The dynamism and complexity of Nigeria’s federalism has attracted academic scrutiny. This is because it has generated so many problems capable of threatening the corporate existence and continuity of the Nigerian state. This paper, therefore, inquired into the causes of dissatisfaction and violent agitation arising from fiscal federalism and the adopted allocation formula. In achieving this, the paper adopted both descriptive and analytical methods by relying on secondary sources for data gathering. It also adopted primary sources by interviewing the key figures involved in the process of allocation of resources. However, the paper, however, concluded that the centralism and the age-long hegemony of federal government as well as the protracted period of interregnum rule of the military are some of the factors that contribute to the constant conflicts associated with fiscal federalism in Nigeria.
Keywords: Agitation, Allocation, Centralism, Conflicts, Continuity, Dynamism, Hegemony, Interregnum, Military.
Fiscal decentralisation has become fashionable regardless of levels of development and civilisation of societies. Nations are turning to devolution to improve the performance of
their public sectors. In the United States, the central government has turned back significant portions of federal authority to the states for a wide range of major programmes, including welfare, Medicaid, legal services, housing, and job training. The hope is that state and local governments, being closer to the people, will be more responsive to the particular preferences of their constituencies and will be able to find new and better ways to provide these services (Sharma, 2005:169).
Fiscal federalism can be explained as an arrangement that involves intergovernmental fiscal relations mostly in contemporary federations. Nevertheless, it is not a peculiarity of federal states alone; its elements are also noticed in most of the unitary states too. The concept of fiscal federalism is not to be associated with fiscal decentralization in officially declared federations only; it is applicable even to non-federal states (having no formal federal constitutional arrangement) in the sense that they encompass different levels of government which have de facto decision making authority (Adamolekun, 1983).
This, however, does not mean that all forms of governments are ‘fiscally’ federal; it only means that ‘fiscal federalism’ is a set of principles that can be applied to all countries attempting ‘fiscal decentralization’. 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 (Oates, 1999: 1120)
Nigeria is a plural country that can be aptly classified as a federal state. The establishment of the Nigerian federal structure dated back to the 1946 adoption of Richard’s constitution which granted internal autonomy to the then existing regions of Nigeria. Also, the adoption of the Littleton constitution of 1954 laid further credence to the federal structure of Nigeria (Nwosu, 1980).
Even in non-federal states, there has been a growing movement towards greater fiscal decentralisation in recent years. Some analysts have attributed this to globalisation and deepening democratisation the world over on the one hand and increasing incomes on the
other (Tanzi, 1996). Other specific reasons for the increasing demand for decentralisation are:
- Central governments increasingly are finding that it is impossible for them to meet all of the competing needs of their various constituencies, and are attempting to build local capacities by delegating responsibilities downward to their regional governments.
- Central governments are looking to local and regional governments to assist them with national economic development strategies.
- Regional and local political leaders are demanding more autonomy and want the taxation powers that go along with their expenditure responsibility (Ozo-Eson, 2005:1)
Over the years, the issue of fiscal federalism has remained dominant and most contentious in Nigeria’s polity. This is because of its multi-dimensional perspectives. Over the years the fiscal federalism in Nigeria has crystallised and remained dynamic as a result of its multiplicity in terms of ethnic composition and pluralism vis-à-vis socio-cultural dimensions. It is naturally expected, therefore, that interactions in terms of fiscal relations will be characterised by hostile competition, unending struggle and survival of the fittest syndrome. The centralised nature of the military hierarchical structure and the exploitative tendencies of the colonial government placed the federal government at an advantage in post colonial Nigeria.
Invariably, the financial hegemony enjoyed by the Federal Government over the thirty six (36) states and seven hundred and seventy four (774) local governments has created disaffection in the Nigerian federation. It reinforces the structural vulnerability of the component units while simultaneously intensifying the pressures for better federal economic patronage.