Sources And Strategies For Improvement Of Local Government Revenue In Abia State (A Case Of Ohafia Local Government Area)

Project and Seminar material for Public Administration

Project and Seminar material for Public Administration


The important of revenue generation and the strategies for improvement and management of such revenue for the socio-economic development of Ohafia Local Government Area. Cannot be overemphasized. In fact, the level of a local government area revenue generation and the provision of infrastructural facilities serve as the major parameter for determining its growth and overall development.

This means that there is need for local government to formulate an effective strategy necessary towards the achievement of its objectives and obligations. This work has five chapters. Chapter one deals with introduction comprising statement of the problem, significance of the study, research questions and deficiency of terms used. Chapter two reviews related works on the topic, purposes of local government area. Revenue strategies for improvement of local government revenue.

Revenue strategies for improvement of local government revenue in Abia state, the background and geographical location of Ohafia local government area. Chapter three discuss the methods adopted by the research in the course of this work. Chapter four deals on the analysis and presents the data gathered through questionnaires. Chapter five, discusses the findings made in the previous chapters. It also summarizes the findings, conclusion was drawn and recommendations made.

Table Of Contents

Preliminary Page(s)

  • Title page
  • Approval page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of contents

Chapter One

1.0 Introduction

  • 1.1 Back ground of study
  • 1.2 Statement of the problem
  • 1.3 Objectives of the study
  • 1.4 Research questions
  • 1.5 Significance of the study
  • 1.6 Scope and limitation
  • 1.7 Limitation of the study
  • 1.8 Definitions of terms

Chapter Two

2.0 Literature review

  • 2.1 Introduction
  • 2.2 Sources of local government revenue
  • 2.3 Problems of revenue collection
  • 2.4 strategies for revenue improvement
  • 2.5 Local government revenue management
  • 2.6 Budgeting
  • 2.7 Revenue generation
  • 2.8 Expenditure
  • 2.9 Accounting
  • References

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research design
  • 3.3 Sources / method of data collection
  • 3.3.1 Primary data
  • 3.3.2 Secondary data
  • 3.4 Population and sample size
  • 3.5 Sample technique
  • 3.6 Validity and reliable of measure instrument
  • 3.7 Method of data analysis

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Presentation of data
  • 4.3 Analysis of data
  • 4.4 Interpretation of result

Chapter Five

5.0 Summary Conclusion and Recommendation

  • 5.1 Introduction
  • 5.2 Summary of findings
  • 5.3 Conclusion
  • 5.4 Recommendations
  • References
  • Appendix
  • Questionnaires

Chapter One

1.0 Introduction

One of the greatest problems facing local government administration in Nigeria today is unarguably finance. Essentially, this is needed for the execution of their statutory functions. It is now an established facts that funds from the existing traditional sources (internal, external and loans) are for one reason or the other inadequate to cope with the present-day demand of governance.

Also, it has been discovered that those officials entrusted with revenues collection of the local government treasury are not competent. Again, companies and individuals shy away from declaring their real profits(s) at the end of fiscal year, thereby making it difficult for tax officials to know how much tax they should pay.

In this works, I will examine various sources of revenue generation and strategies to be adopted so as to improve revenue generation. Efforts will also be made to proffer suggestions on ways of revenue improvement where possible, though no matter the strategies or suggestion(s) successful revenue generation depends on the treasures, the chief account office, revenue officials and the effective chairman.

1.1 Background Of The Study

Ohafia Local government is situated on the cross River Basin. It is bounded on the North by AfiKpo /Edda Local government in Ebonyi state; in the south by Arochukwu .L.G.A.the three main clans of Ohafia included Ohafia main land, Abriba and Nkporo.

In 1976, Arochukwu-Ohafia L.G.A was created by the Federal Military government but in 1983, Ohafia L.G.A was in first administered by chief Barrister Ogbonnaya Dike from Abia village. The local government Head quarter is Isiama which has become a cosmopolitan center. The people of Ohafia are noted for their farming prowess, they produce agricultural products such as yam, palm oil, palm Kernel, cashew nuts, timbers, groundnut, Garri etc. these products are a source of revenue to the local government.

The local government has not been able to attract either state or federal government investments except federal Army Barracks. The people are noted for their trading activities hence, the name Ohafia. The people of the market besides training, are noted for their hospitality to strategies.

The famous Obanyi Isingwu, Uduma and Usmang Abriba to name but few are the only source of water supply. During dry season, water is always scarce. It is necessary to observe that the famous celebrated wear dance, Ekpe cultural dance and (Dibu ugwu Dance) are a beauty to behold. Therefore this study shall examine the remote cause of not generating adequate internal /revenue in Ohafia local government area to be precise and the way out of this problem.

1.2 Statement Of The Problem

The purpose of this work is to final out various sources and strategies for improvement of local government revenue in Abia state with special reference to Ohafia L.G.A. the collection and revenue generation has been one of the main problems of local government. However, to generate their own internal revenue has aroused the curiosity of the researcher to investigate into the remote causes of not generating internal revenue and proffering suggestion(s) where necessary.

1.3 Objectives Of The Study

I. to help the policy markers, officials and administrations of local government as well as students of local government and public Administration on the general finance of any local government.

ii.To find and expose those influences that constitute problems to the topic under study.

1.4 Research Questions

The local government system as a third tier of government in Nigeria is charge with enormous responsibilities as contained in the four the schedule of the constitution of the federal republic of Nigeria (1999). These responsibilities required availability of enough revenue to discharge it.

The inability of local government to raise their own internal revenue and the difficulties associated in revenue collection aroused the curiosity of the researcher to investigate into the remote causes and proffer remote cause and proffering suggestion (s) where necessary.

Specifically, I will examine the following questions.

  1. Why do local governments source for revenues?
  2. Are there any known sources for revenue?
  3. Will the revenue help in providing the necessary infrastructural needs of the local people?
  4. Who manages the revenue of the local government?
  5. Does a federal and state government allocation prevent local government from sourcing for more revenue?
  6. Is federal and state government the major source of local government revenue?

1.5 Significance Of The Study

The sources and strategies for improvement of local government revenue is an interesting and researchable topic. This work will enable the local government executive to know the various ways the council generates its revenue and thereby putting him in a position to make enabling decisions on how to use the hard earned revenues.

In fact, the topic under study is part of business studies, this study will highlight the problems that militate against revenue collection in Abia state, it will also serve as parameters to other people who may wish to contribute their own ideas to this topical issue. The society and indeed the local people will benefit lot from the study.

1.6 Scope Of The Study

This study will cover the area of problem emanating from collection of revenue. In Abia state, which does leads to stress. This study though limited to Abia state will not lose sights of the facts that it should be done in such a way that will make it relevant to any other local government In other states. Though the research does not intend to deviate from the focus of this study but will rather study every aspect of it given the available data and information.

1.7 Limitation Of This Study

Every effort will be made to carry out this research work meticulously, though there is certain limitation due to opposing variables militating against the progress of the research, the factors are stated below.

I. Finance:

only the economic realize the cost of things as regards to the research about making other necessary provisions and findings.

Ii. Time:

there is a limited time frame available for the study, which results mainly dues to the shortness of the academic session. This time factor will in no small way effect the study.

Iii. Academic Workload:

there are other opposing factors in the sense that equal attention has to be paid to other assignments.

1.8 Definition Of Terms

For the purpose of understanding and clarity, the following terms are defined in the content in which they apply in this work.


this applies to all monies realized either from the federal or state government or internal source.

Local Government:

This is a forum of public administration which in a majority of contents, exists as the lowest tier of administration within a given state.


this is the direction and scope of an organization over the long term which achieves advantage for the organization through its configuration of resources within a challenging environment, or it is a plan of action designed to achieve a specific goal.


Sources are those points at which something spring into being or from which it derives is or are obtained.

Chapter Five

5.0 Summary, Conclusion And Recommendations

5.1 Introduction

In this last chapter, some of the research findings reported in the preceding chapters will be discussed. Conclusion will be drawn from the findings and recommendations made.

5.2 Summary Of Findings:

This work has so far examined the sources and strategies for improvement of local government revenue in Abia state in general and Ohafia local government in particular.

Data were obtained through the use of questionnaire and oral interview. The data collected was analyzed in consonance with the research work formulated at the beginning of this work.

The first finding was that improvement of local government revenue is the joint effort of the chairman, the Board in internal revenue and the local community.

Another interesting finding of this study was that for the local government revenue to improve the existing financial resources should be expanded. The local government official should reduce their frequent travelling and encouraged local investment.

Furthermore, it was found out that the major source of local government revenue was statutory allocation and apart from the huge amount from the allocation, the local government still source for more revenue. This shows that the statutory allocation has not been able to solve the revenue problems of local government councils.

Another inference drawn from the data analysis was that because of the low revenue of the local government, it has not been able over the years to perform its statutory function hence the low growth and development rate Ohafia local government.

5.3 Conclusion

Conclusion drawn from the findings of this work was;

  1. That local government revenue will not improve without the positive responsibility of the chairman, board of internal Revenue staff and the local communities.
  2. That expansion of existing financial resource base should be expended and travelling by local government of local investors.
  3. That statutory allocation yield more revenue to the local government authority.
  4. That apart from statutory allocation the local government still source for more revenue.
  5. That the federal and state government should release allocation to local governments on time.
  6. That the levels of growth and development have been hampered to the cash crush.

5.4 Recommendation

Having critical studied the sources strategies for improvement of local government revenue in Abia state with reference to Ohafia local government Area, the researcher has decided to make the following recommendations in the belief that if strictly followed to the later, some of the problems observed will be curtailed if not removed entirely.

  1. The local government revenue officials should exhibit transparency in the discharge of their duties. Adequate supervision should be intensified in this direction.
  2. The local government should build motor parks, markets, embark on other business ventures like transportation soap making, etc. this will help them to generate revenue internally.
  3. The local government orientation agency should embark on enlightenment campaign to sensitize people on the need to pay their taxes and rate as and at where due.
  4. Revenue officials who connive with payer to either falsify or under-estimate them should be made to face the wrath of the law.
  5. The federal and state governments should increase the local government revenue and ensure that such allocation is released promptly.
  6. The law enforcement agency and the court should help the local government by playing their own role effectively.

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