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Ethnic Affiliation And Resource Challenges In Nigeria
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Omitola, (2005) is of the view that in the annals of
federal countries’ revenue sharing arrangements, the sources of the
federally collected revenue that form the subject of the sharing formula
have remained largely unchanged. These sources which are not amenable
to other units include import duties, mining rents, excise units, export
duties and royalties (Ovwasa, 1995:102-117). The implication of this is
that, since these sources of revenue are not amenable to the
jurisdiction of the other units of government, the problem of revenue
allocation has focused on not who should raise the taxes, but on how to
share the proceeds that is, the actual revenue collected by the federal
government. The imbalance between functions and resources base, calls
for higher level government to transfer revenue to the lower level.
Graham in a perceptive work, described such transfer as “deficiency
transfer or balancing†(Graham, 1964). It is so described because the
transfer seeks to make up for the differences in the levels of functions
devolved to the lower government and the resources available to it.
Another principle of revenue transfer which is horizontal revenue
sharing arises out of the variations in revenue generation capacities of
the component units. Where the revenue raising capacities are low,
heavier tax burden is imposed relative to higher revenue raising
capacities area. This transfer is called “equalization transferâ€. This
transfer is necessary because higher taxation will scare away businesses
and the economy of the unit will become more depressed. To avoid this,
the higher the federal level of government has to transfer to the lower
unit, the better, to enable it make up for the differences between its
internally generated revenue and those required for maintaining the
minimum standard of services.
According to Ovwasa, (1995) The two
types of resource transfer discussed above are known as
intergovernmental grantsin-aid. The third principle has been given
different names by different scholars. Beak (cited in Graham 1964)
called it “simulationâ€, “incentive†or “conditional†grants. This grant
is also known as categorical grants because such grants are designed
basically to undertake certain projects. This is also known as
categorical grants because they are desired for particular purposes.
Nevertheless, in view of the fact that no federation has all its
component parts equally developed, the transfer of funds within a
federation is a potent weapon in the hands of managers of the state more
so in a plural society with diverse cleavages to satisfy hegemonic
interests. On the other hand it can help in ensuring that all parts of
the federation have resources to carry out their functions. The
government can thus ensure that the revenue from resources located in a
part of the country is used for the benefit of all parts
(Nyemutu-Roberts 2005:328). To this extent, revenue allocations can
foster national integration. However, when misused, it engenders
political altercations and contestations which destabilise the political
economy and tend to undermine the efficacy of federalism in fostering
political accommodation and economic development. This is why the most
common source of friction in a federation is the distribution of fiscal
resources (Aluko 1976:1). It is important to add that fiscal
relationship in a gamut of intergovernmental relations is no longer only
federal-state but also state-federal, federal-local and state-local.
This is one of the most significant recent trends in inter-governmental
fiscal relationships in federal systems across all regions and climes of
the world (Aluko 1976). In developing countries like Nigeria, studies
have shown that the state and local governments rely mainly on
allocations from the federal government (Ekpo, 1994; Olowononi 1998).
The allocation from the federal government usually constitutes about 70
to 90 percent of the state or local government revenues. Some major
implications of this dependence are that the situation of the local
governments would be worse; the agitation for constant review of revenue
allocations in favour of the States and local governments will persist
and continue to be a major friction in the political equation of the
country. Moreover, the States will remain inefficient in tax collection
and consequently remain underdeveloped in tax and general revenue
administration. All these will continue to generate unnecessary tension
(Tella, 1999) as the case with Nigeria. According to Dunmoye (2002),
four interrelated factors can initiate or ruin a viable federation.
These are:-
• the issue of political power sharing or representativeness especially at the centre;
• the problem of equitable employment to members of all sectors or all constituent units in the federation;
• location of industries or infrastructures and projects especially those funded by the federal government and
• The sharing of resources or what is known in Nigeria as revenue allocation.
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ABSRACT - [ Total Page(s): 1 ]This research work titled ethic affiliation and resource challenges in Nigeria with particular reference to Igbo Etiti Local Government Area of Enugu State. The researcher examined the effect of ethnic affiliation on the development of Nigerian economy. Four research questions and hypotheses were formulated in this project work. The research instrument used in this study includes oral interview and questionnaire. The population of the study was 209,248 while the samples size of 399 was determine ... Continue reading---
