Revenue-Sharing Mechanisms in A Genuine Federal System: Lessons From Nigeria's First Republic and Global Best Practices

This study focuses on the examination of revenue-sharing mechanisms in a genuine federal system with lessons from Nigeria's First Republic and global best practices. Framed through the lens of Fiscal Federalist theory. the study employed a qualitative approach and secondary sources of data, the research analyzed the historical context of Nigeria's revenue allocation, highlighting the significance of the derivation principle that empowered regions to retain a substantial share of their resources. The following questions served as guides: (1). What were the key revenue-sharing mechanisms during Nigeria's First Republic and how does it contribute to regional autonomy and fiscal responsibility? (2). What are challenges associated with Nigeria's current revenue-sharing framework, particularly as it relates to regional disparities and dependency on federal allocations? (3). How does Nigeria’s brand of federalism fit into global best practices in revenue-sharing mechanisms? And (4). What lessons could Nigeria learn from its First Republic and international experiences that could be applied to improve its current revenue-sharing system for equitable resource distribution and sustainable development? The study revealed that while the First Republic's approach promoted regional autonomy and accountability, contemporary challenges such as regional disparities, dependency on federal allocations, and a lack of transparency hindered equitable resource distribution. Comparative insights from successful revenue-sharing frameworks in countries like Canada and Australia illustrate effective equalization mechanisms and fiscal autonomy. The following Recommendations were arrived at: strengthening the derivation principle, implementing robust equalization funds; enhancing fiscal autonomy for states; ensuring transparency and accountability in revenue management; and there is need for urgent reform in Nigeria's federal system. By adopting these strategies, Nigeria can develop a more equitable and efficient revenue-sharing framework that fosters balanced regional development and national cohesion. This study contributed to the discourse on fiscal federalism and offered practical solutions for improving Nigeria's resource distribution in a federal context. Received: 21 July 2026 / Accepted: 28 September 2026 / Published: November 2026