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REVENUE ALLOCATION AND POLITICAL STABILITY IN NIGERIA 2010 TO 2015

Abstract

The Nigerian federalism has from the inception of managing the allocation of revenue among its component parts met with virulent protestation that has degenerated into perennial crisis. The locus of contention has always been the unacceptable modality or parameter adopted in the allocation of revenue. The outcome has become a defining factor of social, economic and political relations among the classes, groups and beliefs within the federation. However, going by the logic or theories of federalism, financial subordination is a deviation from a proper working of federalism; in other words, all component parts including the central authority should have the power in the constitution to control its own resources fiscally. However, such theory does not consider weaker or disadvantaged areas in its exposition nor does it consider the issue of hegemony in relation to political power or control of natural resources. These are peculiarities that may not be common to other federalisms in history compared to Nigerian variance. This uniqueness places a horrific burden on the state in ensuring equitable distribution of revenue.

CHAPTER ONE

INTRODUCTION

Background of the Study

Nigeria is not only Africa’s most populous nation state, but is also a major and prominent petroleum producing country in the continent. Over 90% of the country’s external revenues are derived from crude oil exports, although the non oil producing sectors are beginning to exhibit significant revenue generating capabilities. Nigeria’s vast crude oil reserves are geostrategically located in the Niger Delta region, which constitutes only 9 of the 36 states in the ethno culturally diverse federation. The Niger Delta region refers specifically to the following States: Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers. There are about forty ethnic groups and a population of over 30 million people who reside in the greater Niger Delta region. Some of the major ethnic groups in the Niger Delta include: the Ijaws, Itsekiris, Urhobos, Isoko, Edos, Igbos, Yorubas, Ogbia, Ibibios, the Ilajes, Ikweerres, Kalabaris, Efiks, and the Ogonis. The above map presents a vivid illustration of the geo-territorial configuration of the battle for crude oil in the modern Nigerian political system.

Some of the Oil Majors operating in the resource rich, and destitute Niger Delta region, also dubbed as Nigeria’s “Kuwait” include: Shell Petroleum Developing Company, Nigerian National Petroleum Company, Chevron/Texaco, Exxon Mobil, Total Fina, ELF Aquitaine, Agip and their subsidiary contracting companies. Crude oil exports have fallen to less than 2 million barrels per day production as a result of pipeline vandalism, illegal bunkering or illegal tapping of crude oil by criminal syndicates that includes a plethora of sea pirates, cults, brigands, restive youths, and more organized insurgent groups that have unleashed a reign insecurity, impunity, hostage takings, and other forms of economic violence in order to capture spoils, demarcate preferred petroturfs for black market activities. Currently the most prominent ethnic militia in this turbulent region is the Movement for the Emancipation of the Niger Delta (MEND). Nonetheless, there are a plethora of armed groups, criminal syndicates operating in the nine Southern states of the Niger Delta region.

In a profound sense, therefore, studies of resource curse, the Dutch Disease, the Petro-State-Complex, Oil bunkering, Militias’ Insurgency, Ethnic Separatism, Fiscal Federalism, and the enabling effects of Multi-National Corporations in Host-Communities, as well as stakeholders pursuit of sustainable economic development in the Niger Delta region, most encompass a multi-layered approach to the diagnosis and analysis of the complex interplay of State power, local-regional political dynamics, and ethnic strife. Brutal contestations for resources, historical revisionisms of proprietorship rights, and convulsive communal environmental calamities should be studied beyond the conventional primacy of economic determinism and rational choice models. The Niger Delta Question thus calls for an interpretatively qualitative and holistically integrated analysis which combines strands of different theoretical paradigms and more importantly, integrates perspective that focuses on the historical sociology of the region and an analysis of the internal political roots of the ethno-energy-conflicts and security dilemma. Indeed, multinational corporations have both positive and negative effects on economic growth in resource rich and ethno-culturally intertangled polities such as the modern Nigerian political system.

1.2 STATEMENT OF THE PROBLEM

The discussion on revenue allocation in Nigeria, cannot be divorced from the role governing class has played as well as power relations among the constituent nationalities. Particularly, since the advent of oil boom in the 1970’s when it has become the major component of federally collected revenue, tensions have heightened among the governing elites representing the local bourgeoisies from the North and South. The locus of struggle or antagonism has rested on the allocation of revenue. It is on this note that the researcher intends to investigate the effect of revenue allocation and political stability in Nigeria

The main objective of the study is to ascertain the effect of revenue allocation and political stability in Nigeria. For the purpose of the study the researcher intend to achieve the following objective;

To aid the completion of the study; the following research hypotheses was formulated by the researcher;

H0: revenue allocation has no effect on political stability in Nigeria.

H1: revenue allocation has a significan effect on political sability in Nigeria

H02  revenue allocation does not play any role in consolidating Nigeria democracy

H2: revenue allocation plays a vital role in consolidating nigeria democracy

it is believed that at the completion of the study; the study will be of great benefit to the political class who agitate for resource control and efficeint distribution of resources as this will bread the sense of oneness among Nigerians as the study enumerate on the importance of resource allocation on national integration.

The study will also be of importance to the state government as the study seek to emphasis on the benefit of ensuring that the region that produces resources for the state should adequately be developed so as to give the populace the sense of belonging rather than exploitation as these will bread peaceful coexistence in the country. The study will also be beneficial to researchers who intend to embark on study in similar topic as the study will serve as a guide to their study. Finally the study will be beneficial to academia’s students and the general public.

The scope of the study covers revenue allocation and political stability in Nigeria from 2010-2015. However, in the cause of the study; the researcher encounters some constrain in the cause of the study;

(a)Availability of research material: The research material available to the researcher is insufficient, thereby limiting the study.

(b)Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c)Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.

1.7 DEFINITION OF TERMS

Revenue

Revenue is the amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the “top line” or “gross income” figure from which costs are subtracted to determine net income

Revenue allocation

the Nigerian government financial system operates a structure where funds flow to the three systems of government from what is termed the federation account.

Politics

Politics is the process of making decisions applying to all members of each group. More narrowly, it refers to achieving and exercising positions of governance organized control over a human community, particularly a state. Furthermore, politics is the study or practice of the distribution of power and resources within a given community (this is usually a hierarchically organized population) as well as the interrelationship(s) between communities.

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