Abstract: | The presence of the government in the Nigerian economy is quite overbearing. Public sector activities have broadened in scope over the years to encompass virtually every aspect of the Nigerian socioeconomic scene. The oil boom of the mid-1970s brought considerable wealth in its wake and influenced the implementation of a series of ambitious projects. The sudden downturn in the fortunes of the Federal Government in revenue generation in the late 70s and early 80s due to declining crude oil prices threw the economy off balance. This paper analyses the financial problems at the Federal level, as well as at the State and local government level. At the Federal level, the root of the current financial paralysis resides not in dependence on the external sector per se, but rather in overdependence on the oil sector. At State and local level the problems emanate mainly from the operation of the fiscal system over the years. The paper ends with suggestions for a possible reorganization of the Federal financial structure and with recommendations for necessary adjustments in present intergovernmental financial relations. Notes, ref. |