PROBLEMS OF REVENUE ALLOCATION TO THE LOCAL GOVERNMENT

PROBLEMS OF REVENUE ALLOCATION TO THE LOCAL GOVERNMENT

(A  STUDY OF SULEJA LOCAL GOVERNMENT AREA OF NIGER  STATE)

ABSTRACT

This research work identified “The problems of revenue allocation in the local government” the information of the research revealed to the researcher that many factors are responsible to the problems of revenue allocation in local government e.g. Diversion, poor planning committee, population, political instability and equity of local government. Recommendation were made in the light of the researcher findings. In order to avoid problems of revenue allocation in local governments, the federal government should reform the constitution so that the local government would be able to receive their revenue/share to them directly from the federal government. A board should be establish that would effectively control allocation fund and make them known what expenses they should use for on air. Based on the research discoveries, before an application to be employed into the local government department he/she should be made to undergo screening through the experts as to ascertain that the right qualified are confirmed to be employed.

CHAPTER ONE

1.0 INTRODUCTION

Nigeria is constituted with three levels of government, the central government. (Federal) state government and local government levels. All these levels are established with certain functions to perform.

According to Yusuf and Dauda (1998) local government are expected to be agent of development in their various localities. They are expected to provide the local communities with essential services. The civil servants in the local government have to be paid, offices have to be constructed and social services like health clinics, schools, play grounds, motor parks, markets maintenance of good sanitary conditions, among other facilities, have to be provided. To realize these basic functions, local government must have a steady source of revenue which includes external and internal sources.

Knowing how important a local government is, the researchers try to look at the problems of revenue allocation to the local governments. A study of Suleja Local Government of Niger State so as to be able to make assert of suggestions and recommendations as to possible solution of these problems of revenue allocation to the local governments.

1.1     BACKGROUND OF THE STUDY

The 1976 Federal guideline of local government reforms table ‘A” provided a clear definition government as “A government at the level exercised through representative council established by law to exercise specific power within defined areas”. The power should give the council substantial control over local affairs as well as the staff, institutional, financial power to direct the provision of services and determine and implement projects so as to complement the activities of the state and federal government in their areas.

Also according to Encyclopedia, World Book (1983) local government generally refers to the “government of an area smaller than a country, state or province. Such areas include countries, cities, towns and villages, each unit of local government as some important responsibilities for the welfare of its citizens and provides certain services”.

According to ANYAELE (1991) a local government may be defined as “Government at the local level established by law to perform specific functions within defined areas”. Local governments are vested with substantial power to take control over local affairs.

Ezeugo (2002) define local government as “the government nearest to the people at the grass roots level”. It is established to cater for the welfare of the people at the grass root and bring development to door step of the local populace.

According to Akpan, (1934) local government “is a public organization authorized to decide and adminster a limited range of public policies within a relatively small territory which is a sub-division of a regional government”.

In the light of the definitions of local government as government at the local level and with the numerous functions provided to it. As early as 1976, the federal government recognized that lack of adequate finance and subventions is one of the factors responsible for the inefficiency and the collapse of the pre 1976 local government system all over the country. Therefore the federal government set to tackle this problems right from the inception of the reforms.

In 1982, a clear revenue allocation formula was made to the three tiers of government under the revenue allocation act. The federal government on its part to live up to its responsibilities. But there were  still problems about the money reaching the destination because the law did not allow the federal government the freedom to give money directly to local government.

The researcher therefore, undertook the study to critically analyze the problems and suggest possible solutions to the problems.

1.2     STATEMENT OF THE PROBLEM

The decision by the researchers to undertake this study, the problems of revenue allocation to the local government, a study of Suleja Local Government of Niger State was bone form the need to investigate into the Problems of allocation of revenue as well as those affecting all other parts of development and welfare of local government. Despite the law was passed which made provisions for this allocation,  and state governments agreed to contribute form her internally generated income to local government.

In addition to the above, the Niger State local government Edict of 1976 part (xi) made general financial provision, subject to the provision of this part that all revenue of local government shall be applied to the administration and development and welfare of the area over which its authority extends. It is for the purpose of the above mention problems that the study focuses its attention on the problems of revenue allocation to the local government.

1.3     OBJECTIVES OF STUDY

The reasons for study this great topic are itemize as following:

1. To find out how state control administration of local government.
2. To promote welfare and encourage the membership participation in decision making process at local level.
3. To organize its membership political education.
4. To ensure proper recording of local government source of revenue for execution of official project.
5. To enable us know much about government policies and programmes
6. And to know the inter-government relation between one level of government and in other level.

1.4     RESEARCH QUESTIONS

Research questions are those questions asked in order to locate answers to research problems. The research work was embarked to investigate the problems of revenue allocation in Suleja local government area of Niger state.

There were some problems which the researcher envisage and prompted me to undertake the research work. Some of these problems are:

• Why the funds allocated to local government were not actually transferred to the account of local government by state government?
• How effective does the administrative management of revenue board allocates funds to local government?
• To what extent has the problems of revenue allocation affects local government welfare development?

1.5     RESEARCH HYPOTHESIS

To this effect and in an attempt to fully assess and identify those problems been faced by local governments in Nigeria, the researcher wish to formulate the following:

1. Excessive control by state government on local government affairs hinders the proper flow of revenue allocation to local government.
2. Lack of adequate allocation to local government affects their development projects.
3. Absence of financial experts in the local governments affects the rate of revenue generation in the local government areas.

1.6     SIGNIFICANT OF THE STUDY

This study is carried out basically to look into the problems of revenue allocation to local government with particular reference to Suleja local government of Niger State. Also it will be directed to or focused on the unrealistic transfer of funds to the account of the local government by the state government.

It will create awareness with the problems encountered by revenue allocation to the local government. And it will also fund the possible solution to the problems.

This study after been completed will be very advantageous to local governments to know how the allocation of revenue is been distributed by the federal govern governments.

1.7     SCOPE OF THE STUDY

This study seeks to undertake on overview of all the local governments in Nigeria. But study is to cover only Suleja local government areas as a case stdy, which is one of the many local governments in Nigeria.

However, the necessary reference would be made to other local government and comparism to assess the performance of this local level base on allocation output.

1.8     DEFINITION OF TERMS

Terms are words with specific meanings. The terms to be used for this study as the topic suggest are problems, revenue, allocation, local government, policy, administration, administer, subvention, overview, and encounter.

1. PROBLEMS: Simply means question or solutions involving difficulties.
2. REVENUE: Ganiya O. G. (1998) this refers to the money that a government receives form taxes or that an organization receives form it business. It also refers to the amount of money collected by the government form their usually regular sources of revenue.
3. ALLOCATION: Simply means to distribute share out or to give each his share.
4. LOCAL GOVERNMENT: Is the system of government of a town or an area by elected representative of the people who live there, or the organization that is responsible of a local area and for providing services.
5. POLICY: Is the plan of action agreed or chosen by a political party, or a company.
6. ADMINISTRATION: Simply means the activities that are done in order to plan, or organize and run a business, school or other institution.
7. ADMINSTER: Simply means to manage and organize the affairs of a company, an organization or a country.
8. SUBVENTION: Refers to the amount of money that is given by a government to help an organization.
9. OVERVIEW: It means a general description or an outline of something.
10. ENCOUNTER: To experience something, especially something unpleasant or difficult, while you ar e trying to do something else.

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