IGBOSCHOLARS INTERNATIONAL JOURNAL OF IGBO SCHOLARS FORUM, NIGERIA

Nigeria’s federal system is fundamentally shaped by the politics of revenue allocation, yet persistent disputes over fiscal transfers, resource control, and intergovernmental relations continue to undermine national cohesion and subnational development. This article interrogates the crisis of fiscal federalism in Nigeria by examining how elite politics structures revenue allocation outcomes and constrains reform trajectories. Drawing on the political economy and elite theory frameworks, the study analyzes the historical evolution of revenue allocation formulas, the bargaining strategies of political elites, and the institutional dynamics that sustain fiscal centralization. Using a qualitative methodology that combines documentary analysis of constitutional provisions, revenue allocation commissions’ reports, and secondary scholarly sources, the article demonstrates that revenue allocation in Nigeria is less a technocratic exercise than an arena of elite contestation driven by power asymmetries, rent-seeking, and regime survival. The findings reveal that elite dominance has entrenched distributive conflicts, weakened fiscal autonomy at the subnational level, and exacerbated regional inequalities, thereby deepening the legitimacy crisis of Nigeria’s federal arrangement. The article argues that without confronting the political foundations of revenue allocation, technical reforms are unlikely to achieve sustainable fiscal stability. It concludes by outlining reform prospects anchored in institutional restructuring, enhanced fiscal decentralization, and inclusive elite bargaining, with broader implications for federal systems in resource-dependent states.

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