REVENUE GENERATION, UTILIZATION AND GRASS ROOT DEVELOPMENT IN NIGERIA: A CASE STUDY OF EHIME MBANO LOCAL GOVERNMENT COUNCIL OF IMO STATE
CHAPTER ONE
INTRODUCTION
One of the recurrent problems of the three tiers system in Nigeria is dwindling revenue generation a characterized by annual budget deficits and insufficient funds for meaningful growth and visible projects development. Local government areas the nearest government to the people at the grassroots in Nigeria, they are strategically located to play a pivotal role in national development. Since they are responsible for the government of about 10 percent of the population of the majority of Nigerians and formulate strategies for their realization (Bello-Iman 1990).
Local government in Nigeria receives statutory allocations from the two higher tiers of government federal and state. At the present revenue sharing formula, local government receives 20 percent from the federal account. They are also statutorily entitled ten percent of state’s internal revenue. As regards to value added tax, local government receive 30 percent in 1998. This was shared to local government on the following basis equality (50 percent), Adisokonu Nwankwo, 2004.
The federal government controls all the major sources of revenue like import and export duties, mining recent and royalties, petroleum sales tax, petroleum profit tax and companies icon tax among other revenue, local government taxes are minimal hence limits their ability to raise independent revenue.
So they depend solely on allocation from federal account. Much of the revenue collected by the federal government and distributed among the different tiers of government using the vertical revenue allocation formula is from the federal government. But the federal government seems to exercise too much control that incapacitate local government from performing their best to do project (Emenuga, 1993 and Ekpo, 1994).
Local government has the responsibility for economic planning and development, citizenship development and empowerment through primary vocational education and capacity enhancement through health care provision cannot be effectively executed. In a study carried out by United Nations Development Programme (UNDP) and the state/Local government department of the presidency, out of an aggregate of 23,6027 claimed by the respondent. Local government, only 5,291 are linked to National grid for electricity supply while 33 percent do not have electricity at all even in their headquarters (UNDP, 1989) yet between 1995 and 1997 the local government executed only 122 rural electrification projects nation wide. Sixty percent of the local government inhabitants have no access to telecommunication facilities yet as local government are still confined to their traditional with just a little improvement.
Recently, citizens are interested on the development of their local government which yearn towards improved standard of living. Local government actualize the development goals through revenue mobilization. The more the revenue, the more the development, but local government administration is faced with challenges which causes development backwardness in Nigeria and in Ehime Mbano Local Government Council of Imo State and such problems are as follows:
(Ejike, 1993).
Over control of public revenue by federal government and state government, there is no lucrative fund left to local authorities which weakens administrative machinery, lack of mission, lack of comprehensive functional role, lack of proper structures. The role of local government in development process are not known, low quality staff which include dishonest staff and untrained personnel who are suppose to save as tools for development at the local government level, even the few available ones are not properly trained in efficient budgetary and financial management systems. The delay in the passage of annual budget in addition to insincerity among the council staff on field assignment poses greater problems because most of them usually divert collected fund for their personal usage, thereby denying the council of the needed funds for it operation.
It is on this not that this study sought to investigate whether generated and statutory revenues have been properly utilized for moral development or not, with a view to proffer possible suggestions.
This research study is aimed at examining on the area in which revenue generation, utilization and grassroots development is actualized in our society.
1.4 Research Questions
Based on the explanation contained in the background of this study, we propose the following hypotheses:
1.6 Significance of the Study
The importance of the study is very necessary for government in all tiers that comprises both federal, state and local government. Also to students and researchers
The scope of this study will be limited to Ehime Mbano Local Government of Imo State. Due to inconvenience, limited time, and financial constraint. This study will focus on revenue generation, utilization and grassroot development in Nigeria.
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