IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 9 NO. 9 2024
DOI: 10.56201/ijefm.v9.no9.2024.pg304.319

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The Impact of Indirect Allocation of Local Government Fund to the Nigerian Economy and Welfare of The Citizen

Abubakar Bala Danlami, Alhaji Kawugana PhD

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Abstract

The indirect allocation of local government funds in Nigeria has been a subject of debate due to its impact on economic development and the welfare of citizens. This study examines how the current system of fund allocation affects local governance, service delivery, and economic growth. The research explores how the indirect disbursement of funds—where state governments act as intermediaries—impacts local government autonomy, infrastructure development, and the provision of essential services such as education, healthcare, and rural development. Findings indicate that indirect fund allocation often leads to delays, mismanagement, and reduced financial autonomy for local governments, limiting their ability to effectively implement development projects. The study also highlights that inefficiencies in fund distribution contribute to poor economic growth, inadequate social services, and increased poverty levels at the grassroots level. Furthermore, cases of political interference and corruption within the state- controlled allocation system hinder the efficient utilization of local government funds. The study recommends the direct allocation of funds to local governments, enhanced financial transparency measures, and stronger legal frameworks to ensure that resources are utilized effectively for community development. Implementing these recommendations could improve economic stability, enhance public service delivery, and promote better living standards for Nigerian citizens.

delays, mismanagement, and, reduced financial autonomy poor economic growth, inadequate social services, and increased poverty levels political interference and corruption direct allocation of funds

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