Abstract
This study examined the relationship between fiscal federalism, governance and local government finances in Nigeria, focusing on the administration of local governments and other subsidiary issues on revenue generation in the country. It analysed the legal, institutional and procedural mechanisms for administration, as well as assessed the effect of intergovernmental relations on local government under federal system of governance in the country. This is with a view to providing information on revenue allocation and intergovernmental relations as important elements in understanding and addressing the fiscal federalism on local council finance in Nigeria in the context of their divergent governance experiences since the fourth republic.The paper discovered that beyond the function of revenue generation or allocation, fiscal relations influenced governance positively by creating the expediency of transparency and responsiveness in government as well as a corresponding three levels of government has responsibilities and roles to play in the lives of citizenry in order to bring governance to the grassroots. However, the work found evidences of lack of fiscal autonomy and independent of local government as well as delay in local government election has resulted to poor performance of local administration in Nigeria at large. The results also revealed that a very important factor affecting the local government administration in Nigeria still remains the overbearing contribution of about 93% oil revenue to the national income; a situation that, both state and local governments in Nigeria cannot generate up to twenty five percent (25%) of their expenditure and poor tax culture amongst the citizenry. The study concluded among others that effective human resources, improved strategy, and enhanced capacity building, are critical to improved revenue generation and allocation, which in turn could go a long way to alleviating good governance in Nigeria.
Highlights
There is no gain saying that federalism has been a commonly used term in serious theological works since the 17th century
This study examined the relationship between fiscal federalism, governance and local government finances in Nigeria, focusing on the administration of local governments and other subsidiary issues on revenue generation in the country
The results revealed that a very important factor affecting the local government administration in Nigeria still remains the overbearing contribution of about 93% oil revenue to the national income; a situation that, both state and local governments in Nigeria cannot generate up to twenty five percent (25%) of their expenditure and poor tax culture amongst the citizenry
Summary
There is no gain saying that federalism has been a commonly used term in serious theological works since the 17th century (prior to the political use). Olugbemi (1980) as quoted in Adesopo (2007) was emphatic in saying that IGR is not all-cooperative venture among interacting units, it manifests intra-systemic conflicts as typified by the constant wrangling over relative share of the tax field, governmental powers and functions, the quantity of allocated funds as well as the unending search for an acceptable revenue-sharing formula among (Nigeria’s) governments. He quickly added that, despite these, we should not dismiss the network of cooperative efforts and consultations which feature continually in inter-jurisdictional transactions
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