The Political Economy of Federalism in Nigeria

Abstract

Nigeria’s federal system is shaped by the country’s political economy,which predominantly revolves around oil rents. The central feature of Nigeria’s political economy is the convoluted relationship between oil and the state. This book, therefore, brings to the fore the intrinsic link between oil resources and the country’s practice of federalism. The federal government oversees the distribution of centrally generated oil revenue. The desire to operate an efficient federal system has often resulted in the adoption of several fiscal principles dictated by a combination of factors, yet the federal system has continuously come under attack from ethno-regional groups. The main argument in this book is that the inability of the federal government to distribute the oil wealth fairly is the main source of the dysfunctional character of the federal system. The colonial legacy of the Federation, the complex ethnic diversity, long years of military rule and ingrained corruption have combined to bring about this verdict. None of these individual factors can be completely ignored in explaining this failure, because they interact in a complicated fashion such that it is difficult to untangle them. The Nigerian federal system is largely flawed and is in serious need of reforms. A political restructuring of the oil-rich federation in ways that would grant the sub-national units some real fiscal autonomy would be a useful reform that might ultimately provide a cure to the ailing federal system.