Published 2025-05-13
Abstract
Nigeria, like other natural resource rich federations, is faced with the
challenge of how best to assign the fiscal dividends of natural
resources (particularly oil) among the different orders of government
to ease the consequences of uneven territorial distribution of wealth.
Utilizing secondary sources, the paper reviewed practices in other
federations as an appraisal of alternatives from which Nigeria can
benefit. The review shows that Federal government monopolization of
mineral revenue remains a project pursued by some federations and
resented by others. There is yet no consensus among territorial
governments in Nigeria, in adopting legislations to deal with the
challenge of assigning the fiscal dividends of natural resources.
National ownership and control of natural resource is the current
practice in Nigeria. Federal legislations for developing and regulating
minerals, have taken over much of the fiscal space available for subnational
governments (states and local) to realize resources from
mineral wealth. The paper recommended the need to rationalize the
system of natural resource taxation by creating different types of fiscal
revenue from natural resources, and stratifying them by layers of
government. While royalties and production taxes accrue to the nation
being the owner of natural resources, others such as, environmental
charges, duties on services related to storage and transportation, and
taxes on the distribution of resources should accrue to states and\or
local governments.