IMPACT OF REVENUE ALLOCATION ON ECONOMIC GROWTH IN NIGERIA, 1985-2020

The study examined the impact of revenue allocation on economic growth in Nigeria within the period of 1985-2016. The overall objective of this study is to evaluate the impact of revenue allocation on economic performance in Nigeria. To address this objective, ARDL model, cluster system and ARDL bound test, co-integration were used through using E-view as estimate technique. The result of the finding were rebost. The allocation to federal and states were positive and' statistically insignificant. This implies .that most likely that allocation were diverted to other sectors of the economy. However, the allocations to local government show negative sign and statistically insignificant meaning utilized in the productive sectors of the economy. The result of the cluster system analysis revealed that states and local governments that get lesser allocation were performing better than those with high allocation. Based on these findings, the study recommended among others that fiscal equivalent criteria be used in revenue allocation in Nigeria.