CHAPTER ONE Introduction
1.1 Background of the Study Finance has emerged as the most critical policy issue in intergovernmental relations in every federal administrative system since the Second World War. This is because in most federal countries of the world, intergovernmental relations have been contentious. The revenue allocations have equally been contentious, distribution of resources among the various levels of government has never been easy and smooth, hence the contention, and Nigeria is no exception (Okeke 2004). According to Danjuma (1994), the existence of federal system with its accompanying political units necessitates a revenue sharing arrangement to enable its unit to carry out its constitutionally assigned responsibilities’. However, in a federation, the logic underlining the allocation of powers (revenue sources’) does not always tally with the logic that underline the assignment of constitutional responsibilities, there is always a gap between the revenue obligation and revenue sources of levels of government. President Babangida (in Oyelakin 1994) pronounced the autonomy of local government vis-à -vis the state government in the following words: Local government councils will be accorded full administrative autonomy and allowed to operate in accordance with the spirit and letter of the constitution. The council will not be subject to national control and direction by the state or federal government in the discharge of their constitutional responsibility of providing the basic needs, including primary education for their communities. Local government council will also enjoy their full financial autonomy. In this regard, all forms of control, overt or covert, which have hitherto been exercised by the state government on the financial dispensation of local government, must cease forthwith (Oyelakin 1994:160).
This was a climax to the series of concerted efforts which the Babangida administration and other successive regimes had made to revive, revitalize, and revamp the local government system in Nigeria, enhance its freedom of action and re-mould it into an effective springboard for national development. However, the evolution of intergovernmental relations in Nigeria has remained far from desirable. Therefore, there is no doubt that local governments over the years suffered from the continuous whittling down of their powers. The situation has degenerated from day to day to the extent that apart from the apparent dearth of democratic principles in most of the local governments today, many in addition lost memory of the financial autonomy, which is supposed to enable them function independently (Chubah 2007). The confusing state of inter-governmental relations as it affects the local governments has only narrowed them to a receiving end where they have become mere instruments of manipulation in the hands of both the states and federal government even when the federal government meant well in her actions as regards the fiscal revival of the local governments, such effort has continued to be intercepted by the state governments. A situation that subordinated the local government to the supervision and dictates of the state governments negates its autonomy. Again, looking at the financial base of the local government, one discovers that most of the funds available to these local governments are from the state and federal governments, situation which negates all tendency of autonomy on the part of local government. Igbo-Etiti local government Area as one of the seventeen (17) local governments councils in Enugu state is not left out in the struggle for local government autonomy in Nigeria. Nevertheless, recent vote against financial autonomy of local government by the National Assembly further jeopardized the reasons for the existence of local government in the country. Hence, this study focuses on inter-governmental financial relations and local government autonomy in Nigeria, with a particular reference to Igbo- Etiti Local Government Area