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REVENUE GENERATION AND UTILIZATION OF LOCAL GOVERNMENT AREAS (A CASE STUDY OF UMUAHIA NORTH LOCAL GOVERNMENT)

ABSTRACT

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.

CHAPTER ONE

INTRODCUTION

1.1   BACKGROUND OF THE STUDY

The revenue generation and utilization in any local government can hardly be overemphasized. The organization more specially, local government is known to have attained or sustained high level of economic growth and development without amply supply of funds and utilization of the establishment people of the locally are use to manage their affairs and achieved the set goals of the council. The above statement explain that local government system is established and expected to perform as well as carryout specific responsibility in improving the living standard of their local dwellers. Revenue has been considered as a significant issue in the economic development of any nation. It’s importance cannot be over emphasized, be it the federal, state or local government. It serves as a life wire of every business which helps the organization to attain its goals. Revenue is of great importance to national planning and development.

The origin of revenue generation and utilization of local government areas started with local government reform of (1976) constitution where local government as established to create impact in the generation of revenue for the development of people in the local government area. This (1976) constitution gave the rural people a sense of belonging in the allocation of “national cake,” since Nigeria constitution provides local government authorities with unique opportunities and challenges to achieve self generation of income for economic growth and development Akpan (1985).

Again, the “1985” Nigeria constitution equally provide that local government authorities should benefits from the federal state government revenue to have these supplemented with their self generation revenue. All the efforts are aimed at making local government viable and self reliant. There is a total of seven hundred and seventy0four (774) local government councils in Nigeria including Imo State which has twenty-seven (27) local government councils. These local government areas are trying to generation enough fund to sustain themselves financially in these covers, these are many hindrance on the way to their success ranging from instability and poor condition of the economy, poorly conflicted road for revenue collection, uncooperative attitude of payee, insufficient industrial units, inadequate supply of social amenities etc. these problems standing against revenue generation government including Umuahia North as a case study. These problems have stimulated the researcher to move into a great mission through research in order in set up strategies to achieve these goals. Poor revenue generation will no doubt prevent the council from rendering good services to the public. The researcher work is therefore set to examine the prospect and problems encountered in revenue generation in Umuahia North and proper solution.

1.2     STATEMENT OF PROBLEMS

It can be observed that revenue generation is an achieve that needs skilled and experienced head in the since that it deals with several dependent and intendment various such as time, energy and labour. Again due to problem of the limited research of the people to satisfy their living very well; revenue generation becomes difficult. These problems include insufficient industrial unit, poorly consisted road for revenue collection, micro- operative attitude of payee, inadequate finance.

1.3  RESEARCH QUESTIONS

1. What impact has revenue generation and utilization in local government system?

2. Inadequate revenue generation in local government system does it affect the council?

3. Is improper revenue generation reflects on the productivity in the local government. Supply of social amenities etc?

Therefore, this research work is design to investigate the various problems associated with revenue in the local government under study and proffer possible solution for efficient generation of revenue in Umuahia North.

1.4  OBJECTIVES OF THE STUDY

Based on the above, the study is designed to outline the following.

1.  To x-ray some of the problems militarily against revenue generation in Umuahia North.

2.  To see if increase in revenue generation will aid quality income distribution in Umuahia North.

3.  To find out if adequately generation revenue will promote economic growth and development of the area.

1.5   SCOPE OF THE STUDY

The study shames through revenue generation in Umuahia North. Information was based on both primary and secondary data from board of internal revenue department, ministry of financial budgeting and economic planning department. Other loans without Umuahia Norths were also covered in order to obtain sufficient information concerning the research work, more especially the revenue collector without this area.

1.6  LIMTATION OF THE STUDY

Within the period of this work, a lot of hunches where encountered, more especially the revenue collectors within the concern. It is necessary to highlight in the course of carrying out the research they include:

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.7 SIGNIFANCE OF STUDY

This research work is of paramount importance Umuahia North authority and other similar local government areas because of the role of financial the organization and institutions. The work will help to advice the researcher knowledge and enable him contributes in finding solution to the problem for which the research is based. The work will also enable to determine the possible course of failure in revenue generation and hereby guiding the government on the steps to take in solving them it will also be of immense benefit to the local government if it takes the findings and recommendations of this research into consideration when making polices and decision concerning revenue generation. This work will be a reference document or further research.

Finally, the research will contribute to the stock of knowledge and stimulate further research into the student matter by students and lecture in the family of and management sciences.  

1.8     DEFINITION OF TERMS

Good research either demands that terms should be defined in right sense where they are used to remove any ambiguous measuring in pursuant of this relief; the following terms are defined as they are used in the study.

Revenue: This is defined as an income of the local government defined from taxes and other sources.

Taxation: This is defined as a compulsory payment made by individual, corporate bodies or institutions to government at institutions to government at internal for its substance.

Internal revenue: Those revenue generations with in the local government in a given, period.

External revenue: Are that revenue generate in a given e.g statutory, allocation from the federation account.

Personal income tax: This is tax which is imposed on individual’s wages, salaries and other earning it is usually progressive. It is also sum total of compulsory payment to government by citizens of certain percentage usually a year.

Statutory allocation: This is the mechanism for the country financial resources among the different tiers of government in the federation with the overall objectives of enhancing economic growth and development, minizing inter- government tension and promoting national unity Nworji (2004).

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