STATE-LOCAL GOVERNMENT FISCAL RELATIONS IN NIGERIA: IMPLICATIONS FOR RURAL DEVELOPMENT

Abstract

This paper examines the complex dynamics of state-local government fiscal relations in Nigeria and assesses their direct implications for rural development. Relying on qualitative secondary data collection methods, the paper utilizes David Easton's systems theory as its foundational framework of analysis to evaluate these institutional interactions. The findings reveal widespread intergovernmental conflicts between local governments and state authorities, specifically involving the Office of the Governor alongside various state ministries, commissions, and regulatory agencies. A critical issue identified is the systematic diversion and frequent mismanagement of statutory monthly allocations by state governors, a predatory practice facilitated through the mechanism of the State Joint Local Government Account (SJLGA). Consequently, excessive financial encroachment and arbitrary deductions by state governments leave many local councils in severe financial crises. This severe structural deficit directly impedes their administrative capacity to deliver essential public services, maintain basic infrastructure, or effectively mobilize the human and material resources required to foster meaningful rural development. Ultimately, the paper concludes that the current lopsided structure of state-local fiscal relations has significantly undermined development initiatives within rural communities, widening the rural-urban development gap. To address these systemic challenges and rescue the third tier from administrative paralysis, the study recommends the immediate constitutional abolition of the SJLGA. Furthermore, it advocates for the enforcement of the landmark 2024 Supreme Court ruling by granting full financial and political autonomy to local governments across Nigeria, ensuring statutory allocations are remitted directly to the 774 councils.