SOURCES AND UTILIZATION OF LOCAL GOVERNMENT FINANCE IN NIGERIA

(Banking and Finance)

SOURCES AND UTILIZATION OF LOCAL GOVERNMENT FINANCE IN NIGERIA

ABSTRACT

Local government is the third tier of government, it suppose to communicate directly wit the people through their representatives. It is through an effective local government system that is obligations and duties to the people will be idealized.

            The concept of the new system of local government with its objective is aimed at standardizing and stabilizing the functions and financial resources at the local level.

            The basic problem of the local government are revenue mobilization and its effective utilization especially now that there appears to be no comprehensive quite to the source and uses of revenue in the local government.

            The project intend to examine those source of finance available to the local government and comment on the effective means of harnessing the resources it also attempted to offer advice on the optimum utilization of these resources.

            Student researchers and administration of local government will find in this project a vital information that could pass out for a solution to impending problem.

            Also any interest prominent Nigeria who want to know how the local government sources and utilizes its revenue can also benefit from this write up.               

TABLE OF CONTENT

CHAPTER ONE

1.1              Statement of the problem

1.2              Rationale of the study

1.3              Significant of the study

1.4              Background of the study

1.5              Definition of terms

CHAPTER TWO

Literature review

2.1              Sources of local government finance

2.2              Factors limiting the collection of local government finance

2.3              Utilization of local government revenue finance

2.4              Impediments to utilization of local government revenue

CHAPTER THREE

Research design and methodology

3.1              Sources of data

3.2              Location of data

3.3              Method of data collection

3.4              Limitation of the study

CHAPTER FOUR

4.1              Data presentation

4.2              Data analysis

4.3              Discussion on findings

CHAPTER FIVE

Summary, conclusion and recommendation

5.1              Summary

5.2              Recommendation

5.3              Conclusion

Bibliography

CHAPTER ONE

INTRODUCTION

1.1              STATEMENT OF THE PROBLEM

The local government need money as well as annual capital budget to plan and programmed the funding of the capital project and other obligations.

            According to Adedes, and Rowland (1970:10) finance has always been the problem of the local government in Nigeria this was more significant when the local government was a subordinate reform which aimed at creating a local government system with competent and self contained budget that would be effective and effectuate.

            Gboyegar  Alex (1973:43) define finance as the art of providing the means of payment as a body of act, principles, policies and theories dealing with raising of fund by individual business and the government.

            The major factor to be studied in this project is the resources of any local government as well as its revenue sources and utilization. This is because the means  of sourcing of revenue had been the exact problem facing the proper development and functioning of the local government.

1.2              RATIONALE OF STUDY

Local government reform is the only way to achieve good living for people at that level. This reform will reflect on issue such as increase on allocation and grants to develop local government. Finance is the major restraints to the accomplishment of developing project in local government.

            However, this project will look into the source of fund for local government how they generate fund within the council, and how to improve on internal fund generation and utilization in solving problems within its jurisdiction.

1.3              SIGNIFICANCE OF THE STUDY       

Local government finance source and utilization of fund is an important factor which should be addressed to promote rural development it is important to note how enough fund will create positive impact on local government projects. Issues like education, health and social amenities need fund to accomplish them.

            The findings in this research will enable the administration of local government to know how to source and manage funds allocated to them, having realize. That, no project no matter how efficiently planned will succeed without appropriate finance.

1.4              BACKGROUND OF THE STUDY

Local government is the third tier of government of local level created by the federal government of Nigeria by an act of parliament charged with administrative and executive duties on matters concerning the inhabitants of a particular districts. And given the power to make bye – laws the main purpose of creating local government is for rural development in Nigeria.

            The local government serves as a means of distributing the countries resources equitably for the socio – economic development. Of the grassroot. Local government is a growing organization whose purpose of existence is to provide socio – economic service and to contribute to raising the living standard of its people. Local government councils are in better position to make good policies and programmes which the local communities require. They are more knowledgeable and better equipped to handle cases involving religion, land disputes, chieftaincy and communal clash between different communities in their areas.

            However the course of this project topic: source and utilization of local government finances, there will be a critical review of the local government source of finance and the various ways these final are management a also how they help in development of rural areas.

            Today, local government serves as a link between the rulers and the ruled, they educate people on the polices of the state an federal government and give feed back to the federal and state government  on the need and response of the people. Example of this is the case of Niger delta areas, the local government engage or has the responsibility of constructing and maintain of “truck  C roads and providing other amenities for the welfare of the people of the area.

            Beyond this, the people of the area normal expectation of improved services and facilities from the local government such as bridges, good concrete drainage system etc.

            Another example is what Enugu state government is doing for her local government councils, that is called community country council (C.C.C) situation where the said community contribute 2% development fund while local and state government contribute 30% and 50% respectively for any development plan to be carried out, this has made the (people) community involved to have a sense of belonging on various project in their communities local government does not function with making plans rather these plans need execution which involved a lot of fund and finance.

            According to Adedesi and Row lanj (1970), finance  had always been the problem of local government in Nigeria, this was more significant when government system  was  a subordinate reform which aimed at creating a local government system with complete and self contained budget that would be functional and effective.

            The financial strength of the local in Nigeria depend on self and internal revenue generated from local councils as well as grants and allocations from. Federal and state government. There is also power from federal and state government to source for finance within and outside their council as the case may be.

            Also it is important to note, that there are some local government who have resources that generate fund for them, while some local government depends on grants allocated to them federal government. And this has raised the issue of local government reform or restructure  to achieve effective development for the interest of the people at the local level. 

1.5              DEFINITION OF TERMS

In an attempt to mate this write up readable and easy to understand, I have considered it useful to define some term used in this piece of work.

            They are as follows

Local government:  this is the third tier of government created by the federal government of Nigeria by an act of parliament, charged with administrative and executive duties, on matter concerning the inhabitants of a particular district.

Finance:  this is the provision of raising of money at the tie need for investigate and utilization of the money to achieve stated objective

Budget:  it is defined a as a financial statement prepared prior to a defined or stated period of time usually on year.

Project:  by project we mean the plan which the government intended to execute, it can be inform of road construction, providing pipe borne water in the local government, electricity etc.                                          

Interest: it is the amount being paid when capital is invested in a business

Population:  population is the entire aggregate of individual living in a set of geographical area sharing common goals and aspirations.

Resources:  it is that part of local and other assets that generate reveal which help the government in achieving their plans.

Receipt:  it is a document usually a paper showing that payment had been made on something.

Expenditure: by expenditure I mean that part of money or income which the local government spent on behalf of the people in providing social amenities to them.

TERMS AND CONDITIONS

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4. Direct citing ( if referenced properly)

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