Financial Autonomy and the Performance of Local Governments in Nigeria

Abstract

Finances play significant role in the life of any organization, being it public or private. Therefore, for local government to achieve its goal of service delivery to the people at the local level, freedom over its finances (financial autonomy) is very important. This financial autonomy defines freedom of local authorities over their income (revenue) and expenditure, hence entrenching local decision making and accountability to the local people by their leaders. However, the review carried out in this work indicated that Nigerian Local Governments are battling with the issue of financial autonomy, the issue is even worse because of the presence of State-Local Government Joint Account, which has pave way for State Governors to have unfettered access to Local government funds and starve Local Governments of their finances. In order to enhance the performance of Local governments, the study suggested for the scrapping of State-Local Government Joint Account, establishment of internal control mechanism for Local Governments in order to monitor and control legitimate financial operations, as well as exploration of the internal revenue base of Local Governments among others.