Federal Government Statutory Fund Allocation and Infrastructural Development in Ogun State, Nigeria

The level of Federal government revenue allocation to state determines sound infrastructural foundation and overall socio-economic development of a state. However, Ogun state still experiencing poor infrastructural development facilities in terms of environmental management, health, educational and agricultural sectors due to inadequate federal statutory revenue allocation.  The main objective of the study is to examine the effect of federal statutory revenue state allocation on infrastructural development in Ogun State, Nigeria. The study employed ex-post facto research design with ARDL method of analysis and data was sourced from National bureau of statistics, Ogun State Inland Revenue Service, Ogun State Ministry of Finance and Ministry of Budget and Planning. Findings revealed that federal statutory revenue state allocation significantly affects environmental management in Ogun State (R² = 64%, t-stat_(1,19)=-6.095293, p<0.05); that federal statutory revenue state allocation  significantly affects educational development in Ogun State (R² = 73%, t-stat_(1,19)==-3.811322, p<0.05); that federal statutory revenue state allocation significantly affects agricultural development in Ogun State (R² = 34%, t-stat_(1,19)=-5.707987, p<0.05); that federal statutory revenue state allocation significantly affects health sector in Ogun State (R² = 67%, t-stat_(1,19)=-9.379976, p<0.05) and that federal statutory revenue state allocation significantly affects infrastructural development in Ogun State (R² = 77%, F-stat_(4,16)=89.68, p<0.05). The study concluded that both in the short and long runs federal statutory revenue state allocation significantly affect infrastructural development in Ogun State. The study recommended that more financial control and value for money audit should be carried out to minimize wastages and corruption in the states of the federation, so as to change the direction of influence of states’ revenue allocation on infrastructural development.

Keywords: financial control, infrastructural development, sector, statutory allocation, value for money audit