The Problems Of Effective Utilization Of Revenue Available To Local Governments In Nigeria (A Case Study Of Ilorin East Local Government Area Of Kwara State)

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The Problems Of Effective Utilization Of Revenue Available To Local Governments In Nigeria (A Case Study Of Ilorin East Local Government Area Of Kwara State)


Abstract


The high rate of embezzlement, poor leadership, low rate of accountability, general laxity of the finance department and corruption in Nigeria Local Government, and Ilorin East Local Government in particular really inspired me to work on this project topic: THE PROBLEMS OF EFFECTIVE UTILIZATION OF REVENUE AVAILABLE TO LOCAL GOVERNMENT. In doing 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 Ilorin East Local Government Area of Kwara State. The researcher therefore recommended that the revenue available to local government should be handle 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.


Table of Contents


  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgment
  • Abstract
  • Table of Content

Chapter One

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Significance of the Study
  • 1.4 Purpose of the Study
  • 1.5 Limitation of the Study
  • 1.6 Definition of Terms
  • 1.7 Research Questions

Chapter Two

Literature Review

  • 2.1 Theoretical Framework
  • 2.2 Functions of Local Governments Councils
  • 2.3 Sources of Revenue to Local Governments In Nigeria
  • 2.4 The problem of effective utilization of Revenue of Local Governments
  • 2.5 The impact of the problems of effective utilization of revenue available to local governments
  • 2.6 Solutions/way forward to the problems of effective revenue utilizations

Chapter Three

Research Methodology

  • 3.1 Research Design and Methodology
  • 3.2 Sources of Data
  • 3.3 Area/location of Study
  • 3.4 Population of the Study
  • 3.5 Sample and Sampling Techniques
  • 3.6 Method of data analysis

Chapter Four

Data Presentation and Analysis

  • 4.1 Interpretation and Analysis of Findings
  • 4.2 Data Presentation and Analysis

Chapter Five

Summary, Conclusion and Recommendation

  • 5.1 Summary of Findings
  • 5.2 Conclusion
  • 5.3 Recommendations
  • References
  • Bibliography
  • Appendixes

Chapter One


Introduction

1.1 Background of the Study

Nigeria as a sovereign nation operates a federal system of government i.e. the federal government, state government and the local government councils.

Onwo (1992) Observed that each level of the three tiers of government derive its powers not from the magnanimity of the central government but from the constitution; each level of government has defined responsibilities assigned to it by the constitution. The implication of this is that the three segments of governments are mutually interrelated in a unified effort to make life worth – while for the masses.


1.2 Statement of the Problem

The relevance of the local government councils as the government at the grassroots level is measured by the quality and quantity services rendered to the rural dwellers.

For the council to render meaningful services, in form of provision of basic amenities, construction and maintenance of roads, creation of employment opportunities for the citizens and pay staff salaries as and when due, money is undoubtedly required.

Without the availability of revenue, a local government council will not only be incapable of serving the people but will undoubtedly crumble. It therefore, follows that for the local government to discharge its statutory functions effectively, it should not only be adequately funded but such fund should be efficiently applied.

  1. One of the fundamental problems in local government financial administration is the issue of Effective Utilization of Revenue Available to the Local Government. Ilorin East local government council may have its unique problems that militate against its financial administration.
  2. The problem of delay in payment of federal/state government grants to the local authorities.
  3. The problems of accountability in the local government council.
  4. Another problem is that of ineffective financial control and management both internally and externally.
  5. Fifthly, the problem of financial mismanagement and embezzlement of available funds in local government council.

Finally, the problem of corruption as stated by Oluwale (2000) militate against the utilization of local government revenue.


1.3 Significance of the Study

The significance of any human Endeavour is measured by its relevance to solving human problems. Therefore, the significance of the study is measure by its relevance to solving the problems of effective utilization of revenue available to local governments in Nigeria.

The project will be of benefit, first and foremost to the Ilorin East Local Government administration, as it will expose to them potential sources of generating of revenue internally.

Secondarily, it will help the council to strengthen its financial bases as this study would highlight some identified problem hampering the utilization of revenue in the council.

Thirdly, it will also be useful to the indigenes of Ilorin East local government to co-operate with local council administrators to enable them build a viable local government by paying their taxes and rates promptly.

Fourthly, the project will be useful to various institutions especially Kwara State Polytechnic, Ilorin, Kwara State for gaining greater knowledge and understanding of the problems of effective utilization of revenue available to local government.

Finally, the project will be useful to the general public, organizations, companies etc that may have interest in the project.


1.4 Purpose of the Study

The central focus of the study is to critically analyze the problems of effective utilization of revenue available to Ilorin East local government area as a case study.

  1. The study is meant to identity the major revenue sources available to local government.
  2. To ascertain the problems that confronts the council’s administration in utilizing revenue for their services.
  3. To find out whether or not the revenue is adequate for the council’s expenditure.
  4. To investigate the system of financial control in the local government council.

1.5 Limitations of the Study

This is centered on the problems of effective utilization of revenue available to local government in Nigeria but due to the wide or vast nature of Nigeria, the researcher now chose Ilorin East local government as a case study to deal with these 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.


1.6 Definition of Terms

Some concepts and terms required proper explanation or definition to enhance our understanding of the theme where necessary opinions of scholars will be cited to illustrate the terms.

Democracy

The Ancient Greeks defined democracy as a government of the people, by the people and for the people. This political arrangement allowed every adult male citizen to participate in government activities.

Dare (1981) Postulated that modern democracy is a system of government which gives to individual maximum freedom and periodical opportunities to choose their leader and programmes. Multiple party-systems are a vital characteristic of a democratic government.

Pragmatism

The term pragmatism is derived from the Greek from which practical action arise. It could simply be referred to as philosophy or practical consequences or result oriented. In our context, it is used to describe political programmes aimed at better living standard of the masses.

Rural Development

Rural development is a strategy designed to improve the socio-economic life of the rural dwellers. It involves extending the benefits of development to the less privileged in the society. When applied to local government councils as a third tier of government, in the county, it means conscious efforts by the government, to carry government programmes to the village level. In so doing, deliberate actions are initiated to improve the rural population.

Accountability

Owing to the fact that local government provides local services like sanitation, education, transportation etc to the people of the area, it is logical that it is accountable to the local people within its area of jurisdiction.

This principle of accountability is better ensured by making local government or local government bodies elective institutions. If they function below expectation, they may be criticized by the people or voted out during the next elections. Absence of local accountability may make them indifferent and insensitive to the need, feelings and aspirations of the local people.


1.7 Research Questions

In the effort of carrying out this research, the following questions were formulated:

  1. Are you aware of the constitutional provision of revenue sources to the tiers of government in Nigeria?
  2. By what means has Ilorin East Local government planned the expenditure of available revenue?
  3. What systems of financial control measures are used by council administrators?
  4. Has the utilization of the Revenue Available to Ilorin East Local Government produced positive or negative effects?

Chapter Five


5.0 Summary of Findings, Conclusion and Recommendations

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


5.1 Summary of Findings

From the study, one could summarize that the problem of effective utilization of revenue available to local government, in particular, Ilorin East local government as a case study is not in the hands of the federal and state government, but in the hands of those in the council especially those entrusted with the local government revenue.
On 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 part of the finance department top the list of the problem that hinders revenue utilization. In this case, it means that the finance department to those entrusted with the revenue of the local government are strict with the regulations when it comes to handling the local revenue.

The collected and analyzed data revealed that the level of development on Ilorin East local government is unsatisfactory, though the actual revenue is not up to the estimated revenue, but the available revenue is not utilized to produce the basic amenities for the indigenes of Ilorin East local government like good roads, electricity, pipe – bore water etc.

It was identified that the utilization of the revenue available to Ilorin East local government produced negative impact on its indigenes. It has produced underdevelopment in Ilorin East local government. There are no local industries where the indigenes of Ilorin East can be gaily employed. Therefore, the standard of living of the people of Ilorin East local government is very low.

According to the interview carried out by the researcher on one of the staff of Ilorin East local government, he was of the views that, though the money is coming both the statutory allocation and the internally generated revenue, but before the revenue gets to the implementation stage, the revenue will be inadequate die to embezzlement of the revenue by top officials.

Misplaced priority also hinders utilization of revenue of the local governments. The revenue allocated and generated by local government are always misplaced and mismanaged. As one of the findings of this study, priorities are misplaced projects are done not according to or as demanded by the people.

The researcher also found out that lack of accountability constitute problem for effective utilization of local government revenue, poor leadership, corruption, poor electoral body at the local level, late release of fund from the state government and inadequate skilled personnels. All these problems hinders effective utilization of revenue available to local governments.


5.2 Conclusion

After careful study of the data collected and analyzed, the researcher drew the following conclusion

That the major problem of the utilization of local government revenue originated from electing corrupt and unqualified personnel who knew little of nothing about being a leader or functionaries in the local government. When the head is corrupt, certainly, the whole body fellow when the leaders or chairman of a local government embark on illegal payment in the council without being cautioned, what then become of the staff. The overall impact of the problem of effective utilization of revenue available is to say that, it has produced underdevelopment such as lack of social amenities like good road, tap water, electricity and other social infrastructural facilities and poverty.

The research work has discussed critically and analytically the problems of utilization of revenue at local government level, examining the problems associated with revenue utilization, the impact and the solutions to these problems. It is the view of the researcher that if those entrusted with the money of the local government are honest and accountable, posses sound knowledge about revenue, reduce human factors and posses accurate and reliable information etc. they will be able to effectively and efficiently manage and utilize revenue at local government level in such a way that will commend the support and approval of the people, ad deliver the needed development to where it is most needed.


5.3 Recommendation

As a result of the findings of this research work, the researcher postulated that without good leadership, corruption free personnel as well as the chairman, accountability in every department of the local government, setting priority first, free and fair election at the local level, there can never be prudent management of its revenue.

Therefore, in order to combat the problems of effective utilization of local government revenue, so that intended development of Ilorin East local government is enhanced and citizens enjoy modern items of development, the researcher recommended the following:

  1. Firstly, the electoral body at the local government area should carryout a free and fair election. This will reduce the number of corrupt and unqualified personnels in the local government.
  2. Secondly, the internal auditors to the council should be highly qualified senior accounting staff to avoid being intimidated by other administrative officers of the council.
  3. Thirdly, there should be an auditor general. Auditor general is very important in local government, this is because the auditor general is a neutral person who is appointed by the state government, and by so, he knows no one in the council, and function without being partial.
  4. Fourthly, there should be checks and balances. This is because power corrupts and absolute power corrupts absolutely. The three tiers of government should act as a watchdog over the other.
  5. Fifthly, an audit alarm committee should be established in the local government so as to inform the auditor general when the chairman is making illegal payment.
  6. There should be inter-departmental checking of all the department especially the finance department i.e treasury department for accountability.
  7. Lastly, the state government should ensure to remit the share of local government revenue when due or promptly.

The Problems Of Effective Utilization Of Revenue Available To Local Governments In Nigeria (A Case Study Of Ilorin East Local Government Area Of Kwara State)


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The Problems Of Effective Utilization Of Revenue Available To Local Governments In Nigeria (A Case Study Of Ilorin East Local Government Area Of Kwara State)


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