States’ Dependence Level on Federal Allocation and Internally Generated Revenue in Nigeria: An Assessment

This study examined states’ dependence level on federal allocation and internally generated revenue in Nigeria. The study used secondary data drawn from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), and National Extractive Industries Transparency Initiative (NEITI). The study used comparative analytics in its analysis. It was observed that most states in Nigeria generate about 15% internally and depend on Federal Allocation for about 85% every month for socio-economic fiscal obligations. For states and local governments in Nigeria to reduce their dependence on Federal Allocation and balance their financial sources, they should discover their statutory internally generated revenue sources and devise appropriate means and mechanisms to make them functional. This will make the revenue sources more viable as they generate more revenue. Without viable and functional sources of internally generated revenues, any prolonged drop in global oil prices will drag Nigeria’s economy to the trough, recovery of which may take a long time.