Democracy And Problems Of Fiscal Federalism In Nigeria (1999-2009)

Project and Seminar Material for Political Science

Abstract

This study is on democracy and problems of fiscal federalism in Nigeria. The total population for the study is 200 staff of ministry of budget and national planning. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made statisticians,economists, administrative staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.

Chapter One

Introduction

1.1 Background of the Study

Nigeria, the most populous black nation on earth with a population of about 140 million people and over 350 distinct language groups, successfully transmitted to democratic governance on May 29, 1999 after so many years of military rule. A federal system of government often arises from the desire of groups of people to form a union without necessarily using their identities. Federalism would therefore, seem to provide an attractive system of government especially in the context of ethnic pluralism found in many African States. It is generally accepted that so far federalism as a conflict management system has failed to remove the bogey of ethnicity, sectionalism and religious conflict from Nigerian body politics. With over forty years of trying to navigate through the murky waters of Nigerian politics many, including the nationalists, politicians and civil society have become despondent to the extent that one can hear voices calling for the outright balkanization of the country. Furthermore is Nigeria, the contestation over federalism has fundamentally manifested itself in two principle either as a guest for access and control over political power or as access to federally generated revenue. As observed by Momoh (1999:3), the task to social engineering and reconstruction of the notion of federalism in both form and the substance was left in the hands in the military. It was not surprising that the crisis of federalism depended on the country. Also as the revenue allocation principle was restricted in favour of the states, there were more demands for increased revenue from the state and local governments. It is not out of place to note that the peculiarities, irregularities and tensions that vexed and continue to vex Nigerian federalism stemmed in apart from the arbitrary rule of the military (Suberu 1994:68). However, there is still doubt that the desire to improve on Nigeria’s federal practice exerts a magnetic force amongst many Nigerian. Also in the current dispensation, the expectations is that the various vexation issues like the over centralization of powers by the federal government, the creation of states, revenue allocation, the creation of local government councils and the question of citizenship is given urgent attention. Much as it has been obtained in most European colonies, the workability of federalism in Nigeria has been far reaching feat from being politically transparent. Democracy in the real sense of it should be there to accept and respect the opinion of the diverse units, which have come together to form new political society.

1.2 Statement of the Problem

The problem associated with the practice of federalism raised it ugly head immediately after independence when Nigeria adopted the republican form of government. The practice of federalism in Nigeria has been so problematic as it involved diverse ethnic groups.The major problem which this research is set out to tackle is to identify imminent problems of federalism in Nigeria’s democratic setting.

The following problem stated would be relevant.

What are the problems faced by Nigeria’s federal system?
How has these problems compounded the already worsen democratic settings in Nigeria.
What are the steps and strategies taken to solve these problems?
What are the prospects that Nigeria’s democracy will strive and survive notwithstanding the federal problems?

1.3 Objective of the Study

The objectives of the study are;

To ascertain the relationship between democracy and problems of fiscal federalism in Nigeria
To identify the problems of fiscal federalism in Nigeria
To ascertain the problems posed by federalism to the practice of democracy in Nigeria
To identify the sources of revenues, problems areas and solution

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0: there is no relationship between democracy and problems of fiscal federalism in Nigeria.
H1: there is relationship between democracy and problems of fiscal federalism in Nigeria.
H02: there are no problems posed by federalism to the practice of democracy in Nigeria
H2: there are problems posed by federalism to the practice of democracy in Nigeria

1.5 Significance of the Study

The problem of federalism in Nigeria has been a recurrent one and is fast receiving wider attention from scholars. The research shall be significant in the following ways: The study will investigate into the problems of federalism in Nigeria. The study will be significant because it will bring to fore-font the problems of federalism in Nigeria. The study is significant because recommendation will be made in which will help to solve some of the problems of fiscal federalism in Nigeria. It will also Serves as reference materials Fulfillment of graduation.

1.6 Scope and Limitation of the Study

The scope of the study covers democracy and problems of fiscal federalism in Nigeria. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

1.7 Definition of Terms

For the purpose of this work, the following terms shall be conceptualized.

Democracy:

It refers to the system of government whereby it is rule by the people. Democracy is a form of government organized in accordance with the principles of popular sovereignty, political and Economic Equality, popular consultation and majority rule. Okon, Eminue (2005), introduction to Political Science.

Federal Character:

It implies the principle which tends to give every group an equal opportunity to participate in the socio-economic and socio-political life of the country. Wheare (1963:10), the substance of federal government administration in Nigeria.

Federalism:

it refers to a form of government with constitutional arrangement with some constitutional structure, which is deliberately formed by political architects to maintain unity. Wheare (1963), the element of Nigerian federalism.

Ethnicity:

It refers to a situation or condition where preference is accorded a particular set of people based on their ethnic regional indication. It represents a feeling of belonging to a group of people. Truman, D. (1951), “The Governance” New York: Knopt Publisher

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
Chapter three deals on the research design and methodology adopted in the study.
Chapter four concentrate on the data collection and analysis and presentation of finding.
Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain democracy and problems of fiscal federalism in Nigeria 1999-2009. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of democracy and problems of fiscal federalism in Nigeria 1999-2009

5.2 Summary

This study was on democracy and problems of fiscal federalism in Nigeria 1999-2009. Four objectives were raised which included: To ascertain the relationship between democracy and problems of fiscal federalism in Nigeria, to identify the problems of fiscal federalism in Nigeria, to ascertain the problems posed by federalism to the practice of democracy in Nigeria, to identify the sources of revenues, problems areas and solution. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of ministry of budget and national planning. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made statisticians, economists, administrative staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

5.3 Conclusion

Nigeria’s fiscal system over the years has been characterized by misplaced expenditure priorities; inequitable appropriation of the nation’s revenue and excessive fiscal centralization. No doubt, fiscal federalism has been a perennial problem, particularly because of different levels of resource endowments among the different levels of government and partly because of inter group struggles to have adequate and fair share of the central revenue. The persistent agitation for resource control by the rich states and ethnic minorities of the South-South geopolitical Zone can be ignored only at great cost to national unity. Against this background, there should be a redefinition of the statutory roles of each tier of government and a modification of the current jurisdictions and the need to revisit the old revenue sharing and expenditure assignment formula. In particular, there is a need to assign less weight to criteria such as landmass, because of its inherent inequality and redistributive distortions.

More so, there is need to adopt a strategy which will make the sub-national government less dependent on the central government and looking inwards for fiscal sustainability will restore social contract and improve service delivery in the sub-national government. Similarly, emerging criteria such as equality of state and population into one should be given serious consideration, since they are essentially duplicative. Moreover, the inter-tier distribution of revenue has been lopsided and the revenue allocation criteria often reflect sectional, rather than national interest. The two lower tiers of government have been treated like mere appendages with highly restricted revenue powers rather than a part of a truly federal system whose fiscal autonomy is guaranteed. Their marginalization, as evident in incessant curtailment of revenue powers, heavy dependence on the federation account and limited fiscal jurisdiction in general, can and do affect the viability of many States and thus constitute a threat to national stability. To correct the situation, there should be redefinition of the statutory of role each tier of government and a modification of the current fiscal jurisdictions. These changes must be reflected in the new Nigerian constitution amendment if the country is to achieve fiscal sustainability, balanced development and equitable distribution of the federation revenue in the years ahead

5.4 Recommendation

There should be adequate compensation for those who provide the common wealth and all stakeholders must be committed to fine-tuning the process in the overall interest of the country.