Political Economy of Oil-Revenue Sharing in a Developing Country: Illustrations from Nigeria

January 1, 2003

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Ehtisham Ahmad, and Raju J Singh. Political Economy of Oil-Revenue Sharing in a Developing Country: Illustrations from Nigeria, (USA: International Monetary Fund, 2003) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Control over natural resource revenues is a contentious, politically divisive issue in most developing countries-especially for oil production. A typical policy response of the center in such cases has been to introduce revenue sharing arrangements. Such measures have generally not assuaged the aspirations of the oil-producing regions and have exposed them to volatility in their revenue flows that they are generally unable to cope with. An alternative is to assign more stable revenue bases to the regional administrations, together with a general-purpose transfer system that incorporates a floor. This acts as an insurance mechanism for the regional administrations and facilitates the stable provision of public services in the oil-production regions, as well as the possibility of redistribution. We use the recent history of oil-revenue sharing in Nigeria to illustrate the propositions.

Subject: Commodities, National accounts, Oil, Oil prices, Oil, gas and mining taxes, Personal income, Prices, Revenue sharing, Taxes

Keywords: Central government, Fixed cost, Gas and mining taxes, Intergovernmental Fiscal Relations, Internal revenue, Natural resource, Oil, Oil prices, Oil revenue, Oil-producing state, Personal income, Revenue responsibility, Revenue sharing, Revenue-sharing formula favors state, State land, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/016
Stock No:

WPIEA0162003
ISBN:

9781451843422
ISSN:

1018-5941

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