2003年-世界发展银行全球_Nigeria___State_Finances_Study_118页_10mb

Nigeria States Finances Study Summary

Core Content

This report, titled Nigeria States Finances Study, conducted by the World Bank in April 2003, provides an in-depth analysis of fiscal federalism arrangements and financial management practices in Nigerian states. It aims to improve understanding of state finances and identify policy and institutional reforms to enhance fiscal discipline and efficiency.

Main Objectives

• To better understand the public finance picture in Nigerian states.
• To identify policy and institutional reforms at the state and national levels that could help states manage public finances more effectively.
• To contribute to the dialogue on fiscal discipline and macroeconomic stability in the context of fiscal federalism.

Key Findings

Fiscal Federalism Arrangements

• Nigeria's federation consists of three tiers: federal government, 36 state governments, and 774 local governments.
• The 1999 constitution introduced a federalist framework, but the country has historically functioned as a unitary state under military rule.
• Revenue and expenditure responsibilities are not clearly defined, leading to overlaps and inefficiencies in public service delivery.
• The Federation Account is the central pool for revenues, shared among federal, state, and local governments according to a formula (Federal: 54.7%, States: 24.7%, Local Governments: 20.6%).

Revenue and Expenditure Trends

• Between 1997 and 2001, state revenues grew about threefold, driven by oil boom, depreciation of the Naira, and increased statutory allocations from the Federation Account.
• Revenue per capita increased from N739 ($9) in 1997 to N1213 ($12) in 2000, but still remains low compared to some states.
• Expenditure increased dramatically, with some states seeing up to ninefold growth in spending.
• Personnel costs accounted for an average of 47.2% of recurrent spending and 34.2% of total expenditures in 2000.
• States' ability to fund basic expenditure from their own resources has declined, with only 8.5% and 9% of personnel costs covered by internally generated revenues in Ebonyi and Bauchi states respectively.

Fiscal Challenges

• States face growing vulnerability to oil price shocks due to their heavy reliance on statutory allocations from the Federation Account.
• There is a lack of reliable data on state finances, with some states having incomplete records and difficulties in obtaining information on arrears and debts.
• Financial management institutions at the state and local levels are weak, contributing to fiscal imbalances and inefficiencies.

Key Reforms and Options

• Hardening Budget Constraints: Introducing mechanisms to ensure states adhere to fiscal discipline, such as limiting borrowing and increasing accountability.
• Modernizing Financial Systems: Enhancing transparency and accountability through modern finance and procurement laws.
• Medium Term Expenditure Framework (MTEF): Implementing a more structured and long-term approach to budgeting and fiscal management.
• Reforming Revenue Allocation: Adjusting the revenue sharing formula to better reflect the needs and responsibilities of states, following the April 2002 Supreme Court ruling.
• Improving Institutional Capacity: Strengthening state financial management systems and building skills to improve efficiency and effectiveness.

Study Approach and Methodology

• The study included 14 out of Nigeria's 36 states, selected to ensure geographical and economic diversity.
• States were divided into six geopolitical zones, and the sample included both oil-producing and non-oil-producing states.
• Data was collected from primary sources, including state Accountant General offices, and secondary data from official publications.
• The study involved collaboration between state officials, local consultants, and World Bank staff, with State Steering Committees (SSCs) overseeing the process.

Limitations

• Reliable data was difficult to obtain, with conflicting reports and lack of audited records in some cases.
• Some states had incomplete data, and information on arrears and debts was often unavailable.
• The study relied heavily on data from the Office of the Accountant General of the Federation due to the lack of consistency in other sources.

Links with World Bank Activities

• The study contributed to the States Governance and Capacity Project, helping states compete for inclusion and support.
• It facilitated deeper engagement between the World Bank and Nigerian states, improving understanding of budget and financial management issues.
• The findings will be used as a reference for incoming administrations following the 2003 elections.

Conclusion

The report highlights the need for stronger fiscal discipline, improved financial management systems, and clearer revenue and expenditure responsibilities at the state level. It emphasizes the importance of institutional reforms and the role of the World Bank in supporting these changes to ensure macroeconomic stability and efficient public resource allocation.