Comparative Analysis of Fiscal Decentralization and Economic Performance of Akwa Ibom and Cross River State in Nigeria (Published)
This paper analysed the impact of fiscal decentralization on economic growth of Cross river state and Akwa Ibom state in Nigeria using secondary data from joint task board, Revenue Allocation board and national bureau of statistics (NBS) from 2005-2020. 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 Cross river state and Akwa Ibom 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 Cross river state and Akwa Ibom state 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 Cross river state while Fiscal Autonomy and Federal allocation contributes infinitesimal to economic growth but not the major determinants of Economic growth in Cross river state. Also findings from the study revealed that Internally generated revenue and Federal allocation are the major determinants of Economic growth in Akwa ibom state while Fiscal Autonomy and population growth contributes infinitesimal but not the major determinant of Economic growth in Akwa ibom 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 Cross river state and Akwa Ibom state 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.
Keywords: Cross river state and Akwa ibom state, Fiscal Decentralization, SURE Model, economic growth