Fiscal federalism can be defined as the distribution of financial resources and responsibilities between different levels of government, such as the Federal Government, States, and Local Governments. This research explores the relationship between federal and state fiscal relations under democratic governance in Nigeria. This paper aims to examine the fiscal relations between the Federal and state governments under democratic governance. The methodology adopted for this research is a literature search based on qualitative data. These data were obtained from policy documents, journals, newspapers, textbooks, etc. The data was subsequently analyzed using content analysis. The findings revealed that despite the various constitutional provisions, the principle of fiscal relations is faced with the challenges of unequal distribution of national resources between the federal and its federating units, inadequate revenue generation, and fiscal functions of the various tiers of government. The paper concluded that fiscal relations are highly lopsided as they favour the federal government against the federating units and have less impact on the people. The paper recommended that there is a need to ensure that there should be an equitable distribution of revenue and fiscal responsibilities among the federating units, and each state government should be encouraged to improve its internal revenue generation.
Yusuf et al. (Tue,) studied this question.