Role of internally generated revenue in local government administration in Nigeria

Role of internally generated revenue in local government administration in Nigeria

Author by Olayemi Olusola

Journal/Publisher: Journal Of Business Management And Social Sciences Research

Volume/Edition: 3

Language: English

Pages: 40 - 44

Abstract

This study, the role of internally generated revenue in local government administration in Nigeria, was conducted using
three out of twenty recognized local government councils in Ogun State, South Western part of Nigeria, as case study.
Local government, also referred to as local council, is the third tier of the government which is seen to be closer to the
people. They are vested with the responsibility of catering for the economic, social, infrastructural and educational needs
of the common populace in areas in which the state governments could not be felt. It is however disheartening to discover
that most local governments have failed woefully to meet these needs due to dwindling subventions that are always late in
coming from the Federal government, through the supervising state governments. It is only those local governments that
are able to generate enough internal revenue that could perform the task of fulfilling their social obligations to the citizenry.
The study used both primary and secondary methods of data collection. Econometric technique, through Ordinary
Least squares (OLS) regression, was used through the aid of E-views Software Statistical package. The findings of the
study of the local governments’ financial statement over six years period, using the above techniques, reveal that miscellaneous
sources of revenue such as fines, fees licenses, earnings, rent, interest, dividend payments, grants are statistically
significant at 5 per cent level of significance while rate is statistically insignificant, due to inadequate remittances to the
treasury by rate collectors. Since rates and taxes, ordinarily constitute a greater percentage of what should be internally
generated by local governments, we recommend that the local government councils should intensify efforts towards carrying
out aggressive collection of these sources and at the same time block every loopholes that have made the collections to
be insignificant.


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