TOWARDS SUBNATIONAL FISCAL AND ECONOMIC SUSTAINABILITY

Abstract

In the last year, Nigeria has experienced significant macroeconomic and fiscal imbalances. Following the decline in oil revenues since mid-2014 amidst slow policy responses, the economy gradually slowed into negative growth in 2016. Three years after the oil price slump, fiscal deficits have remained wide, debts are rising, and governments are faltering on public sector wages. Over the years, large revenue windfalls recorded during boom periods have destabilized the budgets of both federal and State governments; and have lured governments into unsustainable increases in expenditures, in which they find themselves locked in when revenue falls.