Fiscal Allocation and Intergovernmental Relations in the Nigeria’s Fourth Republic

Abstract

This study examined the effect of fiscal allocation on intergovernmental relations in Nigeria's fourth republic. Sharing of accrued revenue among the tiers of government is not new in many countries of the world, especially those practising federalism as a system of government. The issue of fiscal allocation has posed major concern that affects political, economic and social relations among the levels of government. The share of the revenue from the sale of crude oil in Nigeria has caused unending conflicts among the tiers of government. In discussing the issues under consideration, this paper adopts an exploratory method of analysis with materials source from journals, articles, books, internet, etc. empirical data also made use where appropriate. The findings of this paper revealed that the formula for sharing revenue in Nigeria cannot address problems of fiscal federalism and intergovernmental relations among the three tiers of governments. This paper, therefore, suggests among others, that there should be constitutional amendments, which will give the component units sovereign to utilize their resources discretionally without the interference of the centre.Contribution/Originality: The paper's primary contributions from the finding are that states and local governments should have a certain level of control on their resources and improve the internally generated revenue.Centralized fiscal federalism should be modified through constitutional means. Fiscal decentralization and financial autonomy should be encouraged where tiers of government in Nigeria will have sovereignty over resources in their domain without interferences. INTRODUCTIONThe sharing formula among levels of government has attracted unending conflict majorly in some federal practising countries. Some of these countries include Brazil, South-Africa, Nigeria, etc. The reasons for recurring loggerheads among the tiers of government in these countries are; inequality in sharing of national resources among the tiers, delay in allocating resources to the component units by the central government, overwhelming of the resources by the centre at the expense of the components, etc. all the above-mentioned lead to conflicts among the levels of government and invariably affect the development of such country. Fiscal allocation is a process by which money generated internally is shared among the different levels of government of a country. However, the definition contradicts the existence of sharing formats of those selected countries which results in unending conflicts among the tiers of government (Athanasius, 2018).In Nigeria, conflict among the tiers of government is usually caused by fiscal imbalance. The effort to regulate the fiscal disagreements among levels led to the establishment of National Revemie Mobilization and Fiscal