Author(s) :

Onyekwere, Cecil Chinedum, Alexander, A.A., Saheed, Z, Duru, Mike, Yakubu, Alfa, Ikubor, Jude.

Volume/Issue :

Abstract :

The economic development of local governments in Nigeria faces several challenges, including revenue allocation, lack of autonomy, and constant interference by the State Government. There is a widespread belief that Fiscal Decentralization (FD) is the remedy to these challenges, and this study used panel data from 2006 to 2021 to examine the effect of fiscal decentralization on economic growth in the 23 local government areas of Kaduna state. Fiscal Decentralization between Kaduna state and each local government was measured using four indicators, namely, revenue indicator (RI), expenditure indicator (EI), autonomy indicator (AI) and capital indicator (CI). Except for the expenditure indicator, the study's findings indicate that all measures of fiscal decentralization are positively and significantly correlated with economic growth. Further findings revealed that a possible explanation for why the expenditure indicator is negatively related to economic growth is that Local Governments are often used as administrative spending units, where spending decisions reflect the state government’s policies regardless of the immediate needs of the local government area in question. Based on the findings of this research, it is recommended that Kaduna state government should promote true fiscal decentralization by assigning more fiscal responsibilities to Local governments in order to bring about faster economic growth in all regions of the state.

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