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.