State–Local Fiscal Relations and the Erosion of Local Government Autonomy in Nigeria: Evidence from Bayelsa State, 2020–2025

Efebo Belinda Godswill Eferebo

doi:10.56201/jpslr.vol.12.no8.2026.pg61.75

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State–Local Fiscal Relations and the Erosion of Local Government Autonomy in Nigeria: Evidence from Bayelsa State, 2020–2025

Efebo Belinda Godswill Eferebo

Abstract

This study examined how state–local fiscal relations affected local government autonomy in Nigeria, using Bayelsa State as a case study between 2020 and 2025. The study was motivated by the persistent contradiction between the constitutional recognition of local government councils and the institutional arrangements through which their finances were historically mediated by state governments. It specifically examined the extent to which state–local fiscal relations constrained the financial autonomy of local government councils and assessed how state involvement in local government financial administration affected fiscal accountability and effective autonomy. The study was anchored on Fiscal Federalism Theory, principally associated with Musgrave (1959) and developed by Oates (1972, 1999). A mixed-methods documentary case-study design was adopted. Quantitative evidence was derived from verified Federation Account Allocation Committee and Bayelsa fiscal documents, while qualitative evidence was obtained from constitutional and statutory provisions, the 2024 Supreme Court judgment on local government financial autonomy, official Bayelsa government documents and recent peer- reviewed studies. The findings showed that Nigeria's vertical fiscal imbalance and the historical State Joint Local Government Account created structural dependence of local governments on higher tiers of government. In Bayelsa, the state Ministry of Finance continued to exercise a formal supervisory role over local government financial affairs, even as post-2024 reforms strengthened direct local fiscal control. The study concluded that the Supreme Court judgment represented a significant institutional correction but could not by itself guarantee effective autonomy. It recommended direct and transparent transfers, stronger local revenue mobilisation, independent fiscal accountability and rule-based rather than discretionary state support.

References

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State–Local Fiscal Relations and the Erosion of Local Government Autonomy in Nigeria: Evidence from Bayelsa State, 2020–2025

Abstract

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