Page 24 - CITN 2017 Journal

FISCAL BEHAVIOUR OF

SUBNATIONAL GOVERNMENT:

EVIDENCE FROM OSOGBO LOCAL

GOVERNMENT, OSUN STATE,

NIGERIA

By
Abiodun Abiodun ADEGBOYE
Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria
walelife@yahoo.co.uk ; +234 (0)7055 0355 72
and
Elizabeth Kehinde ADESINA
National Youth Service Corps, Akwa Ibom State Directorate, Nigeria
kehindeelizabeth90@gmail.com ; +234 (0) 7033 9556 28

ABSTRACT

The Nigerian constitution recognizes the local government areas (LGAs) as the third tier of
government, and sets aside for it, the responsibility of effective public service delivery at
the grassroots. In recent times, debates have ensued on the effectiveness of the 774 LGAs
in Nigeria. While a polar group calls for scrapping of the LGAs because of their poor or
non-performance due to, among others, corruption; some others have advocated for a
reasonable degree of autonomy to guarantee effectiveness and accountability in the
discharge of their duty. In view of this, the study examined the fiscal behaviour of Osogbo
LG area of Osun State with a view to investigating whether it enhances welfare or not.
Also, the paper studied factors that affect revenue drive of LGAs, and identified the main
sources of revenue and its applications in the LG area. Both primary and secondary data
from Osogbo LG were employed in the study which utilized descriptive and inferential
statistical techniques. The results showed that the effect of fiscal actions of is most
significant in education sub-sector, followed by health and sanitation sub-sectors. The
results also revealed that low internal revenue generation; political interference by Osun
State Government, and inadequate capacity for tax collection are the primary factors
affecting the fiscal activities of the LG area. Lastly, the study finds that increased spending
on essential, welfare-enhancing services may improve living standard of inhabitants in
Osogbo, Osun State.

Keywords: Sub-national, Local government, Fiscal actions, Osogbo, Nigeria.
JEL CLASSIFICATION: H71, H72, H39

17