Analysis of options for Maximizing Local Government internally generated Revenue in Nigeria

Abstract

This study examined the various options for maximizing internal revenue generation in the Nigerian local governments. It took critical and hard look on the various sources of internal revenue in the local governments, problems of exploiting the various sources for revenue generation, and the reason why most of the sources remain untapped or under-tapped by the local government in Nigeria. The study suggested feasible and pragmatic ways to maximize internal revenue generation in the local governments. It observed that prior to 1976 Local Government Reform; most local governments were able to maximize their internal revenue generation and discharged their primary responsibilities with little or no financial assistance from the higher tier governments. However, with the introduction of statutory allocations to the local governments following the 1976 Reform, most of the local governments abandoned the hitherto viable internal revenue sources in preference to the revenue from statutory allocation. This unwholesome attitude of most local governments, among others, was identified as the bane of internal revenue generation at this level of government. The paper concludes, by stating that unless the local governments look inwards to maximize their internal revenue sources it cannot be financially self-reliant. The implication of this is that it cannot enjoy reasonable degree of autonomy as a third tier of government if it continues to be heavily dependent on the financial assistance from both the federal and the state governments, to be able to function effectively. The reason is because as the saying goes, "he who pays the piper dictates the tune."

An Assessment of Revenue Mobilization in Nigeria Local Government: Problems and Prospects

“…Also there is need for local government to mobilize resources in order to take care of the responsibilities to the people and based on the constitution the sources of Nigeria local government are group into (Agya, et al, 2015): external sources which includes; Statutory allocation from the Federation Account in accordance with section 160 (2) of the constitution of the Federal Republic of Nigeria (Promulgation) Decree 1989, Statutory allocation from each state government to the local governments in its areas of jurisdiction, Federal Grants-in-aid, State-Grants-in-aid, Borrowing from state government and other financial institutions. According to Atakpa, Ocheni and Nwankwo (2012), Statutory allocations from the Federation Account plays a highly increasing roles in the proportion to the revenue generated by local governments in Nigeria. However, even the oil boom and revenue accruing to the Federations' Account started declining since 1983.…”

“…The local government revenue in Nigeria can be increased if the existing legal sources of revenue are fully exploited and tapped, most local governments will need not to rely on or bother itself seeking additional sources since the present sources provided by the existing laws will be well adequate to meets the obligations (Agya, et al 2015& Atakpa, Ocheni & Nwankwo, 2012. Revenue generation can also be increase through the following: facilitating arrangement between the council official and the traditional ruler on how to collect community rates and involvement of traditional rulers through the head of the villages and their chiefs to assist in collection of the tax on behalf of the local governments due to their familiarity with and respect accorded to them by their subject (Olaoye, 2008); modification of existing laws on internal generating revenues to enhance their generation capacity; promulgating laws that will enhance zero tolerant for corruption, because irrespective of huge amount of revenues generated internally in our local governments, no valuable progress will be made or achieved if the incessant misappropriation, mismanagement, corruption and embezzlement of public funds is not seriously dealt with (Atakpa, el at.…”

Financial Autonomy and Rural Development in Ogun State, Nigeria: A Stakeholder’s Perspective

“…Suffi ce to say that this type of revenue is the major avenue for fi nancing local government projects, though the quantity of it is a function of revenue will and size of the LGA and of course the nature of operations in such LGA (Agba et. al, 2014;Atakpa, Ocheni & Nwankwo, 2012;Olaoye, 2008).…”

Challenges of Expanding Internally Generated Revenue in Local Government Council Areas in Nigeria

“…Aliyu (1995) opines that this kind of fraudulent practice is prevalent in most local government councils throughout the country. Indeed, Atakpa et al (2012), citing Newswatch Magazine edition of December 20, 1993, captioned "Fortress of Corruption: Audit Report indicts Local Government of Fraud and Corruption,''" corroborated that "most local governments in Nigeria today have become centres or fortresses of corruption." The Report highlighted that "all the Chairmen of the twenty-one local governments in a particular state were pronounced guilty of financial irresponsibility; that the local government councils had become fortresses of financial malpractices…."…”

“…The finance and audits' departments of many local governments in Cross River State are not sufficiently staffed with well trained, qualified and experienced financial managers, accountants, clerks, auditors and property valuation officer who would apply their skills and initiatives to develop pragmatic plans and strategies to enable them harness and exploit fully and effectively the internal revenue sources. Atakpa et al, (2012) posits that some local government officials "exhibit their inability to keep proper and adequate accounting records" because they" have little or no knowledge about the accounting systems in local government." These problems are further compounded by poor assessment methods.…”