The inter-face of ethnicity and revenue allocation in Nigeria's first republic

Abstract

In 1960, Britain bequeathed to Nigeria an imperfect federation, consisting of three uneven regions. This lopsided arrangement, paved the way for the domination of the federation by the biggest region – the Northern region. This paper adopts the instrumentalist view of federalism. It interrogates the impact of ethnicity on allocation of federal finance in Nigeria between 1960 and 1966. The paper explores the constitutional basis for revenue distribution and the process of subversion by the ruling party. It examines the various mechanisms employed by the North to appropriate federal patronage for its region at the expense of other regions in the period. The paper contends that the unequal access to and competition for scarce resources at the Centre made politics become a dangerous enterprise. The ruling elite (Northerners) seized this opportunity to institutionalise iniquitous fiscal policies which snowballed into political tribulations in the first republic. Till date the ethnic factor continues to play a pivotal role in the political economy of resource sharing in Nigeria. The paper concludes that Nigeria has not been able to manage the challenge of revenue allocation well because the ruling class has been sectional and corrupt. Much more importantly the ability of the North through the instrumentality of the Central government to dominate its competitors engendered serious crisis in the Nigerian federation which eventually led to the political instability that engulfed the first republic and led to its demise in 1966. It suggests the adoption of key pillars of fiscal federalism such as equality and partnership between the centre and the federating units, state ownership of natural resources, funds transfer and scientific equalisation, all of which have made developed federations' intergovernmental relations adaptive and innovative. These measures could help evoke equity, douse tension and make the Nigerian federation very viable.