ABSTRACT

The history of mankind in all generation has been a struggle dominated by the need to enhance his material condition either as an individual or as a collectivity. The struggle for material condition has led to the evolution of different types of political systems, which include federalism. Importantly, each state is endowed with different kinds of natural resources, which has engendered development in some states and underdevelopment in others. While scholars have made substantial contributions on the nature, structure, dynamism and economics of federalism, very little efforts has been directed to a comparative analysis of the impact of the structure of federalism on revenue allocation and the management of natural resources in Nigeria and South Africa. In particular, this study attempts to resolve the following puzzles as delineated: (i) how does the structure of federalism impact on the pattern of revenue allocation among the constituent units in Nigeria and South Africa? (ii) Do the proceeds from natural resources exploitation in Nigeria and South Arica adequately enhance the provision of basic social amenities? (iii) Does the role of the state in Nigeria engender conflict in resource access and management in contradistinction to the role of the state in South Africa? The study adopted the documentation method of data collection. The study also adopted the basic propositions emanating from the Marxian political economy approach, which are applicable to Nigeria and South African social formations as our theoretical framework of analysis. Among other things, the study revealed that the unbalanced structure of the Nigerian federalism impact disproportionately on the revenue allocated to the component units, while the structure of the South African federalism enhances equitability in revenue allocations. The study also observed that the proceeds from the exploitation of natural resources did not adequately impact on the provision of basic social amenities in both Nigeria and South Africa. The study recommend for the restructuring of Nigerian Federalism with a-three-tier government based on the existing 6 geo-political zones as the federating units. Again, the government should enact law that ensures that proceeds from natural resource exploitation are used to provide basic social amenities to the entire political system, but particularly to the region of extraction.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

A very striking feature of every federal state is the existence of diversities. Whether federations are formed by integration of previously independent entities or through differentiation of a single entity into many components, the central motive is usually to enhance political and economic benefits. The nature and dynamism of federal states are usually influenced by the structure of its internal territorial configuration. As a result, the different component units that make up the federation struggle for economic and socio-political dominance. In this struggle, the state is the major mediator and distributor of all the privileges and this role increases the value of the state. As opined by Suberu (1998:277), the linedemarcating politics and economics has been erased as state power equals wealth and wealth isthe pathway to power.In this connect, Awa (1976:12), contends that one of the aims of federalism is that economic resources in various component units should be used in such a way that the entire political system benefits equitably from the economies of scale. The political system in a federal state is usually a configuration of ethnic, religious and cultural groups. Either in isolation or in combination, these groups’ identities may have some bearing on the political conduct and socioeconomic role in the society. Since most federal states are heterogenous, it should not be surprising that their internal politics are defined and characterized by their pluralities, and these different identities have remained powerful elements in their domestic politics.Notwithstanding, federalism has had multiple significance for managing diverse societies. It is an approach to governance that may be applicable to certain countries given their pluralism in terms of culture, religion, language and ethnicity. The quest for unity in diversity in a federal state is usually achieved through the framework of rules as enunciated and implemented by the state. Thus, federalism could be conceived as a system of rules for the division of public policy responsibilities among a number of autonomous governmental agencies. These rules define the scope of authority available to the autonomous agencies and provide a framework to govern relationships between and among agencies. In most federal states, particularly in Africa, such as Nigeria, Sudan, South Africa etc, the nature of the division of powers often times constitute the major impediment to the realization of federal objectives. More so, some federal states outside the shores of Africa such as Venezuela, Malaysia and Austria are highly centralized while Switzerland and Canada are highly decentralized http://www.forumfed.org/en/federalism/president_article7.php. Each federal state is unique and it is this peculiarity that underscores why federal states behave differently.One of the major challenges of federal states has been the concerted efforts of the central (federal) government to turn the component units into its administrative units. This is necessitated by the fact that federal governments are increasingly becoming involved with the distribution and management of wealth, and these include, the management of proceeds from the exploitation of natural resources while the component units are more or less instrument of this distribution. As a result, the centrifugal and centripetal forces that shape the search for equilibrium between the constituent units and the federal government find its most lucid expression on the nature of balance between centralization and decentralization of the governments. In most federations of the world, particularly, Nigeria as well as South Africa, responsibilities are divided among the governmental institutions like the legislature, executive and the judiciary; and among the various structures of the federation like the federal, state(province) and local governments. The nature and character of political structure of any federation necessarily impact on the political system. This fear was highlighted thus by Ikejiani and Ikejiani, (1986: vii)i when they argued that:…It is most important for us to warn that to try under the national political structure is probably to fail. The major task is to reform our present political structures and institutions of government. The difficulties spring not from the qualities of leadership but from the fact that we are trying to solve the problems of Nigerian unity with political structures and institutions that are absolutely inappropriate. Nigeria, we dare say, will not, regardless of who is the head, or which political or military regimeis in power, recover from the general malaise, disunity, instability and all the iniquities which have engulfed her until our political structures and institutions are changed. Until this is done, Nigeria will continue to have little confidence in their governments and will continue to live with policies that are inefficient and ineffective in dealing with the problems, especially the problem of… ‘revenue allocation and management of natural resources’.Thus, the task facing Nigeria, and indeed, other federal states like South Africa is to reform the political structures and governmental institutions with a view to reducing the degreeof inequity in the system. The debate is on how federalism will be able to create a feeling ofsatisfaction and fairness among the component units, without deepening existing conflict lines.The perception of inequality, marginalization and intimidation of one such group by another as itconcerns the allocation of governmental resources and management of natural resources isusually measured on the basis of group/regional identity. As a result, the management of naturalresources is a contentious issue, particularly, in federal societies that are characterized bypluralistic tendncies, fear of marginalization and domination among others.Therefore, the politics of natural resource management is a very contentious issuebecause of the problem associated with different groups and their contributions to the federationvis-à-vis the distribution of resources. The contentious problems that every federal or plural statehas to contend with include the problem of what should be the institutional form of thegovernment? How can all sections of the country work in harmony and none feel excluded ordominated by the others? (Kew and Lewis, 2010: 388-389). And most importantly, how caneconomic, political and financial resources, etc be distributed or allocated to eliminate anyperceived feeling of marginalization or domination of one section by the other? In fact, the baneof every plural society is the national question, particularly as it concerns the distribution ofresources, particularly, revenue allocation between the tiers of government and among thecomponent units. In this context, it is the state that is the purveyor, enunciator and distributor ofthese resources, and hence the struggle to control the apparatus of the state for the authoritativeallocation of these resources adds dynamism to internal politics of federal states.This is necessary because of low development of the productive forces, which increasesthe use of the state power as an instrument in the hands of the dominant class. The peculiarity ofthe states in Africa manifest not only in its relative autonomy, but more importantly in its role asa means of production. This was aptly buttressed by Ake (1985: 3), when he asserted that theunique feature of the socio-economic formation in post-colonial Africa, and indeed incontemporary periphery formations generally is that the state has very limited autonomy. Thedegree of autonomy of the state is usually a consequence of the level of the development of theproductive forces. As a result of lack of autonomy of the states in Africa, the state became aninstrument in the hands of the dominant class, particularly, the hegemonic dominant class. Thisdominant class uses the state and its apparatuses for primitive accumulation of the resources ofthe people, particularly, through governmental policies that seek to protect their interest.Consequently, all policies, including those relating to the access, exploitation and managementof natural resources are formulated to suit the interest of the dominant class. As a result, the statewhich is constituted to play a regulatory and mediating role in the allocation and distribution ofpower and resources becomes an instrument in the hands of the dominant class, and indeed,serves as a means of production. But this ought not to be so, particularly in a federal statebecause of its inherent devices by which federal qualities of society are articulated and protected(Livingstone: 1956).This study therefore attempts to determine how the practice of federalism impacted onrevenue allocation and natural resource management in Africa’s two most important countries:Nigeria, Africa’s most populous state, and South Africa, Africa’s wealthiest and most developedstate (Sodaro, 2001: 810). Both Nigeria and South Africa share a lot of similarities, yet, they areradically different in many ways. Accordingly, Kan-Onwordi (2007:56) avers that in 1991, SouthAfrica contributed just 4% of Africa’s global export trade, but by 2007 it had become thecontinent’s largest economy while Nigeria because of its huge population remains the continent’sbiggest consumer nation. Politically, both Nigeria and South Africa are sub-regional powers inWest Africa and Southern African respectively, and continentally, both are powerful countries.Both have also experienced different types of dictatorship, typified in Nigeria by over thirtyyears of military dictatorship and in South Africa, by over thirty-three years of apartheid regime.Notwithstanding these similarities, both Nigeria and South Africa are significantlydifferent from one another in many other ways. While Nigeria has a population of 140 millionaccording to 2006 estimates, South Africa has a population of 44 million. The difference alsomanifested at the economic level. While the GDP and Per Capita Income of South Africa are putat S187.3 billion and S12, 200 respectively, Nigeria’s GDP and Per Capita Income are put atS77.33 billion and S1, 400 respectively (Kan-Onwordi, 2007: 57). However, according to 2009estimate, the Per Capita Income in South Africa was S10, 000, while that of Nigeria is S2, 400.http://www.photius.com/rankings/economy/gdp_per. It is equally important to observe that whileNigeria is a mono-product economy with agriculture and oil contributing over 70% of GDP withservices contributing a meager 27%, the South African economy is grossly dependent onservices, which contributes almost 70% to GDP while other sectors contribute the remainder.The economies of the two countries are further defined by the fact that Nigeria’s economy has ahuge informal sector; that of South Africa has a large formal sector.Nigeria is endowed with vast and largely untapped natural resources including suchminerals as oil, limestone, tin, columbite, silver, coal, gypsum, shale, zircon, zinc, iron-ore, andnatural gas to mention but a few (Anyanwu, 1997: 3). Nigeria has long possessed a high potentialfor developing into a regional and global superpower with its abundant human and naturalresources. However, the Nigerian economy is heavily dependent on crude petroleum export asthe main source of foreign exchange earnings and government revenue. For decades, revenuefrom oil accounted for over 90 percent of export earnings. The over dependence of the Nigerianeconomy on oil has had its own effects. For instance, by 1980, the oil sector which accounted for22 percent of GDP provided 80 percent of government revenue and over 96 percent of exportearnings (Anyanwu, 1997: 5). Even with the oil boom of the 1970s, the government could notproperly harness the enormous revenue into productive use. As a result, starting from the mid1981, when the world oil market began to collapse due mainly to oil glut, the Nigerian economywitnessed a very serious crisis. This crisis resulted in the adoption of the Structural AdjustmentProgramme (SAP) in 1986. Even more important is that the year 2008 witnessed yet anotherboom in the oil sector as the world oil market experienced the highest ever increases in the pricesof crude oil. In all these, the centrality of the role of the state is never in doubt.On the other hand, South Africa is abundantly endowed with gold, coal, platinum anddiamond etc. She has the strongest economy in Africa. As a result of the lifting of sanctions andthe good will generated by the transition from apartheid to non-racial democracy in 1994, theSouth African economy turned around and grew by an average of 3 percent in 1994 and 1995with a Per Capita GNP in the 1990s of about S3, 500. Much of South Africa’s infrastructure andeconomic development were built on mining, especially gold and diamond (Sodaro, 2001: 840).Meanwhile, it is important to state that revenues from mining alone are insufficient to carrySouth Africa in the twenty-first century, which necessitated a reform agenda by the governmentthat brought about diversification of the economy.It is in fact these similarities and differences as noted above that necessitated acomparative study of federalism and the management of natural resources in both countries witha view to ascertaining how the two states employ the proceeds from natural resource exploitationto impact on the standard of living of its citizens defined within the context of provision of basicsocial amenities. The study situates the discourse within the context of the centrality of the statein understanding how federal states manage their natural resources.

 

1.2 STATEMENT OF THE PROBLEMThere is a plethoral of literature on the nature, structure and dynamics of federalism.Particularly of note in this regard are the works of Dietze (1960), Wheare (1964), Awa (1976),Amuwo et al (1998), Agbese (2003) and Elaigwu (2007) among others. Notwithstanding theseavalanche of scholarly works in this regard, the concept appears to be shrouded in controversy.Essentially, federalism is a device by which plural societies can best be governed, yet, thecontroversy that it generates as a result of its nature, structure and dynamics are better imagined.Federal states are formed either by a process of differentiation of a unit into component units, orthrough integration of various independent units into one federal polity.One of the principles of federalism is that economic resources in various component unitsshould be used in such a way that the entire political system benefits equitably from theeconomies of scale (Awa, 1976: 12). And since federalism is the method of dividing power sothat the central and the component units are both coordinate and independent; the manner of thisdivision and the structure of a federal state has very serious implications on allocation of thebenefits from the economies of scale. Accordingly, Bryce (1997:1) contended that the problemconfronting federal states is how to secure an efficient central government and preserve nationalunity, allowing independence of the various component units.Nevertheless, Hanson and Perloff (1965) argue for centralization of fiscal responsibilities,alluding that unless the state fiscal systems are centrally planned, the quest for economicdevelopment would be undermined. On the other hand, Bauer (1961) and Scot (1965) argue fordecentralization of fiscal responsibilities believing that it would accelerate the pace of economicdevelopment more than is anticipated. Also there is the problem of vertical fiscal imbalanceamong the three tiers of government, which is due to minimal revenue-raising abilities of thesub-national units’ vis-à-vis their expenditure responsibility. For Ibeanu (2005:53), the issue ofpracticing unbalance federalism has led ethnic minorities to organize stiff opposition against themilitarist state and petrobusiness.Generally, scholars like Mbanefoh and Egwaikhide (2003: 213), Enyi (2005:295) amongothers believe that the equitable allocation of resources between the central government and thatof the various tiers of government, together with the allocations among the various componentunits is the hallmark of every federal state. The gap that appears to emerge from the above is therevenue generation capacity of the different tiers of government. This however was aptlyarticulated by Elaigwu (2007:5) when he opined that fiscal federalism deals with the generationand distribution of scarce but allocatable resources, as federations attempt to create equalityamong its citizens and component units.Deriving from the above is that there is a substantial amount of scholarly work done onthe nature, structure and dynamics of federalism in Nigeria and South Africa, yet, surprinsingly,very little efforts have been directed at the impact of structures of federalism on revenueallocation, particularly, to the component units. But more importantly, no serious effort has beenmade by scholars to empirically demonstrate with quantifiable evidence the nexus betweenunbalanced federal structure and inequitable revenue allocations.On issues relating to natural resource management in federal states in Africa,contemporary literature like the works of Roberts and Oladeji (2005), Etekpe (2007), Ikein(2010) among others, are replete with plethora of evidence that countries with abundance ofnatural resources, particularly, non-renewable resources like oil, gold, diamond, platinum, etc,have had low economic growth and are incapable of providing basic social amenities to itscitizens in comparison with countries without the abundance of these resources. Among othercountries with abundance of natural resources are Nigeria, Sudan, Zimbabwe etc, and they tendto have more internal conflicts, lack adequate tax mechanism, are affected by dutch disease, thatis, an economic phenomenon in which the revenue from natural resource export damage anation’s productive economic sector by causing an increase of the real exchange rate and wageincrease, engage in excessive borrowing, with revenue volatility, lack the capacity ofdiversification among other undermining variables http://en.wikipedia.org/wiki/Resource_curse.As a result, these resources, instead of being a blessing have become a curse. Scholars like Obi(1998), Bannon and Collier (2003), Omoweh (2005), have also contended that the reasons forthis paradox of plenty are not unrelated to corruption of the leaders, government mismanagementof resources, volatility of revenue from the natural resource sector due to exposure to globalcommodity market swing and a decline in the competitiveness of other economic sectors,http://en.wikipedia.org/wiki/Resource_curse. Moreover, the World Bank has argued as it didduring SAP in 1986, that good governance defined in the context of sound economic policieswill provide resource-rich countries the road to growth and developmenthttp://en.wikipedia.org/wiki/Resource_curse.Notwithstanding the above proposition, it should be expected that if a unitary statebecomes a victim of natural resource mismanagement because of its over-centralization of powerand authority, a federal state is more suitable to turning its natural resources to blessing becauseof inherent devices by which federal qualities of society are articulated and protected(Livingston: 1956).Essentially, revenue from oil and gas come from royalties, licence fees, profits from stateoil companies, and export taxes, etc. Royalties and licence fees are associated with ownership ofthe resource and are typically the major source of revenue from oil and gas(http://webcache.googleusercontent.com/search?q=cache:bIsm5u6ubIE). In most federations ofthe world, particularly, USA, Canada and Australia, onshore resource ownership is normallywith the component states, but in Nigeria, it is owned and controlled by the federal government,while in South Africa, the federal government guarantees access to private ownership of naturalresources. Again, every government requires funds to embark on developmental programmes. Inall countries of the world, whether there is the abundance of natural resources or not,development is usually engendered by the level of financial resources available in such country.Nigeria and South Africa do not only rely on taxes to generate its revenue; they relied heavily onproceeds from natural resources, which provide substantial revenue to the government of the twostates.Scholars are unanimous that revenue from natural resources is the mainstay of Nigeriabut not South African economy. Particularly of note are the works of Obi (1998: 261),Adegbulugbe and Akinbami (2006: 190), and Anyanwu (2007: 176) among others who contendthat over 80% of all federal revenue and 90% of all foreign exchange earnings come from oil. Onthe other hand, South African economy is grossly dependent on services, which contributesalmost 70% to GDP while other sectors contribute about 30%. The economies of the twocountries are further defined by the fact that Nigeria’s economy has a huge informal sector; thatof South Africa has a large formal sector.Notwithstanding these scholarly contributions, there is little emphasis on quantificationand systematic analysis of existing divergences in revenue allocation and natural resourcemanagement in both Nigeria and South Africa. In fact, no serious effort has been directed on theimpact of the proceeds from natural resources on the provision of basic social amenities in bothNigeria and South Africa. Again, scholars have not adequately established the implications ofthe role of the state in resource access and management vis-à-vis conflicts.It is therefore consequent upon these apparent lacunas that we pose the followingresearch questions:1. How does the structure of federalism impact on the pattern of revenue allocationamong the constituent units in Nigeria and South Africa?2. Do the proceeds from natural resource exploitation in Nigeria and South Africaadequately enhance on the provision of basic social amenities?3. Does the role of the state in Nigeria engender conflict in resource access andmanagement in contradistinction to the role of the state in South Africa?

1.3 OBJECTIVES OF THE STUDYThe broad objective of this study was to comparatively determine how the practice offederalism impact on revenue allocation and natural resource management in Africa’s two mostimportant federal states, Nigeria and South Africa. However, our specific objectives are asfollows:1. to determine how the structure of federalism impact on the pattern of revenueallocation among the constituent units in Nigeria and South Africa;2. to ascertain whether the proceeds from natural resource exploitation in Nigeria andSouth Africa adequately enhance the provision of basic social amenities;3. to explore whether the role of the state in Nigeria engender conflict in resourceaccess and management in contradistinction to the role of the state in South Africa.

1.4 SIGNIFICANCE OF THE STUDYIt is contended that countries with abundance of natural resources are characterized bylow economic growth, lack the capacity to diversify its economy and are prone to internalconflicts, hence, the resource curse thesis. Yet, the two most important countries in Africa,Nigeria and South Africa, with abundance of natural resources show varied indices of theconsequences of this abundance. It is therefore on this premise that this study becomes verysignificant both for its theoretical relevance and practical utility.At the theoretical level, the study has increased the general storehouse of knowledge. Inparticular, it has discovered the impediments that have constituted a clog in the wheel of progressin Nigeria’s struggle for equitable resource management formulae. More so, it has contributedimmensely to a better understanding of why the abundance of natural resources in South Africahas not led to the type of mayhem being experienced in Nigeria. In fact, the major theoreticalsignificance of this study is its contribution in filling the academic gap that was identified in theexisting body of knowledge. Above all, this study also serves as a reference material for futureresearchers who may be interested in extending the frontiers of human knowledge as it concernsthe management of natural resources.The practical significance of this study cannot be over-emphasized as it serves as areference material to help solve the predicaments that abundance of natural resources hasbrought to Nigeria, and help South Africa to consolidate and improve on its present conflict-freemanagement of its natural resources. Specifically, the study serves as a guide to politicians,administrators and policy makers towards discovering the undermining variables in resourceaccess, exploitation and management with a view to formulating policies that can resolvepermanently the problems associated with natural resource management.

1.5 THEORETICAL FRAMEWORKVarious theories would have captured the essence of this study, particularly, acomparative model of analysis like the systems theory, structural-functional theory, etc, but weconsidered the basic propositions emanating from the Marxian Political Economy Approach tobe more apt than a comparative model. This is essentially because the Marxian PoliticalEconomy Approach focuses on the reciprocity of politics and economy, derived ofcourse fromthe primacy of material conditions. Since the study is on issues relating to resource (revenue)allocation by the state, and the management of natural resources; the nexus between the state andits role of authoritatively allocating values can best be captured by the Marxian PoliticalEconomy Approach. Again, though a comparative model would adequately compare bothNigeria and South Africa within the context of the study, but, the difference in the behaviour ofthe two states may not be better captured using the comparative model. The differences in thetwo states, is a function of economic condition, which reproduced itself at the political realm.Therefore, the centrality of the role of the state in the allocation and management of naturalresources can best be captured using the Marxian Political Economy Approach, hence, itsadoption in this study.Therefore, deriving from our literature review and the thrust of the study, we anchor ourinvestigation on the basic propositions of the Marxist Political Economy approach which areapplicable to the Nigerian and South African social formations. Accordingly, four essentialelements characterize the Marxist Political Economy approach as follows:1. The first element is the materialist approach to history; that is, the development of theproductive forces, which is central to historical change.2. The dialectical approach to knowledge and society that defines the nature of reality asdynamic and conflictual.3. The third is a general view of capitalist development; that is, the capitalist mode ofproduction and its destiny are governed by a set of economic laws of motion ofmodern society.4. The fourth is a normative commitment to socialism; that is, all Marxists believe that asocialist society is both the necessary and desirable end of historical development.Out of the four elements, we adopt the first two propositions of Marxist Political Economyapproach in the investigation of this study. These are:1. The materialist approach to history or what Ake (1981: 1) called the primacy ofmaterial condition.2. The dialectical approach to knowledge and society that defines the nature of reality asdynamic and conflictual; or again, what Ake (1981: 3) refers to as the dynamiccharacter of reality.First, political economy is a method which gives primacy to material conditions,particularly economic factors in the explanation and understanding of socio-economic andpolitical realities. For example, economic condition is the most determining factor why theEuropean colonialists came to Africa; it also determines why they established the types ofpolitical systems that they did in Africa, etc. The economic condition is equally important inunderstanding why the nationalist struggle emerged and the type of political system that wasadopted at independence, etc. In fact, in every society, those who are economically privilegedtend to reproduce themselves as the politically dominant groups, and are always interested inmaintaining the existing social order. To be sure, an understanding of the economic condition isa pre-condition for understanding how a particular state emerges, transforms and behaves.In this context, we can align ourselves with Engels as quoted in Lenin (1976) that the:state is a product of society at a certain stage of development;it is the admission that society has become entangled in an insolublecontradiction with itself that it has split into irreconcilable oppositeswhich it is powerless to conjure away. But in order that theseopposites, classes with conflicting economic interests, mightnot consume themselves and society in fruitless struggle, itbecame necessary to have a power seemingly standing abovesociety that would moderate the conflict and keep it within thebounds of ‘order’; and this power, arisen out of society but placingitself above it, and alienating itself more and more from it, is the state.The state that alienates itself from the contending social classes in any society does so onthe basis of high level of penetration of commodity relations, that is, the pervasivecommoditization of production relations. Accordingly, Ake (1985: 1) argues that such a staterepresents a specific modality of class domination, one in which class domination is mediated bycommodity exchange so that the system of institutional mechanism of domination isdifferentiated and dissociated from the ruling class and even the society and appears as anobjective force standing alongside society. Consequently, the state appears to be an objectiveforce, a neutral umpire and an unbiased mediator in the society. However, behind this seeminglyneutrality of the state in mediating and moderating societal conflicts is a strong congruencebetween the interest of the state and that of capital (economy). This position was aptlycollaborated by Miliband (1977), when he opines “that a state, however independent it may havebeen politically from any given class, remains, and cannot in a class society but remain, theprotector of an economically and socially dominant class”. With the emergence of classes inhuman society came struggle for survival in the social relations of production; and in thisstruggle the state has remained the regulator, the enunciator and the propagator of all laws thatregulate the inevitable conflict in the social relations of production. In fact, right from theemergence of state in human history, its role has remained central in social production. Forinstance, the state determines whether access should be granted to private or public ownership ofland and natural resources; it determines how the exploitation of natural resources are to becarried out; and how the distribution of revenue from the exploitation of natural resources are tobe done to create a sense of equity and justice or otherwise. To be sure, the centrality of the roleof the state has never been in doubt in social relation and organization of production.Meanwhile, the degree of autonomy of the state is consequent upon the level ofpenetration of commodity relations, which is dependent on the development of productive forces,which again, expresses the overall productive capacities of a society. The following constitutesthe basic elements of a state that is autonomous from the contending classes:1. The state ceases to be a means of production.2. The state is alienated from active participation in politics.3. The state becomes a minimal state and is therefore, retrenched from activeparticipation.4. As a result of the above, the state becomes a state of no particular class but of all theclasses.5. Therefore, the various apparatuses of the state are not employed for primodial and, orprimitive accumulation, and6. Finally, the increased level of commoditization enables private initiatives to beenhanced, which reduces primodialism defined in the context of the use of statepower for personal aggrandizement.Deriving from the above, it is pertinent that the economic condition does not only enableus to understand the political role of the state, but also its economic role of authoritativeallocation of values. Thus, as Ake (1981: 11) noted, the state of development of productiveforces decisively influence social organization, culture, the level of welfare, and evenconsciousness. Consequently, we can infer that the political and social-organizational styles thatwere adopted by African countries after independence was largely dependent on the state ofdevelopment of the productive forces; and its success or failure was also a product of the level ofdevelopment of the productive forces.Meanwhile, a particular relation of production comes into being because the productiveforces are at a particular stage of development. For, instance, under feudalism, productive forceswere in a very rudimentary stage of development and land was the major means of production.However, notwithstanding the development of technology and industrialization in Africa,particularly in Nigeria, land has remained very important as a means of production. The socialrelation of production between the government and the citizens, particularly in the areas wherethe bulk of government revenue is generated revolves around land and the endowment therein.But in societies that have transcended the feudal mode of production, the changes in productiveforces have given rise to new relations of production, particularly, that between the capitalistsand workers. This new relations enhances the pervasive commoditization of production. As aresult, the increased penetration of commodity relations results to increased autonomy of thestate. In short, as the development of productive forces increase, it increases the role of the stateas a regulator or mediator. That is to say, the state merely sets the rules that guide the behavior ofgovernment and citizens, etc.It is imperative to state that African economy was at a feudal stage, particularly theNigerian and South African economy before the dislocation and distortion of its economic baseby the colonialists. This dislocation and distortion stagnated the development of the productiveforces with all the attendant consequences. As a result, the transition from feudal mode ofproduction to capitalism was foisted on the colonial states, which to a certain degree halted thedevelopment of the productive forces. Now the low degree of the development of the productiveforces affects the level of pervasiveness of production relations, which in turn determines thedegree of autonomy of the state. Thus, this degree of the autonomy of the state affects thecharacter of the role of the state in social relations. That is, whether the role of the state becomesinterventionist or regulatory is dependent on the degree of the autonomy of the state, which is aproduct of the level of development of the productive force.Second, the other proposition of Marxist Political Economy approach is the dialecticalapproach to knowledge and society that defines the nature of reality as dynamic and conflictual.That is, it contends that social disequilibria and consequent change are due to the class struggleand the working out of contradictions inherent in social and political phenomena. Accordingly,Marxists believe that there is no inherent social harmony or return to equilibrium. This is furtherbuttressed by stating that every thesis automatically produces an antithesis, which is synthesizedto produce yet another thesis, and this process continues ad infinitum. This expresses that thefaith of all created things are unstable, always becoming and never being. It is this dynamiccharacter of reality, this movement of opposites that leads to inevitable change in any politicalsystem.In the application of this approach to the study, we shall be guided by the basicpropositions that are relevant in understanding the topic under investigation. Essentially, westated that the level of development of the productive force decisively influences every otherthing. In other words, material condition is very essential in understanding the movement ofsociety. In both Nigeria and South Africa, it is the economic interest of European powers that ledto colonial conquest and the type of political system that was adopted. For instance, it wasbecause of the economic conditions of the colonial period that led to the amalgamation of theSouthern and Northern protectorates, essentially to cushion the administrative cost of governingNorthern Nigeria. It was also to protect the economic interest of the imperialists that wasresponsible for handing over power to the North at independence. Even in South Africa, it wasthe material condition prevalent at that time that made the British government to hand overpower to the white minority. It was also the economic condition that was implicated in theadoption of apartheid policy in South Africa.Consequently, the economic condition was one of the reasons that led to the adoption offederal systems of government in both Nigeria and South Africa. Now, because the level of thedevelopment of the productive forces was still at a rudimentary stage, the pervasiveness ofcommodity relations was equally at a low level. This tendentially implies that the state has lowdegree of autonomy. As a result, the state participates in politics, instead of moderating andregulating politics. The manner of state’s participation in politics expresses the manner ofintervention, essentially to protect its economic interest. Thus, the nature of federal structures inboth Nigeria and South Africa, starting from its inception to date is a product of the level of thedevelopment of the productive forces. This is implicated in the pattern of revenue allocationprinciples and formulae that have been adopted over the years.Deriving from the above, it is equally the material condition that determines the struggleover resource access, exploitation and management, but particularly, the proceeds from itsexploitation, and how it is employed to provide the basic necessities of life. Accordingly, the roleof the state in every social formation, which is to maintain social order and cater for the needs ofthe citizens, becomes imperative. How the state performs this role depends on the level of thedevelopment of the productive forces. In Nigeria, the role of the state appears to beinterventionist because the level of commodity relations is very low with a correspondingrudimentary development of the productive forces; but, in South Africa, the degree ofcommoditization of production is pervasive, which enhances the role of the state as a regulator ormediator of societal conflicts and interests.Meanwhile, the dynamic character of reality which expresses the conflictual nature ofreality explains the struggles between social forces in every society that leads to much of theinevitable change in every political system. The adoption of any political structure or revenueallocation principles and formulae automatically creates an antithesis to it. The struggle forresource control, for example is antithetical to the government’s role of controlling suchresources on behalf of the people. Therefore, in every social formation, whatever there is has itsopposites, and it is the conflict between these opposites that lead to change, and thus, explainsthe dynamic and conflictual character of reality.

1.6 HYPOTHESESDeriving from the research questions posed in this study, we proffer the followinghypotheses:1. The structure of Nigerian federalism negates equitability in the pattern of revenue allocationamong the constituent units, while that of South Africa enhances equitability in the pattern ofrevenue allocation among the constituent units.2. The proceeds from natural resource exploitation in Nigeria and South Africa do notadequately enhance the provision of basic social amenities.3. The role of the state in Nigeria engenders conflict in resource access and management incontradistinction to the role of the state in South Africa.

1.7 METHOD OF DATA COLLECTIONThis refers to the methods employed to generate the necessary evidence or proof (data) totest the hypotheses and answer the questions posed in the statement of problem. According toCohen and Manion (1980: 26), methods are techniques and approach employed to generate datawhich are used as criteria for inference, interpretation, explanation and prediction. This study isessentially qualitative and therefore did not require the use of questionnaires or interviews.Consequently, the method of data collection used in this study is the documentation method andthe ex post facto research design. This involves the use of secondary sources of data collectionwhich included books, journals, magazines, government official documents, conference papers,internet materials, etc. We employed the use of data from the Revenue Mobilization Allocationand Fiscal Commission (RMAFC), the National Bureau of Statistics (NBS), Office of theAccountant-General of the Nigerian Federation (OAGF), the World Bank DevelopmentIndicators, African Development Indicators, World Bank Human Development Index, NigerianInstitute of International Affairs (NIIA), The Ministry of Foreign Affairs, and the South AfricanHigh Commission among others.

1.8 METHOD OF DATA ANALYSISIn an attempt to investigate our hypotheses, we employed the use of qualitative deductiveand, or, inductive logical method of analysis. This involved a logically consistent argument thateither moved from general to specific or in reverse order. More so, we adopted content analysisas part of our method of data analysis. This involved reading meaning into available documentswith a view to interpreting our data in such a way that it gave new insights to the understandingof the relationships between our independent and dependent variables, and enhanced a betterunderstanding of the thrust of the study. However, in order to explain the hidden relationshipbetween our explicandum and other phenomena, we also employed the Ex Post Facto Design asa guide.