Analysis of the Impact of Fiscal Federalism on the Third Tier Governance in Ebonyi State, Nigeria

Abstract

The issue of revenue rights has become the most contentious issue in the relationship between local governments as the third tier of government, and the other two tiers-the federal and the states-within the parameter of Nigeria federalism. This study, therefore, analyzes the impact of fiscal federalism on the third tier of government in Ebonyi State from 1999 to 2010. The study employed a descriptive-analytical method. Thus, data collected through secondary sources were descriptively analyzed. The finding reveals that the statutory revenue allocations meant for the third tier of government during the period became a purview of the Ebonyi State Government following the loopholes and ambiguities created by the 1999 Constitution. The State and the Local Government Councils related to each other in a manner that led to unholy manipulations and diversion of local government funds to other uses. The implication is non-performance of the local government councils as they failed to achieve the principal objective of their creation which is ensuring rapid economic and rural development of their communities. It is recommended among other things, that relevant provision of the 1999 Constitution be re-visited by abolishing the State Joint Local Government Account and funding local governments directly from a Consolidated Account. The study adopts the principal/agent theoretical model as a framework of analysis derived from the writing of Bellow-Imam (1996).