The research is aimed at examining the political and historical antecedent of revenue allocation and its effects on
socio-economic development of Emohua Local Government Area. The paper explores the issues of fiscal
federalism and its challenges arising from lack of equity in the allocation of revenue from the federation account.
This is because Nigeria as a nation has a problem of acceptable revenue sharing formula or principle. Between
1946 and 1991, different commissions were constituted to look into the issues of revenue sharing formula, yet
none of their reports has been generally accepted. The oil boom of the early 1980’s made possible economic
growth, which led to the expansion of government bureaucracy and influence. As a direct consequence of this,
there was a shift in Nigeria’s federal system from a federation of five units consisting of four regions and a
centre in 1962 to a much more federation of thirty six states and the Federal Capital Territory, and seven hundred
and seventy four local governments today. As a result, revenue allocation has become a crucial and controversial
issue in Nigeria. The study proves that the inadequate revenue allocation hampers Emohua Local Government
development activities. We therefore recommend that such local government like Emohua Local Government
Area where the revenue is being generated should be allocated more revenue to enable her grapple with the
desired development responsibilities and the challenges arising from the revenue generating process.