An examination of regional fiscal disparities and their effect on economic performance in Nigeria: Evidence from Delta and Edo States (2000–2020).
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Background of the Study:
Regional fiscal disparities in Nigeria have long been a source of economic imbalance, affecting public service delivery and overall economic performance. Delta and Edo States, despite being endowed with significant natural and human resources, experience divergent fiscal outcomes due to differences in revenue allocation, public spending priorities, and local governance structures (Okafor, 2023). Over the past two decades, fiscal policies have aimed to reduce regional inequalities; however, disparities in fund distribution and administrative efficiency continue to hinder economic performance in these states. These disparities impact infrastructure development, education, and healthcare services, which in turn affect productivity and growth. Recent studies suggest that regions with more efficient fiscal management tend to experience higher growth rates, while areas with fiscal mismanagement lag behind (Eze, 2024). The interplay between regional fiscal policies and economic performance is critical to understanding the broader challenges facing Nigeria’s economic integration. This study investigates how fiscal disparities between Delta and Edo States affect economic outcomes and explores potential policy measures to bridge these gaps (Babatunde, 2025).
Statement of the Problem:
Despite policy efforts aimed at fiscal equalization, significant disparities persist between Delta and Edo States. Uneven revenue allocation, inefficient public spending, and inconsistent fiscal management have resulted in marked differences in economic performance, leading to infrastructural deficits and limited social services in underfunded regions (Okafor, 2023). Such fiscal imbalances hinder overall national economic integration and exacerbate regional inequalities. The study aims to identify the root causes of these disparities and assess their impact on the economic performance of the two states, thereby informing targeted policy interventions (Eze, 2024; Babatunde, 2025).
Objectives of the Study:
• To examine the extent of fiscal disparities between Delta and Edo States.
• To evaluate the impact of these disparities on economic performance.
• To propose policy recommendations for reducing fiscal imbalances and promoting equitable growth.
Research Questions:
• What fiscal disparities exist between Delta and Edo States?
• How do these disparities affect economic performance in the two states?
• What policy measures can be implemented to reduce fiscal imbalances?
Research Hypotheses:
• H1: Regional fiscal disparities negatively affect economic performance in underfunded states.
• H2: Efficient fiscal management is positively correlated with improved economic outcomes.
• H3: Targeted fiscal equalization policies can enhance economic performance in disadvantaged regions.
Significance of the Study:
This study highlights the role of regional fiscal disparities in shaping economic performance in Nigeria. Its findings will aid policymakers in designing fiscal equalization measures that promote balanced regional development and improve service delivery. The research contributes to the broader discourse on economic integration and equitable growth across Nigerian states (Okafor, 2023; Eze, 2024).
Scope and Limitations of the Study:
This study is limited to evaluating fiscal disparities and their economic impact in Delta and Edo States, focusing exclusively on revenue allocation and public expenditure indicators.
Definitions of Terms:
• Fiscal Disparities: Inequalities in the distribution and management of public revenues and expenditures across regions.
• Economic Performance: The measure of a region’s economic output, including productivity, growth, and public service delivery.
• Fiscal Equalization: Policy measures aimed at reducing disparities in public revenue and expenditure between regions.
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