Contending Issues in the Niger Delta Crisis of Nigeria - Journal of ...

Chapter IX: The Politics and Policies of Oil Deregulation in Nigeria:
Implications and Policy Suggestions
distributed on the basis of derivation. In 1981 the shagari civilian
government made a further reduction of allocation to the states by
another 20 per cent. Money distributed to the states on the basis of
derivation fell from 50 per cent at independence to only 5 per cent to
total revenue. The Buhari/Idiagbon military regime of 1984-5 further
reduced this to 1.5 per cent.
For all practical purposes these developments, under military rule
marked the end of fiscal federalism in Nigeria, as the states became so
utterly dependent on the federal government that their right to self
determination became meaningless. The states, now increased to 36
plus the FCT, were too weak and in no position to complain as the
military governors posted there, mostly non-indigenes were appointed
by the military postings. This implied that they were there simply to
carry out military orders and policies even if these were not in the
interest of the states and contrary to the essence of fiscal federalism.
It is useful to note that all the military head of state that
destroyed the fair system of revenue established by the British at
independence were almost without exception, from non-oil producing
states. The military established a system of government that was
plainly tribal in structure and that was complete negation of both
political and fiscal federalism. What was even more absurd was that
this system created a situation in which the oil producing states
became victims of tribal colonialism, and were made to finance the
system itself. States that did not produce any oil at all received
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