Evolution of Fiscal Federalism in Nigeria
Nigeria’s Fiscal Federal structure has been chaotic owing to it’s historic and political history. The pursuit for suitable arrangement is still in contention.
Fiscal federalism refers to a political and constitutional arrangement in a federal system for all fiscal interactions between the tiers of government also known as intergovernmental fiscal relations. The sharing system by which the federal government shares its revenues with states and local government. It implies the disposition of tax powers, retention of revenue and method adopted in sharing centrally collected revenue in accordance with the constitutional responsibilities of all the levels of government.
It also covers the principles and formula of sharing the centrally collected revenue among the individual states and local governments (Williams, 2014). This system is what is generally referred to as revenue allocation which is a mechanism used to address the fiscal imbalances which emerge in the process of economic development.
Historically, fiscal federalism in Nigeria can be traced to the 1946 Richards constitutions which established Regionalism.
This necessitated the establishment of fiscal commissions to fashion a workable financial arrangements for the regional governments in line with assigned responsibilities for efficiency in service delivery. Several factors play significant roles in the consideration of fiscal instruments and revenue allocation by various commission such as history, economy, political and geography as well as cultural and social factors.
The establishment of several commissions are a response to the issue of fiscal federalism threatening the stability of the country due to outcry from various nation-groups over lack of basic amenities in their regions.
These commissions are:
- The Sir Sydney Philipson commission of 1946
- Hick Philipson commission of 1951
- Sir Louis Chicks Philipson commission of 1953
- Sir Jeremy Raiseman commission of 1958
- Bins commission of 1964
- Okigbo commission of 1980
- Dina commission 1968
- Abayode technical commission of 1977
- NRMAFC 1988
Efforts by Military heads of state in revenue allocation
Efforts by the military heads of state indicate the lingering nature of the problem. This led to the promulgation of several decrees to cater for these needs:
- Decree 13 1970
- Decree No 9, 1971
- Decree No 6, 1975
- Parliament Act of 1981
- Revenue Amendment Decree no 36 of 1984 (Buhari’s regime)
- Danjuma commission of 1989
- Armed Forces Ruling Council (AFCRC) January 1990 Approval
- Armed Forces Ruling Council promulgation Decree of 1991
- Armed Forces Ruling Council of January 1992
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