FISCAL FEDERALISM AND REVENUE ALLOCATION IN NIGERIA: IMPLICATIONS FOR LOCAL GOVERNMENT AUTONOMY IN OREDO LOCAL GOVERNMENT AREA, EDO STATE
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Abstract
his study examines the impact of fiscal federalism and revenue allocation on local government autonomy, using Oredo Local Government Area of Edo State as a case study. Despite the constitutional recognition of three tiers of government, Nigeria's centralized fiscal framework often undermines the financial and administrative independence of local councils. The study specifically explored how the concentration of revenue powers and the operation of the State Local Government Joint Account (JAC) affect the developmental capacity of Oredo LGA. Adopting a descriptive research design, the study utilized a sample of 150 staff members from the Oredo Local Government Council, selected through stratified random sampling. Data collected via structured questionnaires were analyzed using mean scores, standard deviation, and Chi-Square statistical tests. The findings reveal that Nigeria's current fiscal federalism significantly limits the financial autonomy of Oredo LGA, as heavy reliance on statutory allocations and state-level interference through the JAC system disrupts budget implementation and service delivery. Furthermore, the council faces internal challenges in revenue generation, including technological gaps and low tax compliance. The study concludes that without genuine fiscal independence, local governments remain administrative appendages of the state rather than effective agents of grassroots development. Consequently, it is recommended that the federal government implement direct statutory allocations to local councils to bypass the bottlenecks of the Joint Account. Additionally, the study suggests strengthening legal safeguards for local autonomy and investing in modern technology to enhance internally generated revenue, thereby ensuring sustainable development and improved public service delivery at the grassroots level.
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