AN EXAMINATION OF THE SOURCE AND USES OF LOCAL GOVERNMENT FUND IN NIGERIA
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AN EXAMINATION OF THE SOURCE AND USES OF LOCAL GOVERNMENT FUND IN NIGERIA
EXAMINATION OF THE SOURCE AND APPLICATIONS OF LOCAL GOVERNMENT FUND IN NIGERIA
Local government is the closest level of government to the people. It is regarded to be the foundation of any country’s governance structure.
The federal government believes that only an effective local government system can mobilise the nation’s human and material resources for local government.
Its objectives are to standardise and stabilise the function and financial resources at the local government level, as well as to encourage initiatives and leadership potential.
The essential procedure of local government is income mobilisation and effective utilisation, particularly given the lack of a complete study on the sources and uses of funds in the local government.
The current trends of inefficiency and ineffectiveness of local governments should be evaluated within the context of available resources.
If the local government’s financial resources are boughant and viable, it will go a long way towards signalling strength and stability to offer superstructure of government authority.
There is little discipline on the side of the local government’s leadership, administration, and workers in collecting revenue efficiently and putting it to good use.
In light of the foregoing, the researcher’s main goals for this research project were to identify the sources of cash accessible to local governments, their uses, and the problems connected with their financing in Nigeria, utilising Ezeagu Central Local Government Development Council as a case study.
This research critically examined the issue of local government financial sources and uses.
Primary and secondary data were employed in the aforesaid study project. The primary data sources were surveys and oral interviews, whereas the secondary data sources were textbooks.
The data was analysed using percentages. The recommendation and conclusion were formed based on the findings.
EXAMINATION OF THE SOURCE AND APPLICATIONS OF THE LOCAL GOVERNMENT FUND IN NIGERIA
Local government is the closest level of government to the people. It is regarded to be the foundation of any country’s governance structure.
The primary goal of this study or research work was to investigate the sources of cash accessible to local governments, their applications, and the challenges related with local government finance in Nigeria, utilising Ezeagu Central Local Government Development Council as my case study.
This study has been divided into five chapters for ease of reading and comprehension.
The author addressed the study work’s bank ground, which provides an overview of the basic technique of local government income mobilisation and its effective use.
She went on to conduct a survey of related material, in which the author obtained several journals and news papers and wrote diverse perspectives on the sources and uses of local government funds in Nigeria. It also considers the current trend of local government inefficiency and ineffectiveness.
The third chapter is about research design and technique. Primary and secondary data are efficiently used.
The fourth chapter is on data presentation. The chi-square approach is used in this chapter to replicate the presentation interpretation, data analysis, and hypothesis testing in chapter one.
The fifth chapter discussed the findings, recommendations, and conclusion. The author’s conclusion is based on the idea that revenue available to local government authorities functions,
as well as cash readily available to these councils, are poorly managed. The author bases his recommendations and conclusions on these findings.
INTRODUCTION TO CHAPTER ONE
1.1 BACKGROUND TO THE STUDY
Many scholars have defined the word local government, each with a different perspective on its development. According to W.A. Robinson (2000), ‘local government’
entails the concept of a geographical non-sovereign community processing the legal right and the required organisation to control its own affairs. This, in turn, presupposed control over participation in state affairs.
According to U.N. Akpan (1999), two notions of local level development have been particularly dominant in Nigeria since colonial times. The first is known as the indirect rule system, and it is nothing more than a field administration model.
According to Gboyega Alex (1998), the colonial authority enacted a nationwide order creating the model first in the Northern provinces and afterwards in the Southern provinces in 1916, two years after the analysis of the Northern and Southern protectorates.
In terms of ideology and practise, indirect rule was really rule by British colonial officials through local chiefs; the emphasis of their model was colonial management of conquered people and so did not encourage public involvement and representation in native authority.
As a result, it was fundamentally different from the pre-colonial government system, which emphasised power balance and citizen engagement. These pre-colonial institutions were warped by indirect authority.
The concept was also not conducive to human growth, despite the fact that it resulted in the establishment of a network of infrastructures including as roads, schools, and dispensaries thanks to the collaboration of native authorities, the colonial central authority, and missionaries.
Local governments have their own sources of revenue, such as community taxes and rates, licences and fees, earnings and sales, federal and state statutory distribution, and so on. Following the Second World War,
the political development between Nigeria and/or Britain resulted in the termination of the indirect rule system and its replacement with a system that emphasised full-grown local administration that was efficient and largely autonomous.
The eastern region was the first to begin the experiment in 1950, with the remaining regions following in 1952. A few years afterwards, specifically in 1976, the federal military government announced the reforms of the nations local government structure.
Essentially, the reform resurrected the concept of participatory and autonomous government, with access to resources both domestically and outside to promote the social and economic well-being of local communities.
The subject of why there was such a dramatic shift away from the former reliance on local regulations via traditional norms and bureaucrats was extensively investigated. Since the 1970s, the demand for autonomy has been administration.
The changes of 1976 laid the groundwork for autonomy. Actually, the 1979 constitution made the anticipated a reality, therefore the era from 1976 to 1979 can be characterised as the period in Nigeria when the concept of local government evolved to include autonomy for the level of government.
However, autonomy was projected to be limited due to control in areas such as finance, administration, judicial, auditing, and even miscellaneous,
which the several state governments exercised in local governments. The most visible control is on rinace, which has an impact on local government growth.
The term “finance” encompasses personal finance, company finance, and public finance.
Finance was defined by Mautia Joy (2001) as the art of providing a means of payment or as a corpus of facts, concepts, and theories dealing with the raising and use of funds by individuals, businesses, firms,
and the government. Our interest in this project stems from the issues of raising and utilising finances by the local government, which will be emphasised by the Ezeagu Central Local Government Development Council.
Thus, a uniform system of local administration was established by identifying the executive functions of local government through the guidelines for local government.
According to Nigeria’s constitution, section 7 subsection 1 (b) (e) (j) (i) (vi) stipulates numerous ways the local government might acquire its finances, yet these methods have remained woefully inadequate for maintaining capital and recurrent council. One of the flaws accountable for the obscenity was a lack of enough finance and subvention.
Until the revenue allocation act was passed and received by the revenue allocation fiscal commission in 2002, the federal government operated a system of block grants and subventions to local governments via state governments. Because money did not flow directly from the federal account to the joint state and local government.
3. Does the local government have any financial authority?
1.5 HYPIOTHESIS STATEMENT
The following hypothesis was developed to guide research.
1 Ho: The available money are sufficient to meet expectations and service.
of the municipal government.
H1: The available funds are insufficient to meet the government’s expectations and services.
2. Ho: the funds available to local government bodies are insufficient.
prudently managed.
H1: The funds available to local governments are not being managed prudently.
3. Ho: The local government is partially underfunded. According to the
account for the Federation
H1: The local government is partially underfunded. According to the
account for the Federation
4. Ho: The local government enjoys financial independence.
H1: Local governments have no financial authority.
1.5 THE SIGNIFICANCE OF THE STUDY
The forces working against the local government authority’ success may be dual in nature. They are native managers and financiers. They are native managers and financiers.
Finance is a significant element of most organisations’ decisions, and knowing how decisions are made is critical if the role of finance is to be seen in its real light.
Finance is critical because it influences planning and achievement of goals.
Local government, as the level of government closest to the people, is the foundation of any country’s government structure. If the local goal area’s financial resources are vibrant and viable, it will go a long way towards community strength and solidarity with other superstructures or government bodies.
The significance of local government in the nation must be acknowledged. It is not a for-profit organisation. However, it is a service-oriented one, and this will undoubtedly harm its revenue. Federal government presence in separate local governments.
It has been noted that the allocation to local governments has not been consistent. The statutory allotment fluctuation always put the local government of their budgets estimate for any given year.
In most fiscal years, revenue is spent on recurrent expenses for running the council, with little or no money left over for capital expenditure. This will be elaborated in a table in Chapter 4 to account for the absence of development projects by various local governments.
SCOPE
Ezeagu Central Local Government Development Area is one of Enugu State’s seventeen local government areas and thirty-nine development centres, for a total of fifty-six local government areas. It is located in the state’s westernmost region. It is located in Mgbagbuowa and is surrounded by the local governments of Ezeagu South, East, and North West.
1.2 STATEMENT OF THE PROBLEM
The fundamental issue with local government is as follows:
1. The issue of revenue mobilisation and effective utilisation.
2. Accountability of local government funds and properties.
3. The difficulty of effective disciplinary leadership in local government.
1.3 AIM OF STUDY
a To investigate the issues in local government finance and identify the factors responsible for low revenue generation and ineffective execution of local government programmes and projects.
b. To detect problems, particularly those affecting finance, in order to make appropriate recommendations for improvement.
1.4 RESEARCHERS QUESTIONS
1. Is the availability of cash sufficient to meet the expectations and services of the local government?
2. Are the monies provided to the local government authority well managed?
The significance of this study is to investigate strategies to improve local government funding for effective channelling, implementation, and execution of the programme in my area of concern, Ezeagu Central Local Government Council.
1.7 DEFINITION OF ERMS
Local governance/Authority: The third tier of governance, following the state and federal governments.
* Finance: – A body of knowledge concerned with the collection of funds by local government authorities; it includes personal, business, and public finance.
* Local levies: These are all internal sources of revenue collected inside the local government jurisdiction.
* Local Government Allocation: The percentage of monies received by local governments from the national fund.
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