Revenue allocation can be
defined as the processes by which the income or resources of a country are
shared among the states for the purpose of
national development. 

  • Population: Revenue is shared among the states on the
    basis of the number of people in that state. In this case, the
    state with the highest population would
    receive more than others with less population. 
  • Derivation: This means that states that have natural resources e.g. crude oil, would receive special allocation. 
  • Equality of
    This means that each state regardless of its
    size or population would receive the same
  • Even Even development: This is to ensure that there are uniform
    development in the states. In this case, less developed states would receive
    more than the developed ones. 
  • Need of the state: Revenue is allocated to the various states based on the need. This is done to ensure that each state attains
    a minimum national standard. 
  • National interest: This suggest that the interest of the nation
    should be the guiding principle in revenue