Abstract
The most severe problem facing public institutions in Nigeria is the fiscal one, particularly in local government. This problem has been provoked by a number of factors, including 'over dependence' on statutory allocations from both the state & federal governments, deliberate tax evasion by the local citizenry, creation of non-viable local government areas, differences in the status of local governments in terms of the rural-urban dimension, & inadequate revenue & restricted fiscal jurisdiction. This article examines these factors & their attendant problems, implications & effects within the context of the fiscal federalism established by the 1999 constitution of the Federal Republic of Nigeria. For financially healthy local governments to exist, responsibilities & functions must be allocated in accordance with their taxing power & ability to generate funds internally. The constitutional provision that recognizes local governments' power in this regard must give them full freedom to operate & this must be well guaranteed & adequately protected. These measures, coupled with a review of the revenue-sharing formula, the granting of fiscal autonomy & fiscal discipline as well as making local government responsive, responsible & accountable to the people will set local governments free from the fiscal stress promoted & strengthened by the 1999 constitution. 9 Tables, 1 Figure. [Copyright 2002 Sage Publications Ltd.]