Fiscal Federalism in Nigeria: A Contemporary Review

Fiscal issues are the most severe problem facing public institutions in Nigeria, particularly the local government. This problem had been provoked by a number of factors including "over dependence" on statutory allocations from both the state & federal governments, deliberate tax evasion by local citizenry, creation of nonviable local government areas, differences in the status of local governments in terms of rurality & urbanism, & "inadequate revenue & restricted fiscal jurisdiction." These factors & their attendant problems, implications, & effects are examined within the context of fiscal federalism in line with the provision of the 1999 Federal Republic of Nigeria's constitution. Further, we argue that for a financially healthy local government to exist, there needs to be an allocation of responsibilities & functions in accordance with their taxing power & ability to internally generate funds. The constitutional provision that recognizes local governments' power in this regard must give them full freedom to operate, & this must be well guaranteed & adequately protected. These, coupled with the need to review the revenue sharing formula, granting of fiscal autonomy, fiscal discipline, as well as making local government responsive, responsible, & accountable to the people will, in our view, set our local government free from the manacle of fiscal stress promoted & strengthened by the 1999 constitution of the Federal Republic of Nigeria. 18 Tables, 1 Figure, 34 References. Adapted from the source document.