Improving Effective Revenue Utilization In Nigeria Local Government (A Case Study Of Ibadan North Local Government)

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Improving Effective Revenue Utilization In Nigeria Local Government (A Case Study Of Ibadan North Local Government)

Chapter One


1.1 Background of the Study

An effective local administration rests majorly on the availability of human and materials resources to ensure development which the nation could mobilize and if properly harnessed. In 1976, the federal military government then issued guideline on local government in Nigeria. The reform gave recognition to local government in Nigeria as the third tier of government as incorporated successive Nigeria constitution.

This gave a substantial and unprecedented autonomy to local governments in the country. With this autonomy, greater responsibilities were assigned to meet the aspiration of the people that most of the local governments are finding it difficult to cope with at the grass root.

Moreover, the principal aims of creating local governments in Nigeria include;

  1. To serve as the third tier of government through which appropriate services and development are made in responses to the wishes of local community through their representatives.
  2. To serve as the intermediary between government at the centre and local communities.
  3. To mobilize and utilize both human and material resources by engaging the people at the local level in the government activities.
  4. To facilitate the exercise of democratic self government closer to the grassroots.
  5. However, all local governments in Nigeria do no longer perform their responsibilities simply because of Poor finances arise from inadequate revenue generated.

The financial situation in Nigeria local governments is further aggravated by the prevailing economic situation in this country which erodes the value of fund available to provide essential social services to the people. The precarious situation of the local government has been blamed on the total dependence of federal and state governments for monthly statutory allocation and support from higher level of government looking inward to improve their internally generated revenue (IGR) rather than to bring about economically feasible budgeting and desire development.

It is in the light of the above necessity the calls for the needs to examine critically the internally revenue generation could be improve upon to complement dependence on the higher allocation instead on total dependence on the higher levels of the government to survive.

1.2 Statement of the Problem

Generally, the local government is faced with myriads of problems ranging from corruption and embezzlement, poor financing and mismanagement of funds which could be attributed to poor leadership. This has deterred their development. The major issues that are connected with the revenue utilization is not unconnected with total dependence on federal and state statutory allocation and resultant effect is the poor revenue utilization and poor services delivery and its attendants implications of poor governance for poor leadership.

1.3 Objective of the Study

The objectives of the study are as follows;

  1. To critically examine ways of improving revenue utilization in local government level
  2. To conceptualize the concept of revenue utilization
  3. To determine whether there is effective revenue utilization at the local government level

1.4 Significance of the Study

From the outlook, there is need for the local government to improve their performance. However, the research is significantly considering the people and the need to utilize substantial revenue for its various sources in addition to federal and state statutory allocation for avoidance, it will also help to identify some means of utilizing revenue that has been neglected over years.

It will also be beneficial to grassroots, because improved revenue utilization means improved standard of living in form of provision of social amenities such as road, hospital, park, drinkable, educative as it will be a reference point for researchers.

1.5 Scope of the Study

The researcher is intended to the carryout using primary and secondary data. Primary that will be obtained from each oral interview and questionnaire while secondary data will be obtained from annual reports and estimates of Ibadan north local government.

The method of data analysis is chi-square

1.6 Statement of the Hypothesis

  1. Ho: there is no correlation relationship between effective revenue utilization and Nigeria local governments.
    H1: there is correlation relationship between effective revenue utilization and Nigeria local governments.
  2. Ho: internal control has not been put in place to ensure effective utilization of revenue generated at the local level.
    H1: An internal control measure has been put in place to ensure effective utilization of revenue generated at the local level.
  3. Ho: there is no constitutional provision for revenue generation of local government level.

1.7 Limitation of the Study

In carrying out this research work, no doubt on the number of hindrances are likely to be encountered because this type of study entails a critical look on effective revenue utilization in Nigeria local government such problems are:

1. Non- availability of material:

This posses a big problem for the researcher most of the libraries visited are not adequately stocked.

2. Financial constraints:

The researcher was restricted by the meager financial capacity available to me. Being a student with little or no means of income.

3. Time constraint:

The researcher was faced with limited time for me to carry out the research work with project work. Another limitation is that the study is limited to only one local government area.

1.8 Definition of Operational Terms

Local Government:

According to Lawal, (200), local government can be defined as a political sub-division of a nation in federal system which is constituted by law and has substantial control of local affair which includes the power to impose taxes or exact labour for prescribed purpose.

According to William Robson (2006), defines local government as involving the conception of territorial, non-sovereign community possessing the legal right and the necessary organization to regulate its own affairs


Revenue can be defined as the funds generated by the government to finance its activities. In other words, revenue is the total fund generated by (federal, state and local government) to meet their expenditure for a fiscal year.

This also refers to the grand total of money of income received from the sources of which expenses are incurred. Revenue could be internal or external revenue.


Utilization can be defined as effective use of resources to promote general administration in the interest of the people

1.9 Historical Background of the Organization

The administrative headquarter of Ibadan north local government was located at Agodi gate. It was established through the promulgation decree of 1991.

During the period of military regime in 1991 headed by a military dictatorship president Ibrahim Gbadamosi Babangida, despite the splitting of the old difference Ibadan municipal government (IMG) in five independence local government, namely;

  1. Ibadan north east local government
  2. Ibadan north- east local government
  3. Ibadan –south west local government
  4. Ibadan north west local government
  5. Ibadan south-east local government

The resident of these are mostly Yoruba and other tribes and their religions include Christianity, Islamic and traditional religion. The people of the area engaged in different economic activities.

The administration is governed by duly elected executive arm of government which is the chairman and the accounting officer for the local government consist of eleven (11) wards and as at now, each ward is represented by a councilor.

Organizational structure of Ibadan north local government

Chapter Five

5.0 Summary Of Findings, Recommendations and Conclusion

In this chapter, efforts will be made to present the findings of this study, makes some recommendations and finally draw some conclusions.

5.1 Summary of Findings

From the study, one could summarize that the problem of effective revenue utilization is not in the hands of the federal and state government, but lies in the council especially those entrusted with the local government revenue. One the problem that hinders the effective utilization of revenue available to local government, it was deduced from the data collected that general laxity on the management cadre of the local governments in Nigeria. In this wise, to those entrusted with the revenue of the local governments need to strictly with financial regulations guiding financial management in administration of local government in Nigeria.

Misplaced priorities on government programmes also hinder utilization of revenue in the local government in Nigeria. The revenue allocated and generated by local government are always mismanaged. On series of projects which may and not meaningful to people development and in the same manner resources are used to effect bad debt owned by successive past administration of the local governments.

5.2 Recommendations

The study recommends effective internal control system to ensure better utilization of resources. To make this effective, there must be interdependent relation between various departments within the local government system. This will facilitates checks and balances in the payment of voucher and expenses and financial documents relating to government programme in this level of government.

Also, there must be clear constitutional provisions guiding the intergovernmental relations among different tiers of government. This will constitute a check to the tight control by the higher level of government over the control of resources of local government. The independent control of resources will ensure effective utilization of resources and institutionalization of strong anticorruption agencies to curb corrupt practices in any arms or tiers of government.

Moreover, good policies formulation devoid of misplaced of priorities in government programmes or projects at the local level will ensure better utilization of resources of local governments. Thus, programmes or projects that could impact positively in the life of people must be embarked upon to ensure judicious use of local government resources to make life meaningful at the grassroots.

5.3 Conclusion

The good management of revenue by various tiers of government is identified to ensure better accomplishment of government programmes. The management of revenue in more effective could be guaranteed through internal control mechanism, clear constitutional provision and capability of the local government to embark on the felt needs programmes of the people will ensure better development and as well make grass root habitable for the people.

Improving Effective Revenue Utilization In Nigeria Local Government (A Case Study Of Ibadan North Local Government)

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Improving Effective Revenue Utilization In Nigeria Local Government (A Case Study Of Ibadan North Local Government)


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