Managing Urban Cities in Nigeria Efficiently by Local Councils: The Capital Market Option

Ogbuagu O Ekumankama, Augustine Ujunwa, Halidu Ahmad Umar, Mahmud Ibrahim Adamu


Urbanization is currently a global phenomenon, which has come with the dire need of providing and improving basic infrastructures. Local governments have also been charged with the acceleration of economic development in their municipalities. This has however, generated serious debate on the preparedness of the local governments in accomplishing this goal, considering the level of financial impropriety often leveled against them. To what extent therefore can the local governments manage our cities? This study proposes a capital market option as an alternative to check the financial impropriety of local councils and as a mechanism for involving the private sector in the efficient delivery of urban infrastructure in Nigeria. This paper is essentially of the view that the Nigerian local governments can manage the urban cities in Nigeria efficiently, if they adopt a market approach, by using the capital market sources of funding and not limiting themselves to statutory revenue allocations. It was also noted that there is enough infrastructure in place, to enable the local governments to access the capital market financing. However for this to be successful, further amendments are needed in the Nigerian constitution, to secure the fiscal autonomy of the local governments as contained in the 1989 federal Constitution.

Key words: Local government financing; Municipal Bond; Urban development; Urban Infrastructure


Local government financing; Municipal Bond; Urban development; Urban Infrastructure


Adamolekun, L. (1991). Decentralization Policies: Problems and Perspectives. Asian Journal of Public Administration, 13(1), 67-92.

Adeyemo, D. O. (2005). Local Government Autonomy in Nigeria: A Historical Perspective. The Journal of Social Sciences, 2, 77-87.

Aja-Nwachukwu, I. (2003). Options for Financing Local Government Development Programmes. In H. O. Isu (Ed.), Financial Management in the Local Government System – A Strategic Approach (pp. 134-147). Ibadan: Spectrum Books Limited.

Akindele S. T., & Olaopa (2002). Fiscal Federalism and Local Government Finance in Nigeria.

Anderson, L. (1999). Transition to Democracy. New York: Columbia University Press.

Anyafo, A. M. O. (1996). Public Finance in a Developing Economy: The Nigerian Case. Enugu: Banking and Finance Publication, UNEC.

Arua, N. (2008). Diagnostics of the Corporate Bond Market in Nigeria. Journal of Banking Finance and Development, 2(1), 11-17.

Awotokun, A. M., & Adeyemo, D. O. (1999). Local Government in Nigeria: A Critcal Exploration. The Journal of Public Affairs.

Block, B. B., & Hirt, G. A. (2002). Foundations of Financial Management. New York: McGraw-Hill Irwin.

Central Bank of Nigeria. (2000). The Changing Structure of the Nigerian Economy and Implications for Development. Lagos: Realm Communications Ltd.

Central Bank of Nigeria. (2009). The Statistical Bulletin 20. Abuja: Central Bank of Nigeria.

Detail. (2009). The Nigerian Bond Market – A Viable Investment Opportunity? A Monthly News Letter. Retrieved from

Ekpo, A. H., & Ndebbio, J. U. E. (1998). Local Government Fiscal Operations in Nigeria. AERC Research Paper, 73.

Ekpo, A. H., & Ndebbio, J. (1991). Fiscal Operations in a Depressed Economy: Nigeria, 1960-1990. AERC. Research Paper, 44.

Ekumankama, O., & Ujunwa A. (2008). Broadening Local Government Financing in Nigeria: The Capital Market Option. Journal of Banking Finance and Development, 2(1), 28-37.

Emezi, C. (1984). Local Government in Historical Perspective. The Nigerian Journal for Public Administration, 2(2), 50-52.

Ezeoha, A., & Ekumankama, O. (2010). Financing Urban Development in a Highly Populated Country: The Nigerian Urban Development Bank Experience. Nigerian Journal of Management Sciences, 11(1 & 2), 87-111.

Federal Republic of Nigeria. (1976). Guidelines for Local Government Reforms. Kaduna: Government Printer.

Federal Republic of Nigeria. (1979). Constitution of the Federal Republic of Nigeria. Lagos: Government Printer.

Federal Republic of Nigeria. (1989). Constitution of the Federal Republic of Nigeria. Lagos: Government Printer.

Federal Republic of Nigeria. (1999). Constitution of the Federal Republic of Nigeria. Lagos: Government Printer.

Freira, M. E., Huertas, M., & Darche, B. (2001). Subnational Access to the Capital Markets: The Latin American Experience (pp. 1-39). World Bank Institute.

Gboyega, A. (1993). Local Government Reform in Nigeria. In P. Mawhood (Ed.), Local Government in the Third World. London: John Wileysons.

Green, H. A. (1976). The Theory of Local Government and Managerial Effectiveness (pp. 7-24). The Nigerian Journal of Public Affairs, Institute of Administration, Ahmadu Bello University Zaria.

Guardian. (2005). 15 Firms to Manage Nigerian Government Bond. Retrieved from

Igbuzor, O. (2005). Local Government Reform and Constitutional Review in Nigeria. Retrieved from

Leigland, J. (1997). Accelerating Municipal Bond Development in Emerging Economies: An Assessment of Strategies and Progress (pp. 1-22). Centre for International Development, Jakarta, Indonesia.

Minis, P., & Cochran, T. (1995). Financing Municipal Infrastructure in South Africa, Recommendations for Policy Implementation. Report prepared for USAID/South Africa by the Research Triangle Institute.

Mukoro, A. (2004). Customary Law and Traditional Rulership in Nigeria. In I. O. Aransi (Ed.), Local Government and Culture in Nigeria. North Caroline: Chapel Hill Press.

National Population Commission. (1996). The 1991 National Census.

NCEMA (1990). Economic Management at the Local Government Level. Ibadan: Processed NCEMA.

Nnanna, O. J., Englama, A., & Odoko, F. O. (2004). Financial Markets in Nigeria. Abuja: Central Bank of Nigeria Publication.

Nwite, S. C., & Onwe B. U. (2008). The Bond Markets and the Financing of Lower Level Governments in Nigeria: A Review. Journal of Banking Finance and Development, 2(1), 43-49.

Ogamba, E., & Okereke-Onyiuke N. (2008). Determinants of Securitized Government Debt Financing in Nigeria. Journal of Banking Finance and Development, 2(1), 1-10.

Okafor, S. O. (1986). The Local Government Reform and Rural Development in Nigeria: A Case Study of Damboa Local Government Area in Bornu State. Nigerian Journal of Policy & Strategy, 101-113.

Ola, F. R. (1984). Local Government Administration in Nigeria. London: Kegan Paul International Plc.

Orewa, G. O., & Adewumi, J. B. (1983). Local Government in Nigeria. Benin: Ethiope Publishing Corporation.

Pandey, I. M. (2002). Financial Management. New Delhi: Vikas Publishing House.

Peterson, G., & Shaman, F. (1997). Building Local Credit Systems. World Bank Working Paper.

SEC (2000). The Research and Marketing Department of the Securities and Exchange Commission. Issues in Capital Market Development, 3.

Shah, A. (1991). Perspective on the Design of Intergovernmental Fiscal Relations. World Bank Working Paper No. 726.

Swedish Consultant Trust Fund. (2004). Draft Terms of Reference for the Revision of Bank Group Urban Development Policy, African Development Bank Partnership and Cooperation Division. Tunis Belvedere, September.

Ujunwa, A. (2009). Municipal Infrastructure Financing in Nigeria: Strategy and Policy Implication. Journal of Business Administration and Management, 2(1), 126-133.

US Bureau and Times Atlas of the World (10th ed.).

Uzochukwu, A. (2009). Nigeria: Effective Financing of Local Governments to Provide Water and Sanitation Services. A Water Aid Report.

Vanguard (2006). Capital Market: DMO Inaugurates Bond Market Steering Committee. Retrieved from

World Bank. (1996). Restoring Urban Nigeria, African Technical Department. The World Bank with Nigerian Collaboration, 62, May.

World Bank. (1995). How Municipal Bonds Work. New York: New York Institute of Finance.

World Bank. (1997). How the Bond Market Works (2nd ed.). New York: New York Institute of Finance.

World Bank (2001). Developing Bond Market: A Hand Book. Washington DC: The World Bank and IMF.

Yusuf, M. O. (2002). Private Sector Initiatives and Infrastructural Development in Nigeria. In Proceedings of the 11th Annual Conference of the Zonal Research Units, Infrastructure Development and Economic Growth in Nigeria (pp. 54-60). Abuja, Central Bank of Nigeria Research Department.



  • There are currently no refbacks.

Copyright (c)

Share us to:   


  • How to do online submission to another Journal?
  • If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:

1. Register yourself in Journal B as an Author

  • Find the journal you want to submit to in CATEGORIES, click on “VIEW JOURNAL”, “Online Submissions”, “GO TO LOGIN” and “Edit My Profile”. Check “Author” on the “Edit Profile” page, then “Save”.

2. Submission

  • Go to “User Home”, and click on “Author” under the name of Journal B. You may start a New Submission by clicking on “CLICK HERE”.

We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases:;;

 Articles published in Management Science and Engineering are licensed under Creative Commons Attribution 4.0 (CC-BY).


Address:1055 Rue Lucien-L'Allier, Unit #772, Montreal, QC H3G 3C4, Canada.

Telephone: 1-514-558 6138
Http:// Http://

Copyright © 2010 Canadian Research & Development Centre of Sciences and Cultures