Navigating Fiscal Federalism In Nigeria: Issues In Revenue Allocation And Intergovernmental Dynamics

Abstract

This study examines the challenges of fiscal federalism, revenue allocation, and intergovernmental relations in Nigeria, focusing on their effects on governance and development. Using content analysis as the research method, the study analyzed existing literature to assess how fiscal structures and revenue sharing influence cooperation among the federal, state, and local governments. The findings shows that Nigeria’s fiscal federalism is marked by unequal revenue distribution, excessive central control, corruption, and weak institutional capacity, which hinder effective policy implementation and service delivery. Overdependence on oil revenue and poor intergovernmental coordination further contribute to inefficiency and regional disparities. The study recommends reviewing the revenue allocation formula to ensure fairness, promoting fiscal decentralization, diversifying revenue sources, and strengthening institutional frameworks. It also emphasizes the need for transparency, accountability, and effective mechanisms for intergovernmental cooperation and dispute resolution to enhance governance and achieve balanced national development.