EDO STATE GOVERNMENT REVENUE SOURCES AND PATTERN (1999-2010)
CHAPTER ONE
1. INTRODUCTION
1.1 THE STUDY’S BACKGROUND
There is no country or state that can adequately address development issues unless adequate and sustainable revenue sources for government activities are in place. It is becoming increasingly difficult for the government to carry out its developmental agenda without measures in place to ensure revenue to fund projects and programs.
Oshiomole (2011) went on to say that adequate revenue is critical for the state’s sustainability, especially in light of the recent global economic meltdown. To administer and run the state or sovereignty, governments all over the world rely on citizen contributions in the form of levies and taxes.
The rising cost of running government, combined with dwindling revenue, had forced various state governments in Nigeria to devise strategies to increase revenue. The sharp drop in the price of oil in recent years has reduced the funds available for distribution to Nigeria’s states.
As a result, the need for the state government to generate adequate revenue from internal sources has become a matter of extreme urgency and importance. The state government’s revenue base must be geared toward making the state government virile, self-sustaining, and financially less dependent on the statutory allocation from the federation account.
However, the experience of the last few years in Edo state indicates that the state government’s financial independence has been elusive due to political embroiled economic instability and worsening social conditions. In this context, the issue of revenue generation in Edo State has gained prominence.
It has also been observed that statutory allocation from the federation account was a dominant feature of Edo state’s revenue profile prior to the advent of the current administration. The current administration in Edo state claimed that the shock from the international market had drastically reduced the accruing revenue from the federation account, to the point where it was on the verge of suffocation at the start of this administration (Edo light, October-November 2010).
It was therefore critical that sources other than FAAC emerge if the state was not to fail. The measures introduced included a total overhaul of the state government’s I G R collection machineries in order to increase its revenue base, sensitization and public enlightenment, a review of existing tax law, and penalties/sanctions for evasion and avoidance.
1.2 STATEMENT OF THE PROBLEM
There is no doubt that a sustainable revenue generation is required for any state government to excel in its primary function of providing essential services to the people of her state. However, since the advent of democracy, the performance of many state governments in Nigeria in terms of income generation has been far below expectations.
Observations across Edo state since 1999 show that the state government has failed to meet people’s expectations in terms of social and essential services. This is linked to the state government’s internal revenue generation, which is not properly coordinated. As a result, this study is being proposed or designed to answer the following research questions.
What are the sources of revenue for the Edo state government from 1999 to the present?
Is the revenue generation inadequate?
Why has the revenue generation in Edo state been so low since 1999?
What steps can be taken to increase revenue generation?
1.3 STUDY AIM
Overarching Goal:
The study’s overarching goal is to examine the sources and patterns of Edo state government revenue from 1999 to 2010.
Particular Goals:
To achieve the overall goal, the study will concentrate on the following specific goals:
I To investigate the sources of income generated by each Edo state administration from 1999 to 2010.
(ii) Determine whether or not revenue generation is poor.
(iii) To identify the causes of poor revenue generation in each Edo state administration from 1999 to 2010.
(iii) Determine the current administration’s efforts to increase her revenue generation.
1.4 THE STUDY’S APPROPRIATENESS
The study’s findings will be useful to:
1. The state government: This study will provide the foundation for the state government to develop various methods of improving their I G R and relying less on F A. A. C. This will allow each state government to meet the demands of providing the people with the necessary social basic amenities while also allowing them to perform their primary function of providing essential services more effectively.
2. Local Government: This study will assist Nigerian local governments in increasing their internally generated revenue. People also receive numerous benefits from the local government level.
– Providing clean water to the residents of the area
– The construction of good roads to facilitate the movement of goods and services.
– The establishment of a well-equipped health center in the community to reduce the number of deaths.
– Offering free education to the community in order to reduce illiteracy.
– The community’s electricity stability
1.5 HYPOTHESIS OF RESEARCH
A hypothesis is a theoretical conceptualization of an idea or quest concerning how the researcher believes the outcome of his study will appear.
It is made up of a set of previously accepted assumptions that serve as the foundation of the investigation. It is a hypothesis that has yet to be tested for validity.
The research work will employ null hypotheses (Ho) and alternative hypotheses (Ho) for the purposes of this research study (H1)
1 HYPOTHESES
H0: The Edo state government is not generating the revenue expected.
H1: The Edo state government is generating the anticipated revenue.
2 HYPOTHESES
H0: The revenue of the Edo state government is low.
H1: The revenue of the Edo state government is not low.
3 HYPOTHESES
H0: Since 1999, the Edo state government has not used her collected revenue.
H1: Since 1999, the Edo state government has used her collected revenue.
4 HYPOTHESES
H0: The Edo state government is not making good use of its revenue.
H1: Edo state makes good use of its revenue.
1.6 OBJECTIVES OF THE STUDY
The investigation focuses solely on the sources and patterns of revenue generation by the Edo state government from 1999 to 2010.
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EDO STATE GOVERNMENT REVENUE SOURCES AND PATTERN (1999-2010)