Examkin

Question

Difficulty: EasyRevenue Allocation System and Principles in Post-Independence Nigeria

In Nigerian post-independence fiscal federalism, which revenue allocation principle dictates that a state should receive a specific percentage of revenue generated from natural resources extracted within its geographical territory?

  1. The derivation principleAnswer
  2. B
    The principle of equality of states
  3. C
    The principle of population size
  4. D
    The principle of absorptive capacity

Answer

The derivation principle
The derivation principle ensures that a state receives a direct percentage share of revenue generated from natural resources (such as crude oil or minerals) extracted from its territory.

Step-by-Step Solution

1
Identify the fiscal federalism principle defined by resource location.
The revenue allocation criterion that allocates funds based on the origin of resource extraction is the derivation principle.
Derivation was historically adopted in Nigeria to compensate host communities and states for environmental degradation and the exploitation of their natural resources.

Key Concept

Derivation Principle in Post-Independence Nigerian Revenue Allocation
Rate this question

Topics

Revenue Allocation System and Principles in Post-Independence Nigeria

More questions from this topic