ABSTRACT
When the researcher chose this topic: REVENUE
ALLOCATION AND LOCAL GOVERNMENT DEVELOPMENT IN NIGERIA, he was inspired by the
high rate of embezzlement, poor leadership, low rate of accountability, general
laxity of the finance department and corruption in Nigeria Local Government,
and Aguata Local Government Area in particular. To do this, the researcher developed
four (4) Questions. These questions were administered in form of questionnaires
to 195 staff who were selected as a sample of the population. Apart from this,
secondary data were used. In organizing and presenting data collected, tables
and percentages were used as well. The data analysis revealed that ineffective
utilization of revenue in the local government had created a negative impact in
Aguata Local Government Area. The researcher therefore recommended that the
allocated revenue available to local government should be handled by honest and
accountable personnel, those who posses sound knowledge about revenue
generation and utilization. The outcome would be an effective and efficient
management and utilization of local government revenue in such a way that would
deliver the needed development.
CHAPTER ONE
1.0 GENERAL INTRODUCION
1.1 BACK GROUND OF THE STUDY
Under development has been a major factor hindering third world countries
in achieving sustainable development. According to Rodney (1972:90),
Underdevelopment does not necessary mean absence of development. It does not
also mean that it is characterized by untransformed economic, political and
social structures. It is more or less a condition of relatively low level of
development, a situation in which the necessary qualitative social
transformation has not yet taken place.
Achieving human development is linked to a third world perspective of
development which views it as freeing people from obstacles that affect their
ability to develop their own lives and communities.
Development therefore is empowerment. It is about local people taking
control of their own lives, expressing their own demands and finding their own
solutions to their problem. No wonder Arvind and Evereth (1989:84) refer to
development as a widely participatory process of directed social change in
society intended to bring about social and material advancement, including
greater freedom, equality and other valued qualities for the majority of the
people through their gaining greater control over their environment.
Development can only be said to be effective if it is focused on human
capital development and the introduction of new ideas to foster social change.
Rogers (1967:36) argued that development involves among other things, a type of
social change in which new ideas are introduced into a social system in order
to produce higher results or output through more modern social organization”
Development cannot take place in the absence of capital. Capital comes in
form of revenue allocation or statutory allocation from the federal and state
government.
Before 1976, the insolvency of Nigerian Local Governments was pervasive
to the extent that every aspect of their inadequacy was attributed to lack of
finance. For instance even when Adebayo Adedeji itemized the problem besetting
local government in Nigeria in 1976 as
(i) Lack of a comprehensive functional role
(ii) Inappropriate structure
(iii) Low quality of staff
(iv) Low administrative efficiency and
corruption
(v) Poor performance or even total neglect of
functions and
(vi) Inadequate
finances, he went further to state that the panacea to all the problems was
finance.
Therefore the first major attempt at looking at the local government
finance was in 1976, during the nationwide local government reform. The reform
measures and the 1979 constitution identified reasonably adequate sources of
revenue for the local government among which was the mandatory statutory
allocation from the both the federal and state government.
Since 1976 till date the central and state government have being
transferring statutory allocation to the local government. This funds are meant
for the local people as stipulated in section 1 (f) of the fourth schedule of
the 1999 constitution, which states in sum that the local government shall be
involved in the development of the state in so far as the areas of authority of
the council are affected. Statutory allocation or revenue allocation therefore
is supposed to be used for the development and sustainability of our local
governments.
1.2 STATEMENT OF PROBLEM
The local government is
faced with myriads of problems ranging from corruption and embezzlement, poor
financing, mismanagement of funds to poor leadership. This has deterred the
development of local government in Nigeria. The major issues are; what has contributed
to the non-performance; is it because of total dependence on federal and state
statutory allocation? Is it as a result of poor internally generated revenue
drive? Is it because of ineffective utilization of available scarce resources
or mismanagement by public office holder? Among others, certain percentage of
the statutory allocation has always been deducted by the state government
thereby causing the local government to underperform. Based on the above stated
problems, it has become necessary to conduct an analysis on revenue allocation
and developments in Aguata Local
government area.
1.3 OBJECTIVE OF THE STUDY
The broad objective of this research is to evaluate
the relationship between the total revenue allocation or generation by the
local government and rural development.
The specific objectives are;
1. To examine the relationship between
statutory allocation to the local government and government developmental
effort.
2. To evaluate the extent to which
internally generated revenue has contributed to the Local government
developmental and it various sources
1.4 RESEARCH
HYPOTHESIS
A hypothesis is a theoretical conceptualization or an
idea regarding how researcher thinks the result of his study will look. It
consists of a set of assumptions accepted previously as a basis of
investigation. It is a proposition that is yet to be tested for its validity.
For the purpose of this research study, three null hypotheses were formulated.
HO1:
There is no significant relationship
between statutory allocation to Aguata local Government and developmental
effort.
HO2:
Allocation to Aguata Local
government account does not have
significant effect on Local government
development projects.
HO3:
There is no significant relationship between internally generated revenue and
developmental project of Aguata local government.
1.5 SIGNIFICANCE OF STUDY
This research
will be significant in that it will be of benefit to Aguata LGA as it will
expose to them potential sources of generating revenue internally. It will also help the council to strengthen
its financial bases as this study would highlight some identified problems
hampering the utilization of revenue in the council. Furthermore, this study will also serve as a
guide to enable local governments utilizes the revenue allocated to them to
bring about meaningful development. The
research will also aid further researchers to use as reference materials and
literature and finally the study will provoke more research into the topic.
1.6 LIMITATIONS
OF THE STUDY
i. Delimitations
(scope) of the study: This is centered on revenue allocation and
development to local governments in Nigeria but due to the wide or vast nature
of Nigeria, the researcher now chose Aguata local government as a case study to
deal with this particular problems in other local government in Nigeria. The
study is also centered on the sources of revenue available to local government
both the internal and external sources of revenue.
ii. Limitations
(constraints) of the study: In the
effort of carrying out this research the researcher was faced with the problem
of time, finance and visitation of Aguata Local Government, the case study of
the research work.