The increasing burden on federal governments of many countries has necessitated decentralisation of social,
financial and developmental responsibilities of government, which generated heated global debate as to the
impact of decentralisation on the economy. Nigeria has undergone significant economic changes since
gaining independence in 1960. Central to these changes has been the ongoing debate over fiscal
decentralisation and its impact on the country’s economic performance. This study therefore examines the
impacts of fiscal decentralisation on economic performance in Nigeria, with time series data spanning a
period of 42 years from 1981 to 2022. Using Autoregressive Distributed Lag model in which fiscal
decentralisation was operationalised as the share of state expenditure in the total government expenditure,
and economic performance as the growth rate of per-capita GDP and unemployment rate, the study finds
that fiscal decentralisation had significant positive effects on unemployment and per-capita GDP. Fiscal
decentralisation is, ipso facto, a significant determinant of economic performance in Nigeria. Therefore,
fiscal responsibilities of the Nigerian government should be more decentralised so as to further reduce
employment rate, increase per-capita income, and, by extension, enhance economic performances in
Nigeria.