The Economics of Nigerian Federalism: Selected Issues in Economic Management

Nigeria's economic difficulties are due primarily to public-sector mismanagement exacerbated by the dynamics of federalism and state creation and by the growth in centralized federal power. Monetary policy has been inadequate, fiscal policy has rewarded state governments but not brought their spending policies in line with their own resources and with national economic objectives, and resources have been consistently misallocated, largely because of the principle of “federal character.” Recent efforts to deregulate and privatize the economy show promise, but the success of economic development will depend greatly on the future civilian or military governance of Nigeria.