The primary reasons for creating the Nigerian local government system was grassroots mobilization and development. The Council has however, consistently failed to provide critical services to the rural poor ostensibly because of poor funding. The work examined the structure, functions and accountability mechanisms of the Council vis-à-vis its revenue generation capacity. The problem identified is that the Council contracts out services and its statutory revenue sources at ridiculous prices to patrons even in the face of fiscal cutback and burgeoning demand from the critical populace. Using the Local Government Discretion and Accountability Diagnostic Framework of Analysis and Financial Agency Theory, the paper found that lack of political, administrative and financial accountability mechanisms provides the leeway for unscrupulous Council officials to grossly enrich themselves and their patrons. The paper recommends that the Public Procurement Act which emphasizes Due Process in tendering should be institutionalized by the local government. The anti-graft agencies should be repositioned to deal with treasury looters while the electoral process should be reformed to make it more transparent and inclusive.

Cities are assets, solutions and drivers of economic and social development. Cities possess huge untapped economic potential that can and should be leveraged to create wealth and economic opportunities for all. This requires good urban planning that supports urban compactness, integration, and connectivity. However, even the best urban plans risk ending up unused if they are not accompanied by financial and regulatory strategies for implementation. Strategic public investments must go hand in hand with strategic funding mechanisms and supporting governance systems. The report also identifies successful governance mechanisms for efficient and equitable provision of public services in metropolitan areas of developing countries, and shares experiences and methods to making public service provision more viable in peri-urban areas of large cities and in smaller urban centres of these countries.

2015 the global community committed itself to an ambitious programme of reform. Achieving the Sustainable Development Goals and implementing the resolutions of the Paris climate conference require that great efforts are made – including those of a financial nature. Many states will have to ensure that untapped or barely used sources of income are developed. Sub-national units such as provinces, departments, districts, and cities will play an increasing role in the mobilisation of public revenues. They are also in the forefront with regard to realisation of the global reform agenda, as many of the objectives concern classic areas of activity of local government: schools, basic medical care, local road construction, public transport, construction of social housing, the supply of drinking water and disposal of waste water, refuse collection etc. These services are already the responsibility or co-responsibility of subnational units. The mobilisation of revenues at sub-national level is therefore not only a financial necessity, it is also prudent from a development policy perspective: if the users and funders of a good match, there is a greater likelihood that the preferences of citizens will be observed and the use of funds monitored. In addition, local taxes and levies are often paid by a broad circle of citizens and companies. This serves to strengthen the relationship between governments and the governed. One thing should be clear in this: although many countries will exploit the scope for collecting local taxes and levies in the future, this potential is nevertheless limited. Many sub-national units will remain dependent on transfer payments from the central state. Cities, districts and the middle tier cannot solve the funding problem of the states on their own. However, they can help to place the provision of public services on a broader foundation of legitimacy and, in co-operation with the national level – for example via the exchange of information – improve fiscal policy as a whole. Consequently, they also contribute to overcoming problems of fragile statehood.

This study presents the main organisational and financial indicators related to subnational governments in 101 federal and unitary countries worldwide. It provides, through country profiles and a synthesis analysis, qualitative information on subnational government structure and responsibilities, as well as macro financial data assessing subnational government spending, investment, revenue and debt. Financial indicators of the country profiles are accompanied by short comments on the structure of expenditure and investment (by type and economic function), revenue (tax, grants, user fees and property income, etc.) and the main characteristics of the debt and fiscal rules.