Fiscal Federalism and Resource Control in Nigeria: Deconstructing a Conundrum

Following the end of the Nigeria-Biafra war in 1970, crude oil exports became Nigeria’s major foreign exchange earner, and national politics became a struggle over who controls the country’s oil sources and revenues. For nearly thirty years, the military, dominated as it were, by Northern Nigerian officers, kept on tinkering with revenue allocation formulae to the advantage of the North and to the chagrin and dismay of the oil-bearing South. While the latter continued to agitate for a review of the existing lopsided federal structure through restructuring and devolution of powers to enable them control the resources within their communities, the North persisted in its opposition to any change in the status quo. The result has been a lack of trust and acrimony in North-South relations. The paper adopted the qualitative research approach which basically involved content analysis. Among its findings was that the soured relations between the North and the South has impeded national integration, nation-building, and national development. It concluded that there is a compelling need to address the various issues associated with fiscal federalism, revenue allocation, and resource control through a restructuring of the Nigerian polity and economy.This will discourage the endemic and destructive struggle for the federal government between the political elite from both the North and South.