The Impact Of Fiscal Decentralization On Economic Growth Of Bayelsa And Delta State In South- South Geopolitical Zone In Nigeria
Michael Ayibanua Amaegberi Ph.D
Department of Economics, Niger Delta University, Wilberforce Island, Bayelsa State. Nigeria
Okon Asidok Nsikhe
Department of Economics, University of Calabar-Calabar
Keywords: Fiscal Decentralization, Economic growth, Sure Model, South-South states
Abstract
This paper analysed the impact of fiscal decentralization on economic growth of Bayelsa state and Delta state in south- south geopolitical zone in Nigeria using secondary data from joint task board, Revenue Allocation board and national bureau of statistics (NBS) from 2005-2016. The Study adopts SURE model method of Estimation to analyse the results. Finding from the study revealed that Federal Allocation, Internally generated Revenue, Fiscal Autonomy and Population decentralization in Nigeria influences economic growth in Bayelsa and Delta State. The theoretical expectation that decentralization would improve the economic performance of the selected states in south-south through proximity and regional competition seem not to be found in the study. The flow of fiscal decentralization in Bayelsa and Delta States in Nigeria seem to follow inefficient application of resources by the political class with increased cost of governance rather than ensuring cost effectiveness in the provision of public services. Therefore, findings from the study revealed that population growth and internally generated revenue are the major determinants of Economic growth in Bayelsa while Fiscal Autonomy and Federal allocation contributes infinitesimal to economic growth but not the major determinants of Economic growth in Bayelsa state. Also findings from the study revealed that Internally generated revenue and Federal allocation are the major determinants of Economic growth in Delta State while Fiscal Autonomy and population growth contributes infinitesimal but not the major determinant of Economic growth in Delta State. Therefore the study suggests key Economic reforms to improve transparency and accountability in all sectors of the economic as well as good governance in order to make fiscal decentralization a catalyst for economic growth in Bayelsa and Delta states of Nigeria. The study also recommends that Policy measures must be put in place to grow the economy using monetary and fiscal policy mix reaction to ensure macroeconomic stability and realisation of macroeconomic goals of economic growth, price stability, low unemployment and balance of payment of states in Nigeria