Nigeria is the most populous country in Africa. The 2006 provisional census counted over 140 million people (United Nations 2007), 64 percent of whom live in rural areas. These rural areas are undergoing radical, noticeable change, particularly in the agricultural sector. The agricultural sector is increasingly market-oriented and has seen a diversification of income opportunities and an increasing division of labor. It is therefore important to have a highly efficient rural service sector that fosters agricultural productivity and development outcomes. However, access to rural services, has only had marginal impacts in the agricultural sector. Rural households, therefore, continue to face poor access to agricultural and social services. These gaps in rural service provision need to be closed in order to enable the countryside to mobilize its development potential.
To distinguish rural from urban development, one must define “rural.” Demographers classify a population as rural based on the size or occupational distribution of residents and the geographical characteristics of the area. Most definitions consider an area rural if people work or live on farms. The number of residents in a population considered rural differs from less than 2000 (Reardon et al. 2001) to less than 5001 (Acemoglu et al. 2001) to less than 10,000 people (International Fund for Agricultural Development 2001). In Nigeria, areas with populations above 20,000 are considered urban, meaning that rural areas have sizes below this cut-off (Onokerhoraye 1984).
Decentralization has become a key issue in development policy in the last two decades. Decentralization is a process of transitioning from a governance structure in which power is concentrated at the central or national level to one in which authority to make decisions and implement them is shifted to lower level governments or agencies. It consists of a transfer of public functions from higher tiers to lower tiers of governance.