The dynamics of oil and fiscal federalism : Challenges to governance and development in Nigeria

This thesis explores some of the major challenges to governance and development in Nigeria since independence. The focus of the thesis is on the dynamics of oil and
fiscal federalism, given that more than 90% of her revenue income accrues from oil, and on the continuing difficulties of securing from these revenues a satisfactory path
of economic and social development for Nigeria.

It examines more specifically how the productive application of the revenue streams obtained by Nigeria from its oil reserves has been severely undermined by the
politics of 'fiscal federalism', i.e. the manner in which taxation and public spending are divided up between the federal, state and local levels of government. It argues
that it is in the context of these fragmented and contested processes of oil revenue allocation and management that the origins of predation and corruption are located.
The main aim of the research is to discover whether and how reforms in the taxation and expenditure system could reduce predation, and direct the country's oil revenues
into productive channels within a development strategy that will benefit the people at large, rather than a small and corrupt elite.

The field research for this thesis was conducted at the federal and state levels of government, and assesses the problems associated with the contentious revenuesharing
system between the three tiers of government. It concludes that this dynamics of oil and fiscal federalism poses a major challenge, because it has ignored the
productive contributions of the federating units and based revenue allocation on predatory politically-motivated parameters. These have consequently led to
instability in the oil producing Niger Delta region, which constitutes a major challenge to the sustainability of oil production in Nigeria. This in tum has over the
years resulted in failure to achieve a satisfactory path of economic and social development for Nigeria.