IIARD International Institute of Academic Research and Development

JOURNAL OF POLITICAL SCIENCE AND LEADERSHIP RESEARCH (JPSLR )

E-ISSN 2504-883X
P-ISSN 2695 2432
VOL. 11 NO. 5 2025
DOI: 10.56201/jpslr.vol.11.no5.2025.pg55.74

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Revenue Allocation Frameworks and Oil Resource Governance: A Comparative Study of Nigeria and the United States of America

Julius Ebikekon Takeme, Charles Arinze Obiora, PhD, Uchechukwu Grace Ojukwu, PhD

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Abstract

Federalism serves as a foundational political and administrative structure for managing diversity and distributing resources in multi-tiered systems of governance. In countries like Nigeria and the United States, revenue allocation plays a vital role in promoting intergovernmental relations and equitable development, especially in the management of strategic natural resources such as oil. This study undertakes a comparative analysis of revenue sharing models in both countries to ascertain how effectively they address the challenges of oil resource management. Guided by the Fiscal Federalism Theory which emphasizes the division of responsibilities and financial autonomy among different levels of government the study employs a qualitative research design. The approach facilitates an in- depth exploration of the institutional arrangements, historical trajectories, and policy frameworks that influence oil revenue allocation in the two federations. Relying entirely on secondary data, the study evaluates how fiscal federalism as an independent variable impacts the governance of natural resources as a dependent variable. Findings reveal that the United States’ revenue allocation framework, grounded in decentralization and fiscal autonomy, promotes more effective and sustainable oil resource management. States maintain considerable control over resource exploitation and revenue utilization, which has minimized conflict and encouraged responsible governance. Conversely, Nigeria’s highly centralized system has led to dependency, inefficiencies, and persistent tensions in oil-producing regions. Based on these findings, the study recommends a recalibration of Nigeria’s revenue allocation structure to incorporate greater fiscal decentralization, enhance subnational autonomy, and ensure equitable resource control thereby fostering more accountable and conflict-sensitive natural resource governance.

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