1.1 Background of the Study
The local government system is a system of government established as a
third tier of government after the federal and state governments.
The local government is a government at the grassroots level of
administration meant for meeting peculiar grassroots needs of the people
(Agagu, 1997). Put succinctly, the local government system is that tier
of government closest to the people; it is vested with certain powers
to exercise control over the affairs of the people in its domain (Lawal,
Like every other institution, local governments require resources to
meet its responsibilities as demanded by the constitution. Broadly
construed, resources are any assets that an organization might draw on
to help it achieve its goals (Bryson et al. 2007, 704). More
specifically, “resources include all assets, capabilities,
organizational processes, firm attributes, information, knowledge, etc
controlled by a firm that enables the firm to conceive of and vary out
strategies that will improve its efficiency and effectiveness” (Barney
Rainey and Steinbauer (1999) offer three types of organizational resources; financial, human, and technological resources.
Given that human resources is always touted as the most important of
all the resources, the centrality of financial resource to
organizational survival and growth cannot be treated with any sense of
Resource generation in the local government is without incertitude,
synonymous with revenue generation. According to (Rabiu, 2004) revenue
generation in the local government is derived from two broad sources,
viz: the internal and external sources, internally generated revenue
includes local rates, taxes and fines and fees and miscellaneous sources
(e.g. rents on council estates, royalties, interests on investments and
proceeds from commercial activities). While external sources include
the statutory 20 percent received from the federation account and 10
percent from the states’ internally generated revenue (Adedokun, 2004).
One of the recurring problems confronting the local government system
in Nigeria is dwindling revenue generation and poor utilization of
scarce resources. Thus, culminating in the inadequate provision of
public utilities and worsening socio-economic conditions (e.g. poverty,
unemployment, malnutrition, etc) that are existent in the local
In Kogi state, the situation is nonetheless different, as revenue
generation and effective utilization continues to generate
controversies. Well aware of the importance of resource generation and
utilization in the local government system, the Kogi State government
transformed the Department of Local Government into the Ministry of
Local Government and Chieftaincy Affairs in 2007; empowering it to
oversee to the affairs of local governments. But despite its creation,
it is shaming to note that in resources generation and utilization in
the local government continues to be a conundrum.
It is against this backdrop that this study sets out to investigate
the lack of development in the local governments in Kogi state and the
continued mismanagement of generated revenues; in spite of the creation
of the ministry of local government and chieftaincy affairs charged with
the responsibility of ensuring that local government receive their 10
percent remittances from the state’s internally generated revenue and
that development plans in the local governments are well articulated and
requisite funds meted out accordingly for such purposes.
1.2 Statement of the Problem
Local government as a third tier of government was established with
specific functions to assist the federal and state government in
enthroning effective rural development and good governance at the
grassroots level (Nwankwo, 2004). However, the local governments system
in Nigeria has failed to accelerate socio-economic and human
development, mainly because of poor utilization of funds.
The 1976 local government reforms as emphasized by Alu (2006) provide
two main sources of revenue for local governments namely: internal
revenue and statutory allocations from federation and state accounts. In
spite, of these sources of revenue, local government funds are rarely
available to meet expenditure requirements.
Adebayo et al (1973) argues that poor utilization of funds is
responsible for the failure of local governments to perform their
primary functions. Similarly, Nwankwo (2004) blamed the lack of
development in rural areas on poor financial management, which has over
time hampered the completion of public projects, especially those that
has to do with the provision of social welfare services.
With a determination to ensure the effective utilization of funds in
Kogi State local government system, the Ministry of Local Government and
Chieftaincy Affairs was established. But unfortunately, the Ministry
has not done much in terms of ensuring that public funds in effectively
managed by local governments in the state. This development the Ministry
attributes to operational challenges (Ministry of Local Government and
Chieftaincy Affairs Hand-over address, 2011).
Considering the aforementioned problems the following research questions have been raised;
1) How are the resources of the local governments in Kogi State local government system generated?
2) What are the factors that are responsible for the poor
utilization of resources in the local government system in Kogi State?
3) What is the role of the Ministry of Local Government and
Chieftaincy Affairs towards effective resource generation and
utilization in Kogi state local government system?
4) What are the consequences of poor resource generation
and utilization in the local government system in Kogi State?
5) What measures can be put in place that would enhance
resources generation and utilization in the local government system in
1.3 Objectives of the Study
The General objectives of the Study
The general objective of the study is to investigate resource
generation and management in the Ministry of Local Government and
Specific Objective of the Study
The specific objectives of the study are as follows:
1) To find out how the resources of the local government in Kogi state are generated?
2) To ascertain the factors that are responsible for the
poor utilization of resources generated in the local government system
3) To examine the role of the Ministry of Local Government
and Chieftaincy Affairs towards effective resources generation and
utilization in Kogi state local government system.
4) To determine the consequences of poor resources
generation and utilization in the local government system in Kogi State.
5) To make recommendations on how resources can be
effectively generated and utilized in the local government system in
1.4 Significance of the Study
This study has both theoretical and empirical significance.
Theoretically, this study is pertinent because it adds to the science
of public administration. It also serves as a stepping stone for
researchers who wish to undertake a similar study.
Empirically, this study will assist in identifying more potent and
pragmatic ways of managing local government revenues effectively in
Nigeria and in Kogi state particularly.
This study will also add to the body of knowledge, not only by
enriching the existing literatures on the subject of resource generation
and management in public institutions in Nigeria, but also by
proffering solutions on how best to manage generated resources
Apart from this, the study will impart more knowledge on State
governments and local government administrators, state, chairmen,
councilors, political appointees, scholars, local government
stakeholders, accounting staff in the finance department, revenue
officers and council revenue staff and their agents, that effective
management of revenues will help to increase local government efficiency
and boost infrastructure development in the rural areas.
1.5 Scope and Limitations of the Study
This study covers resource generation and management in the Ministry of Local Government and Chieftaincy Affairs, Kogi State.
This study was constrained by the inability to get specific requisite
reference materials and the unwillingness of most local government
operatives to divulge certain information that would have helped the
course of this study considerably.
The study was also faced with the overwhelming task of convincing
most of the sample population to participate in this study by filling