A federal state is one in which there is constitutional division of powers among different levels or three tiers of government (federal, state/region, local governments).
In a federal system, the federal or central authority represents the whole and acts on behalf of all in certain matters, especially defence, external affairs, currency, national revenue etc and any other areas considered to be of common interest.
There also exists state/region or local authorities with powers of legislation and administration within constitutional limits.
It should be observed as well that in this system, the supremacy of the constitution is not only respected or upheld but also responsible for the division of powers among the tiers of government.
- A central government is supreme with respect to all matters of common importance to the whole federal state.
- Every state and local government has its own government. However, state and local governments are still subordinate to the central government. Central, state and local governments are referred to as three tiers of government in a federal set up. e.g NIGERIA.
The following methods are used in the division of functions for the three tiers of government as provided by the constitution.
- The exclusive legislative list: Powers and functions listed here are mainly for the central government alone to exercise. For example, currency, defence, power, customs, immigration, external affairs, etc.
- The concurrent legislative list: Functions listed here are to be exercised by both the central and state governments. In case of conflict experienced in the course of exercising these functions, the powers of the central government will supersede that of the state government. Some of these functions are: higher education, labour, roads, industrial development, insurance, research.
- Residual and legislative list: Functions listed here are for the local governments to exercise. Some of the functions or duties are in the areas of primary education, health or maternity centres, library, market, motor-parks etc. Examples of federal states are U.S.A ., Nigeria, India and Russia.
- This is a concept and practice usually associated with federal system of government. This is because the federal structure provides the grounds for intergovernmental relationship between a central government and other federating units such as states, regions, provinces, local governments.
- Fiscal federalism is therefore understood to imply a financial arrangement and relations among tiers and units of government which allow significant fiscal functions (both revenue generation and incurring expenditure) to be exercised at lower levels of government.
- This system also allows for the arrangement in such a way that tax powers of each tier of government are clearly and legally defined.
- Provisions are equally made on how funds are to be transferred from one level of government to another.
This inter-governmental fiscal relations makes for equity and efficiency of the national economy.
It becomes definite and obvious that fiscal federalism can only work or exist where there are decentralized political and administrative arrangement involving the transfer of the authority to plan, make decisions and manage public funds from the central government to other tiers of government.
Nigeria is a good example of where fiscal federalism is practised, creating the opportunity for federating units to have legal powers to assign taxes and carry out spending activities within clearly established due process.
Canada, Brazil, U.S.A, Australia, Switzerland, India, Germany, etc, have stable fiscal relations.
Reasons for the adoption of a Federal System
- Nearness of the federated units: If the component units making up the system are very near to each other e.g. states or regions, etc ., a federal system can emerge.
- Size of the country: If the size of the country is too large, this may hinder the effective control from the centre. Therefore, a federal structure is the best bet.
- Fears of the minorities: The minorities in the country may have the fear of being dominated by the majority group.
- Security: Some countries adopt a federal system in order to have military might or power to face a common external enemy. Diversities in cultures: The recognition of the diversities in cultures, religious beliefs and languages, e.g. Nigeria, may allow for the adoption of a federal system.
- Common historical background: For example, Britain imposed a federal system on Nigeria by dividing the territory into regions and ruled them separately.
- Economic factor: The need to pool resources together to form a stronger economy, e.g. U.S.A.and Nigeria.
- Geographical contiguity: It is advantageous for states which are to form a federation not to be widely separated geographically. The nearness of such states to one another can bring about the desire for a union.
- Common political association: Along period of historical and political association among people living in contiguous state is conducive for a federal union. For example, the experience of people in the former British and French colonies in Africa is a good example.
The main characteristics of a Federal System
- Constitutional division of power: This is a notable feature in a federal system. Powers are constitutionally shared between the central authority and other subordinate units, e.g. state and local governments.
- Powers are derived from the constitution: The central, state and local governments derive their powers from the constitution.
- Supremacy of the constitution: The constitution of a federal state is powerful and supreme.
- Written and rigid: Constitutions of most federal systems are written and rigid.
- Separation of powers: The constitution separates the functions and power among the three organs of government namely: executive, legislature and the judiciary.
- Bicameral legislature: Most of the federal constitutions have bicameral legislature. For example, in U.S.A. there are the Senate and the House of Representatives.
- The supreme court: There is always a supreme court which interprets the constitution and decides on any conflict between the centre and the constituent units.
- Equal representation: Every interest group is recognised and represented in a federal state.
- Autonomy of units: The autonomy of each tier of government is guaranteed by the constitution.
- Grassroots political participation: Provision is made for grassroot political participation of the people in a federal state.
Merits of a Federal State
- Integration of different groups: A federal system brings together different ethnic groups within a system. Federalism blends unity within different groups.
- The issue of autonomy: It allows each unit to be autonomous and affords them the opportunity to develop at their own pace. For example, in Second Republic in Nigeria (1979-83), U.P.N. states adopted free education.
- Federalism brings government closer: Government is brought closer to the people and it increases the sense of belonging and participation. Government programme and activities are made more relevant to the people.
- It eliminates arbitrary rule: This is made possible because the constitution is not easy to amend to satisfy the wishes of a few wealthy and influential individuals.
- Division of functions: Division of functions has made it possible formatters of local interest to be allocated to the state or local governments.
- Reduction in workload: The burden of the central government is reduced because functions are divided.
- Employment opportunities: Since functions are duplicated, employment opportunities are created for more people to be employed in the system.
- Supremacy of the constitution: The supremacy of the constitution in a federal system makes for adherence to democratic principles, rule of law and respect for fundamental rights of man.
- Decision-making process: Opportunities are created for more people to take active part in the decision-making process of their country.
- Grassroot political participation: Greater opportunities are accorded the people of the local areas to participate in the political affairs of the country.
- Safeguards the interest of the minorities: The rights of the minorities and other interest groups are recognised and guaranteed in a federal state.
Demerits of a Federal State
- Statism/Regionalism: Individuals prefer to be more loyal to their states and this can affect national unity.
- Possibility of conflict: Since no tier of government can claim absolute authority, it is possible for conflict in the area of performance of functions to occur between the central government and other tiers, e. g. state government or local government.
- Costly to run: Large number of departments and personnel are needed or created in a federal state, thereby making it a costly venture.
- Uneven development: Federalism accommodates the freedom of each unit to develop at its own pace which leads to uneven development.
- Duplication of functions: Duplication of functions can create redundancy which affects productivity.
- Delay in the execution of national issues: Before issues of national concern are concluded and implemented, it needs the approval of all segments of the society. e.g. in the area of amending the constitution, the parliament and the states’ legislative bodies are involved in the process.
- Rigid constitution: Federal constitutions are usually rigid. This means that the constitution cannot easily be amended to reflect the changing time.
- No uniformity in administration: The autonomy granted the units create imbalances and differences in the area of administration of a federal state ..
- Neglect of the minorities: There is the possibility of the minorities being neglected in the areas of appointment to key positions in government, provisions of amenities etc.
- The problem of federal character: Appointments into federal establishments are not always based on merit. The various ethnic nationalities or groups must be considered in the allocation of appointments. This remains a problem in the Nigerian federalism.
- Ethnic disharmony: There could be distrust among the various ethnic groups in a federal state. This can affect the unity and the very corporate existence of the country.
- Threat of secession: This threat by some units as a factor of divided allegiance or loyalty of citizens poses a great problem to a federal system.
- Unhealthy rivalry: This is very common among the federating units.
- Boundary disputes: This is a common feature in a federal system most especially as it affects the component units.
- Fear of domination: The minorities are always afraid that the majority would dominate them to the extent that issues of national importance are affected.
Federal character is nothing but an official term for ethnic, religious and regional balance in resource allocation, ministerial and other key appointments in government and enrolment of students in schools.
It can also be referred to as the distribution of amenities and resources/appointments, based on quota system to be applied in the three tiers of government in the country e.g. political appointments, admission into tertiary institutions, location of iron/steel mills and location of unity secondary schools, etc.
Factors that Determine the Introduction of Federal Character
- Diversity in religion, ethnic size, ethnic values, education, economic resources etc.
- Uneven development: there is disparity in educational, political and economic development in Nigeria.
- There is discrimination on the basis of education, religion, ethnic affinity, etc.
- Fear of domination of the minority groups by the majority.
- Inability of political leaders to translate unity in diversity into reality.
- Appointment to promote unity, ensure stability and sense of belonging.
- Unhealthy struggle for a lion’s share of the national cake.