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Public Finance and Rural Development in Nigeria: Empirical Evidence from the Structural Equation Modeling

Abdulrashid Rafindadi () and Kondo Augustine Kondo
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Kondo Augustine Kondo: Department of Accounting, Faculty of Management Sciences Usmanu Danfodiyo University, Sokoto, Nigeria

Asian Economic and Financial Review, 2018, vol. 8, issue 11, 1313-1339

Abstract: This study looks at the Nigerian public finance system and the quality of life in rural areas. Specifically the study aims at assessing the implementation and elements leading to the constraints to rural investment in those infrastructural facilities that help in improving or enhancing the quality of rural life in Benue state Nigeria. Data was gathered from nine local government areas in Benue state. Two-hundred and seventy questionnaires (270) were distributed (i.e. Thirty questionnaires duly distributed to each selected local government) and a total of two-hundred and forty-two were returned. A comparative methodological approach of multiple-regression analysis and the structural equation modeling (SEM) was adopted. Findings of the SEM analysis revealed that public finance in rural areas of the selected sample size in Nigeria has not been effective and efficient in all ramifications. While the result from the regression model established that, the five key indices used in the study established poor respective outcome. These were found to be due largely from the joint account system between the state/local government which poses serious challenge when it comes to the issue of financing rural infrastructural projects and other social amenities. The study recommends among others the need for a newly architected public finance system in local governments in Nigeria and this should be directed in a way and manner that will be efficient and prudent to move the developmental prospects of the local governments in the rightful direction in Nigeria.

Keywords: Public finance; Rural development; Rural infrastructure; Nigeria; Regression; Structural equation modeling; Joint account; Finance. (search for similar items in EconPapers)
JEL-codes: H73 H75 H79 H41 H10 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:asi:aeafrj:2018:p:1313-1339