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

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