Effective Governance and Economic Development Issues in Nigeria’s Fiscal Federalism

The study examined Effective Governance and Economic Development issues in Nigeria’s Fiscal Federalism. This is on the premise that the issue of fiscal federalism has been contentious since pre-colonial period to the present day in all its ramifications; from jurisdiction and derivation, to the allocation to federating units. Unfortunately, these have been without recourse to the issues of effective governance and economic development of the country that should be at the core of the matter. The study adopted an ex-post facto research design and obtained data from secondary sources namely Central Bank of Nigeria, National Bureau of Statistics and World Bank publications. It employed the Econometric Structural Vector Autoregressive estimation technique for analysis. Findings of the study revealed that revenue allocation and expenditure by the federating units led to economic growth, but this did not transmit to economic development, the alleviation of poverty and the control of unemployment due to ineffective governance. So, the study makes the following recommendations; Poor leadership in the country can be strengthened by proper enforcement of rules by institutions and agencies of state in the country. Revenue and expenditure allocation to the tiers of government should be transparently accounted for. Also, efforts at increasing social investments should be enhanced and financial inclusion should be prioritized.