The Problems Of Effective Utilization Of Revenue Available To Local Governments In Nigeriap

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When the researcher chose this topic: THE PROBLEMS OF EFFECTIVE UTILIZATION OF REVENUE AVAILABLE TO LOCAL GOVERNMENT, she was inspired by the high rate of embezzlement, poor leadership, low rate of accountability, general laxity of the finance department and corruption in Nigeria Local Government, and Aninri Local Government in particular. To do this, the researcher developed four (4) Questions. This questions were administered inform of questionnaires to 195 staff who were selected as a sample of the population. Apart from this, secondary data were used. In organizing and presenting data collected, tables and percentages were used as well. The data analysis revealed that ineffective utilization of revenue in the local government had created a negative impact in Aninri Local Government Area. The researcher therefore recommended that the revenue available to local government should be handled by honest and accountable personnel, those who posses sound knowledge about revenue generation and utilization. The outcome would be an effective and efficient management and utilization of local government revenue in such a way that would deliver the needed development.



Title Page                                                                                 i

Approval Page                                                                  ii

Dedication                                                                       iii

Acknowledgment                                                             iv

Abstract                                                                           vi

Table of Content                                                              vii




1.1      Background of the Study                                                 1

1.2      Statement of the Problem                                                4

1.3      Purpose of the Study                                               6

1.4      Significance of the Study                                                 7

1.5      Delimitation/Limitation of the study                       8

1.6      Research Questions                                                 9

1.7      Definition of Terms                                                  10

References                                                               13



2.1      Theoretical frame work                                            15

2.2      Brief History of Aninri Local government                         17

2.3      Functions of Local Government Councils                        22

2.4      Sources of Revenue to Local Governments In Nigeria 26

2.5      Summary of Aninri Local Government recurrent revenue and expenditure                                                        29   

2.6      The problem of effective utilization of Revenue of Local Government                                                              51

2.7      The impact of the problems of effective utilization of revenue available to local government             53   

2.8      Solutions/way forward to the problems of effective revenue utilizations                                       

References                                                       62



3.1   Research Design and Methodology                  64

3.2      Sources of data                                                        65

3.3      Area/location of Study                                     67

3.4      Population of the Study                                   67   

3.5      Sample and Sampling Techniques                   69

3.6      Establishing the validity of the instruments    72

3.7      Establishing the reliability of the instruments72

3.8      Method of data analysis                                   73

References                                                               74



4.1   Data presentation and analysis                       75   



5.0   Summary, Conclusion and Recommendations        84

5.1      Summary of Findings                                      84

5.2      Recommendations                                           87

5.3      Conclusion                                                      89

Bibliography                                                    91

Appendixes                                                      94







Nigeria as a sovereign nation operates a federal system of government i.e the federal government, state government and the local government councils.

Onwo (1992) Observed that each level of the three tiers of government derive its powers not from the magnanimity of the central government but from the constitution; each level of government has defined responsibilities assigned to it by the constitution. The implication of this is that the three segments of governments are mutually interrelated in a unified effort to make life worth – while for the masses.

Aninri local government area was created out of Awgu local government in October 1996 by the late head of state General Sani Abacha. As one of the new local government councils, it is facing a very serious crisis of development since its creation. Some problems facing the council include: insufficient office accommodation, staff quarters and office infrastructures. These problems seem to be insurmountable.

Indigenes of the local government are desirous of enjoying modern facilities, improved means of transportation, such as good road network and mass transit transport services. These desires are in line with stated objectives of the local government  such as construction and  maintenance of roads, provision of health services such as maternity homes, health centers, sanitization, provision of primary education and many others – as sponsored by the federal military government. The federation (Nigeria) years book of 1983, outlined the aims of the local government system in the country. According to that document, one of the cardinal aims of the local government system is to make appropriate services and development activities, responses to local wishes and needs by delegating authority to local representative bodies.

The citizens expect the council to excel in developmental activities. They would like to please the community or communities in the local government area through the provision of   functional feeder roads and public utilizations.

The council administration in the other hand complains of inadequate finance to meet up with the numerous responsibilities yearning for attention. According to the guidelines for local government reforms or 1976, “it must be recognized that if meaningful local government is to be expected in Nigeria, much larger financial resources are needed” they also complain that staff salaries alone drain a high percentage of the monthly allocation. Financial experts postulates that money is at the center of developmental projects. Acquisition and proper accountability of funs are the pivot upon revolves. Adedeji (1979) capped it all when he declared that the success or failure and the effectiveness and ineffectiveness of local government depend on the financial resources available to the individual local government and the way these resources are utilized.

From the foregoing, it seems that an empirical study into the revenue base of the local government system at this harsh economic period is not only useful but very vital.

It is therefore against this background that this project work is being undertaken with a view to discovering the problems of Effective Utilization of Revenue Available to Local Governments with particular reference to Aninri local government area of Enugu state.



The relevance of the local government councils as the government at the grassroot level is measured by the quality and quantity services rendered to the rural dwellers.

    For the council to render meaningful services, in form of provision of basic amenities, construction and maintenance of roads, creation of employment opportunities for the citizens and pay staff salaries as and when due, money is undoubtedly required.

Without the availability of revenue, a local government council will not only be incapable of serving the people but will undoubtedly crumble. It therefore, follows that for the local government to discharge its statutory functions effectively, it should not only be adequately funded but such fund should be efficiently applied.

1.      One of the fundamental problems in local government financial administration is the issue of Effective Utilization of Revenue Available to the Local Government. Aninri local government council may have tits unique problems that militate against its financial administration.

2.      The problem of delay in payment of federal/state government grants to the local authorities.

3.      The problems of accountability in the local government council.

4.      Another problem is that of ineffective financial control and management both internally and externally.

5.      Fifthly, the problem of financial mismanagement and embezzlement of available funds in local government council.

Finally, the problem of corruption as stated by Oluwale (2000) militate against the utilization of local government revenue.



The central focus of the study is to critically analyze the problems of effective utilization of revenue available to Aninri local government area as a case study.

1.      The study is meant to identity the major revenue sources available to local government .

2.      To ascertain the problems that confront the council’s administration in utilizing revenue for their services.

3.      To find out whether or not the revenue is adequate for the council’s expenditure.

4.      To investigate the system of financial control in the local government council.




The significance of any human endeavour is measured by its relevance to solving human problems. Therefore, the significance of the study is measure by its relevance to solving the problems of effective utilization of revenue available to local governments in Nigeria.

The project will be of benefit, first and foremost to the Aninri Local Government administration, as it will expose to them potential sources of generating of revenue internally.

 Secondarily, it will help the council to strengthen its financial bases as this study would highlight some identified problem hampering the utilization of revenue in the council.

Thirdly, it will also be useful to the indigenes of Aninri local government to co-operate with local council administrators to  enable them build a viable local government by paying their taxes and rates promptly.

Fourthly, the project will be useful to various institutions especially Caritas University, for gaining greater knowledge and understanding of the problems of effective utilization of revenue available to local government.

Finally, the project will be useful to the general public, organizations, companies etc that may have interest in the project.



i.      Delimitations (scope) of the study: This is centered on the problems of effective utilization of revenue available to local government in Nigeria but due to the wide or vast nature of Nigeria, the researcher now chose Aninri local government as a case study to deal with this particular problems in other local government in Nigeria.

The study is also centered on the sources of revenue available to local government both the internal and external sources of revenue.

ii.     Limitations (constraints) of the study:  In the effort of carrying out this research bathe researcher was faced with the problem of time, finance and visitation of Aninri Local Government, the case study of the research work.

        The researcher being a student, found it difficult to get exeat out of the school premises and the time frame given was so limited in carrying out the research work. Also, the distribution and collection of the questionnaire to the staff of Aninri Local Government was not easy for the researcher as the respondents were not always available.

The study was carried out under a lot of constraints. The class work and financial constraints were other limitations which made it uneasy for the materials to be ready available at the appropriate time.



In the effort of carrying out this research, the following questions were formulated:

1.      Are you aware of the constitutional provision of revenue sources to the tiers of government in Nigeria?

2.      By what means has Aninri Local government planned the expenditure of available revenue?

3.      What systems of financial control measures are used by council administrators?

4.      Has the utilization of the Revenue Available to Aninri Local Government produced positive or negative effects?



        Some concepts and terms required proper explanation or definition to enhance our understanding of the theme where necessary opinions of scholars will be cited to illustrate the terms.



        The Ancient Greeks defined democracy as a government of the people, by the people and for the people. This political arrangement allowed every adult male citizen to participate in government activities.

        Dare (1981) Postulated that modern democracy is a system of government which gives to individual maximum freedom and periodical opportunities to choose their leader and programmes. Multiple party-systems are a vital characteristic of a democratic government.


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The Problems Of Effective Utilization Of Revenue Available To Local Governments In Nigeriap