Since the 1976 Local Government reforms that were undertaken to strengthen the local government  administration in Nigeria, several challenges have cropped up, over the years, to impede the revenue generation and management of local government system; one of such challenges is the dwindling revenue base of local government councils. This study examined the challenges of revenue generation and management in Nigerian local government system, with special reference to Oron Local Government Area of Akwa Ibom. The study employed survey research design. A sample size of fifty-eight (58) was randomly selected from the whole employees of the departments in Oron Local Government Area. Questionnaires were adequately distributed and duely returned. The simple percentage method was used to analyse the data collected. Based on the findings, the study observed that there is an increase of state government interference in the affair of revenue generation and management in Oron Local Government Area. The study therefore recommended that Revenue Agents should be abrogated and replaced with local governments employed staff. However, in order to avoid tax ovation by some people, local government councils should encourage their indigene by providing them with adequate amenities  this  will  no doubt spur them to paying their revenues without complain  or involuntarily.


Declaration - - - - - - - - - - i

Certification - - - - - - - - - - ii

Dedication - - - - - - - - - - iii

Acknowledgement - - - - - - - - - iv

Abstract - - - - - - - - - - v

Table of contents - - - - - - - - - vi



1.1 Background of the study - - - - - - - 1 

1.2 Statement of the problem - - - - - - - 3

 1.3 Objectives of the study    - - - - - - - 6                                 

1.4 Research Hypotheses - - - - - - - - 6  

1.5 Significance of the study - - - - - - - 7 

1.6 Scope and limitation of the study - - - - - - 8

1.7 Definition of Terms - - - - - - - - 9  

1.8 Organization of the study - - - - - - - 10

References - - - - - - - - - - 12



2.1 Concept of Local Government as a third-tier of Government - - 13

2.1.2 Evolution of Local Government in Nigeria    - - - - - 16

2.1.3 Political structure of Local Government in Nigeria - - - 23

2.1.4 Functions of Local Government - - - - - - 24

2.1.5 Reasons for creating Local Government - - - - - 26  

2.1.6 Local Government Finance  - - - - - - - 27    

2.1.7 Challenges of Revenue generation and Management 

in Nigeria Local Government System----30

2.2 Theoretical Framework - - - - - - - 36

References - - - - - - - - - - 38



1.3 Research Design - - - - - - - - 39

3.2 Area of the Study - - - - - - - - 39

  3.3 Population of Study - - - - - - - - 41

3.4 Sample Size and Sample Technique. - - - - - 41

3.5 Sources of Date Collection - - - - - - - 42

3.6 Instrumentation - - - - - - - - 42

3.7 Administration of Instrument - - - - - - 42  

3.8 Method of Data Analysis - - - - - - - 43

3.9 Validity of Instrument    - - - - - - - 44     

3.10 Reliability of the research Instrument - - - - - 44



4.1 Data presentation and Analysis - - - - - - 45

4.2 Discussion of Findings - - - - - - - - 58



5.1 Summary - - - - - - - - - 62

5.2 Conclusion - - - - - - - - - 63

5.3 Recommendation - - - - - - - - 65

References - - - - - - - - - - 66

Appendix 1 - - - - - - - - - - 70



1.1 Background of the study 

The ideas behind the creation of Local Government in Nigeria is that the people at the local level are assumed to have the fullest awareness of their needs. Every local jurisdiction has its unique economic, social and physical characteristics and its historical tradition which are better understood by its people (Uhunmwuangho and Aibieyi, 2013). Thus, Uhunmwangho and Epelle, (2008) argue that the Local Government  Areas are created to provide the services which the Federal and State Governments cannot easily undertake due to their remoteness from the local Communities. 

Nigeria runs a federal system of government that consists of three tiers, that is, the federal, state and local governments. Each of these spheres has constitutionally assigned responsibilities to discharge. According to Orewa (1983) , it has been generally agreed that no central government can satisfactorily conduct administration wholly from the capital through civil servants, based at the headquarters. Thus, need for a form of decentralization, according to him, such as will enable the government to reach out to the people at the local level, becomes imperative. 

Since the 1976 Local Government reforms that were undertaken to strengthen the local system in Nigeria, several challenges have cropped up, over the years, to impede the performance of Local Government Councils in the discharge of their constitutionally assigned responsibilities. One of such challenges is the dwindling revenue base and management. This challenge of revenue generationand management in Nigerian Local Government system has become imperative in view of the fact that in recent time, since 1976, the role of the local government as a veritable instrument for rapiddevelopment of rural, and even the urban areas have taken a central stage albeit without a corresponding access to prerequisite financial resources through a channel of creating or generating revenues to meet this expectation (Maurice John, 2012). 

Interestingly, the sources of funds for this tier of administrative authority have continued to dwindle over the years with the ascendancy of both the central and state as the key actors in the Nigerian political economy. The local government is relegated to the back stage. Adedokun (2012) clearly made this situation explicit by observing that the federal structure of Nigeria constraints local  government’s ability to mobilize and use revenue to meet their obligation in a sustainable manner. He notes further that one of the recurrent problems of local governments in the country is the dwindling revenue generation and management as characterized by annual deficits and insufficient funds for meaningful growth and viable project development and also the problem of corruption. 

The creation of Oron Local Government Area out of Akwa Ibom State is a very unique phenomena. Oron Local Government Area has had its own challenges of revenue generation and management and this has hampered on grassroots development in time past and in the present. It is therefore pertinent to examine this challenge and bring forth a way forward in order to justify the reason for the existence of Oron Local Government Area. 

1.2 Statement of the problem 

In many countries, Nigeria included, the local government is widely acknowledged as a viable instrument for rural transformation and for the effective delivery of social economic services to the people. Local Government in Nigeria is a well-recognized third-tier of government. It is administration or government at the grass root or local level. At this level, government is expected to be very close to the people, both in the villages, settlements and towns, and to impinge on the day-today life of the common man.

Furthermore, local government is expected to be actively involved in the overall national development objective of achieving a broad-based social and economic development and securing an optimum utililization of man power. Its constitutional role also encompasses the generation of revenue and management.

Unfortunately, all of these above have transpired to nothing but many problems for Local Governments in Nigeria, which  include Oron Local Government Area of Akwa Ibom State revenue generation in Oron Local Government is a task for the all staff, particularly those in the finance and supply departments. This is to boost the revenue based of the council. The council accrued its revenue from two known sources which are the external and the internal sources. 

However, the revenue generation and likewise the management is not without challenges. There has been a very low revenue generation as well as poor management in respect to its internally generated revenue. These challenges include non-challant attitude of revenue collectors and supervisors, non-utilization  of funds for the purpose they are meant for, the unnecessary award of contract to individuals, politicians and private companies and the interference of the state government on both externally and internally generated revenue of the local government, especially the statutory allocation which passes through the state government. These challenges do not allow for proper management and development of the local people in Oron local government.

Based on these, the study raises important questions which include: 

(1) What strategies has Oron Local Government Area of Akwa Ibom State adopted in generating revenue?

(2) To what extent has the State Government interfered in the revenue generation of Oron Local Government Area?

1.3 Objectives of the study

The general objective of the study is to examine the challenges of revenue generation and management in Nigerian Local Government system with special reference to Oron Local Government Area of Akwa Ibom State.  The specific objectives of the study are:

(1) To find out if there are strategies adopted by Oron Local Government Area of Akwa Ibom State in generating revenue.

(2) To examine the level of interference of the state Government in the affairs of revenue generation and management in Oron Local Government Area of Akwa Ibom State. 

1.4 Research Hypotheses 

The following hypotheses for this study are: 

(1) State Government interference tends to affect revenue generation and management in Oron Local Government.  

(2) Lack of good strategies by the Local Government tends to affect revenue generation and management in Oron Local Government.  

1.5 Significance of the study 

The issue of poor performance in the collection of revenues and poor management in Oron Local Government Area of Akwa Ibom State definitely have a negative effect on the socio-economic development of the area.

This study is significant in the sense that it will identify the problems of Local Government system in Nigeria in respect to revenue generation and management in Oron Local Government Area of Akwa Ibom State.

The findings from this study is expected to enable the management of Oron Local Government to adopt better ways of improving revenues in order to foster socio-economic development at the grass root.  The findings from this study is also expected to draw the need for a revisit of the constitution concerning local government autonomy, which has been long time ago trampled upon by the state governments in Nigeria. 

The study will be significant to students and to the entire public. The study will indeed add to the existing knowledge in the field of academics and increase positive change in local government system in Nigeria. 

1.6 Scope and limitation of the study

The study has been designed to examine the challenges of revenue generation and management in Oron Local Government Area of Akwa Ibom State , Nigeria. These scope of the study is focused particularly on the revenue staff of Oron Local Government, its agencies and contractors and the managers of the council (The Head of Council, Head of Personnel, Treasurer, Head of Works and some other Heads of Departments).

The study is limited to time constraints, financial inadequaciesandunwillingness of some respondents in the local government area to produce adequate date for the study. 

1.7 Definition of Terms  

Some of the terms used in this work are hereby defined for easy comprehension. 

Jurisdiction: This is a territory over which an individual or government has authority.

Local Government: This is regarded as the third-tier of government. It is a political sub-division of a nation (or in a federal system, a state) which is constituted by law and has substantial control of local affairs including the power to impose taxes or to demand labour for prescribed purposes. 

Local Government Autonomy: This implies a situation whereby local governments enjoy separate existence and independence from the control of the other tier of governments. It is autonomy which requires not just the legal and physical existence of an apparatus of government but that local government must exist, not as an appendage of another Government, but as an autonomous  entity in the sense of being able to exercise its own will in the conduct itsaffairs free from direction of another government.

Management: This is the act of planning, organizing, staffing, directing, coordinating,, reporting and budgeting. 

Revenue:  Revenue is the income of government from taxation, excise duties, customs other sources, appropriated to the payment of the public expenses. 

1.8 Organization of the study 

This research work has been organized into five chapters. Chapter one is introduction and it embodies the background of the study, statement of the problem, objectives of the study, research hypotheses,significance of the study, scope and limitation of the study and definition of terms. 

Chapter two is review of related literature and theoretical framework. Chapter three focus on research methodology and it encompasses research design, area of the study, population of the study, sample size and sampling technique, administration of instrument, validity instrument, reliability of instrument and method of data analysis.

Chapter four deals with data presentation and analysis while chapter five covers summary, conclusion and recommendations. 


Uhunmwangho, S. O. and Aibieyi, S. (2013). Problems of Revenue Generation in Local Government Administration in Nigeria Business and Management. Research Journal. Vol. 2 (3) Pp. 89-96. 

Uhunmwangho, S. O. and Epelle, A. (2008). Strategies for Managing Challenges and Ensuring Effective Governance in Local Governments in Nigeria. Journal of Citizenship Education. Vol. 7, No. 2. 

Orewa, S. O. (1983). Rural and Local Administration in Nigeria. Benin City: Ethiope Publishing Corporate.

Maurice, A. C. and John A. A. (2012). Challenges of Managing Local Government Finance in Nigeria. Research on Humanities and Social Science. Vol 2. No. 3. 

Adedokun, A. (2012). Local GovernmentsTax Mobilization and Utilizationin Nigeria. Problem and Prospect http/



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