Abstract
Based on the former 21-state structure, the paper examines fiscal relations between the federal and state governments in Nigeria. The paper argues that fiscal performance in a federal structure must include an investigation into the nature of the fiscal relationships between the different tiers of government. The study reveals that states were dependent on the federal government for revenue before the economic crisis in 1979–1980 and evidence of a degree of centralization. The adjustment period featured fiscal decentralization. The findings of this study indicate that the allocation formulae were not strictly adhered to by the federal government. States, it is argued, need some financial autonomy if they are to contribute to national development.
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