The Impact of Indirect Allocation of Local Government Fund to the Nigerian Economy and Welfare of The Citizen

Abubakar Bala Danlami; Alhaji Kawugana PhD

doi:10.56201/ijefm.v9.no9.2024.pg304.319

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The Impact of Indirect Allocation of Local Government Fund to the Nigerian Economy and Welfare of The Citizen

Abubakar Bala Danlami, Alhaji Kawugana PhD

Abstract

The indirect allocation of local government funds in Nigeria has been a subject of debate due to its impact on economic development and the welfare of citizens. This study examines how the current system of fund allocation affects local governance, service delivery, and economic growth. The research explores how the indirect disbursement of funds—where state governments act as intermediaries—impacts local government autonomy, infrastructure development, and the provision of essential services such as education, healthcare, and rural development. Findings indicate that indirect fund allocation often leads to delays, mismanagement, and reduced financial autonomy for local governments, limiting their ability to effectively implement development projects. The study also highlights that inefficiencies in fund distribution contribute to poor economic growth, inadequate social services, and increased poverty levels at the grassroots level. Furthermore, cases of political interference and corruption within the state- controlled allocation system hinder the efficient utilization of local government funds. The study recommends the direct allocation of funds to local governments, enhanced financial transparency measures, and stronger legal frameworks to ensure that resources are utilized effectively for community development. Implementing these recommendations could improve economic stability, enhance public service delivery, and promote better living standards for Nigerian citizens.

Keywords

delaysmismanagementandreduced financial autonomy poor economic growthinadequate social servicesand increased poverty levels political interference and corruption direct allocation of funds

References

• Akpan, U. F., & Eyo, E. I. (2020). Local Government Finance and Economic Development in Nigeria: Issues and Challenges. Journal of Public Administration, 12(4), 45-62. • Adeyemi, T. O. (2020). Challenges of Local Government Funding in Nigeria: The Role of Fiscal Federalism. Paper presented at the Annual Conference on Public Administration, University of Lagos, Nigeria. • Arowolo, D. (2019). Fiscal Federalism and Local Government Autonomy in Nigeria: Challenges and Prospects. African Journal of Political Science, 17(2), 89-103. • Central Bank of Nigeria (CBN). (2022). Annual Economic Report on Public Sector Financial Management in Nigeria. Abuja, Nigeria: CBN Press. • Constitution of the Federal Republic of Nigeria (1999, as amended). • Ekpo, A. H. (2021). Decentralization and Local Government Efficiency: A Case Study of Nigeria. African Economic Review, 15(3), 112-130. • Olasupo, F. A., & Oyeleke, S. A. (2018). Transparency and Accountability in Local Government Fund Management in Nigeria. International Journal of Governance and Policy Analysis, 10(1), 78-94. • National Bureau of Statistics (NBS). (2021). Local Government Performance and Economic Growth in Nigeria: A Statistical Review. Abuja, Nigeria: NBS Press. • Nigerian Financial Intelligence Unit (NFIU). (2019). Guidelines on Local Government Fund Allocation and Financial Autonomy. Abuja, Nigeria: NFIU Press. • Yusuf, B. K. (2019). Corruption in Local Government Finance: Implications for Economic Development. Working Paper No. 21-05, Nigerian Institute of Economic Research. • Nigerian Financial Intelligence Unit (NFIU) Act, 2018. • Local Government Reform Act (2003). • World Bank. (2021). Decentralization and Local Government Finance in Africa: A Case Study of Nigeria. Retrieved from www.worldbank.org • Transparency International. (2022). Corruption Perception Index: Nigeria’s Ranking in Public Financial Management. Retrieved from www.transparency.org

The Impact of Indirect Allocation of Local Government Fund to the Nigerian Economy and Welfare of The Citizen

Abstract

Keywords

References

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