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The study discussed “A critical Analysis of the source of revenue and expenditure pattern in local government area of Enugu; A study of Udenu Local Government Area of Enugu State.  The  determined the effect of tax revenue on productivity of local government, the relationship between tax rate and creativity in Udenu local government and the extent of levy on profitability of Udenu local government. A sample of 85 from the population of 180 using Taro Yamane’s formular. The study found out that expenditure assignments should match with revenue generating powers in order for local governments to discharge their functions effectively. In essence, revenue and expenditure decentralization must support local government public revenue profile. Local government revenue generation in Nigeria needs restructuring so that taxing powers be given to Local authorities and also it should be allowed to share major tax bases with other levels of government to enable enough independent funds for development. It is noted that federal government is highly favored in all the revenue allocation systems so far and fiscal federalism is tilted more in favor of the federal government. This, in a way, is affecting the economic survival of the sub-national governments. Local governments therefore, shall strive towards improving internally generated revenue and instill transparency and accountability in their management structure. This can be effectively carried out through community participation in their various activities. The study recommended that local government should embark on the establishment of some industries that will provide employment opportunities to the people.
CHAPTER ONE:        
1.1.    Background of the study                       
1.2    Statement of the problem                     
1.3    Objectives of the study                    
1.4    Research Questions                    
1.5    Research Hypotheses                       
1.6    Significance of the study                     
1.7    Scope of Study                            
1.8    Limitations of the Study                   
1.8    Definition of Terms                        
2.1    Introduction                                
2.2    Conceptual Framework                       
2.2.1 The Concept of Local government                 
2.2.2    Functions of Local Government                 
2.2.3 Role Of Local Governments Local governments
in Nigeria have enormous responsibilities to perform.      
2.2.4 Local Government Revenue Generation              
2.2.5    Ways of Improving Local Government Revenue Generation       
2.2.6    However, some of the strategies for improvements          
2.2.7    Challenge and Prospects of Revenue Generation in Local Government   
2.2.8 Strategies Adopted In Curtailing Revenue Generation Problems   
2.3    Theoretical Framework                         
2.4    Empirical Studies                         
2.5    Summary of Reviewed Literature                   
3.1    Introduction                           
3.2    Research Design                           
3.3    Area of the Study
3.4    Sources of Data                       
3.4.1     Primary Sources                         
3.4.2     Secondary Sources                     
3.5    Population of the Study                     
3.6     Determination of Sample Size            
3.7    Sample Technique                       
3.8    Validity of the Instrument                  
3.9       Reliability of the Instrument                 
3.10     Methods of Data Collection                 
3.11   Methods of Data Analysis            
4.1    Data Presentation and Analysis                      
4.2    Test of Hypotheses                     
5.1    Summary Of Findings                            
5.2    Recommendations                               
5.3    Conclusion                                    
1.1    Background Of The Study
Revenue generation in Nigeria local governments is principally derived from tax. Tax is a compulsory levy imposed by government on individuals and companies for the various legitimate function of the state (Olaoye, 2016). Tax is a necessary ingredient for civilization. The history of man has shown that man has to pay tax in one form or the other that is either in cash or in kind, initially to his chieftain and later on a form of organized government (Ojo, 2013). No system or rules can be effective whether foreign or nature unless it enjoys some measures of financial independence. Local governments in Nigeria have developed over a number of years. Historically, the development of direct taxation in local government in Nigeria can be traced the British pre-colonial period under this period, community taxes were levied on communities (Rabiu, 2014) recently the revenue that accrues to local government is derived from two broad sources, viz the external sources and the internal source.
An effective Local Government system rests majorly on the availability of human and material resources which the nation could mobilize and harness for local governments development. In 1976, the Federal Military Government then issued guidelines on local governments reforms. The reforms which gave recognition to local governments as the third tier of government whereby government activities at the local level were taken care of. In 1988, another reform of local government was established. This gave a substantial and unprecedented reform of autonomy to the local governments in the country. With this autonomy, greater responsibilities devolved on the local government therefore, became a common knowledge that most of the local government are finding it difficult to cope with the present level of responsibilities. The principal aims of creating local governments were as follows: To serve as the third tier of government through which appropriate services and development are made in response to the wishes of local community through their representatives. To serve as an intermediary between government at the center and local communities. To mobilize and utilize both human and material resources by engaging the people at the local level in the government activities. To facilitate the exercise of democratic self–government closer to the grass root of the society and to exchange initiative and leadership potential.
Mostly, all local governments in Nigeria do no longer perform their responsibilities simply because of poor finances arises from adequate revenue generation drive. The bad financial situation is further aggravated by the prevailing inflationary situation in this country which erodes the value of funds available to render essential social services to the people. Development is highly associated with fund, much revenue is needed to plan, execute and maintain infrastructures and facilities at the local government level. The needed revenue generated for such developmental projects like construction of accessible roads, building of public schools, health care centers, construction of bridges among others are sources generated from taxes, royalties, haulages, fines and grants from states, national and international governments. Thus, the Local government cannot embark, execute and possibly carryout the maintenance of these projects and other responsibilities without adequate revenue this is the basic reason why development is skeletal at some Local Government councils in Nigeria.
But by 1989, most of the problems resurfaced. The catalogue of problems remained those of inadequate financial and other resources, frequent transfer of functions to and from local governments, lack of autonomy definable in terms of excessive control exercised by both central and state governments and inadequate involvement of the community in decisionmaking (BelloImam, 2007). All these, in one way or the other have seriously affected the financial autonomy of local governments in Nigeria, as well as their performances.
The prevailing federal government revenue allocation formula stipulates that local government is entitled to twenty percent of the revenue accruable to the federation account and ten percent of the internally generated revenue of the state governments, in addition to their own internally generated revenue, which though, in most cases are usually small. The local governments are therefore in a situation where they depend almost entirely on the federal and state governments for funds for the performance of their statutory functions (BelloImam, 2010). However, the problem of local government revenue management is traceable to the Nigerian federalism and this problem has been provoked by a number of factors. According to Akindele, (1995), these problems include overdependence on statutory allocations from both the state and the federal governments, deliberate tax evasion by local citizenry, creation of non-viable local government areas, differences in the status of local governments in terms of the rural- urban dimension, inadequate revenue and restricted fiscal jurisdiction. Furthermore, the technical committee on the review of the structure of local governments in Nigeria in its report indicated that the third tier of government had failed in meeting the needs of the people going by the unaccounted huge amount of money allocated.

1.2     Statement Of Problem
Nigeria operates a federal system of government where power is constitutionally shared between three tiers of government. Local government was created as a means of promoting development and bringing government closer to the people. Nigeria's experience in local government administration, whether in military regimes or in democratic era has clearly shown that local governments are faced with daunting challenges in their mandate to promote development and provide essential services to the rural dwellers. Local government, which is statutorily established to be the closest tier of government to the people, is not doing its bidding coupled with the fact that resident population in the local government has no significant access to the benefits of its existence. The failure of the local governments in the area of service delivery has made the citizens to lose their trust in government as an institution. In some areas, council officials are better known for the harassment of citizens than service delivery.
    It is common knowledge that Udenu local government has the weakest capacity to initiate and manage rural development programme. Most of the officials are performing their functions without the relevant qualification to perform effectively. As a result, the available resources for accelerated and sustainable rural development are inefficiently utilized for the purpose intended.
However, some challenges which served as impediments to Local Governments ‘efforts to generate adequate revenue from various sources. Many factors have been identified to be responsible for the inadequate internal revenue effort. Chief amongst them are corruption and weak machinery for check and balances in the generation of revenues. Preliminary survey has shown that the inability of the local governments to provide adequate services to the people within their areas of jurisdiction is attributed largely to inadequate revenues.
In relation to the above stated problem the research will be investigating on why and how this problem can be tackled for better efficiency of the local government.
1.3    Objectives of the Study
The general objectives of the study critical analysis of the sources of revenue and expenditure pattern of local government in Enugu state (A study of Udenu Local Government Area). The specific objectives are:
1.    To determine the sources of revenue to Nigeria local government area.
2.    To examine the extent of expenditure pattern to Nigeria local government area.
3.    To ascertain challenges and strategies to effective utilization of function in Udenu local government area.

1.4    Research Questions
The following research questions will be were drafted from the objective above:
1.    What are the sources of revenue to Nigeria local government area?
2.    What is the extent of expenditure pattern to Nigeria local government area?
3.    What are the challenges and strategies to effective utilization of function in Udenu local government area?
1.5    Research Hypotheses
The study is based on the following hypotheses:
Hypothesis One
H0:    Local government area have no sources of revenue.
H1:    Local government area have many sources of revenue.
Hypothesis Two
H0:    Local government have no expenses to be incurred.
H1:    Local government have expenses to be incurred.
Hypothesis Three
H0:    There are no challenges and strategies to effective utilization of function in Udenu local government area.
H3:    There are challenges and strategies to effective utilization of function in Udenu local government area.
1.6     Significance of the Study
 It will also contribute to the noble goal of making local governments in Nigeria more effective.
This study is expected to add to the body of literature on local government and stipulate further research in this direction. The constant need to improve governance in Nigeria, particularly the local governments, makes the contributions of this work invaluable as reference for further research in local governments in Nigeria.
Practically, the findings of this research will assist policy makers and local government administrators in making local governments in Nigeria more financially viable and efficient in service delivery.
It will also go a long way in making local governments in the country more viable, efficient, effective and self-reliant as the finding will bring to the fore issues that have undermined the revenue generation mechanisms of the local government system.
It will therefore serve as a guide to local government administrators.
It will as a prerequisite for the award of Higher National Diploma (HND) in the department of Business Administration and Management
It is services a future source of material for the students and scholars.
1.7    Scope of the Study
The study covered critical analysis of the sources of revenue and expenditure pattern of local government in Enugu, State. The study will focus on Udenu local government area of Enugu State.
1.8    Limitation of the Study
This research is an academic one, the researcher underwent certain barriers which tend to limit the research.  
The result got are purely dependent on how sincere the respondents are; another limitation is the time limit the student has for the entire research and this makes it impossible for more personal observation to be made because as a student, the researcher could not engage herself in such elaborate enquiry.
The duration of the project work which lasted for only three months limited such extensive investigation.  
Another militating factor is the fear of some respondent whose job security made to avoid certain questions, however, cares were treated technically, since such questions that would have elicited vital information on government involvement in the management were avoided.
There was time inadequacy to visit and re-visit the organization.
1.9  Definition of Terms / Acronyms
-    Local Government: Local Government as a political sub-division of a nation in Federal system
-     Revenue Public revenue could be defined as the funds generated by the government to finance its activities. In other words revenue is the total fund generated by government (Federal, state, local government/ to meet their expenditure for a fiscal year. This refers also to the grand total of money of income received from the source of which expenses are incurred. Revenue could be internal or external revenue.
-    Generation: This is the process of sourcing revenue for the local government in carryout their aim and objectives.
-    Expenditure: Public expenditure refers to the expenses which the government incurs for its own maintenance, in the interest of the society and the economy in order to help other countries.
-    Development: Development is thus the process by which people create and recreate themselves and their life circumstances to realize higher levels of civilization in accordance with their own choice and values.
-    Revenue: Revenue is income that a company receives from its normal business activities, usually from the sales of goods and service to customers.
-    Capitation Rate: This is a flat rate levy by the government on the income of retired adults in the community.
-    Property Rate:  This is the rate levied on the value of immovable properties.
-    Fees: These are movies paid to local governments to secure legal authority for any operating business.


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