Abstract
Local governments are critical agents of sustainable development, especially in rural areas where they are closest to the people. However, in Nigeria, the autonomy of local governments is often compromised by political, financial, and administrative constraints, limiting their capacity to deliver sustainable development. Hence, this study investigates how optimizing local government autonomy can serve as a viable tool for enhancing sustainable development in rural areas, using Ibadan, Oyo State, Nigeria as a case study. Adopting a qualitative research design, data were collected through semistructured interviews with local officials, community leaders, and residents. Thematic analysis revealed four major financial challenges, themes: autonomy lack of community participation, political and administrative constraints, and the resultant impact on sustainable development. The findings suggest that granting greater autonomy to local alongside governance governments, inclusive and institutional reforms, is essential for improving development outcomes in rural Nigeria. Hence, the study recommended strengthening financial autonomy, reforms, institutional enhanced community participation, capacity building as well as the incorporation of sustainable practices and developmental projects in local government budgeting and planning programmes.

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