Revenue Allocation Formula in Nigeria

Instead of focusing on diversifying, the leaders of the country focus on gaining power and standing in the government. “Nigeria’s most daunting challenge lies in overcoming the severe divisions among its competing religious and ethnic groups” . Moreover, once they gain it, their problems do not end, since they must look over their back, never knowing how long they will hold on to the little power they have. Meanwhile, the common person suffers, as he is neglected by his government and must survive on his own. “The standard of living declined even further than before and external debts increased.” This neglect of the common man bodes ill for the government, as it is the common man who votes in the polls. However, the vote does very little, since corruption is rampant in Nigeria.

According to Shell Global (n.d.) one of the largest branches of Shell Company is Shell Petroleum Development Company (SPDC) in Nigeria which has joint venture with Nigerian Government’s Nigerian National Petroleum Corporation (NNPC). The ratios are divided in a method of 55% to Nigerian Government, 30% to Shell Company, 10% to ELF Petroleum Nigeria Ltd and 5% to AGIP. The operation of SPDC in Nigeria has added $38 billion to the Nigerian Government in the past five years (2007-2011) together with the taxes and royalty payments. The Nigerian Government receives 95% of its profit from SPDC onshore oil and gas production in Niger Delta. In relation to Shell Company’s relation following are some key aspects.

Niger Delta region, placing the Nigerian oil output down to a third of its capacity” (Klare 3).

Nigeria has not flourished the ability to manufacture direct products in its own country. Instead, imports, 85% of its national demands and is a customer to many developed countries who gain greater profit from Nigeria's inability. Western countries like France forged deep ties with governments rich in major oil, gas and mining companies, strategically allowing themselves to secure exploration and production rights in exchange for royalty payment (Frank Vogl, 2012). These strategies have always resulted in a greater profit for

Nigeria has become the fastest growing country in Africa, its coastal ports are the heart and soul of its economy. Since its creation by the British Empire, there has been a civil breakdown and conflict among its tribal leaders. However, their religious understanding between Islam and Christianity has kept them at peace amidst themselves throughout time. The last few years, the government has developed itself into a functioning federation, the people are able to notice how outside influence has improved their daily lives.

For example, Shell Oil, an MNC (Multi National Corporation), extracted 50% of Nigeria’s yearly crude output, and 14% of its own output from the Niger delta region (The Changing Nature of Third World Exploitation, 1995). Though a large number of the local populace was recruited by Shell to serve as the basic labor force, there has been no change in the deplorable conditions the locals were living in. Over a period of 15 years, due to massive and widespread oil spills, heavy land degradation of the alluvial soil has taken place. The locals, who come from an agriculture based society, have in effect, been deprived of their ancestral way of life, their heritage, all due to the greed driven actions of the partly

It put North at 55.4% of Nigeria population and north over the years has manipulated census figure provided a mainstay for northern hegemony. Nigeria population was used as a basis for allocating parliamentary seats at the centre among the then three regions of the federation (north, west and east).

become the 6th largest oil exporter in the world, but it is also where 80% of the governments

The Nigerian economy has quite the surplus of natural resources they offer the potential for economic growth. “Crude oil accounted for over 95% of exports and over 65% of government revenue in 2004;” Nigeria is number eight in the world's exporter for oil. But agriculture still is a big part in the basic economic activity for the Nigerians.

The Niger Delta is a region of Nigeria that is very rich in crude oil and gas. Crude oil and gas make up 70% of the country 's revenue and 95% of it 's export earnings (Ezekoli, 5608). Those percentages are incredibly high and represents large amounts of money that can be found in the region. However, the people of the Niger Delta never see the wealth that comes from their natural resources. The wealth instead goes to the oil companies set up in the area as well as the pockets of a few elite government officials. The disconnect between the people of Nigeria and the oil companies and governments is incredible (Ezekoli, 5609). The effects are slum turned neighborhoods, increased poverty, and job loss. In order to improve the conflict in the Niger Delta, the government and oil companies need to allow more involvement of women and people as voters and elected officials, and create or adhere a sustainable environmental regulations plan.

Nigeria has a population of around 180 million, making it the most populous country in Africa. Nigeria is located in a region with tropical climate and that can grow variety of crops. With their numerous resources and growing technology they have been able to have positive economic advancement. Nigeria has had improvements in five of the ten economic freedoms. This includes Freedom of corruption, labor freedom, and management of government spending ("Nigeria." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption.). Nevertheless these large improvements in their economy has not brought human development, where most Nigerians live under the poverty line. This paper will focus on why Nigeria has not been able to use their economic prosperity in the sector of human development, this includes standard of living, health, safety, and basic necessity one needs to live a stable life. We will compare it to the state of Ghana whose economy has also flourished but has been success in human development.

Nigeria is an Agricultural and oil rich nation but characterised by Political instability, corruption, poor

     Nigeria has been a country in political turmoil for a long time. The country was created in 1914 under British colonial rule and at that time it was considered a protectorate. It was not until 1960 that Nigeria received independence from the United Kingdom. One of Nigeria's problems politically is that it has over three hundred different ethnic groups. The three largest of these are the Hausa-Fulani, Igbo, and Yoruba. At the time of the independence of Nigeria it was split up into three states with each state being under the control of one of the major ethnic groups. The natural resources of the other 297 ethnic groups were exploited for the major three groups,

Most children in the Niger delta have little or no education, due to lack of funds from their parents who have lost their lands and have no jobs because of limited opportunities. The Niger delta government and the oil companies have refused to look into the situation; instead they favor their close relations neglecting the masses. Corruption in the Niger delta has led some youths in taking drastic measure in order to put food on their table. For example, Ikechukwu Efe an indigene of the Niger delta said that some of his friends created their own “oil refinery”, which is made up of crude oil in metal barrels with controlled heat from fire woods. This is a dangerous process in refining crude oil but the degree of poverty in the state left his friends with no choice. If only the government of the Niger delta have created jobs with the wealth of the state Ikechukwu’s friend would not have to put their lives in danger. Until corruption is put to an abrupt the people of the Niger delta will continue to live in poverty.

The Niger River Delta region was rich in mineral oil deposits and they also produced palm oil, coffee, and tin for export. The economy of the new nation was largely dependent on selling oil production leases to foreign companies and money earned from export of oil. Since, each region had its own government, the politicians were focused on channeling the wealth from the sale of oil into their own region so as to benefit themselves, their followers and their own regions. This gave rise to competition, greed for oil money and corruption among politicians.