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1.2 Statement of the Problem
REVENUE ALLOCATION AND AGITATION FOR RESOURCE CONTROL: A FOCUS ON NIGER DELTA AREA
1.1 Background of the Study
Since the inception of the entity called Nigeria following the 1914 amalgamation, there has been schemes, schedules, modes, methods and patterns of relationship among the federating units in terms of administration and finance (Chijioke et al, 2013). This according to Adeleke (2013: 145) was carried over to the post independence Nigeria where unrelenting struggle for resource control and revenue allocation has constituted a threat to the continued existence of Nigeria as one indivisible nation. The year 1957 marked a turning point in the history of Nigeria Federating nation as oil was discovered as its main source of economy, for instance, before then, the Northern part of the country is reputed for the production of groundnut pyramid, the West cocoa production while oil palm was produced in
commercial quantity by the Eastern region (Adeleke, 2013). The crisis associated with the control of oil resources has to do with the formula for allocating the oil revenue among component units of the nation, in that each state is scheming and embarking on political manipulations with the intention of getting more allocation for its area (Adeleke, 2013). This development was as a result of the boom of oil resource and Nigeria’s over dependence on “Petro-Dollar” and the consequent neglect of all other natural resources in the country. To that effect, the Niger Delta States on Whose territory the oil resource is extracted has constantly and relentlessly demanded to have the “Lion Share” or total control of managing the oil resource within their territory and pay certain percentage to the central government. According to Adeleke (2013: 141) with the change to monolithic economy by Nigeria, revenue allocation and formula for allocating resources became problematic issue causing resentment and clog
in the wheel of the nation’s progress and development. According to him, the dimension which the agitation for resource control and revenue allocation has taken is shaking the Nigerian state to its very foundation and even threatening its continued co-existence. Furthermore, Adeleke maintained that, the centralization of the wealth resources in the hand of the federal government is another source of conflict
over the control of the wealth from crude oil exploration in Nigeria. The centralization according to Dibua (2004) has made the federal government too powerful and authoritarian thereby negating the operation of true fiscal federalism and made the federal government to distant itself from the people such that the revenue from the exploitation of natural resources were not used to implement policies that would promote sustainable development in the country as a whole and the place of derivation in Niger Delta.
Protagonist of resource control pushed forward the argument that the country cannot be said to be a federation when the elements of federation such as state police, control of natural resources by the federating units, etc are lacking. Their argument was based on the precedence during the First
Republic (1960 – 1966) when the 4 regions which were then the federating units had control over agricultural produce. This was at a time when agriculture was the mainstay of the Nigerian economy. Adoti and Imuoha (2015) posit that: the 3 major regions – Eastern, Western and Northern – had
control of palm produce, cocoa and groundnuts respectively. Beside this, the regions also got as high as 50 percent derivation from whatever accrued to the federation account as revenue from the agricultural produce. It may have been agreeable in the 60s because the monies that accrued to the regions could not be compared with what oil-bearing states would get today. Apart from that, major beneficiaries of that arrangement were the Igbo, Yoruba and Hausa/Fulani who dominated Nigerian politics then (Azaiki, 2006). The situation is different today as potential beneficiaries of 50 percent derivation ………..
1.2 Statement of the Problem
The issue of how to share resources has generated a lot of heat which is almost suffocating the whole nation. This is because Nigeria’s fiscal relations centers on the fundamental question of who gets what, when and how of the national cake (Ukwueze, 2011).
By implication, the revenue-sharing formula in Nigeria thus emphasized the federal government’s interest, which encouraged the centralization of oil proceeds with the federal government (Oyovbaire,
1985). To a large extent, this was to pitch the ordinary people of the Niger Delta, such as Ijaws and Ogonis, against the non-oil producing states in Nigeria (Ejobowah, 2000). For instance, the former Chairman of Northern Governorship Forum (Babangida Aliyu) maintained that the underdevelopment and poverty of the Northern Nigeria is due to the poor allocations the 19 states in the region receive from the federation account.