INTERNALLY GENERATED REVENUE AND COMMUNITY DEVELOPMENT IN NIGERIA. A STUDY OF NJIKOKA LGA, ANAMBRA STATE
ABSTRACT:This work discusses internally generated revenue and community development in Nigeria. A study of Njikoka LGA, Anambra state. A hundred and twenty questionnaires were shared amongst people in Njikoka LGA of Anambra state. Interviews and surveys were also conducted.Primary and secondary data were used the analysis. Both frequency distribution and regression analysis were used.It was observed therefore that internally generated revenue have a significant positive impact on community development in Nigeria. Also, there is a strong positive relationship between internally generated revenue and community development in Nigeria. TABLE OF CONTENTTitle Page………………..iCertification………….…iiDedication………………iiiAcknowledgement……….ivTable of content……...…vAbstract.......................vi CHAPTER ONEINTRODUCTION Background of the Study Statement of the Research Problem Objectives of the Study Significance of the Study Research Questions Research Hypothesis Conceptual and Operational Definition Assumptions Limitations of the Study CHAPTER TWOLITERATURE REVIEW Sources of Literature The Review Summary of Literature Review CHAPTER THREERESEARCH METHODOLOGY Research Method Research Design Research Sample Measuring Instrument Data Collection Data Analysis Expected Result CHAPTER FOURDATA ANALYSIS AND RESULTS Data Analysis Results Discussion CHAPTER FIVESUMMARY AND RECOMMENDATIONS Summary Recommendations for Further StudyBibliographyCHAPTER ONE: INTRODUCTION Background of Study - Local government plays a crucial role in the delivery of services to the citizenry. The success of any local government is its ability to utilize its human and material resources to achieve the desired objectives i.e. rendering needed services to the community. Local government is a government in which popular participation both in the choice of decision makers and in its recognition of a third tier of government. Prior to 1976, however, Nigerian local government has passed through various reforms. These reforms and re- organizations have affected the system financially, administratively, politically and functionally.The historical evolution of the local government system in Nigeria dates back to the colonial era when it was called the colonial native authority system which existed between 1920’s and 1930’s (Orewa and Adewumi 1983). In their form, they represented a system of indirect rule whose aim was to establish a system of local authorities through traditional authorities. The main task of local government in this era was maintenance of law and order at grass root level. Also the issue of revenue generation in the localgovernment system has been in existence since in this traditional system of local government. In pre-colonial Nigeria the Chiefs, Obas and Emirs were responsible for revenue generation. This they usually did through levies and taxes, which they used in managing their communities. During the colonial era the British especially in the North introduced a system of indirect rule in which direct taxes were introduced in various local communities for running their affairs. By 1933, the powers of the local authorities were extended to cover expanded functions due to reliable performances. After the independence in 1960, local governments acquired more responsibilities that were assigned to them by the constitution. For instance, section 6 of the 1979 Constitutions of Nigeria provides that:The functions to be conferred by law upon local government council shall include those spelt out in fourth schedule to this constitutionAlso the constitution made provision for substantial funds to local councils. This is because there is no doubt that sound financial base is a prerequisite for effective performance of the roles assigned to local government. For instance, section 7(6) of the 1999 Constitution makes provision for the funding of local government as follows;a) The National Assembly shall make provision for statutory allocation of public revenue to local government councils in the federation; andb) The House of Assembly of a state shall make provisions for statutory allocation of public revenue to local government councils within the state.More specifically, provision was made under the Revenue Allocation Act of 1981 for statutory allocation of 10 percent of national revenue to local government, became operational in 1989 and 20 percent in 1992. (Idike 1995:1). In addition, state governments were required to contribute 10 percent if their internally generated revenue to local government (Dasuki Report, 1985).Under this fiscal arrangement, local government depended mainly on State and Federal Governments for revenue and grants. This source of revenue is in some cases unreliable and unstable. This is due to the fact that most state government have failed to release 10 percent of their internally generated revenue to their local governments. In addition, some State Governments interfere with the statutory allocations to local governments.It is in recognition of this that the originators of 1976 Local Government Reform made genuine efforts to assist the local government system financially. For instance in 1976, the Federal Military Government after the reform as it was contained and noted in the Guidelines for Local Government Reform 196:11) stated that:Lack of adequate funds and appropriate institution has continued to make local government ineffective and ineffectual. In embarking on the reforms, the Federal Military Government was essentially motivated by the necessity to stabilize and rationalize government at the local level. This must entail the decentralization of some significant functions of state government to local levels in order to harness local resources for rapid development.This gave rise to provision of different sources of internal revenue generation for Nigerian local government in our subsequent constitutions. Also various measures were taken to take care of the financial problems of the local system. For instance there are many Edicts in various states like Anambra State Edict (1976) in favour of other sources of revenue for the local government system..The aim for provision of internal sources of revenue generation to Njikoka local government is to supplement the statutory allocations fromboth federal and state government. It is assumed that if local government can satisfactorily generate a large proportion of its revenue internally, it will cease relying heavily on the statutory allocations. Despite these constitutional provisions for sources of internal revenue, Njikoka local government and some other local government s in Nigeria are still unable to tap all these internal sources. Hence, the problem of poor internal generated revenue in most local government in Nigeria.It is on this background that this study tends to examine factors that constitute impediments to maximum generation of internal revenue in Njikoka local government of Anambra state. Statement of the ProblemIn the words of Oguonu (2000:136) “what makes the difference between local governments is the ability of a local government to internally generate revenue”. The inability to generate income apart from resources from the federal government, has been a persistent problem in Njikoka local government. Revenue generation entails generating and exploring all the sources of revenue for the local councils. Njikoka government relies heavily on external sources for funds: it is evident that Njikoka local government areahas failed to explore the various sources of internal revenue generation open to the local government; hence the problem of internally generated revenue. Some factors are accountable for the poor internal revenue generation in Njikoka Local Government Area. It is in this light that we asked this broad research question-what then are the causes of poor internally generated revenues in Njikoka local government of Anambra state?The study attempts to provide answers to the following questions.1. What accounts for the inability on the part of revenue collectors to collect internally generated revenue in Njikoka Local Government Area2. Does lack of financial autonomy constitute a problem to internal revenue generation in Njikoka local government area. Objectives of the StudyThe broad objective of this study is to examine the problem of internal revenue generation in Njikoka local government. The specific objectives of the study are as follows:1. To determine what accounts for the inability of revenue collectors to collect internally generated revenue in Njikoka local government.2. To find out if lack of financial autonomy constitutes a problem to internally generated revenue in Njikoka local government; and3. To proffer solution to the problem of poor internal revenue generation in Njikoka Local Government Area..