Fiscal Federalism: Vertical Fiscal Imabalance Response to a Redefined own Revenue of the Sub-National Governments in Nigeria

Nwaogwugwu, I.C (2017)

Staff Publications

Article

This work is all attempt to redefine the concept of 'Own Revenue' of the sub-national governments which provides an alternative to the traditional definition. It also makes an attempt to measure Vertical Fiscal Imbalance (VFI) in Nigeria under these two concepts. One, the Traditional Definition of 'Own' (Independent) Revenue of the subnational governments and their 'Own' Expenditure when the problem is viewed from the perspective of the sub-national governments. If the issue is examined from the perspective of the federal government, then the focus will be on the Total Federally collected Revenue in relation to the 'Own' Expenditure of the Federal Government. Two, "Own Revenue" of the governments as the revenue generated by the SNG from heir constitutionally allotted resource bases in addition to the statutory transfers from the federal government. This study has shown that Vertical Fiscal Imbalances exists in Nigeria under the traditional and redefined Own Revenue of the Sub- National Governments although it is less severe in the case of the latter. Hence, cooperative federalism is recommended to enable the governments discharge their constitutional responsibilities.