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Concept and meaning of federalism (2)

Chief Obafemi Awolowo also observes that Nigeria is not a nation. 

“It is a mere geographical expression. There are no ‘Nigerians’ in the same sense as there are ‘English’, ‘Irish’ or ‘French’. The word ‘Nigeria’ is merely a distinctive appellation to distinguish those who live within the boundaries of Nigeria from those who do not”.… Since 1914, the British government has been trying to make Nigeria into one but the Nigerian people themselves are historically different in their backgrounds, in their religious beliefs and do not show themselves any sign of willingness to unite. Nigerian unity is only a British creation for the country.

The other school of thought argues that federalism was freely chosen by Nigerians. According to them, the 1950 and 1953/54 constitutional conferences preceded the adoption of a federal system of government in Nigeria and Nigerians participated actively in the deliberations that led to the adoption of the Macpherson Constitution in 1951. The argument that Nigerians participated actively in the deliberations that led to the adoption of federalism in Nigeria is not water tight. Thus a critical analysis of the views of the above schools of thought would take us to the conclusion that in as much as Nigerians participated in the London Constitutional Conferences of 1950, 1953, 1954 respectively, the British government played a greater role in establishing the Nigerian federation. 

Unlike the federal systems of United States of America and Switzerland, which fall under the category of aggregative or coming together of federations (which involves the classical method of federation building in which a federal state is constituted through an agreement or bargain to bring together previously sovereign entities in a new federation), as described by Suberu and Agbaje, the Nigeria federation was established to hold together the diverse ethnic groups and nationalities that had been forcibly and arbitrarily incorporated into a unitary colonial state under British imperialism. John P. Mackintosh stated thus: “The Nigerian federation has always had peculiar features; the most evident being that it was not created by the coming together of separate states but was the result of the subdivision of a country, which had in theory been ruled as a single unit”. This peculiar feature of the Nigerian federation (i.e. being a British creation) is a major problem of consolidation in that it lacks the integrative features associated with coming together federation but it is rather associated with the citizens, owning their allegiance to their units or regions rather than to the central government.

The road to Federalism in Nigeria

Federalism as it were, originated during the colonial epoch, beginning with the amalgamation of the Northern and Southern Protectorates in 1914. It was introduced into Nigeria precisely by the 1946 Richardson Constitution, after the 1922 Clifford Constitution. The Constitution introduced regionalism into Nigeria for the first time, establishing regional assemblies in addition to the already existing central legislature. However, the regional houses remained only as deliberative and advisory bodies having no real legislative competence.’ They also served as electoral colleges for the central legislature… Each of the then three regions had its Constitution attached as a schedule to the Federal Constitution. 

The federation was finally established in 1954 with the Oliver Littleton Constitution, after the 1951 Macpherson Constitution, which granted substantial autonomy to the regions in some matters, including establishment of regional civil service and judicial system. Prior to these periods, the country was administered as a unitary set up, though with some level of power devolution. It became finally consolidated at independence in 1960 when it emerged a federation delicately balanced on the tripodal pedestal of the three major ethnic groups. 

The 1960 Independence Constitution, retained the federal structure with the three legislative lists, to wit: (Exclusive, concurrent and residual). However, in order to safeguard the unity of the country, it was provided that the executive authority of the regions should not be exercised in such a way that it would impede or prejudice the exercise of the executive authority of the federation or endanger the continuance of the Federal Government in the country. The 1963 Republican Constitution retained the same federal structure and provisions, protecting federalism as contained in the 1960 constitution. The 1979 and the 1999 Presidential Constitution expressly guaranteed federalism – in  section 2(1) and (2) thus:


(1) “Nigeria is one indivisible and indissoluble sovereign state to be known by the name of the Federal Republic of Nigeria

(2) Nigeria shall be a federation consisting of states and a federal capital territory”.

In the spirit of federalism, the Constitution guaranteed three levels of government viz: federal, state and local government. While the Constitution recognised the need for separateness or some degree of autonomy amongst’ the various levels of government, it also recognised the need for interdependence and harmonious and effective government for the Nigerian federalism to be a worthy one. The 1995 Draft Constitution extensively tackled once again the question of federalism in Nigeria, drawing its lessons from past experiences.

Scholars have advanced reasons as to why Nigeria adopted the federal system of government. But while they are agreed on the historical factors that made the adoption of federalism compelling, such as diversities in nationalities, religion, culture and resources, they, however, appear to differ on the political forces that propelled the historical factors in crystallising into a federal union. Their arguments can, however, be narrowed down into two basic schools of thought. The first school, which can be described as the internalist school located the political forces that propelled the historical factors into federalism in the nationalist leaders. 

According to this school, the realities of the country’s historical past coupled with perceived economic advantage accruable from federalism as well as geographical and political factors made federalism attractive to the nationalist leaders before independence. The above factors were reinforced by growing suspicion and fear of domination by one group over another among the various units. Thus, it became appropriate to have a system of government that will grant units considerable freedom and autonomy in the internal governance of their people. This desire was found fulfilled in federalism since it is inherently decentralised and deconcentrated. 

The emphasis here is that, Nigeria’s nationalist leaders have long before independence become convinced and reached the conclusion that the country could only survive on the basis of a federal system. For instance, this was one of the arguments of Nnamdi Azikiwe, Nigeria’s first president (1960-1966), when he canvassed for a ‘federal commonwealth of Nigeria’ . It was also the arguments of Awolowo in his books, “Path to Nigerian Freedom” and “Thoughts on Nigerian Constitution” published in 1947 and 1966 respectively. Similarly, Nigeria’s first Prime Minister, Sir Abubakar Tafawa Balewa, was reported to have argued the case for a federal option in the following words:

“I am pleased to see that we are all agreed that the federal system is, under the present conditions, the only sure basis on which Nigeria can remain united. We must recognise our diversity and the peculiar conditions under which the different tribal communities live… Therefore… we must do all in our power to see that this federal system is strengthened and sustained”  

In essence, the internalist school of thought is of the view that the nationalist leaders had a strong preference for federation while the British merely rubber stamped what Nigerians themselves had desired.

The second school of thought, on the other hand, sees the adoption of federalism in Nigeria as externally motivated. Federalism is here seen as a British imposition meant to serve the political interest of the British alone. It is, therefore, nothing but a contrivance of British rule for the purpose of administrative convenience of the colonial state apparatus. The argument of this school is that, even before 1954 when federalism formally evolved, the country had been a conglomeration of different subcultures administered unitarily, to later introduce the federal system, therefore, reflects nothing but the self- interest of the British. 

It is the belief of some scholars that contrary to the widely shared notion of achieving unity in diversity, federalism was introduced as a divide and rule strategy and to this extent was an abominable, disruptive and divisive British heritage. Still following from this school are scholars, who do not share the idea of federalism as a divide and rule strategy but rather as a strategy for decolonisation. Such a strategy according to Ayoade was either proposed to truncate the cost of colonial administration as in East and Central Africa or to stem internal divisive tendencies as obtained in Nigeria. 

Yet, others have argued that the system was imposed on the country in order to maintain a neo-colonial state apparatus for effective control of the country after independence because British colonialists had the opportunity to de-emphasise the particularistic tendencies of the different ethnic groups in the country but for selfish reasons, they ended up creating ‘structural imperfections to bedevil inter-ethnic relations after independence. From a synthesis of submissions by the two schools of thought discussed, certain facts become obvious about the evolution of federalism in Nigeria. It is clear that some objective factors made federalism desirable if the country is to remain united. Hence, one can hardly query the foresight of the nationalist leaders, who, out of the desire to have self-rule along with shared rule, opted for the federal solution. 

Similarly, the British overlords could not have pretended not to know that it was the most appropriate for a heterogeneous society like Nigeria, though other pecuniary considerations may have influenced the choice. Added to this is that the British would not have imposed federalism in the country if circumstances had dictated otherwise. In other words, adoption of federalism in Nigeria is neither an exclusive action of the British nor that of the nationalist leaders alone but rather, it was a mutual desire of the two parties. Watts aptly made this point while describing the relevance of the federal idea in the post 1945 period. He opined that,

“…The creators of the new states approaching independence found themselves faced with simultaneous conflicting demands for territorial integration and balkanisation. They had to reconcile the need, on the one hand, for relatively large economic and political units in order to facilitate rapid economic development and to sustain genuine political independence, with the desire, on the other hand, to retain authority of the smaller political units with traditional allegiances, representing racial, linguistic, ethnic and religious communities. In such situations, where the forces for integration and separation were at odds with each other, political leaders of nationalist independence movements and colonial administrators alike found in the “federal solution” a popular formula, providing a common ground for centralisers and provincialists”.

A pertinent question that derives from the preceding analysis is that, if mutual fears and suspicion of domination among groups, quest for self-determination, economic prosperity, desire for unity in diversity among other compelling factors propelled a federation of Nigeria, to what extent then have these imperatives been transcended many years after adopting the system? This calls for an examination of the content and practice of federalism in Nigeria.

The Federal structure of Nigeria is believed to be “a bad marriage that all dislike but dare not leave, and that there are possibilities that could disrupt the precarious equilibrium in Abuja”. The dominant conceptual and legal foundation for Nigeria’s internal political geography is federalism.  A federal arrangement was expected to be instrumental for forging national unity out of the plural society and at the same time in preserving the separate social identities cherished by its component parts. 

Adoption of federalism notwithstanding, Nigeria’s political system has continued to operate with minimum cohesion.  Rivalry fundamentally instigated by ethnic mutual suspicion increasingly weakens the fabrics of Nigerian Sovereignty.  This has culminated in the Nigerian Civil War. It has also dragged the nation-state into the turbulent June 12 political crisis which has completely made Nigerian sovereignty frail and fragile. 

   Fifty six years after independence, Nigeria still battles with one of the major fall-outs of federalism, the politics of trying to appease all sections of the polity.  This has become necessary because success to national positions and resources are limited at the individual level.  This is as a result of the multi-ethnic nature of the society.  According to Ola, different governments that have governed this country have at one point or the other derived various methods to cope with this ever present problem of power distribution in both the political and economic spheres.  Therefore, there have been accusations and counter accusations from all sections of the polity, as to how powers are being distributed or how they ought to be distributed.


Federalism is a system meant to integrate people in a society who are diverse ethnically, culturally, geographically and even religiously.  It therefore becomes imperative that once a government is in place, it must endeavour to adequately and equitably distribute powers, functions and resources among these diverse groups.  But in Nigeria, there are instances where governments have openly violated this principles of federalism.  Suffice it to say that in theory, Nigeria can be said to be operating the federal system of government, whereas in actual practice, the country is tending towards a unitary system.  Therefore, the problem with federalism in Nigeria is the misapplication or non-application of this clause especially as it has to do with power distribution.  Power distribution is a volatile issue which if not properly handled could lead to various forms of crises which are bound to crop up.  


True federalism is essentially a derivative of federalism as a concept. It is also referred to as fiscal federalism. This deals essentially with how revenues are generated and distributed among federating units in a federation; an issue that has proven to be highly emotive and touching in Nigeria.


The inherent vice of capitalism is the unequal sharing of blessings; theinherent virtue of socialism is the equal sharing of miseries. – WinstonChurchill

Revenue allocation refers to the mechanism for sharing the country’s financial resources among the different tiers of government in the federation, with the overall objective of enhancing economic growth and development, minimizing inter-governmental tensions and promoting national unity.

According to John Idumagbo, the colonial policy of divide et impera reinforced the security of communal identity, thus making the task of tribal integrities more complex. No doubt, politics was seen as a struggle amongthe various factions, first, to establish regional dominance as a spring board for the acquisition of national wealth. We have been forced to believe that unless our “own people” are in power, we cannot secure those amenities that are disbursed by the government. What resulted from this belief was dirty politicking in revenue allocation, the siting of industries, building of roads, and quota system of admission into Universities, award of scholarships, contracts and statism in appointments to the federal public service.


From the Willinks Commission in 1958 to the Irikefe Commission in 1975, the vast increase in bad government with its attendant proliferation of states has been seen as a way of diffusing economic and political power. As early as 1943, Dr Nnamdi Azikiwe had suggested the creation of eight states in Nigeria. In 1947, Late Obafemi Awolowo argued for a federal Constitution based on the ethnic factor. Ostensibly, the impetus for this agitation was thedesire to minimize inter-ethnic tension. The most fundamental issue in State creation is fiscal autonomy.

Nigerian federalism has stubbornly shunned fiscal autonomy, or what may be referred to as resource control. The calculation has been for the majority to create States and LGAs based on population so they can share from thecommon pool of oil resources. As new States and LGAs emerge, so does a complex calculus of resources distribution, which of course, must be based on justice, equality and fairness. But the Nigerian situation is anomalous. Most of the states can hardly generate 10% of the annual revenue from internal sources. States depend almost solely on statutory allocations from the Federation Account. Thus, most states are no better that glorified local governments as they lack the capacity to generate internal income or revenue.

In 1960, largely autonomous regions possessed the residual powers in the federation and functioned almost independently. Even before the First Republic collapsed, the federal government was asserting greater powers. Inparticular, it controlled the national economy and possessed emergency powers to intervene in any region where law and order had broken down, as it did in the Western Region in 1962.

The federal government took over state and local government functions for a variety of reasons: the transfer of legislation and administration of mining rent and royalties to the federal government; centralisation of the marketing boards, fixing of producer prices; right to revenues emanating from company income tax, import, export, petroleum profit (PPT), introduction of uniformrates in personal income and sales taxes while the states were to administer the taxes. The Okigbo Commission report in 1980 made it mandatory for all for all federally collected tax to be paid into the Federation account.Consequently, the vertical distribution formula was adjusted in 1980 to 55.34; 6.8: and 2.5 per cent while in 1993, the formula was changed to 48.5; 24.20: and 7.5 per cent for federal, state and local governments and special funds, respectively.

The horizontal distribution formula had remained stable since 1981, except, for the increase in derivation principle for mineral revenue to 13 per cent since 1999. Even the derivation monies are subjected to reckless spending bythe States, and in spite of agitations that the 13% be upped to 25% and progressively to 50%, the Federal Government has been foot-dragging in implementing such recommendations because it would be in the interest of asection of the people.

Danjuma argues that the issues of revenue allocation are partly economic but largely a matter of political compromise and an issue central to this compromise is the impact of a given ‘revenue allocation structure’ on thenature of federalism. This is an important and delicate issue, since it is federalism that creates the need for revenue allocation.


Since 1946, several criteria have been used to allocate revenue among the regions/states, but the most controversial has been the “Derivationprinciple”. Because of the variability in the types and quantity of materialresources in the regional units, inequality in economic development is inevitable. But Awa argued that no unit should be allowed to remain too poor and too backward compared to the average standard of living of the units within the federation. Some have argued that the presence of petroleum in any state is fortuitous and the revenue from rent and royalty accruing from its mining should not be monopolized by the state of origin.

On the other hand, it is maintained that agricultural produce which goes into the export market flows from the skill and perseverance of the people in the state of origin and the export duty accruing from it should be surrendered in full to the state of derivation. But contrary to this, there is also an argument that there is an element of the fortuitous in both the agricultural produce andpetroleum as the agricultural produce is partly a function of such places being favoured by nature. Indeed, the totality of the relationships among the units must be predicated on patriotic consideration as evidenced by the spirit as essential ingredients to federalism. Each unit must be given the opportunity to develop at its own pace within the overall national framework.

An important factor that intensified and heightened the agitation of the minority nationalities was the argument that when the various regions dominated by the majority nationalities were producing the wealth of the federation, the principle of derivation dominated revenue allocation. But since the discovery and exploration of oil from the minority areas, the issue of derivation has been greatly downplayed. The inimitable Odia Ofeimuncaptured the fluctuating fortune of the derivation formula in Nigeria from historical perspective in the following words:


From 100 percent in 1946, the Philipson commission recommended 50percent for derivation in 1951; Hicks- Philipson recommended 50 percent,100 percent was actually disbursed in 1953 when the Western Regionpushed for it; in 1958, however, the Raisman Commission set derivationat 50 percent; in 1960, it was 50 percent; by 1970, the regime of GeneralYakubu Gowon…reduced derivation share to 45 percent…In 1975,derivation fell to 20 percent. The Obasanjo / Yar’ Adua administrationfixed it at 25 percent… Shehu Shagari reduced it to 5 percent in 1981.Under Buhari, it crashed to 1.5 percent. General Ibrahim Babangida raisedit to 3 percent …it took the rise of Sara Wiwa phenomenon forconsideration to be given to a 13 percent rise on the principle ofderivation as proposed in the 1995 and now the 1999 Constitution. 

It is our view that the elite have effectively hijacked the revenue allocation process in Nigeria to meet their selfish or myopic interests. On the allocation of revenue between the central government and the units, there have been allefforts to ensure that the central Government controls the bulk, even when these allocations are finally appropriated to individual pockets of the elitescontrolling the central government. These elites have used their position byvirtue of the institution they occupy, either military or civilian, to amassthe wealth of the country to their families and that of their allies. Asregards the allocation among the states, the states with oil resources have argued in favour of higher percentage of allocation via derivation principle and those states without oil have supported the opposite.


To be sure, true fiscal federalism reigned supreme under the 1960 Independence and 1963 Republican Constitutions when Nigeria had autonomous regional governments. Derivation of natural resources was based on 50% share for the producing region, 25% share for the Federal Government at the centre and 25% was shared amongst all the regions, including the producing region that has already shared 50%. With this fiscal autonomy, Chief Obafemi was able to use the Cocoa product of WesternNigeria to build the Cocoa house in Ibadan, the first television station in Africa, the Liberty stadium in Ibadan, and the University of Ife, aside giving free education at all levels to the Yorubas. Sir Ahmadu Bello, the Sardauna ofSokoto, built the Northern Nigerian Development Corporation (NNDC) group, such as Durbar and

Hamdala hotels, Ahmadu Bello University, Zaria, Yankari Games reserves, etc, all with income from hides and skin, Cotton and the famous Kano groundnut pyramids. Okpara and Akanu Ibiam used the palm oil produce of the East to carry out a massive agricultural revolution build the University of Nigeria, Nsukka, Enugu stadium trans Amadi Estate, and otherinfrastructural facilities. On creation of the Mid west region on 9th August, 1963, spear headed by Oba Akenzua II, Dr. Dennis Osadebey, Kessington Momoh, Chief Edebiri and Jereton Mariere used their resources from rubber and timber plantations to develop the old Mid west region. That was how effective true fiscal federalism was. That is why the question is being asked as to why the equation has suddenly changed to a meagre 13% now that theNiger Delta (South- South) zone produces the Crude oil that drives the engine of the Nigerian Nation. That is why the South – South people feel offended when they are told to show “gratitude” for being “allowed” 13% of product derived from their soil, an activity that destroys their ancestral totems, cultural relics and causes unprecedented degradation of their eco and aquatic systems.  


The 2014 National Conference inaugurated by former President Goodluck Ebele Jonathan, GCFR, made historic and far reaching recommendations that could give Nigeria true fiscal federalism. Unfortunately, these laudable recommendations, like others before, have been consigned to the dustbin of historical oblivion.

As a Federal government delegate (addendum), to the 2014 National Conference, I vigorously pushed for a true fiscal federation, fully aware that Nigeria would not realize her great potentials without it. I would attempt a summary hereunder, of some of the recommendations of three Committees whose works are germane to our present discourse of attaining true federalism.

The Conference recommended fiscal federalism and the use of referendum/plebiscite in determining our affairs. 


The Conference recommended that states that so desire could merge or demerge under certain conditions and criteria, the details of which were spelt out. States could also create economic blocks for mutual development.

Whilst knocking down a return regionalism, the conference affirmed that the states shall be the federating units.


In reaffirming section  7 of the 1999 Constitution (as altered), which guarantees a system of democratically elected Local Government Councils, the conference transferred LGCs to the states and recommended that states that so desire may create or reduce the number of existing Local Governments through the states Houses of Assembly. From the background of states literally embezzling, at source, funds belonging to the LGAs, the Conference recommended the scrapping of the State/Local Government Joint Account, and the establishment in its place, of a state Revenue Mobilization, Allocation and Fiscal Commission (SRMAFC).

The Conference abolished the practice whereby sole Administrators or unelected officials administer Local Governments for any period howsoever. It recommended that elections shall be held not later than 30 days to the expiration of the tenure of LGCs and not earlier than 90 days, the tenure being 3 years certain.      


The same committee believe that the present presidential system of Government is too expensive and unwieldy. It therefore settled for a home-made hibrid model of Government that effectively combines attributes of parliamentary and presidential systems of government. It code-named it “the modified presidential system”. 

Under this system, a candidate for the office of President shall contest solely, and later select a Vice President from the Legislature. He cannot select more than 30% of his Ministers from outside the Legislature. 

The conference recommended the principle of Zoning and Rotation of elective offices at Federal and State levels on the basis of equity, justice and fair play.


States shall have their own Constitutions, with their right to self determination as federating units extended to ethnic nationalities, within the state.

The committee on Law, Judiciary, Human Rights and Legal Reforms, of which I was a member recommended, inter alia, that:

The offices of the Attorney General of the Federation/State should be separated from that of the Minister/Commissioner of Justice.

The concept of Plea Bargain should be abolished.


(i) There should be established, the State Court of Appeal and Supreme Court for each state to serve as the terminal Court for States matters except in cases of weighty Constitutional issues, civil liberties and matters of overriding public interest with the leave of the Supreme Court.


(i) Tribunals of Enquiry should be an item under the Concurrent Legislative List.


(ii) Electoral Offences Commission should be established for the Federation as one of the Bodies in Section 153(1) of the Constitution.

(iii) Electoral Offences Tribunal should be established under the Commission to try alleged electoral offences.

(iv) Such offences should be tried summarily where they were committed.


Religion should be removed from governance and accordingly, Government should stop the use of public funds to sponsor people on pilgrimages. Consular Services should, however, be maintained.

That government should devolve power so that states and LGA’s can adequately participate in governance to alleviate poverty in rural areas.


Every Nigerian who meets the specified conditions in the Electoral Act should be free to contest elections as an Independent candidate. 

Section 221 of the 1999 Constitution should be repealed accordingly.


The Conference took serious note of the perennial conflicts between indigenous and non-indigenous citizenship rights and freedoms and believes that these arise mainly from non-recognition of the distinction between citizenship rights and indigenous people’s rights and freedoms. Consequently, the Conference recommended that in addition to reinforcing the recommendation on affirmative actions for ethnic and other minorities (including physically challenged and disadvantaged persons), there should be specific constitutional guarantees of the rights and freedoms of indigenous peoples which cannot be acquired, particularly as they are peculiar to their cultural and traditional rights and practices. 

The Conference recognized the unconditional rights and freedoms of every and any ethnic nationality in Nigeria that considers itself as unjustly subjected to real and perceived injustices of marginalization, domination and suppression to join their kith and kin through the instrumentality of relevant laws enacted and procedures established consistent with either ‘referendum’  or ‘plebiscite’ with their consequential ‘boundary adjustments’ provided such movements shall only be applicable to communities that have contiguous boundaries. 

Without Prejudice to the above, minority groups that wish to exist as separate and meet the criteria for State creation shall be allowed to do so under the instrumentality of the relevant laws and procedures as part of their rights to internal self determination.


That to achieve true federalism in Nigeria, the legislative powers/duties of the respective tiers of government should be clearly spelt out.

That the deduction in any form of what is described as ‘special funds’ from the ‘Federation Account’ prior to distribution to the mentioned beneficiaries of the Account be stopped, particularly as the Supreme Court had in 2002 declared such a ‘fund’ unconstitutional in A-G, Abia State & Ors vs. A-G of the Federation.

That the revenue formula should be reviewed such that what accrues to the central government is reduced; while making more resources available to the States for development in their rural and urban communities.


That both the Federal and State governments should share responsibilities for security and the maintenance of law and order. Thus, the committee recommends a second tier level policing in addition to the federal Police. Indeed, states that so desire were permitted to have state Police.


The Conference recommended massive devolution of powers from the federal to state and local Government Areas so as to have a leaner Central Government and more prosperous federating units. 


Mines and minerals, including oil fields, oil mining, geological surveys and natural gas were recommended by the Conference to be retained in the Exclusive Legislative List as specified in the 1999 Constitution of the Federal republic of Nigeria (as altered), but should be amended to read:

“Mines and all minerals, including oil fields, oil mining, geological surveys and natural gas provided that states where the mining activities take place shall be involved in matters relating thereto;

The Government of the Federation shall create a special fund to develop mines and minerals in states where such resources are developed.”

The Conference in making this recommendation, considered the overriding need to bring all the other mineral resources of the country, hitherto undeveloped, into mainstream development by activating National Strategic Plan for exploitation of all minerals so as to boost their contribution to the Gross Domestic Product (GDP). It also was of the view that this item (as amended), would enable the federal government set up or create a special fund, that would ensure the realization of the above mentioned goal through a tripartite relationship between the federal government-state and investor(s). This in its view, was also meant to diversify the economy of the country rapidly and give those states involved, a sense of belonging in the Nigerian nation. Such diversification of the economic base of the country would reduce the revenue; engender economic sustainability and substantially reduce the tensions over the issue of revenue sharing.

The Conference accordingly recommended as follows:

That the sharing of the funds accruing to the Federation Account among the three tiers of government should be done in the following manner:

i. Federal Government – 42.5%

ii. State governments – 35%

iii. Local Governments – 22.5%

To replace the existing formulae of;

i. Federal Government – 55.68%

ii. State governments – 26.72%

iii. Local Governments – 20.60%     


The Conference recommended as follows:

a. That the percentages given to Population and Equality of States in the existing Sharing formula be reduced while that assigned to Social Development Factor be increased to a much higher percentage so as to ensure accelerated development of all parts of the country.

b. That three new principles listed hereunder be added to the existing sharing formula to enhance economic, infra-structural and human capital development in the country:

i. Inverse Primary School Enrolment.

ii. Federal Presence.

iii. Unemployment.

c. That the “technical” aspects and details of revenue sharing formula shall be referred to the Revenue Mobilisation, Allocation and Fiscal Commission and the National assembly for final determination. The proposed sharing formula by the Conference was based on:

i. Diminished emphasis on principles of equality of states and population.

ii. Increased emphasis on Social Development Factor; and

iii. Internally Generated Revenue effort.


True federalism or fiscal federalism is the only panacea for the rapid development of Nigeria. The continued reliance on a monoproduct – the fast depleting crude oil – cannot sustain Nigeria without conscious diversification of her resources.

There is the urgent need for a conscious devolution of powers from a behemoth central government to grossly impoverished federating units. As it stands today, Nigeria operates a federal system only in name. It is, in reality, a unitary system of government. 


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