Exclusionary Fiscal Federalism and the Challenges of the Nigerian State

Abstract

This paper critically explores the concept of exclusionary fiscal federalism and its impact on governance and national unity in Nigeria. The country's federal structure, originally intended to foster balanced economic development and equitable resource allocation, has been undermined by exclusionary fiscal policies that disproportionately favor certain regions or groups. These imbalances have fueled regional disparities, feelings of marginalization, and conflicts over resource control, posing significant challenges to Nigeria's stability and development. By analyzing Nigeria's historical and current fiscal arrangements, this study highlights the centralization of revenue control and its adverse effects on federal-state relations.  A mixed-methods approach is employed to examine these issues. This includes qualitative secondary data analysis, such as government fiscal reports, policy documents, and historical records, alongside interviews with key stakeholders, including policymakers, academics, and civil society leaders. Quantitative data focusing on regional revenue distribution and socioeconomic indicators are also analyzed to underscore the extent of fiscal inequality. The study's findings underscore how exclusionary practices in budgetary management hinder national development and political cohesion. It concludes with recommendations for reforming Nigeria's fiscal federalism to promote inclusivity, equitable revenue distribution, and enhanced fiscal autonomy for subnational governments as essential steps toward addressing Nigeria's governance challenges and achieving sustainable development.