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An Overview of Intergovernmental Fiscal Relations and Subnational Public Finance in Nigeria

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Abstract

Fiscal decentralization reform, the reform of fiscal relations between different levels of government, is an important fiscal policy issue in many African countries. While for many African nations the decentralized delivery of government goods and services is a relatively new concept, the issue of intergovernmental fiscal relations has been a constant and important fiscal policy consideration in Nigeria since the country's independence in 1960. Despite Nigeria's long history with a federal government structure, until recently it was hard to truly consider Nigeria as an effectively decentralized country. For much of the country's history, successive military regimes dismissed elected officials and legislative bodies at all levels of government and replaced them with military appointees; since under military rule subnational governments in Nigeria were accountable to the country's military authorities rather than to state or local electorates, we cannot properly speak of political and fiscal decentralization during this period. Nonetheless, in many respects Nigeria's basic decentralized federal administrative structure was maintained by successive military regimes. Under military rule, state and local governments continued to operate as distinct government units, provide important government services, collecting own source revenues and receiving intergovernmental transfers, albeit at the direction of military governors and appointed local executives rather than at the discretion of the local electorate. However, with the return of civilian rule to Nigeria in 1999, which entailed the adoption of a new constitution and the election of government officials and legislative assemblies at all levels of government, Nigeria instantaneously became one of the most decentralized countries in Africa.To this effect, this paper presents a broad overview of intergovernmental fiscal relations in Nigeria. This paper follows the main conceptual building blocks or pillars of fiscal decentralization and subnational publc finance. After a brief overview of Nigeria's federal system, Section 2 discusses the assignment of functional responsibilities in Nigeria's federal system. Section 3 presents an analysis of revenue assignments, considering what revenue sources are available to each level of government. Section 4 looks at the design and implementation of Nigeria's system of intergovernmental transfers. Section 5 considers subnational fiscal management issues, including the importance of capital "development" budgets in the Nigerian budget process. Finally, Section 6 considers the role and status of local governments and state-local government relations.

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  • James Alm & Jameson Boex, 2002. "An Overview of Intergovernmental Fiscal Relations and Subnational Public Finance in Nigeria," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0201, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper0201
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    1. Jorge Martinez-Vazquez & LF Jameson Boex, 1997. "An Analysis of Alternative Measures of Fiscal Capacity for Regions of the Russian Federation," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9704, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Jorge Martinez-Vazquez & LF Jameson Boex, 1997. "Fiscal Capacity: An Overview of Concepts and Measurements Issues and Their Applicability in the Russian Federation," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9703, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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    Cited by:

    1. Jameson Boex, 2003. "The incidence of local government allocations in Tanzania," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0311, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Jameson Boex & Jorge Martinez-Vazquez, 2005. "The Determinants of the Incidence of Intergovernmental Grants: A Survey of the International Experience (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0509, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Maria El Khdari, 2016. "D├ęterminants des transferts intergouvernementaux : le cas des communes Marocaines," Working Papers halshs-01232558, HAL.
    4. Maria EL KHDARI, 2015. "D├ęterminants des transferts intergouvernementaux : le cas des communes Marocaines," Working Papers 201531, CERDI.
    5. Manof Shresta, 2002. "An Overview of Intergovernmental Fiscal Relations in Nepal," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0205, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. Anwar Shah, 2008. "Macro Federalism and Local Finance," World Bank Publications, The World Bank, number 6453.

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    Keywords

    Nigeria; public finance; intergovernmental; fiscal decentralization;

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