The development of rural areas impacts positively on per capita income and food production. The tier of government entrusted with the responsibility in Nigeria of developing the rural areas has not lived up to expectation in spite of the huge capital investment. This paper identified the root causes behind the failings of the local governments, reviews the performance of the fadama programme and draw on the reasons behind the successes of the latter as a basis for suggestions on how the local government system can be improved. Capacity building at the local level, increased demand for accountability, involvement of private and research bodies in local government activities should be encouraged to enhance rural development.