Arrange the following historical milestones regarding the modification of the derivation principle in Nigerian revenue allocation in chronological order, from the earliest to the most recent:
- 1The Republican Constitution guarantees a 50% derivation return on mineral royalties and regional revenues to the region of origin.
- 2Decree No. 6 of 1975 drastically reduces the derivation allocation on onshore oil revenues to 20%, transferring 80% to the Distributable Pool Account.
- 3The statutory allocation act under the Second Republic reduces direct derivation allocation for mineral-producing states to 1.5%.
- 4Section 162(2) of the Constitution mandates a constitutional minimum of 13% derivation for natural resource-producing states.
Answer
The correct chronological order is: (1) The Republican Constitution 50% derivation provision (1963), (2) Decree No. 6 of 1975 reducing derivation to 20%, (3) The 1981 statutory allocation act setting derivation to 1.5%, and (4) Section 162(2) of the 1999 Constitution setting minimum derivation to 13%.
The sequence reflects the historical progression of the derivation principle in Nigeria: starting with high regional retention of 50% in the 1963 Republican Constitution, followed by progressive centralizing reductions under military rule with Decree No. 6 of 1975 (20%), further statutory reduction under the 1981 Revenue Act (1.5%), and finally constitutional restoration to a minimum of 13% under Section 162(2) of the 1999 Constitution.
Step-by-Step Solution
Key Concept
Evolution of the Derivation Principle in Post-Independence Nigerian Fiscal Federalism