Urban local government finance in Nigeria: The case of Lagos municipal area
| Published date | 01 February 1992 |
| Author | Dele Olowu |
| Date | 01 February 1992 |
| DOI | http://doi.org/10.1002/pad.4230120103 |
PUBLIC ADMINISTRATION AND DEVELOPMENT, VOL.
12.19-38
(1992)
Urban local government finance in Nigeria:
the case
of
Lagos municipal area
DELE OLOWU
Obafami
Awolowo
University, Nigeria
SUMMARY
One of the most important results of the global reform of
local
governments in Nigeria in
1976 was to initiate a progressive increase in the amount of monetary transfers to local govern-
ments
(LGs)
by federal and state governments (especially the former). The proportion of
federally collected revenues devoted to
LGs
increased rapidly from less than 2
per
cent in
1976 to 15 per cent in 1990. This has enabled Nigerian
LGs
to play
a
more visible role
in total public expenditures.
On
the other hand, huge federal transfers have led to sharp
declines in absolute and relative terms in locally generated revenues. The two Lagos municipali-
ties are able to generate up to
50
per cent of their total revenues. In contrast, the average
for all local governments in the country is
45
per
cent. The relatively large internal revenue
sources
in the two Lagos municipalities results in generous
surpluses,
which they are able
to channel into capital development
or
special project expenditures. The single most important
internal revenue source is the property tax, which is not even collected in some other large
cities, such as Kano, Ogbomosho and Sokoto.
INTRODUCTION: URBANIZATION, CITY GOVERNMENT
AND
LOCAL
GOVERNMENT REFORM
IN
NIGERIA
Two traditions of urbanization exist in Nigeria and have produced two types of
cities: the preindustrial and the postcolonial. The former are found in the northern
and south-western portions of this large African country, while the new postcolonial
cities are concentrated in coastal areas and along raillroad transportation lines built
during the colonial era. Several of the cities, whose origins are rooted in the precolo-
nial era, have acquired modern forms and thus present elements of both traditions
in terms of their economic base, physical structure and demographic patterns (Mabo-
gunje,
1968, 1977).
Table
1
shows the list of Nigeria’s first
14
cities arranged in
order of their size. Both types of cities described above are to be found in the list.
One feature that is common to most of them is that they are centres of vigorous
demographic growth. The average annual growth for the
14
cities is
10
per cent,
although a few of them have grown at almost double this figure.
The origin of these cities, as well as the nature of economic activities found in
the various urban centres in the country, have had implications for the type of
institutional structures created for their governance. These structures in turn help
to explain the relatively successful performance of some of the cities, while the
Dr Dele Olowu is at the Department of Public Administration, Obafemi Awolowo University, Ile-Ife,
Nigeria.
027
1-2075/92/010019-20$l0.00
0
1992 by John Wiley
t
Sons, Ltd.
20
D.
Olowu
Table
1.
Nigeria: growth rate of towns of 20,000 population and over from 1952 to 1963
Town Population
in
1952 Population in 1963 Annual growth
(thousands) (thousands) rates*
(YO)
Lagos 267 665 9.5
Ibadan 459 627 3.1
Ogbomosho 140 320 8.6
Kano 127 295 8.7
Mushin 321 258 16.1
Ilorin 41 209 17.6
Abeokuta 84 187 8.3
P. Harcourt 72 180
9.5
Zaria 54 166 11.8
Ilesa 34 166 17.1
Onitsha 77 163 7.7
Iwo 100 159 4.1
Kaduna
L.
45 150 12.8
Oshogbo 123 210
5.5
Source:
Population censuses.
*Note:
There has
been
no
accepted official population census since 1963.
One
was organized and cancelled
in
1973, another
was
planned
for
1991.
poor development of these institutional structures in others during the colonial period
explains to a large extent the poverty of their urban structures at the present time.
We have selected two success cases for description and analysis in order to illustrate
the above principle. The first, Lagos Municipality (comprising Lagos Island and
Mainland local governments or the former Lagos City Council), is dealt with here.
The second, Onitsha local government, forms the subject of another paper in this
issue.
From the beginning, colonial administrators in Nigeria had made a distinction
between the governance of dynamic urban centres in which were to be found Euro-
pean merchant traders and missionaries, and the administration of rural areas and
less dynamic cities. As soon as the Northern and Southern Protectorates were amalga-
mated in
1914,
British Colonial Officers proceeded to promulgate a Native Authority
Ordinance of
1916,
which put all parts of rural Nigeria, including the traditional
cities, under a uniform system of rule by pre-existing local potentates. The latter
became representatives of the British Government throughout the country. This sys-
tem of administration was styled ‘indirect rule’, even though the powers of traditional
chiefs were severely circumscribed by the extensive powers of supervision and some-
times control exercised by British field administrators (political officers) over the
native authorities. Much has been written about this system of rural government
in Nigeria, including the reasons for its relative success in the northern and (to
some extent) in the western portions of the country, in contrast to its utter failure
in the eastern parts, which did not possess strong and extensive precolonial structures
of government as the other parts of the country did.
On the other hand, much less has been written about the complement to the
Native Authority (NA) Ordinance of
1916,
the Township Ordinance, which was
promulgated
1
year later for the governance
of
urban centres in Nigeria. This ordi-
nance provided for the creation, constitution and administration
of
all towns and
municipalities in Nigeria with the exception of the indigenous/precolonial towns
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