MANAGING LOCAL GOVERNMENT REVENUE IN NIGERIA: A CASE STUDY OF ENUGU SOUTH AND OJI-RIVER LOCAL GOVERNMENT AREAS. ABSTRACT The management of revenue accruable in Nigerian Local government has been a thing of concern to well meaning members of the society. This is associated with the internal revenue source available to the local government, its generation method, mode of expenditure by council chairman, lack of proper auditing and accountability is achieved/seen to be the main problem of persistent poor management of these funds.The study carried out was used to appraise the existing managerial methods of local government funds meant for providing infrastructure etc in the rural areas as a third tier government. The significance of the study is that; it x-rayed/reviewed the critical issues in managing local government councils in Nigeria. This also helped in providing information on the source and availability of funds to local government councils in Nigeria.The study covers Enugu South and Oji-River Local Government Areas of Enugu State. Critical issues looked into in managing local government council in Nigeria are; sources and availability of funds, regular and prompt payment of staff salaries, pressure groups, community development, accountability probity, etc.The stud is expected to benefit the government, leaders at grass root and well-meaning members of the society. TABLE OF CONTENTS Chapter One Introduction 1.1 Background of the Study 1.2 Statement of the Problem 1.3 Objective of the Study 1.4 Significant of the Study 1.5 Hypothesis 1.6 Scope and Limitation of the Study Chapter Two Review of Related Literature 2.1 Establishment of Local Government in Nigeria 2.2 Functions and Control of Local Government 2.3 Sources, Importance and Application of Local Government Revenue 2.4 Classification of Local government Revenue in Nigeria 2.5 Value Added Tax as a substantial source of revenue to Local Government of the Federation 2.6 The Pathologies of Local Government Administration (Corruption and Fraud) Chapter Three Research Design and Methodology 3.1 The Introduction 3.2 Research Method used 3.3 Source of Data 3.4 Population of the Study 3.5 Sample Size Calculation and Selection 3.6 Questionnaire Design 3.7 Questionnaire Administration and Collection 3.8 Data Analysis Technique Chapter Four Presentation, Analysis and Interpretation of Data 4.1 Introduction 4.2 Tabular Presentation, Descriptive Analysis and Interpretation of Data from Primary Sources. Chapter Five Summary of Findings, Conclusions and Recommendations 5.1 Summary of Findings 5.2 Conclusions 5.3 Recommendations Bibliography Questionnaires CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY The 1976 local government reform defined a local government as: Government at local level examined through representative council established by law to exercise specific powers within defined areas. Theses powers conferred on them shall give the council substantial powers and control over local affairs as well as the staff, institutional and financial powers to initial and direct the provision of services to determine and implement projects so as to complement the activities of the state, and the federal government in their areas, and to ensure thorough devolution of functions to these councils and through participation of the people and their traditional institutions that local initiative and response to local needs and conditions are maximized. (Anambra State Government, 1976: 108) On 1st September 1976, the federal government of Nigeria created local government on the following basis: (1) In an area having a population of not less than 150, 000 persons. (2) In an area containing a population not more that 800,000 persons. (3) Not withstanding the provisions of paragraph (1) and (II) above, where exceptional geographical, cultural and historical factors or any other special circumstances exist in any particular case, a local government area may be established not withstanding the member of inhabitant of the area. Thus, by the local government reforms of 1976 and its subsequent reflection in the 1979 constitution, the government now becomes the third tier of government in Nigeria. Hitherto, there were only tiers of government, Federal and State/regional. Currently, there are seven hundred and seventy four (774) local government areas in Nigeria. The local government reforms sought to bring governance to the doorsteps of the people. In furtherance of the above objective, local governments in the country were made autonomous. Thus, by this act, the local governments in the country now have distinctive, exclusive and concurrent list of functions. Mandatory functions which local councils must perform as the exclusive powers of local government are making by-laws for or all the following, market, motor parks, swage, slaughter houses, etc, while he permissive functions which the local government may perform as concurrent powers of both the local state government are as follows: health centers, primary and adult education, rural and semi-urban water supply. The decentralization of powers raises some critical issues in administering local government councils. Such issues include sources and availability of funds for carrying out its duties, regular and prompt payment of staff salaries, goods and productive governance, accountability, integrity, unbiased recruitment and staffing, meeting the challenges of pressure groups, maintenance of law and order, community development, efficient flow of information, socio-political cum economic factors, meeting contractual obligations and environmental policy, etc. These functions and critical issues require money in order to tackle them successfully. It is the federal government councils in Nigeria over the years the financial base of the local government councils in Nigeria have been increased immensely, this, it was believed would serve as a catalyst in Jump-Stating worthwhile development projects in these councils. But this is yet to be so in most of these local governments across the country, in spite of the enormous revenue that accrues to them. Apart from the revenue that accrue to them from the federation account and Value Added Tax (VAT). THE LOCAL GOVERNMENT COUNCILS HAVE ADDITIONAL SOURCES OF REVENUE AS FOLLOWS. 1. Shop and Kiosk Rate 2. Tenement Rates 3. On and Off Liquor License 4. Marriage, Birth and Death Registration Fees. 5. Slaughter Slab Fees. 6. Naming of Streets Registration Fees (excluding State Capital) 7. Right of Occupancy Fees (Excluding Market where State finance is involved). 8. Market/Motor Park Fees (excluding market where state finance is involved 9. Domestic Annual License 10. Bicycle, Trucks, Canvo, Wheel barrow and Cart Fees other than mechanically propelled trucks 11. Cattle tax 12. Merriment and road closure fees 13. Radio/Television (other than radio/Tv Tansmitter); vehicle radio license (to be imposed by the local government of the state in which the car is registered. 14. Wrong parking changes 15. Public convenience, sewage refuse disposal fees. 16. Customary, burial ground and religious place permits. 17. Signboard/Advertisement permit. 18. Herbal Medicine/native Doctors 19. Ingredient Grinding and Milling Machines 20. Blacksmiths etc. In spite of the above, managing local government resources in Nigeria has left much to be desired. It is against this background that the researcher wants to delve into how local government resources are managed in Nigeria with Oji-River and Enugu South local government as case studies. 1.2 STATEMENT OF THE PROBLEM One of the main objectives of the local governments creation in Nigeria is to promote rapid economic development at the grass roots. Consequently, local government authorities in Nigeria have direct responsibility of meeting social and economic development needs of the people or communities within its domain. However, available evidence shows that local government councils throughout the nooks and crannies of the federation are lacking disastrously in their duties and responsibilities. A cursory look at these council areas will reveal the following. (a) Acute shortage of recreational facilities, schools and school buildings, equipment, qualitative modern markets, functional hospital and maternities. (b) The few available infrastructure are left to rot away due to utter neglect and sanctimonious aloofness of council authorities. (c) Irregular payment of salaries/wages and other benefits that accrue to workers in spite of the pittance receivable and stipends. (d) Monumental credits owed to sundry contractors for shoddily performed jobs. (e) Non-maintenance of roads and other infrastructures (f) Lack of portable water supply and distribution. (g) Intolerable level of corruption and fraud in executing projects. (h) Poor executed any inflated capital project. (i) Frustration in the local government service due to lack of promotions and incentives. (j) Misappropriation and misapplication of funds (k) Lack of acceptable level of accountability, probity and integrity. (l) Wrong caliber of people being at the helms of affairs in most of these councils. The enumerated problems above contributed in no small measure in the under development of our local government areas. Attempts at finding solutions to these multiplex problems militating against effective and efficient management of local council will no doubt yield a huge positive dividend especially nor that is on the threshold of the 4th republic. The researcher is of the opinion that a hard look at these critical issues will definitely lead to finding ways and means of ameliorating the situation in order to stimulate economic and social life of these areas. It will elicit application of proper managerial tools, right attitudinal approach, sound professional knowledge, and ethnics, accountability and probity, administering local government council in Nigeria. The research is therefore constrained to ask the following research questions with a view to finding solutions to the problems facing local government council in Nigeria. (a) What are the sources of local government revenue? (b) Are these resources exhausted and adequate? (c) Are the revenues derived from these resources adequate to stimulate economic parameter available in these local government councils? (d) What are the measure entrenched by the state and federal government to ensure accountability, probity and integrity? (e) Are these measures (if any) effective? (f) What are the additional measures needed to ensure their effectiveness (if necessary)? (g) If these measures are adequate, what other factors could have caused these economic and social malaise. (h) How can these critical issues be addressed in order to get an optimal result? (i) What are the consequences of not addressing these critical issues adequately? The researcher believes that finding answers to the above problems will help in no small measures in addressing critical issues in managing our local government councils. 1.3 OBJECTIVE OF THE STUDY The objectives of this research are: 1. Critical appraisal of issues involved in managing local government council resources in Nigeria with particular reference to Enugu-South and Oji-River Local Government Areas of Enugu State. 2. Appraisal of sourcing and utilization of funds and other economic resources available in these council areas. 3. Appraisal of adequacy and efficiency of the existing machineries for collecting and controlling revenues and expenditure in these local government council. 4. Appraisal of the regularity and promptness of payment of staff salaries and other emoluments. 5. Evaluation of how goods and productive governance of these councils have been. 6. To examine whether there is acceptable level of accountability, probity and integrity on the part of council workers. 7. Evaluation of how pressure groups are handled, and productive governance of law and order maintained and level of community development by these councils. 8. To critically examine the environmental policies and other socio-political factors involved in efficient management of these local councils. The researcher is optimistic that at the end of the study the reasons for the poor performance of local government councils in Nigeria will be understood, and how to improve on the poor performance through the instrumentality of quality recommendations at the end of this study. 1.4 SIGNIFICANCE OF THE STUDY Since the creation of local government in 1976 till date, hey suffered disastrously under bad governance. They have been unable to fulfill the ideals for which they were created instead they have done much to assault the psyche of the people vis-à-vis misrule, embezzlement and flagrant misappropriation of resources, stultification of the growth of development rate of most of these council areas. It becomes easy to appreciate the significance of such study as this, which aims at x-raying critical issues in managing local government councils, in Nigeria. Succinctly, the study is significant for the following reasons: 1. It improves information on the sources and availability of funds to local government council in Nigeria. 2. It identifies critical issues in managing local government councils in Nigeria 3. It is a potent relevant research material for those who may be interested in this sphere of study in the future since it adds to the existing literature in this area. 4. It highlighted factors militating against the realization of the lofty ideas of bringing development to the grass root. 1.5 HYPOTHESIS The following hypothesis were formulated for this study: 1. Sources and availability of funds, regular and prompt payment of staff salaries, good and productive governance. Accountability, probity, integrity, recruitment and staffing, maintenance of law and order, community development, efficient and effective flow of information, environmental policy and socio-political cum economic matters are critical issues in managing local government areas in Nigeria. 2. The allocations given to Enugu South and Oji-River local government councils are able to carryout their economic an social responsibilities. 3. Enugu South and Oji-River Local Government Councils are able to carryout their exclusive and permissive due to effective and efficient management. 4. Adequate and efficient monitoring and control of revenue and expenditure by the federal and state governments contributes to poor performance, misappropriation and misapplication of funds by the council officials. 5. Enugu South and Oji-River local government councils have feasible and available revenue to source additional funds to supplement federal and state government allocation and grants.
MANAGING LOCAL GOVERNMENT REVENUE IN NIGERIA: A CASE STUDY OF ENUGU SOUTH AND OJI-RIVER LOCAL GOVERNMENT AREAS.
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