IDEAS home Printed from https://ideas.repec.org/a/kap/itaxpf/v32y2025i3d10.1007_s10797-024-09851-y.html
   My bibliography  Save this article

Revenue structure and budgetary choice in Nigeria: implication for fiscal sustainability of the states government

Author

Listed:
  • Ikechukwu Andrew Mobosi

    (University of Nigeria Nsukka)

  • Patrick Onochie Okonta

    (University of Nigeria Nsukka)

Abstract

This paper examines the effects of revenue structure and budgetary choice on the fiscal sustainability index of the 36 state governments in Nigeria for the years 2012–2020, using a two-step Generalized Methods of Moments (GMM) estimation approach. Preliminary results suggest that out of 36 states, Lagos and Rivers States are Nigeria’s most financially viable states within the sample period. Edo, Kano, Delta, and Ogun states are the third, fourth, fifth, and sixth most economically viable states, with Osun occupying the bottom (36th) position in Nigeria. The paper further finds that the fiscal viability index has a positive spillover effect that runs from the past to the present, suggesting that states with stable fiscal policy are likely to sustain their fiscal policy structure. Similarly, the budgetary choice variable has a positive but statistically insignificant effect on the fiscal sustainability index. Revenue Structure has a negative and statistically significant impact on the fiscal sustainability index. Further research reveals a bidirectional causal relationship between the state government’s budgetary decisions (the Annual Operating Budget, or AOB) and the fiscal sustainability index (FSI). Based on the above results, the paper recommends fiscal policy reform that enables diversification of revenue sources and stringent management of IGR by the state government, with high transparency.

Suggested Citation

  • Ikechukwu Andrew Mobosi & Patrick Onochie Okonta, 2025. "Revenue structure and budgetary choice in Nigeria: implication for fiscal sustainability of the states government," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 32(3), pages 828-850, June.
    • Handle: RePEc:kap:itaxpf:v:32:y:2025:i:3:d:10.1007_s10797-024-09851-y
    DOI: 10.1007/s10797-024-09851-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10797-024-09851-y
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10797-024-09851-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Fiscal policy; Sustainability; Budgetary choice; Revenue structure; Nigeria;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:itaxpf:v:32:y:2025:i:3:d:10.1007_s10797-024-09851-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.