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

In the evolution of fiscal federalism in post-independence Nigeria, which revenue allocation principle dictates that a fixed percentage of federally collected revenue be distributed equally among all constituent states, regardless of their population size, landmass, or resource contribution?

  1. Equality of StatesAnswer
  2. B
    Derivation Principle
  3. C
    Internal Revenue Generation Effort
  4. D
    Absorptive Capacity

Answer

Equality of States
The correct principle is Equality of States because it operates on the constitutional premise that all federating states are equal political entities within the federation and must receive equal base shares of federal allocations to maintain government operations.

Step-by-Step Solution

1
Analyze the core criterion described in the stem
The stem describes distributing revenue evenly across federating units irrespective of demographic, geographical, or economic differences.
Understanding the fundamental objective of each revenue sharing criterion is essential to distinguish political equality principles from demographic or resource-based principles.
2
Evaluate the matching principle
The Equality of States principle treats all states as constitutionally equal federating units, allocating equal shares of the state portion of the Federation Account to each state.
This principle balances federal governance by guaranteeing basic funding for administrative operations across all state governments.

Key Concept

Principles of Fiscal Federalism and Revenue Allocation in Nigeria
Estimated Time:1m 0s
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Revenue Allocation System and Principles in Post-Independence Nigeria

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