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Resolving Revenue Allocation Challenges in Nigeria: Implications for Sustainable National Development

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  • Sylvester Ohiomu
  • Sunday Ade Oluyemi

Abstract

This study examines the structure and formula for revenue allocation in Nigeria which has been fraught with challenges, proffers solution, and highlights its implications for sustainable national development. The work uses the methodology of Group Unit Root Test, auto regressive distributed lag (ARDL) Bounds Testing and Cointegrating Long Run tests for robust policy recommendations. Using the Gross Domestic Product as the dependent variable and revenue allocation to the three levels of government, and oil revenue as the independent variables, the results from the study show that revenue allocations and the other variables have significant relationship with economic growth in Nigeria. Based on our findings, the study recommends among others that the current revenue allocation formula should be reviewed to embrace autonomy in its entirety to achieve national goals and objectives. Various levels of government should be adequately funded to enable it carry out its expenditure responsibilities to accelerate grass root development. JEL classification : C22, C32, C58

Suggested Citation

  • Sylvester Ohiomu & Sunday Ade Oluyemi, 2019. "Resolving Revenue Allocation Challenges in Nigeria: Implications for Sustainable National Development," The American Economist, Sage Publications, vol. 64(1), pages 142-153, March.
    • Handle: RePEc:sae:amerec:v:64:y:2019:i:1:p:142-153
    DOI: 10.1177/0569434518775324
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    bounds test; federalism; fiscal discipline; optimal tradeoff; revenue formula;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics

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