While efforts have
been made since 1976 to bring about local government as a tier of government
under a three tier federal system, local government administration is still seen
as an appendage of the state governments. In spite of the constitutional
provision which defined functions and sources of funding of the system, local governments
in the country have not been able to extricate themselves from the apron string
of state governments.
Funding of local government administration in Nigeria remains
a mirage. In spite, of the constitutional provisions and guarantee of funding
of local governments from the federation account, local governments in the
country operates a joint account with their respective state governments
thereby making it difficult if not impossible to discharge their constitutional
and responsibilities. State governments’ releases money to
local governments only to pay staff salaries and in some instances their staff
are owed for months. Yet, financial paucity in local government administration
could be blamed on lack of seriousness on the part of local government administrators
to explore internal sources of revenue generation. Most local governments in
the country are contented with the federal and or state allocations. Thereby serving
as a mere distribution outlet for federal and state generated revenues; a
situation Suberu (2004) describe as the cost of distributive federalism. In his
words, "for a federal system that is dominated by the redistribution of
centrally collected revenue, it is hardly surprising that the revenue
generation and allocation issue has remained particularly contentious and
OF THE STUDY
Local government administration through internally generated
revenue (IGR) raises revenue to finance development programmes at the
grassroots’. This is in addition to the statutory allocation from the
federation account. Through such monies, it provide social amenities and
services such as pipe born water, boreholes, roads, cottage industries, skill
acquisition centers, maternity and cottage hospital and health care delivery,
market stalls, etc. to the people.
Local government administration promotes democratic rule in
the society. This is because, local government administration is the closet
level of government to the people and as such, it provides the opportunity for
the people to further learn the democratic values and norms. Local government
administration in a federal system like Nigeria promotes nation building and
Contributes to socio-economic and political development in
the country. However, despite the elaborate justification of local government
administration, local government administration is faced with a number of
issues and challenges, poverty of leadership at the local government level
remains one of the most daunting
challenges of sustainable development of the grassroots’ in developing
countries. While we
recognize the fact that leadership problem is a national phenomenon in Nigeria,
local government administrations have come under serious criticism over years
for poor service delivery and bad governance. Both political and administrative
leadership are in deficit at this level of government due to financial
challenges among other .pertinent issues
OF THE PROBLEM
(in Igbokwe-Ibeto, 2003) notes that: to
achieve social change and general economic growth requires a spreading efforts so that local communities and individuals can participate to bring under
ideal conditions, energy, enthusiasm
and most important of all local development activities... local authorities provide the opportunity for local
people to participate in local
decision and local schemes within the general national policies, and to act above all, as local
centers of initiative and activity conducive, to development. The above statement buttresses the fact that
local government has a meaningful and positive role in development process.
Akhakpe Fatile & Igbokwe-Ibeto (2012) noted that community development
through the instrumentality of the local government is essential for a
sustained development process. The local government system is therefore the
surest way to get the grassroots’ through planning and sustenance of
implementation strategies if adequately funded under a corrupt free system. The
problem confronting this research is to appraise the role of local government
internal revenue as it promotes social economic development.
OF THE STUDY
1. To find out the sources of local
government internal revenue.
2. To find out the roles of local
government internal revenue in socio-economic development.
3. To discover the challenges of local
government in the promotion of socio-economic development.
1. What are the sources of local
government internal revenue?
2. What are the roles of local government
internal revenue in socio-economic development?
3. What are the challenges of local
government in the promotion of socio-economic development?
OF THE STUDY
This study is
meant to reveal the role, sources and challenges of local government internal
revenue as it promotes social-economic development to states in Nigeria.
It is also meant
to serve as an eye-opener on the benefits of local government towards the
socio-economic development of the country.
HO: There is no significant role of the
local government in promoting socio-economic development.
OF THE STUDY
This study is
restricted to the role of local government internal revenue as it promotes
socio-economic development in Enugu state.
LIMITATION OF THE STUDY
limitations of the study are as follows:
1. Time: - This is the first limitation that
affected the research study badly because carrying out the study requires time
and one can’t afford to miss lecture and embark on a journey to the cost study.
2. Finance: - It is another limitation because
the study requires enough funds to carry out the research and without the funds
the study will not be fruition.
SYSTEM OF TRANSACTION
Odugbemi (1989:175) defines it “as a system of transactions
patterns) among managers of hierarchically, structured
levels of government in a state”. He goes further to argue that the objectives
for intergovernmental relations is the achievement of the division of work,
authority, resources sharing among levels of public and sometime extra
government authorities in state.
Under the 1979 and 1999 Constitutions, local governments
throughout the country were entitled to statutory allocation from the
This is a system whereby the local authorities have a direct
share of either
Specific items or the total, nationally derived
revenue. Orewa (1991:121)
INTER-GOVERNMENTAL RELATION DEFINED
Cameron (2001:213) defined intergovernmental relations “as
an arrayof structures, processes, institutions and mechanisms for coping with the
inevitable overlap and interdependence that is a feature of modern life”.
LOCAL GOVERNMENT DEFINED
Local government in the presidential system, in Nigeria, is
the third tier of government which also is constitutionally empowered to make
decisions over a specified range of government functions and services. As such,
local government deserves serious attention from the central government so as
to be able to deliver essential services to the rural populace.
EQUALISATION GRANTS DEFINED.
This grant is paid as an aid to less economically privileged
local governments whose revenue is not enough to finance and maintain a particular
essential service. The Federal Government therefore, pays a subsidy to meet the
excess of expenditure over revenue.
ii. Block Grants
This is an annual payment made by the central or federal
government to its local government on a basis related to the number of persons
or tax payers in each local government. This grant is not tied to a specific
service. The rationale for this grant is the recognition of the fact that a local
authority, for one reason or another, has lost some sources of revenue to the
central authority. It is therefore compensatory.
Iii. Percentage Grant
This is usually given for a specific service to encourage a
local authority to provide the service or facility at a nationally acceptable
standard. The grant is given as a percentage of the total expenditure incurred
by local authorities on a giving service.
Fees, License, and Rent
This is another internal revenue generating source for
financing the local government. In some local government councils however, the
term ‘permit’ is used in place of license or “permit fee” instead of “license
Fees are charged by local government either for specific
services provided for individuals and which are paid for by the users, or as a
charge for controlling the activities of their citizens.
Iv. Unit Grant
This type of grant is paid for each unit of service such as
a clinic, a mile/kilometer of road, a patient attending a clinic, a child
attending a school etc. The unit grant is a fixed amount per unit or it might
be a fixed amount for a specified number of units. The unit grant is aimed at encouraging
Authorities to increase the number of units of services
provided or employed.
v. Special Grants
The federal governments give a special grant to support a
local government in times of emergency, such as occurrence of natural disaster,
famine or rain storm etc. Similarly, special grants could be given for important
national economic and social programs to be handled by the local governments,
such as re-vitalizing the agricultural programme of a country.