among the three tiers of government. Issues and challenges of nigerian fiscal federalism. It also provides a comparison of subnational debt management practices of selected nigerian and indian states.
The politics of fiscal federalism and the challenges of. The principle of fiscal federalism is that the states should control what they have and pay certain percentages to the center. Derivation principle of revenue allocation in nigeria. Taxation, revenue allocation, and fiscal federalism in nigeria 31 total nigerian government revenues were collected by the federal government. Politics, fiscal federalism, challenges, development, nigeria.
However, most literature on federalism focused on power relations between and among levels of government visavis fiscal federalism while issues relating to contextual dilemma and the pitfalls in the experiment have attracted few academic works. Taxes should be collected effectively and fairly, both in equitable and monetary terms, for our benefit, so as to ensure our desired growth and development. 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. This work will adopt the use of secondary source of data as the main method of data collection. The paper posits that fiscal federalism is a particular pattern of constitutional division of revenue powers and responsibilities among levels of government. The challenges of internally generated revenue of state in nigeria. In nigeria for instance, the federal system comprises federal, state and local governments while in the united states, federal system includes the federal. This paper examines the various issues and challenges confronting fiscal federalism in nigeria s fourth republic. Resource allocation and management as well as fiscal federalism decentralization have remained contentious issues in a federal state such as nigeria. Problems of nigerian federalism and solutions legit. This is done by examining the evolution of nigerias federalism. Abiodun awolaja looks at some of the issues surrounding the concept in the country and some of the solutions proffered to tackle them.
Dec 24, 2019 problems facing nigerias federalism a number of factors make the system so problematic in practice, and few of them will be discussed below. Presented to the faculty of economics and social science. Nigeria and challenges of fiscal federalism politics. It dates back to 1946 when the richards constitution was introduced. Taxation, revenue allocation and fiscal federalism in nigeria. The problem confronting fiscal federalism in nigeria fiscal federalism has always been a matter of argument in nigeria since its inception. This is not unexpected as the federal government is solely responsible for the collection of mining rights and royalties, petroleum profit tax nigeria s major. Fiscal federalism, good governance, fiscal autonomy, nigeria. This is an eternal problems of the government which affect every citizen in nigeria. Problems and challenges of fiscal federalism in nigeria. 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. Methodology the study adopted evaluatory and assessment methods, with. The role of states and local governments prepared for the nigerian per steering committee by stuti khemani july 24, 2001 introduction 1. An analysis of issues and challenges 40 research centre for management and social studies evolution of nigeria s fiscal federalism nigeria s fiscal federalism is anchored on economic, political, constitutional, social and cultural development.
In view of the above, it is pertinent to ask some fundamental questions. It is the thinking of most nigerians that with fiscal decentralization, economic welfare of nigerians will be automatic. 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 studies. Nigeria and challenges of fiscal federalism politics nigeria. Attah said that if government accepted fiscal federalism, most of nigeria s problems would be solved. Major emerging challenges to fiscal federalism shifting sands in division of fiscal powers globalization and information revolution and their discontents towards an hour glass model of federalism new vision of local governance widening economic and fiscal. Conceptual issues fiscal federalism is a byproduct of federalism. Today we want to find out the main problems of nigerian federalism. 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. Home special report the challenge of federalism, democracy and development the challenge of federalism, democracy and development on february 17, 2012 4. Federalism and its challenges in nigeria the chapter examined the position of federalism in the nigerian content since its independence in 1960. The politics of revenue allocation and resource control have been a dingdung affair for a very long time in nigeria. 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.
Since it is fundamentally true that the challenges of fiscal federalism are. Fiscal federalism, governance and internally generated. Submissions can relate to topics such as asymmetrical federalism, fiscal federalism, distribution of competences, multilevel governance, centralization versus decentralization, or theories of secession. Oecd ilibrary population ageing and subcentral governments. Read more about fiscal federalism and how it works in this. Sep 08, 2018 this has posed serious challenges to the issues of fiscal federalism in nigeria. Issues and challenges of nigerian fiscal federalism citeseerx. The politics of fiscal federalism and the challenges of development in nigeria bolaji omitola okuku campus, osun state university, nigeria abstract in nigeria, the issue of fiscal arrangement that is generally acceptable to the varied and complex groups within the polity has remained a volatile and often combustible problem.
Applicants should not limit themselves to these topics, which are just suggestions. Fiscal federalism in nigeria in any federal system, there must be an arrangement on how the revenue of the state will be shared among the component parts. In fact, fiscal federalism is a general normative framework for assignment of functions to the different levels of government and appropriate fiscal instruments for carrying out these functions in 2017, governor of rivers state of nigeria, ezenwo nyesom wike said that he believes true fiscal federalism will strengthen the economy of his. The relative roles of the three tiers of governmentthe federal government, the. Pdf taxation, revenue allocation and fiscal federalism in. Policy fiscal federalism and nigeria s development.
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