Revenue Generation And Utilization Of Local Government Areas (A Case Study Of Umuahia North Local Government)

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Revenue Generation And Utilization Of Local Government Areas (A Case Study Of Umuahia North Local Government)


Revenue generation is the nucleus and the path to modern development. Thus, the study was to assess the revenue generation and utilization of Local Government Areas. This is because local government as the third tier of government and the closest to the people especially in the rural areas needed revenue to provide basic social amenities to the people. But it is unfortunate to note that the local government management have not lived up to expectation especially to provide basic social amenities to the rural people. Thus, the objective of the research was to analyze the extent to which low revenue generation had affected the development of those areas. The researcher used primary and secondary methods of data collection to generate the needed data. The data obtained through questionnaire was presented in tables and expressed in simple percentages. The following were some of the findings which included slow development of the areas, lack of basic social amenities to the rural people and lack of revenue to maintain the existing infrastructures. The researcher therefore recommended that the local government should provide basic amenities of high quality. By doing so, the people’s interest would be geared towards giving their maximum support to the local government which would lead to the development of the rural area.

Table of Content

  • Title page
  • Certification page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of content

Chapter One

1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Purpose / Objective of the Study
  • 1.4 Research Questions
  • 1.5 Significance of the Study
  • 1.6 Scope and Delimitation
  • 1.7 Limitation of the Study
  • 1.8 Definition of Terms

Chapter Two

Literature Review

  • 2.0 Development of Local Government in Nigeria
  • 2.1 Sources of Review Generation in Local Government
  • 2.2 The Need for Revenue Generation in the Development of Local Government Areas.
  • 2.3 The Problems of Revenue Generation
  • 2.4 The Implication of Revenue Generation on the Development of Local Government Area
  • 2.5 Tax as a Major Source of Revenue
  • 2.6 The Purpose of Tax
  • 2.7 Problems Associated With Tax Collection In Umuahia North Local Government Area

Chapter Three

3.0 Research Methodology

  • 3.1 Research Design
  • 3.2 Area of Study
  • 3.3 Population of the Study
  • 3.4 Sample Size and Sampling Techniques
  • 3.5 Instrument for Data Collection
  • 3.6 Sources of Data Collection
  • 3.7 Validation of Instrument
  • 3.8 Method of Data Analysis

Chapter Four

4.0 Data Presentation and Analysis

Chapter Five:

  • 5.1 Summary of Findings
  • 5.2 Recommendation
  • 5.3 Conclusion
  • Bibliography
  • Appendix

Chapter One


1.1 Background of the Study

Development is a sine qua non for modern civilization. In a crusade and struggle to carryout development at all nooks and crannies of the society, the local government as the tier of government that is nearest to the people is saddled with the responsibility of direct development of the people to a certain level.

Development is highly associated with fund, much revenue is needed to plan, execute and maintain infrastructures and facilities at the local government level. The needed revenue generated for such developmental projects. Like construction of accessible roads, building of public schools, health care centers, construction of bridges among others are soles generated from taxes, royalties, haulages, fines and grants from states, national and international governments.

Thus, the Local government cannot embark, execute and possibly carryout the maintenance of these projects and other responsibilities without adequate revenue generation.

This is the basic reason why development is skeletal at some Local Government councils in Nigeria. The issue of revenue generation is not exceptional to local government in Abia State. This has been one of the problems encountered by Umuahia North Local Government.

This however pronouncedly affected development negatively in local government councils. In this research project, the issue to address is how far revenue generation and utilization can affect the development of local government areas especially in Umuahia North Local Government.

1.2 Statement of the Problem

The Local Government Council take direct care of the grassroots people, that is the people in the rural areas. This group of people sometimes lack essential facilities and condition of modern civilization. They lack pipe bore water to drink, do not have electricity, accessible roads, poor educational infrastructure and facilities to mention but a few.

This is one of the major reasons of rural – urban migration of movement. This has made our cities to be congested and increase in many criminal activities. Based on the above and foregoing assertions, it is obivious that revenue generation and utilization of the rural area is a serious problem. This might be as a result of low revenue generation. If Nigeria is to achieve her desired goal of vision 2020 and possibly meet the millennium development goals (MDGS) target, the issue of revenue generation must be addressed squarely.

Hence the researcher is bothered to find out the impact of revenue generation and utilization on the lives of people at the rural area and how it has affected development in general especially in Umuahia North Local Government Area.

1.3 Purpose / Objective of the Study

The broad objective of the research is to evaluate the revenue generation and utilization of Umuahia North in Abia State.

The other objective of this study includes:

  1. To determine the level of modern social amenities available in Umuahia North.
  2. To find out the level of poverty associated with the rural people as a result of slow development
  3. To find out the degree of rural-urban migration.
  4. To make useful suggestions to solve the problem of low revenue generation as development depends on revenue generated.

1.4 Research Questions

  1. What are the impacts of low revenue generation on the development of Umuahia North?
  2. Are there adequate modern social amenities in Umuahia North?
  3. Is the poverty level of the rural people high has a result of slow development?
  4. Has low revenue generation in Umuahia North contributed to rural-urban migration?
  5. How can revenue generation in Umuahia North be improved?

1.5 Significance of the Study

The significance of any human endeavour is measured by its relevance to solving human problems. The findings of this study would help Umuahia North Local Government to identify the problems associated with revenue generation and its consequences on development.

1.6 Scope and Delimitation

The study is focused on revenue generation and utilization, and how it affects development of the local government areas. It will also involve the analysis of problems associated with revenue generation and its impact on the development of Umuahia North Local Government.

1.7 Limitation of the Study

The researcher was constraint by time as time frame for the submission of this research was short for an expansive research.

The researcher equally encountered financial limitation as lack of sponsorship from corporate bodies thus; the researcher’s little resources could not cover more areas.

The willingness of most local government staff to supply the needed data was another major problem.

1.8 Definition of Terms

Some concepts require proper explanation to enhance our understanding of the theme where necessary opinion of scholars will be cited to explain the terms. The researcher will also give some fundamental definition of terms.

Local Government

According to Lawal (2000) Local Government as a political sub-division of a nation in Federal system which is constituted by law and has substantial control of local affairs which includes the power to impose taxes or exact labor for prescribed purpose.

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


Public revenue could be defined as the funds generated by the government to finance its activities. In other words revenue is the total fund generated by government (Federal, state, local government/ to meet their expenditure for a fiscal year.

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


This is the process of sourcing revenue for the local government in carryout their aim and objectives.


Public expenditure refers to the expenses which the government incurs for its own maintenance, in the interest of the society and the economy in order to help other countries.


Tax can be defined as a compulsory levy by government on goods, services, income and wealth. It provides definite source of revenue for government expenditure. (Udeh O.S. 2008)

It is the way by which government obtain extra money. It spent from income of individual and companies. Tax could be direct or indirect tax. A tax is a payment made by the taxpayers and used by the government for the benefits of all the citizens.

Tax Evasion

Tax evasion means illegal reduction in one’s tax liabilities, thereby paying less than the appropriate amounts and not paying at all.

Tax Avoidance

Tax avoidance is the act of streamlining one’s financial affairs within the law so as to minimize the tax liabilities.


According to Ake (2001) Development is thus the process by which people create and recreate themselves and their life circumstances to realize higher levels of civilization in accordance with their own choice and values.

It also a type of social change in which new ideas are introduces into a social in order to produce higher per-capital income and levels of living through more modern production methods and improved social organization.

Chapter Five

5.0 Summary of Finding, Recommendation and Conclusion

In this chapter, the research presents the summary findings based on the analysis of the data collected, base on the result of findings, recommendations are made which leads to conclusion.

5.1 Summary of Findings

The researcher discovered that the impact of revenue generation on the development of the local government areas could be rated below average which has resulted to slow development of the rural areas.

The researcher also found out that the revenue generation within Umuahia North local government area was grossly inadequate for the provision of modern social amenities.

Due to low revenue generated to provide basic social amenities, such as accessible road, schools, portable pipe-bore water, electricity among others it was impossible for rural people to sell the agricultural crops, drink portable water, pay school fees. Thus the poverty is very high.

The researcher also discovered that due to low revenue generation to provide basic social amenities especially in the rural areas. There was exodus of rural dewellers to the urban centres.

Included in the researchers findings was that the major method to be adopted by the local government in order to improve revenue generation base should be the enlightenment of the citizens on the need and important of regular payment of taxes.

5.2 Recommendations

Based on the findings, the following recommendations have been made.

The efforts of local government should not only be directed toward the revenue yielding alone but also to the provision of social amenities such as basic health facilities, accessible roads, town halls, electricity and water supply which will help to improve the socio-economic of life of the rural people.

These facilities provided by Umuahia North Local government should be of high quality by doing this; the people’s interest will be geared towards giving their maximum support to the government which will lead to the development of the area.

There should be constant campaign and awareness programme within Umuahia North local Government to enlighten the rural peoples on the benefits of prompt payment of taxes to the government as when due, it will go a long way in improving the revenue generation.

The local government should embark on the establishment of small scale industries which will provide employment opportunities for the youths in the rural area to tackle the problem of rural-urban migration.

There should be improvement and development with agricultural sector, such improvement will encourage participation of the rural people within Umuahia north local government which will improve their standard of living of the people.

5.3 Conclusion

In the research, it is clear that low revenue generation by local government in Nigeria have affected the spread of development to all the nooks and crannies of the country. Thus local government councils and their management should strategically plan on proper measures to generate revenue as to meet with their functions as provided by the constitution of the country.

This will enhance their financial ability to implement their constitutional functions or responsibilities to the rural peoples.

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