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Fiscal Federalism and Sub-National Development in Nigeria: Comparative Analysis of Revenue Allocation and Expenditure Efficiency

Isibor Areghan PhD, Jude Idemudia Okoh PhD, Omoniyi Joseph Oluwadamilare, Grace Omoniyi Oluwadamilare, Kafidiya Olabisi, Ogunfeyimi Ruth Inumidun

Abstract

This work explores the complex interplay between fiscal federalism and sub-national development in Nigeria. It critically examines the historical evolution of Nigeria's fiscal federalism, the principles and challenges of its vertical and horizontal revenue allocation formulas, and their profound implications for the developmental capacities and expenditure efficiency of state and local governments. Drawing on data from the National Bureau of Statistics , Revenue Mobilization Allocation and Fiscal Commission , and various research reports, the study highlights the pervasive over-reliance of sub-national entities on federal allocations, particularly oil revenues, and the resulting fiscal imbalances. It discusses how this dependence, coupled with P-ISSN 2695-186X issues of accountability and expenditure inefficiency, has led to uneven development across states in Nigeria and hampered effective service delivery at the grassroots. This study recommends that, reforming Nigeria's fiscal federalism to foster greater fiscal autonomy, will require, enhancement of revenue mobilization, improvement of expenditure efficiency, and promotion of equitable and sustainable development across all tiers of government.

Keywords

Expenditure EfficiencyDerivation Principle. Fiscal FederalismRevenue AllocationSub-National Development

References

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