Federalism in Nigeria: Structure, Powers, Finance & Challenges

Nigeria's federal system (1999 Constitution) distributes power among Federal, 36 State, and 774 Local Governments—on paper. Reality is more centralized.

1. Division of Powers (Exclusive / Concurrent / Residual)

• Exclusive (Federal): Defence, foreign affairs, currency, immigration, customs, mining, police (federal), aviation, posts.
• Concurrent: Education, health, agriculture, roads, labour, environment, universities.
• Residual (State): Local govt, chieftaincy, culture, markets, minor courts.
• Conflict: Federal law prevails on concurrent list.

2. Fiscal Federalism (The Real Power)

• Revenue allocation: FAAC (Federation Account Allocation Committee) shares oil revenue: Federal 52.68%, States 26.72%, LGs 20.60% (plus 13% derivation to oil states).
• State IGR (Internally Generated Revenue): Lagos, Rivers, FCT lead; many states <10% IGR – "federal allocation addiction."
• VAT: Collected federally, shared 15% Fed / 50% States / 35% LGs (derivation principle contested).

3. Representation

• Senate: 3 senators/state (109 total) – equal representation.
• House: 360 seats – population-based.
• State Assemblies: 24–40 members each.

4. Local Government (Third Tier – Often Crippled)

• Constitutionally guaranteed but state-controlled (joint accounts, caretaker committees).
• Supreme Court (2024): LGs must receive allocations directly – enforcement pending.

5. Intergovernmental Relations

• NEC (National Economic Council – VP + Governors).
• NCF (National Council of States – Pres + Govs + ex-officio).
• Party politics (APC/PDP) overrides constitutional federalism.

Challenges

• Over-centralization (military legacy).
• Resource control agitation (Niger Delta).
• Ethno-religious friction (sharia states, herder-farmer).
• Weak LG autonomy.

Nigeria: federal in name, unitary in fiscal reality—contested daily.