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An Appraisal of the Federal Revenue Allocations to State Governments in Nigeria

Journal of Rural and Industrial Development

Volume 2 Issue 2

Published: 2014
Author(s) Name: Ugochukwu C. Nzewi Ph.D, Hope N. Nzewi, Chikwelu M . Mbonu | Author(s) Affiliation:
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Abstract

Given the controversial debate on an acceptable formula for sharing federally collected revenue, the study appraised the formula for sharing the states share of revenue from the Federation account among the individual states in order to determine whether it discriminates against any group of Nigerians. The 27 non-oil producing states of Nigeria were purposively selected for the study. Data on revenue from the Federation account to each state were obtained from the Office of the Accountant General of the Federation. Kruskal-Wallis one way analysis of variance by rank was used to analyse the data. Findings show that there is significant difference in the per capita revenue attracted by individual Nigerians to their respective states. The implication is that the current formula for horizontal distribution of states share of the federation account is not in the spirit of Sections 42 of the Nigerian Constitution which prohibits discrimination against any Nigerian. The study recommends that the National Assembly should take note of this finding and possibly review the existing formula for distributions of the states share of the Federation account among the states.

Keywords: Federally Collected Revenue, Horizontal Distribution of States Share

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