1

CHAPTER ONE

INTRODUCTION

1.1 Background of Study

Local government plays a crucial role in the delivery of services to the

citizenry. The success of any local government is its ability to utilize its

human and material resources to achieve the desired objectives i.e. rendering

needed services to the community. Local government is a government in

which popular participation both in the choice of decision makers and in its

recognition of a third tier of government. Prior to 1976, however, Nigerian

local government has passed through various reforms. These reforms and re-

organizations have affected the system financially, administratively,

politically and functionally.

The historical evolution of the local government system in Nigeria

dates back to the colonial era when it was called the colonial native authority

system which existed between 1920’s and 1930’s (Orewa and Adewumi

1983). In their form, they represented a system of indirect rule whose aim

was to establish a system of local authorities through traditional authorities.

The main task of local government in this era was maintenance of law and

order at grass root level. Also the issue of revenue generation in the local
 2

government system has been in existence since in this traditional system of

local government. In pre-colonial Nigeria the Chiefs, Obas and Emirs were

responsible for revenue generation. This they usually did through levies and

taxes, which they used in managing their communities. During the colonial

era the British especially in the North introduced a system of indirect rule in

which direct taxes were introduced in various local communities for running

their affairs. By 1933, the powers of the local authorities were extended to

cover expanded functions due to reliable performances. After the

independence in 1960, local governments acquired more responsibilities that

were assigned to them by the constitution. For instance, section 6 of the 1979

Constitutions of Nigeria provides that:

The functions to be conferred by law upon local

government council shall include those spelt out in
fourth schedule to this constitution

Also the constitution made provision for substantial funds to local

councils. This is because there is no doubt that sound financial base is a

prerequisite for effective performance of the roles assigned to local

government. For instance, section 7(6) of the 1999 Constitution makes

provision for the funding of local government as follows;

 3

a) The National Assembly shall make provision for statutory allocation

of public revenue to local government councils in the federation; and

b) The House of Assembly of a state shall make provisions for statutory

allocation of public revenue to local government councils within the

state.

More specifically, provision was made under the Revenue Allocation Act

of 1981 for statutory allocation of 10 percent of national revenue to local

government, became operational in 1989 and 20 percent in 1992. (Idike

1995:1). In addition, state governments were required to contribute 10

percent if their internally generated revenue to local government (Dasuki

Report, 1985).

Under this fiscal arrangement, local government depended mainly on

State and Federal Governments for revenue and grants. This source of

revenue is in some cases unreliable and unstable. This is due to the fact that

most state government have failed to release 10 percent of their internally

generated revenue to their local governments. In addition, some State

Governments interfere with the statutory allocations to local governments.

 4

It is in recognition of this that the originators of 1976 Local Government

Reform made genuine efforts to assist the local government system

financially. For instance in 1976, the Federal Military Government after the

reform as it was contained and noted in the Guidelines for Local Government

Reform 196:11) stated that:

Lack of adequate funds and appropriate institution

has continued to make local government ineffective
and ineffectual. In embarking on the reforms, the
Federal Military Government was essentially
motivated by the necessity to stabilize and
rationalize government at the local level. This must
entail the decentralization of some significant
functions of state government to local levels in
order to harness local resources for rapid
development.

This gave rise to provision of different sources of internal revenue

generation for Nigerian local government in our subsequent constitutions.

Also various measures were taken to take care of the financial problems of

the local system. For instance there are many Edicts in various states like

Anambra State Edict (1976) in favour of other sources of revenue for the

local government system..

The aim for provision of internal sources of revenue generation to

Njikoka local government is to supplement the statutory allocations from

 5

both federal and state government. It is assumed that if local government can

satisfactorily generate a large proportion of its revenue internally, it will

cease relying heavily on the statutory allocations. Despite these constitutional

provisions for sources of internal revenue, Njikoka local government and

some other local government s in Nigeria are still unable to tap all these

internal sources. Hence, the problem of poor internal generated revenue in

most local government in Nigeria.

It is on this background that this study tends to examine factors that

constitute impediments to maximum generation of internal revenue in

Njikoka local government of Anambra state.

1.2 Statement of the Problem

In the words of Oguonu (2000:136) “what makes the difference

between local governments is the ability of a local government to internally

generate revenue”. The inability to generate income apart from resources

from the federal government, has been a persistent problem in Njikoka local

government. Revenue generation entails generating and exploring all the

sources of revenue for the local councils. Njikoka government relies heavily

on external sources for funds: it is evident that Njikoka local government area
 6

has failed to explore the various sources of internal revenue generation open

to the local government; hence the problem of internally generated revenue.

Some factors are accountable for the poor internal revenue generation in

Njikoka Local Government Area. It is in this light that we asked this broad

research question-what then are the causes of poor internally generated

revenues in Njikoka local government of Anambra state?

The study attempts to provide answers to the following questions.

1. What accounts for the inability on the part of revenue collectors to

collect internally generated revenue in Njikoka Local Government

Area

2. Does lack of financial autonomy constitute a problem to internal

revenue generation in Njikoka local government area.

1.3 Objectives of the Study

The broad objective of this study is to examine the problem of internal

revenue generation in Njikoka local government. The specific objectives of

the study are as follows:

 7

1. To determine what accounts for the inability of revenue collectors to

collect internally generated revenue in Njikoka local government.

2. To find out if lack of financial autonomy constitutes a problem to

internally generated revenue in Njikoka local government; and

3. To proffer solution to the problem of poor internal revenue generation

in Njikoka Local Government Area.

1.4 Literature Review

There are reasonable number of existing literature on local government

finance and internal revenue generation in Njikoka local government. Some

scholars have made one or two contributions in this area.

The aim of this literature review was to familiarize ourselves with what

other scholars have said about the subject matter, see how they approached

the issue and determine whether the scholars have answered the question(s)

we intend to answer satisfactorily. The literature review was specifically

aimed at discovering the gap in the existing literatures. It was to know what

other scholars have either said or not said.

 8

For instance, L Rowland (1977:77), made some comments on the desirability

for local governments to have their own sources of revenue.. He state’s that

“an effective local government system cannot exist where the local authority

has no power to improve and collect its own taxes”. Certainly, in many

developing countries such as Netherland, local authorities have fewer sources

for revenue generation”.

Orewa (1986:180), in his book titled “Local Government Finance in

Nigeria”, described and discussed various sources of revenue open to local

governments and problems in the collection and management of their

finance. Such problems are-shortage of trained manpower, ignorance of the

councilors over their duties and non-commitment to duty on the part of the

staff and councilors alike..

Adediji (1979:87), blames poor internal revenue generation of local

government on the following reasons

a. Lack of proper structure

b. Low quality of staff and

c. Lack of mission and comprehensive functional role.

 9

According to him, these problems lead the local government into vicious

circle of poverty. This is due to the fact that inadequate funding results in

employment of low skilled and poorly paid staff.

Bello- Iman (1990:134), in the same vein states that “ the major

constraint to internal revenue generation in local government is the shortage

of well trained and qualified personnel which suppose to serve as tool for

collection of taxes and rates at the local level”. According to him, even the

few available are not peoperly trained in efficient budgetary and financial

management systems. Also most of the local governments are short-stuffed to

carryout their duties”.

Nkala (1985:60), talking about the problem of personnel in internal

generation of local governments states that “at the inception of democratic

local government system in the former Eastern region of Nigeria in 1950,

early recruits into the local government service were mainly ‘sons of the

soil’, party stalwarts, relations of councilors”. He blamed shortage of trained-

staff in local government on politicization of recruitment, selection and

placement.

Mugrave, R.A (1959:89), noted that “poor auditing has contributed

immensely to problem of internal revenue generation of local governments”.

 10

According to him, “local governments should have a means of ascertaining

whether it’s financial operation is properly conducted, this can only be done

through audit”.

In a more recent study, Ebo (2000:123), did a thorough work on how

to enhance internal revenue of local government, using Nsukka as a test case.

He corroborated the evidence of other scholars to the effect that there is a

great loss of council’s revenue due largely to the loopholes in the

management of revenue sources. He noted that collection procedure of the

council could be streamlined in many areas especially where their facilities

were used. Citing motor parks for instance, he observed “motor parks fees

paid by taxis can be good money earned for local government councils if

properly managed But as of now (2000) each of these taxis pays #10 a day to

the local government no matter how many loads they made. In contrast to

this, each taxi pays touts up to #30 per load and there may be several loads

per day. Thus, the local council receives #10 per taxi daily. What a flagrant

case of robbing peter to pay paul”.

As Ikejiani-Clark (1995:53) pointed out that,

the growing prominence of corruption and fraud in

local government as evidenced from massive data
from the various parts of the federation has
 11

coincided with increased academic interest in

corruption and fraud in our public life\.

Still in the same view, Obi (1996) and Ikejiani-Clark (1995) produced

massive data on cases of corruption and fraud in Nigerian local governments;

for instance, Obi observed that

the poor state of accountability in the local

government studied was as a result of interwoven
tragedy emanating from the Nigeria factor, weak
accounting control mechanism lack of prosecution
of offenders, dishonesty, absence of adequately
maintained financial records, conflict in role
perception by the chairmen and many others. He
concluded that “unaccountability was the major
cause of poor internal generated revenue and low
development in the local communities’ in Nigeria
(Obi 1976:179)..

Further, Ezeani (2004:120), states

corruption remains a major problem which has

constrained local government especially in
developing countries from contributing
meaningfully to the upliftment of the standard of
living of the local people. It is rife in the areas of
revenue generation and declaration by collectors to
embezzlement of local government funds by
officials of local government.

To stress the point, Obinna had (1995:47) stated that

some unscrupulous revenue collectors and senior

financial officers of the local government defraud
 12

the local government by printing fake receipts

which they use to collect unaccounted revenue.

On the side of lack of adequate manpower for revenue generation by

Nigerian local government, Nwankwo (1995:154) observed that why local

governments have not paid proper attention to internal generation of revenue

was due to poor staffing, sharp and fraudulent practices of the revenue

collectors, lack of logistic support for revenue collectors and refusal of most

citizen to cooperate in paying the necessary fees due to the local government.

Wraith (1972:68) stated that

lack of foresight and entrepreneurial skills on the

part of key local government function arises
especially the revenue officials have contributed
heavily to the failure of internal revenue
generation for the local governments.

He maintained that local government functionaries who should look inwardly

to identify and exploit fully more viable sources of revenue in their areas of

jurisdiction unfortunately fail to do so mainly because they are not

enterprising.

On the issue of the auditing system in Nigerian local government,

Musgrave (1959:39) noted that poor auditing system in Nigerian local

government has contributed immensely to problem of internal revenue

 13

generation of local government. To him, local government should have

means of ascertaining whether its financial operation, are properly conducted,

this can only be done through audit. In this view, Oguonu (1995:143) pointed

out that:

the dearth of qualify staff to conduct audit has

resulted in using people who do not possess the
requite experience and knowledge to face the
challenges of the work.

Supporting this view, Ezeani (2004:124) pointed out that “inefficient

supervisors do not effectively supervise the revenue staff and records”.

Again, internal auditors lack independence required for effective

performance of their duties. As Ezeani (quoting Oguonu 1993:860)

succinctly put it:

The administrative set up in such that the internal

auditor can hardly exercise his powers
independently because; he depends on his
superiors for recommendations, for promotions
and career advancement.

Again, Oguonu (2003:135) pointed out that another fundamental

reason for poor internally generated revenue is that Nigerian local

governments were not created on the basis of their viability. She maintained

that they are mere political creations. Further she stated that: “some of the
 14

newly created local governments were as a result of political patronage to

ruling party loyalists”.

Other reasons for poor revenue collection by Onyisi (1999), Adewale

(1998) and Ezeani (2004) are the fact that most of local governments cannot

enforce bye laws on revenue collection. In some cases the law of revenue

collection is not updated. They also maintained that there is also poor

communication network especially in the riverine areas.

Finally, Omopariolar and Adewale (1998:247), stated that

high incidence of tax evasion also plays a major

role in poor internally generated revenue in the
local government system. Most Nigerians are not
willing to pay taxes.

Despite all these arguments presented by these scholars, the issue of

poor internally revenue generation in Nigerian local governments has not

been properly addressed. The scholars have failed to touch on the kind of

fiscal relationship that exists between the local government and other levels

of government and how this intergovernmental financial relations either

enhances or undermines internal revenue generation in Nigerian local

governments. For instance, the 1976 Local Government Reforms put into
 15

consideration the relationship that exists between state and local government.

Local Government Guideline states

the defects of previous local government system

are too well known to deserve further elaboration
here. Local government has over the years suffered
from the continuous whittling down of their
powers. The state governments have continued to
encroach upon what would normally have been the
exclusive preserve of local government. Lack of
adequate funds and appropriate institutions have
continued to make local government ineffective.

Cameron (2001:213) defined intergovernmental relations “as an array

of structures, processes, institutions and mechanisms for coping with the

inevitable overlap and interdependence that is a feature of modern life”.

Odugbemi (1989:175) defines it “as a system of transactions (behaviour

patterns) among managers of hierarchically, structured levels of government

in a state”. He goes further to argue that the objectives for intergovernmental

relations is the achievement of the division of work, authority, resources

sharing among levels of public and sometime extra government authorities in

state.

Olaokun (1979:97) stated that:

there are variations in the capacity of the different

levels of government may not have enough
capacity to raise enough revenue when it is
 16

realized that in a federation it is desirable for every

state or locality to attain minimum level of
services. It becomes imperative that for these areas
that have low revenue-raising capacity to meet up
with the national minimum they have to impose
heavier taxes on inhabitants of such areas.

These existing literature have failed to explain the impact of state –

local government intergovernmental relations on internally generated

revenue.

1.5 Theoretical Framework

Theory of fiscal federalism is applied in this work as our theoretical

framework. The “theory of fiscal federalism” as originally developed by

Musgrave (1959) and Oates (1972), concerns the division of public sector

functions and fiancés in a logical way among multiple layers of government

(King 1984). Fiscal federalism, as it is called, is used to refer to the fiscal

arrangement among the different tiers of government in a federal structure

(Ekpo, 2004).

Initially, stabilization and distribution were considered the cardinal

points in federal arrangement. The focus in federalism then was always on

how to divide functions among the federating units in order to avoid

functional overlapping and conflicts. Recently, attention in federalism has

 17

shifted to revenue mobilization and allocation among different tiers of

government. This is due to the recognition of the fact that adequate finance is

requisite condition for effective delivery of service by the federation units.

According to Bello-Iman (1990:44), the most dominant area of

intergovernmental relations is finance. This is because no level of

government can perform its functions without strong financial base. In this

perspective, the main analytical task of fiscal federalism is to define the

appropriate functions and fiancés of different tiers of government as

efficiently as possible that is in such a way as maximize community welfare.

The theory of fiscal federalism applies to local service units in metro-

political area as to states in a federation (Gramlich 1977, Rubinfeld 1987). In

principle, however, there are important analytical and policy differences, not

only between local metropolitan problems and federal state problems but

even between tight federal state problems but even between tight federations

such as Germany and “Loose” federation such as Canada –with the United

States somewhere in between. These differences arise in part from the

differing nature and rigidity of the constraints imposed by political

institutions. The question has attracted considerable attention in recent years

in part because of the emergence of nascent “federal institutions” especially

 18

in third world countries. For instance, in Nigeria, there are statutory

provisions for revenue sharing an powers to generate revenue through

specific sources. The 1999 Constitution of Federal Republic of Nigeria,

established the type of fiscal relationships that would exist among the various

levels of government. For example, section 149(2) of the 1979 Constitution

or section 162(3) of the 1999 Constitution stipulates that any amount

standing to the credit of the Federation Account shall be distributed among

the federation, state governments and the local government councils in each

state on such terms an in such manner as may be prescribed by the National

Assembly.

Similarly, the 1999 Constitution provided for state-local financial

relationship under section 162 sub-sections 8. This section states that the

amount standing to the credit of the local government councils of a state on

such terms and in such manner as may be prescribed by the House of

Assembly of a state.

Apart from the constitutional provisions of external revenue to local

government, the 1999 Constitution as contained in forth schedule and Model

Financial Memoranda for Local Government (1991) and section 45 of Decree

 19

No 36 of 1998 provide for internal sources of revenue generation by Nigerian

local governments.

Despite all these constitutional provisions, in the words of Owens and

Panella (1991:54), “Local governments almost invariably depend in part and

sometimes very heavily upon transfers from upper-level governments to

finance the services for which they are responsible”. This is due to the fact

that in most countries whether formally federal or not, there is clearly vertical

competition between levels of government for revenue; perhaps because as

rule local government have access only to those revenue sources that higher

level of governments do not want for themselves.

1.6 Hypotheses

To answer our research questions, hypotheses were formulated. The

formulated hypotheses are:

1. Negligence on the part of revenue collectors is a major problem to

Internal Revenue generation in Njikoka Local Government Area.
2. Lack of financial autonomy constrains generation of revenue via
internal sources in Njikoka Local Government Area.
 20

1.7 Method of Data Collection

Both direct and indirect methods were used in collecting data for this

research work. For instance, indirect method of reviewing was used by going

through textbooks, journals, periodicals etc written by other scholars on the

same subject matter. The direct observation was also used by going through

government documents or publications like financial reports and annual

estimates of Njikoka Local Government.

Population of Study, Sample and Sampling Techniques

The population of this study comprises of the staff of Anambra State

Local Government Service Commission, members of Audit Alarm

Committee, Auditor General of Anambra State, staff of Njikoka Local

Government Council and some of Anambra State Government Officials.

A stratified random sampling technique was used to select the

departments to be included in the study. Five departments were selected from

Anambra State and Njikoka Local Government respectively; making it a total

of ten departments. Ten respondents were chosen from each of the selected

departments; and that will give us a total of one hundred (100) respondents.

The respondents were mainly finance staff with some staff in management

position that could influence the activities of finance staff. For instance, ten
 21

respondents were drawn from Account Departments, ten from Planning and

Statistics Units, ten from Audit Units, ten from Personnel Department, ten

from the Anambra State Local Government Service Commission, ten from

the Office of the Governor on Local Government Affairs and ten from the

Office of Auditor-General of Anambra State.

The self-report techniques were used to obtain information from these

respondents. Unstructured interview was conducted on fifteen (15) workers

in Anambra State and (15) in Njikoka Local Government Staff. The

respondents interviewed were not randomly chosen, but selected through

judgmental sampling.

Research Design

Ex Post facto (X O1 O2) was used in this research to obtain data we

used to test our hypotheses or answer our research questions. According to

Asika (1991:24); “ex post facto research is a systematic empirical study in

which the research does not in any way control or manipulate independent

variables because the situation for study already exists or has already taken

place”.

According to White (1990), “ex post facto is often called simple

experimental design. It is developed to provide alternative means for

 22

examining causality in situations which were not conducive to experimental

control and also to control as many threat to validity as possible”.

In this research, we hypothesize the relationship between y, dependent

variable and x, independent variable. We say that there exists a form of linear

relationship between x and y and y changes directly with any change in x.

There is relationship between X1 Negligence on the part of revenue collectors

– Independent variable (x) and internal revenue generation in Njikoka Local

Government Area (y). X2 Lack of finance (Autonomy (x) and Internal

Revenue generation (y).

Since ex post facto research lacks control or manipulation in

hypothesis testing; it is faced with the problem of precision. In words of

Kerlinger (1973) “in spite of its lack of precision ex post facto research still

finds a place in scientific business research. This is because it is a realistic

approach to behaviourial science research. Since experimentation often does

not take place in real life situations and may need one type of contrivance of

research situation or another”.

Method of Data Analysis

In the area of method of data analysis, statistical tables or data

tabulation is applied. Tabulation in the words of Asika (1991:114) “is the

 23

process of creating data for further analysis by the use of tables. Unanka

(2002:20) states that “statistical tables are commonly used in summarizing

socio-political data. They are devices for organizing or presenting statistical

information in a concise and comprehensive manner.

Quantitative descriptive analysis is used to summarize a mass of

information generated in the study so that appropriate analytical methods

could be used to further discover relationship among the variables.

Chi-Square is used in testing of independence among the variables in

our hypotheses. Chi-square is a measure of the discrepancy frequencies. It

serves as a test of significance or independence.

 24

CHAPTER TWO

REVENUE GENERATION IN THE NIGERIAN LOCAL

GOVERNMENT SYSTEM

Local government in the presidential system, in Nigeria, is the third-

tier of government which also is constitutionally empowered to make

decisions over a specified range of government functions and services. As

such, local government deserves serious attention from the central

government so as to be able to deliver essential services to the rural populace.

It is in recognition of this that the 1976 Reforms in Nigeria gave local

government the constitutional recognition as a third tier of government. Prior

to 1976, however, Nigerian local government had passed through various

reforms. These reforms and reorganizations affected the system financially,

administratively, politically and functionally.

It has been noted that “the success or failure and the effectiveness of

local government depends on the financial resources available to the

individual local authorities and the way these resources are utilized” (Adedeji

1969:96). In this light, it became an urgent need of various central

governments in Nigerian to decentralize some aspects of their public finance.

The philosophy behind decentralization is that a sub-national government

 25

(which local government is part of) must be given power over their own lives

and development (Nyerere, 1972).

The issue of revenue generation in the local government system has been in

existence since the Nigerian traditional system of local government. In those

days the chiefs, Obas and Emirs were responsible for revenue generation.

This, they usually did through levies and taxes which they used in managing

their communities. In the indirect system, the Emirs were the political buffer

constructed as instruments of tax management. Direct taxes were introduced

in various local communities for running their affairs. After independence in

1960, local government acquired more responsibilities. Local governments

depended mainly on state government for revenue and prescribed functions

and grants (Danjuma, 1994:78). Although these grants were never strictly

adhered to until 1976 Reform in which genuine effort was made to assist the

local government system financially.

The local governments depend on federal and state governments for

financial survival in Nigeria. This is due to the fact that the state government

grants to local government are delayed and in some cases completely

withheld by the Federal and State Governments respectively. It is on this

background that in 1976, the Federal Military Government under 1976 Local
 26

Government Reform, constitutionally granted the Local governments powers

to generate revenue via different sources. The Guidelines for Local

Government Reforms (1976:39) state that:

Lack of adequate funds had appropriate institutions

and continued to make local government ineffective
and ineffectual. In embarking on these reforms the
federal military government was essentially
motivated by the necessity to stabilize and
rationalize government at the local level. This must
entail the decentralization of some significant
functions of state government to local levels in
order to harness local resources for rapid
development.

Following this 1976 Reforms, the 1979 and 1999 Constitutions of the

Federal Republic of Nigeria, provided two major sources of revenue

generation to Nigerian local governments. These sources are-the external

sources (statutory financing).

The thrust of this chapter therefore is to analyze the various sources of

revenue currently available for the local councils in Nigeria with particular

reference to Njikoka local government of Anambra state.

 27

TABLE 1: SUMMARY OF SOURCES OF FINANCING LOCAL

GOVERNMENT IN NIGERIA
HEAD DETAILS N

a) Recurrent internal revenue X

I Community tax X

Ii Rates X

Iii Licenses, fees and rates X

Iv Investment revenue X

V Statutory allocation sub-Total: General Revenue X

B Revenue relating to specific services X

Vi Specific departmental revenue X

Vii Government grants X

Viii Contributions from other LGAs X

Ix Special rates X

Sub-total: total specific revenue X

C Commercial services X

X Commercial services total recurrent revenue grand X

total

Grand Total

Sources: Anyafo, (1996: 49)

 28

Table 1 above represents different sources of financing available to

local governments in Nigeria. From the table, we can see that we at least have

ten sources of revenue generation to the Nigerian local government. For this

research purpose, we shall group these sources of local government

generation into two major group; as such we have two traditional sources of

local government revenue-external and internal sources. We shall now treat

these sources in detail.

2.1 External Sources of Local Government Revenue

The external sources of local government revenue include:

(i) statutory allocation

(ii) Grant – in – Aid

(A) Statutory Allocation

Under the 1979 and 1999 Constitutions, local governments through out

the country were entitled to statutory allocation from the federation account.

This is a system whereby the local authorities have a direct share of either

specific items or the total, nationally derived revenue. As Orewa (1991:121)

observed:
 29

Only a few countries have this system because

central governments the world over do not easily
accept the idea of partnership between them and
their local authorities. They claim that since the
local governments are creatures of central
governments laws, the local governments should
derive their revenue from sources stated by such
laws or the instrument establishing them, in
addition to central government grants.

Nigeria is among the very few countries in the world where local

government are legally and constitutionally allocated a share of the total

nationally derived revenue. Starting with the implementation of the Report of

the Aboyade Committee on Revenue Allocation during the 1977/78 financial

year, local government have been allocated a specific share of the federation

account, like the other two levels of government viz the state and the federal.

The statutory allocation to local governments was 10 percent initially

(1977/78), but this was raised to 15 percent in 1990, and 20 percent since

1992 to date. Also apart from the statutory allocation, local government are

also to be allocated 10 percent of their respective states’ internally generated

revenues. This provision initially specified 10 percent of total revenue, but

was later restricted to internally generated revenue (1999 Constitution of

Federal Republic of Nigeria, Chapter 1, sub section 7 (6)).

For instance, section 7 (6) of the 1979 Constitution provides that:

 30

The National Assembly shall make provisions for

statutory allocations of public revenue to local
government councils in federation and the House of
Assembly of a state shall make provision for
statutory allocation of public revenue to local
government councils within the state.

State allocations to local government was initially to be paid into a

state local government account; however, because most state governors

started mismanaging local government funds, direct disbursement of local

governments share of the federation account was initiated during the regime

of General Sani Abacha.

At present, allocations from the federation account accruing to the local

governments are shared according to the following criteria (see Table 2)

 31

TABLE 2: CRITERIA FOR SHARING LOCAL GOVERNMENTS

SHARE OF THE FEDERATION ACCOUNT
S/N INDICES %

1 Equity 40%

2 Population 30%

3 Land mass/terrain 10%

4 Internal revenue effort 10%

5 Social development factor 10%

6 Secondary/commercial enrolment

Inverse secondary / commercial enrolment

Water supply

Rainfall

Total 100%

Source: Federal Republic of Nigeria: Local Government Year Book

(1998:11).

B. Grant – in – Aid

The second source of external revenue is grants. In many countries of

the world, the federal or central government provides the local governments

with financial support in form of grant-in- aid to enable them achieve their

functional targets. Grants- in-aid may be defined as the sum of money given
 32

by the federal or central government for use by the lower layers of

government such as the state and local governments in the provision of goods

and services. The grant can take several forms depending on the objectives

which they are meant to attain.

The major grants include the following

(i) Equalization grant

(ii) Block grants

(iii) Percentage grants

(iv) Unit grants

(v) Special and Emergency grants (Ezeani 2004:104).

These grants are explained as follows:

i. Equalization Grants:

This grant is paid as an aid to less economically privileged local

governments whose revenue is not enough to finance and maintain a

particular essential service. The Federal Government therefore, pays a

subsidy to meet the excess of expenditure over revenue.

 33

ii. Block Grants

This is an annual payment made by the central or federal government

to its local government on a basis related to the number of persons or tax

payers in each local government. This grants is not tied to a specific service.

The rationale for this grant is the recognition of the fact that a local authority,

for one reason or another, has lost some sources of revenue to the central

authority. It is therefore compensatory.

iii. Percentage Grant

This is usually given for a specific service to encourage a local

authority to provide the service or facility at a nationally acceptable standard.

The grant is given as a percentage of the total expenditure incurred by local

authorities on a giving service.

iv. Unit Grant

This type of grant is paid for each unit of service such as a clinic, a

mile/kilometer of road, a patient attending a clinic, a child attending a school

etc. The unit grant is a fixed amount per unit or it might be a fixed amount for

a specified number of units. The unit grant is aimed at encouraging local

authorities to increase the number of units of services provided or employed.

 34

v. Special Grants

The federal governments give a special grant to support a local

government in times of emergency, such as occurrence of natural disaster,

famine or rain storm etc. Similarly, special grants could be given for

important national economic and social programes to be handled by the local

governments, such as re-vitalizing the agricultural programme of a country.

The principal objectives of federal governments grants – in – aid is to:

promote the equal provision of particular social

services such as health, education etc, in all parts of
the state by removing the imbalance in the
resources available to the various local authorities,
to encourage the achievement of common standards
in certain areas of local government and to
compensate local authorities for the loss of any
portion of their ordinary revenues (Okonjo
1979:173).

2.2 SOURCES OF INTERNAL REVENUE GENERATION OF

NIGERIAN LOCAL GOVERNMENTS

It is evident that financing the local governments can either be “self-

financed (internally generated revenue sources) or financed via

intergovernmental transfers. As said earlier, in the words of Oguonu (2003:

133) “internally generated revenue is the one that usually makes a difference

between one local government and the other”. Internally generated revenue is
 35

actually indispensable for effective administration, because “no system of

rule can be effective, whether government or municipal, unless it enjoys

some measures of financial independence (Lugard 1965:230). It is this source

that each local government can significantly explore to better its financial

position.

Patterson (2007: 75), defines self financing sources or internally

revenue generating sources as “those sources by which the local government

can raise revenue constitutionally aside from the statutory allocation and

government grants to local governments”. It should be noted that self

financing sources or internally revenue generating sources provide a wide

scope for initiative towards attracting fund. The extent to which these

revenue sources can yield to the benefit of the local government council

depends on the ability and vibrancy of the local government leadership.

Specifically, we shall examine the sources of internal revenue available to

Nigerian local governments; it is pertinent to mention here that Njikoka local

government generates revenue internally by performing the functions

assigned to it by 1999 Constitution of the Federal Republic of Nigeria. For

instance, the Fourth Schedule of 1999 Constitution, section 1 states that “the

main functions of a local government Councils are as follows:

 36

Ib. Collection of rates, radio and television licenses

d. Licensing of bicycles trucks (other than mechanically propelled trucks),

canoes, wheel barrows and arts.

K. control and regulation of –

i. Out-door advertising and hoarding.

ii. Licensing, regulation and control of the sale of liquor etc.

The internal revenue sources of local government in Nigeria can be grouped

as follows:

a. Rates/Taxes

b. Receipts derived from any public utility concern, or any service or

undertaking belonging to or maintained by local government either in part or

in whole.

c. Rents derived from the letting or leasing of any building or land belonging

to a local government

d. Interests on the investment of funds of a local government.

e. License, fees and fines.

The main sources of internal revenue generation are as detailed below:

 37

2.2.1 Rates

Local rates constitute important sources of the internal revenue of local

government (Jenings 1960:209-210). A rate is a tax levied on an individuals

person or assessed yearly income. It may also be levied on the occupier of

ratable property within the local government area and they are fixed in

amount by relevant local government councils. As Obinna (1995:68) rightly

notes:

For purpose of local rates “property” is used in a

sense of cover land, mines quarries, plants,
machinery, building- both domestic, commercial or
industrial.

Therefore rates are viable source of local government revenue not

because of the variety or items classified under “property” but also because

rates are difficult to evade. This is because, rates are certain to the collector

and the contributor and the yields can be calculated fairly accurately in

advance. The 1976 Anambra State Edict of section 5 No 2. states that every

local government shall be a rating authority for its area. As a rating authority,

every local government may impose rates in accordance with the general

directive issued by the Executive councils on that behalf.

 38

Types of Rates includes

A. Capitation Rate

This is the oldest type of rating in developing countries dating back to

the early days of colonialism. It used to be called by such names as “head” or

“poll” tax. Capitation rate is usually flat rate tax. It is very common in

developing countries because of the difficulty of determining the income of

the rural tradesmen and farmers due to the non-existence of any records about

their income. It is used widely in Nigeria.

B. Property or Tenement Rate

Property rate constitutes an important source of internal revenue for

local governments especially in the urban areas. Property rate is imposed on

such property as undeveloped land and building. It is not impose on plant,

machinery or any furniture. It is the basis of local taxation in more developed

countries particularly in Britain, where there are no rates on local income.

Property rates according to Wraith (2972:128) .. are based on the ideal that

the owner (or in the case of dwelling houses it may be the owners or

occupier) should pay a rate which is related to the value of his property”.

This form of rating was adopted by the Federal Military Government of

Nigerian in 1976 as one of the sources of local government revenue.

 39

Property rates are thought to be the best basis for local rating, mainly

because they constitute permanent, dependable and foreseeable source of

revenue.

C. Special Rate

Special rate can have two meaning. First, it can mean a rate levied

upon everybody resident in a local government area for a special purpose

such as a school or water or education etc. Second, it can also mean a rate

levied upon people living in certain part of a local government and not over

the whole area (Wraith, 1972:128). Below is a table 3 indicating the types of

local government rates of Njikoka local government Area.

 40

TABLE 3: TYPES OF NJIKOKA LOCAL GOVERNMENT RATES

S/N TYPES OF RATE AMOUNT BASIS

1 Residential Tenement rate
(a) Modern Building 100
(Per floor)
(b) Modernized Local 50
Structure
(c) Local structure 25
2 Commercial Tenement rate
(a) Modern building 200
(per floor)
(b) Modernized local 100
structure
(c) Local structure 50
Source: Anyafo (1996: 50)

2.1.2 Taxes

Taxes constitute another sources of internally generated revenue of the

local government in Nigeria. They include

A. Community Tax:

This tax is simply a flat rate tax on individuals. In Nigeria, the Income

Tax Management (Uniform Taxation Provisions) Decree of 1975 as modified

 41

by Decree No. 01 OF 1977, provides for community tax to be levied as an

alternative to community rate (FMM, P. 80). This type of tax is payable by

all male persons aged eighteen years and above in the local government

unless:

1. They produce evidence that they have been assessed by the internal

revenue Department of pay personal income tax, either by way of direct

assessment or under pay-As-You-Earn.

2. They are exempted from payment under provisions of section 49 of the

personal tax law.

According to the Model Financial Memoranda (1991) 10.2, it is the duty of

the local government to determine the sub-divisions of its area for purpose of

tax assessment and collection. Such sub-divisions normally consist of

(1) Primary tax area e.g. villages or in urban areas, such sub-divisions as

towns or wards.

(2) Tax supervision districts e.g. Districts or small Chiefdoms. It is worth

mentioning that the rates of community tax are prescribed by the state

government.
 42

(B) Cattle Tax

This is normally charged in lieu of community tax and is paid by

nomadic herdsmen. However, settled tribes may be called upon by the

community to pay both taxes. In practice herds are counted each year and the

collection of the tax is effected later.

2.1.3 Fees, License, and Rent

This is another internal revenue generating source for financing the

local government. In some local government councils however, the term

‘permit’ is used in place of license or “permit fee” instead of “license fee”.

Fees are charged by local government either for specific services provided

for individuals and which are paid for by the users, or as a charge for

controlling the activities of their citizens.

The former are known as service fees and are collected from the users

of such facilities as market stalls, motor parks, slaughter houses, public

restaurants, bars and other facilities which fall under the functions of local

government (Orewa, 1991:93; Wraith, 1972:133).

The second type of fees is regulatory fees which are “charged for

controlling the activities of those engaged in trade, business or industry in

order to ensure that they conform with laid down procedures” (Orewa,
 43

1991;93). For example, local government enacts bye-laws to control the

distribution and sale of liquors and other alcoholic beverages, the operation

of private restaurants and bars, the parking of vehicles in public places, et

cetera. It is important to note that apart from yielding revenue to local

governments, these regulations help to instill discipline in the society and

enable the citizens to recognize the jurisdictional presence of local

government.

Apart from fees, local governments also generate internal revenue

through licenses. License has various kinds and purposes, such including

bicycles, carts, canoes, firearms etc. The objective of introducing this type of

tax according to Wraith (1972:133), is either to limit the number of people

involved in certain activities such as palm wine sellers or hawkers or to

inspect and control potentially dangerous or sanitary behaviour such as the

wrong use of firearms, slaughter houses, et cetera.,

On its part, rental revenue, as part of local government source of

finance, is derived from the following items: staff quarters, lock-up stores

and shops located at the motor-garages; urban and rural markets, developed

and undeveloped plots of land allocated to individuals, associations and

firms, open market stalls and temporary market.

 44

2.1.4 Commercial and Industrial Undertakings

Under this heading, local government councils can generate revenue by

engaging in commercial ventures or activities. In the past, majority of the

local governments had engaged in revenue generating commercial ventures

such as Mass Transit Services, water-selling, catering, rest house ventures

and even petroleum product distribution. However, it should be noted that

generating revenue for the local government council depends on their natural

endowment, state of development, location, entrepreneurial skill and above

all the patriotism of the leadership. Other areas which a local government can

raise revenue could be in establishing an amusement resorts, publishing of

vernacular newspapers as well as primary and secondary school books in the

local dialect of the people.

2.1.5 Interest on Investment/Local Government Investment Revenue

Investment revenue as a source of local government “self-financing” arises

from interests and dividends, accruing from securities (quoted and unquoted),

fixed deposit bank account, savings bank account; treasury bills. Also

included under this assortment of revenue are interest and repayment of

personal advances by the local government staff in respect of vehicle, and/or

housing loans they received.

 45

CHAPTER THREE

REVENUE GENERATION OF NJIKOKA LOCAL GOVERNMENT

1999-2010

For financially healthy local government to exist, responsibilities and

functions must be allocated in accordance with their tax power and ability to

generate funds internally. There is need for expanded fiscal jurisdiction and

revenue rights for local governments in order to enhance local governments’

ability to perform their assigned functions and responsibilities. This is what

fiscal federalism tends to address. According to Ademolekun (1983:19),

fiscal federalism refers to the allocation of the tax raising power and

expenditure responsibilities between the levels of sub-national government

by incorporating incentives for them to mobilize revenue of their own. This

invariably will make local government more responsive and responsible to

the people and set local governments free from the fiscal imbalance. The

inability of local governments to raise substantial portions of their total

recurrent revenue requirements from internal sources which according to

Adamolekun (1984:35) undermined their autonomy, has become common

place knowledge. Njikoka local government has taken some steps towards
 46

solving its financial challenges by exploring different internal sources of

revenue generation.

We have examined the various sources of revenue generation opened

to all local governments in Nigeria by law. We shall examine in this chapter

the actual amount of money that was realized from both internal and external

of revenue sources by Njikoka local government over the period of 1999-

2010 (our period of study). This will specifically enable us to:

(1) see how Njikoka Local Government is able to explore all the internal

sources of revenue generation open to it;

(2) Determine how Njikoka local Government is financially autonomous

from state or federal government a dependent on external revenue;

To achieve this, the internal revenue of Njikoka local government 1999-

2010 is juxtaposed with external revenue over the same period of time,

3.1 Internal Revenue Generation of Njikoka Local Government Area

It is unfortunate that the revenue structure in Nigeria has been such that

the federal government has over the years collected the bulk of government

revenue. Consequently, Njikoka local government has been largely

dependent on federal revenue transfer. The taxes which continue to form bulk

of internal revenue are not adequate for any meaningful development. The
 47

efforts of Njikoka local are being thwarted by the intervention of the

Anambra State Government in the financial management and revenue

generation of the local government. Nigerian Constitutions to date fail to

match tax powers with functions when dividing jurisdictions among the tiers

of government (Phillips, 1994:19). Consequently, the internal revenue

mobilization effort of the local government becomes poorer.

The table below represents internally generated revenue of Njikoka

local government Area from 1999-2010.

TABLE 4A; INTERNAL GENERATED REVENUE OF NJIKOKA

LOCAL GOVERNMENT AREA 1999-2010.
HEAD DETAILS OF 1999 2000 2001 2002 2003 2004/2003
REVENUE
1001 Taxes 47,890 59,419 75,914 71,733 79,110
1002 Rate 18,272 27,134 29,155 30,099 43,225
2003 Local license; 82,075 101,70 120,11 135,11 161,22
fines and fees 7 0 3 7
2004 Earning from 14,748 21,075 39,176 49,716 51,861
commercial

Undertakings
rent on local
 48

1005 government - - 13,015 16,001 10,716

property
1006 Interest - - - - -
payment and
dividends
Miscellaneous 19,230 25,620 41,533 71,220 77,250
Total 18221 234955 31904 375882 423389
5

Head 2004 2005 2006 2007 2008 2009 2010

1001 82,415 86,300 88,410 72,190 29,200 32,700
1002 - - 10,199 - 11,400 21,300
1003 515,277 69893 721,94 766445 -
5 5
1004 144,237 18000 185 191,77 39,350
85 0
1005 - - - - - - -
1006 - - - - - -
Miscell 599335 682,50 701,02 44,005 908,65 - 1,009,750
aneous 0 5 0
Total 1341264 16478 170681 174441 1,915,3 109365 1110470
20 4 0 10 5
Source: Planning and Finance Unit, Njikoka Local Government (2011).
 49

The table 4 above represents just the summary of internally generated

revenue of Njikoka local Government Area from 1999 to 2010. It will also be

noted that under each revenue headings, there are a number of sub-headings;

for instance we have Taxes (1001) as the first heading. Under this tax, there

are about four (4) sub-headings. These sub-headings represent those taxable

objects Njikoka local government can generate revenue from through tax. For

example, we have community rates, development levy, cattle tax, other

special taxes etc as collectable taxes by Njikoka local government. Again

under local license fines and fees (1003), Njikoka local have about ninety

(90) different sources of collecting and generation revenue through license,

fines and fines. In general, one can see from table 5 below that the local

government under study have not less than 119 sources of internal revenue

generation.

The community tax is levied at an annual flat rate per taxable adult in

the various communities, towns and villages under the jurisdiction of the

councils. The low rate of the tax enhances its appeal among rural dwellers

since even the poorest person is assumed capable of paying it (Anyafo,

1996:74). There is also under tax what is called development levy.

Development levy is money collected from the members of the public by the
 50

local government for execution of developmental projects. For instance, the

local may collect a given some of money from members of a community for

construction of a particular road or bridge in that locality. There is also ‘cattle

tax’. Cattle tax is paid by the cattle rearers. This type of tax is also common

and viable in cattle rearing communities in Northern parts of the country. It

yields little or no revenue to Njikoka local government. Special tax as

another type of tax collectable by the local government is tax levied on

members of a given community for provision of specific special service.

Under heading 1002, we have local government rates. This is another

source of revenue generation by the local government. Under this source,

there is residential tenement rates and commercial tenement rates. Tenement

is a house or home stalled. It is also means a land held of a superior landlord

and in this sense appears as a technical legal word applicable to all real

estates, which includes offices, and dignities that concern lands profits

issuing out of lands. Tenement rates are thus, property tax. It can be assessed

on the basis of the capital value, rental income or location of the property.

Njikoka local government also generates revenue internally through local

licences, fines and fees as it is contained in table 4 above on the heading

1003. As we shall see in table 5 below, Njikoka local government have about
 51

ninety two (92) different sources of collecting revenue via licenses, fines, and

fees. Sometimes, the term “permit” is used in place of licence or permit fee

instead of license fee.

Heading 1004 shows that the local government generates revenue

internally through earning from commercial undertaking. Under this heading,

the local government generates revenue by engaging in commercial ventures

or activities. In the past, Njikoka local government engaged in transport

business and commercial farming. The Njikoka Transport Service is no

longer in existence. Little amount of money accrue to the local government

from this source because the local government has abandoned its commercial

ventures. Similarly, we have heading 1005 that contains rent on government

property. It is noted that the local government has some residential quarters

people live in and pay rent to the local government. Also, some stores are

owned by the local government which members of the public let from the

local government. In the past, the local government has tractors which

farmers hired. This source used to yield a lot of revenue to the local

government.

Finally, we have interests’ payment and dividends as heading 1006.

This revenue arises from interests and dividends accruing from securities
 52

(quoted and unquoted), fixed deposit bank account, savings bank account,

treasury bills e.t.c. Also, included under this assortment of revenue are

interest and the re-payment of personal advances by the local government

staffs in respect of vehicle, and / or housing loans they received.

TABLES
NJIKOKA LOCAL GOVERNMENT ESTIMATE
RECURRENT REVENUE 2008
Sub Details of Revenue Estimate Approved Actual

Head 1001 – Taxes 2008 Estimate Revenue

2008

1 Community Rate 500,000 500,000 ___

2 Arrears of Community 100,000 100,000 1950

3 Development levy 800,000 600,000 ____

4 Cattle Tax ____ ____ ____

5 Other Special Tax 120,000 100,000 ____

6 Head 1002 – Rates

7 Tenement Rate 20,000 20,000 ____

8 Penalty for tenement rate 50,000 20,000 ____

 53

9 Ground rate ____ ____ ____

10 Federal govt. grant in view of ____ ____ ____

tenement rate

11 State govt. grant in view of tenement 10e 10e ____

rate

12 Head 1003- Licenses and FEEs 150,000 150,000 ____

Towing of Vehicle fines and fees

13 Fines on overdue cost library books ____ ____ ____

B. General license

14 Bicycle license fees 100,000 100,000 ____

15 Canoe license fees ____ ____ ____

16 Dog license fees 20,000 20,000 ____

17 Cart/Truck/Wheel barrow fees 50,000 50,000 ____

18 Motorcycle emblem fees 100,000 100,000 ____

19 Hockey permit fees 1000 1000 ____

20 Bus/Commercial/Taxi permit 100,000 100,000

21 Learning driving tes-fees 10e 10e ____

22 Liquor license fees 5000 5000 ____

 54

23 Palm wine tapers/selling license fees 10e 10e ____

24 Native Liquor license fess 5000 5000 ____

25 Bulky cigarettes license fees 10e 10e ____

26 Wharf landing fees ____ ____ ____

27 Squatters/hawkers permit fees 5000 5000 ____

SUB TOTAL 1003 1,531,030 1,531,000 ____

C: FOOD CONTROL

28 Slaughter fees 30,000 30,000 ____

29 Abattoir fees ____ ____ ____

30 Eating houses license fees 100,000 100,000

31 Kiosk license fees 10,000 10,000

32 Bake house license fees 120,000 120,000

33 Registration of meat van fees 10e 10e ____

34 Cattle dealers license fees 10e 10e ____

35 Dried fish/meat license fees 10e 10e ____

36 Cold room license fees 150,000 150,000 ____

37 Butchers license fees 5000 5000 ____

SUB-TOTAL 415,030 415,000 ____

 55

D: SECURITY

38 Auctioneer license fees 10e 10e ____

39 Gold smith &god sellers license fees 10e 10e ____

40 Dane gun license fees 10e 10e ____

41 Hunting license fees 10e 10e ____

SUB- TOTAL 10e 10e ____

E: SOCIAL

42 Marriage Registration fees 600,000 500,000 88,400

43 Entertainment, drumming and 100,000 100,000 ____

temporary tooth permit fees

44 Control of noise permit 10e 10e ____

45 Cinematography license fees 10e 10e ____

46 Naming of street registration fees 450,000 450,000 ____

47 Mobile sales promotion license fees 10e 10e ____

48 Teat and Sea Beach permit fees 5,000 5,000

49 Radio/Tv license fees ____ ____ ____

50 Beggars ministerial fee ____ ____ ____

51 Open air preaching permit 10e 10e ____

 56

SUB – TOTAL 1,155,050 1,055,000 88,400

F; HEALTH

52 Dislodging of septic tank charges 10e 10e ____

53 Night soil disposal/dept fees ____ ____ ____

54 Registration of septic tank dislodging 10e 10e ____

license fees

55 Registration of night soil contractors ____ ____ ____

fees

56 Impounding of animal fees ____ 25,000 ____

57 Pest control and disinfected charges 10e 10e ____

58 Birth and death registration fees 200,000 200,000 ____

59 Identification fees 250,000 250,000 ____

60 Burial fees 10e 10e ____

61 Vault fees 10e 10e ____

62 Dispensary test fees 10e 10e ____

63 Laboratory test fees 10e 10e ____

64 Earning from environmental 120,000 120,000

sanitation services
 57

SUB-TOTAL 1,070,060 1,095,000 43,230

G: ECONOMICS

65 General contractors registration fees 50,000 50,000 ____

66 Tender fees 20,000 20,000 ____

67 Sand dredging fees 5000,000 350,000 ____

68 Trade license fees 100,000 70,000 ____

69 Petty traders license fees 120,000 80,000 ____

70 Sand, granite, iron rod sellers license 600,000 450,000 ____

fees

71 Pit sawing license fees 10e 10e ____

72 Forestry and fuel exploitations fees 10e 10e ____

73 Felling of trees fees 10e 10e ____

74 Sawmill license fee 10e 10e ____

75 Produced buying fees ____ ____ ____

76 Rice mill/cassava grinding license 20,000 5,000 ____

fees

77 Corn grinding mill license 10,000 5,000 ____

78 Painting, spraying and sign writing 25,000 5,000 ____

 58

workshop license fees

79 Photo studio license fees 20,000 3,000 ____

80 Welding machine license fees 100,000 10,000 ____

81 Electric (Radio/Tv) Workshop license 20,000 5,000 ____

fees

82 Blacksmith workshop license 10,000 5,000 ____

83 Wood making/carpentry workshop 100,000 10,000 ____

license fees

84 Battery charges license fees 10,000 2,000

85 Printing press license fees

86 Vulcanizes license fees 50,000 5,000

87 Vehicle spare parts license fees 50,000 5,000

88 Registration of laundries dry cleaners 50,000 10,000

fees

89 Motor mechanic and car wash deport 150,000 10,000

license fees

90 Surface tank kerosene license fees 15,000 5,000

91 Photostat, typing institute license fees 15,000 5,000

 59

92 Block making machine fees 120,000 10,000

93 Sewing institute license fees 10,000 2,000

94 Hair dressing/barbing/plaiting license 70,000 10,000

fees

95 Advertisement rate license fees 230,000 150,000

SUB-TOTAL

H: ENGIEERING WORK AND

SURVEYS

96 Sales of unserviceable stores 10,000 10,000 ____

97 Survey fees 10e 10e ____

98 Approved of building plans 10e 10e ____

99 Mortgage sub-lease approval fees 10e 10e ____

100 Customary right occupancy fees 10e 10e ____

101 Commission on transfer of plots 10e 10e ____

SUB – TOTAL 60,070 60,000 7,000

HEAD 1003 – GRAND TOTAL 7,043,160 6,978,000

HEAD 1004 – EARNING FROM

COMMERCIAL UNDERTAKING
 60

102 Market tolls 400,000 400,000 ____

103 Shops and shopping centres 200,000 200,000

104 Motor parks 1,500,000 500,000 39,350

105 Cattle market 10e 10,000 ____

106 Abattoir/slaughter house 200,000 200,000 ____

107 Transport services earnings 10e 10e ____

108 Earnings from industrial 300,000 300,000 ____

109 Earnings from other commercial 450,000 450,000 ____

undertakings

TOTAL 3,070,020 4,670,000 ____

HEAD 1005: RENT ON L.G.

110 Rent on local govt. quarters 300,000 10E ____

111 Rent on other local govt. buildings 10e 10e ____

112 Rent on other local govt. landed 10e 10e ____

property

113 Interest: Vehicle and Bicycle advance 10e 10e

114 Interest: Loans to Parastatals and 10e 10e

limited liability
 61

115 Dividends 10e 10e

116 Interest on staff housing and loans 10e 10e

TOTAL 50E 50E

HEAD 1001: GRANTS

1. Grants from 10e 10e ____

2. Grants from Federal Govt. 10e 10e ____

3. Other grants 10e 10e

TOTAL 30E 30E ____

One noticeable thing about these sources of internal revenue

generation is that some of the sources are either no longer existing or

feasible. For instance, the local government has revenue right to collect corn

grinding mill license fees and gold smith licence fees. Gold smith and gold

sellers used to be in existence but right now, no body engages in such

occupation in the Njikoka local government area. As such the revenue

accruable from this source has automatically closed. The same thing is

applicable to corn grinding mill as there is no place you can see it in the local

government area. In the same vein, some taxes are difficult to impose and

collect. For instance, it is the revenue right of Njikoka to collect fees from
 62

hunters and bicycle license fees. While a very few number of people still

engage in hunting, it is difficult to locate them and get them to pay the fees.

Likewise bicycle users are very few in number and unlikely to pay bicycle

license fees. These have drastically affected internally generated revenue of

the local government.

Despite these constraints to internal revenue generation of Njikoka

local government, as we can see in next section, the local government still

have a good number of internal sources of revenue generation to generate

reasonable amount of money.

3.2 External Revenue of Njikoka Local Government Area

Njikoka local government also derive revenue through external

sources. External revenues means the revenue that is accruable to local

government from federation account and this comprises statutory allocations

and government grants to local governments. This revenue source constitute

the bulk of total revenue to the Njikoka Local Government Area.

The Table 6 below represents the total external revenue of Njikoka

Local Government from 1999-2010.

 63

Table 6: External Revenue of Njikoka Local Government Area 1999-2010

Year Amount Year Amount

1999 41,102,659 2008 626,788,760

2000 46,068,999 2009 626,783,760

2001 49,914,750 2010 948,494,838

2002 51,005,723

2003 52,722,367

2004 54,135,615

2005 99,305,075

2006 301,297,338

2007 588177,790

Source: Planning Unit Local Government Service Commission, Anambra

(2011).

External revenue comprises statutory allocation from federation and

both the federal and state government grants to the local government. The

table 6 above does not reflect any grant either from the federal or state

government. What we have in the table was only Njikoka local government

statutory allocation from federation account. Both the federal and state

government have ceased in recent times to give any grants to the local
 64

government. While the federal government under Obasanjo’s administration

may argue that the local government council in Nigeria is a failure and it is

wasteful given grants to them; the state government is only interested

siphoning local government fund.

In table 7 below, we have Grants as heading 1007. Under these grants,

we have:

a) Grants from state government;

b) Grants from federal government and;

c) Other grants.

These other grants stand for grants that may come from non governmental

organizations, private individuals, or from other local government to Njikoka

local government. These grants are represented in the estimate with the figure

“10e”. This means that even though the local government is not expecting

any revenue from the source but income may accidentally come from the

source. The interview conducted on some staff of the local government

shows that for past nine (9) years, the Njikoka local government has not

received any grants form both Federal and State Government

 65

Table 7 GRANTS TO NJIKOKA LOCAL GOVERNMENT

Njikoka Local Government Estimate of Recurrent Revenue 2008.
SUB HEAD HEAD 1007 ESTIMATE APPROVED ACTUAL
GRANTS 2008 N ESTIMATE REVENUE
2007 N 2007 N
1. Grants from 10e 10e -
state
2. Grants from 10e 10e -
federal
government.
3. Other grants 10e 10e -
TOTAL 30E 30E -
Source: Planning & Budget Unit. Njikoka Local Government (2009).

Having seen the amount revenue accruable to Njikoka local

government over the period of 1999 to 2010, it is imperative to examine the
percentage of internal revenue to the external revenue over the same period
of the study.

Table 8 Percentage of Internal and External Revenue out of the total revenue
of Njikoka local government from 1999-2010

YEAR SOURCE PERCENTAGE %

1999 Ext. revenue 99.6
2000 Ent. R 0.4
Ext. R 0.6
2001 Ent. R 99.2
Ent. R 0.8
2002 Ext. R 99.2
Ent. R 0.8
2003 Ext. R 99.1
Ent. R 0.9
 66

2004 Ext. R 97.4

Ent. R 2.2
2005 Ent. R
Ext. R 97.1
2006 Ent. R 2.9
Ext. R 97.2
2007 Ent. R 2.8
Ent. R 99.6
2008 Ext. R 0.4
Ent. R 99.8
2009 Ext. R 0.2
2010 Ent. R 99.8
2010 Ext. R 0.2
Source: Calculated table

Revenue generation entails generating and exploring all the sources of

revenue for the local councils. Internally revenue generating sources as we

have mentioned earlier are those sources by which the local government raise

revenue constitutionally aside from the statutory allocation and government

grants to local governments. The extent to which these revenue sources can

yield to the benefit of the local government council depends on the ability

and vibrancy of the local government leadership

 67

From table 4, it can be seen that much revenue has not being generated

from the internal sources by the local government. The internal sources of

revenue generation have not being fully-tapped by Njikoka local government,

hence, the problem of poor internally generated revenue in the local

government. It should be noted that prior to oil revolution, internally

generated revenue in the local government system used to be higher than the

external revenue. This phenomenon can be explained in part by the fact that

in the early sixties, agriculture used to be the mainstay of the Nigerian

economy. The oil boom created the condition of over dependency on oil

revenue in Nigeria. Hence agriculture and other entrepreneurial activities

were neglected. As we can see from table 4, revenues from these internal

sources from 1999 to date amount to a less than a significant portion of the

local government. This is due to the fact that internal sources are not fully

tapped. From the 2008. Estimate of Njikoka local government (see table 5

above), a lot of internal revenue sources that were left untapped which would

have yielded good sums of money to the local government if well enhanced.

For instances, the local government has the power to collect liquor license

fees from liquor sellers within the locality, but it was noticed that only 98,

850 was generated from the source in the year 2008 when there are more
 68

than 3000 liquor sellers. To this regard, it is expected that more money

should have been generated from the source if the L.G was committed to

internal revenue generation.

Also a lot of money would have been generated from vehicle spare

parts license fees and photostat, typing Institute licence fees, but nothing was

generated from the sources in 2008. In the 2008 Estimate 50,000 and 15,000

were estimated to be generated from vehicle spare parts license fees and

photostat, typing institute license fees respectively. At the end of the year,

nothing was generated from the sources.

It is in line to say that corruption on the part of revenue officers of the

local government accounts for this decimal revenue generation from these

sources. Largely, the failure to generate revenue from these sources is

attributed to non-commitment and negligence of these internal sources of

revenue generation. For instance, the revenue officers may not give proper

account of the little money realized from these sources. The fact is that must

of the time, the revenue officers do not go to collect revenue from these

liquor sellers, vehicle spare parts dealers and photostat shops.

Furthermore, the 1999 Constitution of Federal Republic of Nigeria in

fourth schedule listed tax jurisdiction and revenue right of Nigeria local
 69

governments. Some of these internal sources are not viable and feasible in

Njikoka Local Government Areas. For instance, while it is possible for local

councils in cities to realize a reasonable sum of money from industrial

undertaking, commercial undertakings, rent on local government

quarters/building, rent on other local on other local government landed

property, transport services (Revenue Heads 1004-1005), the exploration of

these revenue sources by local councils in rural areas is not plausible. For

example, from 1999 to date, Njikoka local council has not being able to

generate any revenue from transport services, rent on other local government

buildings and rent on other local government property. In 2007 and 2008,

350,000 and 450,000 was estimated to be generated from commercial

undertakings, but at the end of the financial year, no money was realized

from the source.

This phenomenon can be attributed to negligence of the internal

sources, over-reliance on external revenue and corruption. For instance,

Njikoka local government has local government quarters where both the staff

of the local government and some members of the public resided in late 80s

and early 90s. These local government quarters were built during the time of

military regime in Nigeria and when there was Sole Administrator in the
 70

local government. These buildings were well built and furnished. The tenants

that were living in the building do pay rents to Njikoka. It is disappointing to

say that the buildings are now in sorry situation since they are not maintained

by the local government. The Zinks are leaking while the ceilings are

collapsing. No body is living in that place now except few members of

National Youth Service Corps (NYSC) who are living only in two rooms.

The local government has relied heavily on oil money (external revenue)

without looking inward for alternative and supplement source of revenue.

This has resulted in negligence of this source of income.

Furthermore, Njikoka Local Government used to have Njikoka

Transport Service Company. This venture yielded a lot of income to the local

government. Due to mismanagement of funds and embezzlement of proceeds

from the venture, the transport service could not flourish. What used to be a

profit to the local government turned to be means of enriching few

individuals in the local government. Instead of resuscitating the venture, the

present administration due to over-reliance on statutory allocation allowed it

to wane forever.

Also table 4 above show that Njikoka local government did not

realized even a penny from interest payments and dividends over the period
 71

of time. The non-remittance of statutory allocation to the local government

by the state government has weakened the performance of the local

government. In the words of Dr Martins Iwuanyanwu (2007:45);

the continued tying together of the local

government share of revenue from the
federal allocation with that of states will
encourage undeniable impetus to the state
governors to mismanage the fund, as
experience had shown. It is a known fact
around the country that the state governments
do not disburse to the local governments as
expected their share of the revenue from the
federal allocation….

In this situation, the local government does not have enough revenue to

perform their statutory responsibilities let alone investing in commercial

under takings.

It is glaring that Njikoka local government depends heavily on external

sources for its revenue generation. This over-dependency on external

transfers can be attributed to negligence of internal revenue sources.

According to Ademolekun (1983:179):

The inability of local government to raise

substantial portions of their total recurrent revenue
requirements from internal sources, undermines
local governments financial autonomy.
 72

From 1999 to present, external revenue forms the bulk of the local

government finance. This period is characterized by upwards review of

federal allocation to the local government. For instance from our table 4 & 6

respectively, in 1999&2010, external revenue of Njikoka local government

stood at 41,102, 659 and 948, 494 838 amounting to a total of 989597497

while internal revenue for the period were 182, 215 and 1,110, 490

respectively total being 1292705. This shows that the external revenue of

local government constitutes about 97.6% of the total revenue while the

internal revenue constitutes only 2.4% of the totally generated revenue of the

time frame.

The diagram below portrays further the revenue structure of Nigerian

local governments, it shows that internal revenue generation in Nigerian local

Governments is poor.
 73

Diagram 1: Revenue Structure of Local in Nigeria 2008-2009.

Share of excess Grants and others

crude 11% 6%

Federal allocation
70%

Internal revenue
3%

State Allocation
0%

Source: Central Bank of Nigeria Annual Publication 2010.

In conclusion, internal revenue generation in Njikoka local government

has not been satisfactory; there is poor internal revenue generation in Njikoka

local governments. Presently, the local government depends on transfers

from the national government for over 90 percent of its annual expenditures.

(see Table 9 below).

The table 9 below represents the recurrent expenditure of Njikoka

Local Government for the year 2008.

 74

TABLE 9 NJIKOKA LOCAL GOVERNMENT SUMMARY ESTIMATE

OF RECURRENT EXPENDITURE 2008
Head Department Establishment Estimate Over Head Total
2008 personnel Cost 2008 Provision
Cost 2008 N 2008
N N
2001 Office of the 34 21311260 15050,000 36,361,260
Chairman
2002 Office of 7 767,720 2,400,010 3,167,730
Secretary
2003 Council 20 34,936,330 6,300,000 41,236,330
Legislative
2004A Office of Head 9 2,472,280 4,100,000 6,572,280
Administration
2004B Administration 267 35,320,570 6,400,000 41,720,570
2005 Accounts 125 23,334,980 34,150,00 57,484,480
2005B Planning/Stat 8 7,869,260 2,280,000 10,149,260
2006 Education/com. 44 10,114,470 2,950,000 13,064,360
Dev soc.
Welfare
2007 Medical ad 136 33,494,360 11,800,000 13,320,330
Health Service
2009 Works, Housing 45 10,621,050 4,250,000 14,871,050
and Survey
2010 Traditional 6 3,600,000 - 3,000
Offices
2011 Miscellaneous - - - -
2012 Contribution to - - - -
local
government
2013 Transfer to 330,190700
Reserve Fund
Total 739 195,462,610 91,400,010 617,053,32
Source; Planning and Finance Unit, Njikoka Local Government (2008).
Annual Estimate of Njikoka Local Government.
 75

Table 9 above shows that the Njikoka Local Government estimate of

recurrent expenditure stood at 617,053,320 for the year 2008. The external

revenue of the local government for the same year was 626,788,760 and

internally generated revenue for the year was just 1,915,310 (Tables 4 and 6).

This by implication show that out of the total income of 628,704,070 of the

year 2008, the local government is expected to spend 617,053,320 on

recurrent expenditure only. This shows that the local government is virtually

left with little money to invest on commercial activities.

This can be explained in part that because of oil boom, some local

government in Nigeria wait for their share of oil money thereby neglecting

the sources of internal revenue open to them. No concrete effort is made to

generate revenue through the internal sources.

 76

CHAPTER FOUR

PROBLEM OF INTERNAL REVENUE GENERATION IN NJIKOKA

LOCAL GOVERNMENT

Njikoka local government cannot survive without a sound financial

base. Owing therefore to this development and responsibilities placed on the

local governments, there is need for adequate financing of that tier of

government because in any society, there is a well accepted principles that

govern the assignment of functions that are associated with the production or

procurement and distribution of goods and services that the society

consumes. The details of this assignment of roles are usually prescribed by

the Constitution or an Act of the Parliament. However, each tier is usually

assigned responsible with the objective of maximizing the social welfare of

the citizens within its jurisdiction and at the same time ensuring efficiency.

Public goods the consumption of which is not national in character, but

localized are assigned to the local government. It is in this light that local

governments in Nigeria have a range of functions to performs and

responsibilities to discharge.

Once the assignment of roles has been carried out, the next step is to

determine who gets what. Another task is to start characterizing the various
 77

methods of raising public revenue. This addresses the issue of raising and

sharing of financial resources for executing decentralized functions. It is to

this that more often than not emphasis is placed on the sharing of revenue

aspect than the sharing of responsibilities.

Currently, Nigerian local governments in general and Njikoka Local

Government in particular; is financed through two broad sources-

a) inter governmental transfers (statutory, allocation or external transfer) and

b) internally generated sources or what some people prefer to call “self-

financing”.

In the words of Oguonu (2003:139), it is “the internal revenue that

differentiate one local government from another. Under the revenue side of

form LGT 78, the local government councils in Nigeria could be financed

internally via eleven (11) sources. These sources have been examined in page

31. It is the ability of local governments in Nigeria to utilize these internal

sources that determines the financial autonomy of any local government.

Anyafo (1996:39) states “it is common knowledge that virtually all the

local government councils in the country depend largely on the statutory

allocation for financial survival”. He went further to posit that as much as

ninty percent of the public revenue in some local councils is sourced from the
 78

statutory allocation. Financing the local government primarily through

federal transfers create the problems of the common. The problem however,

is that transfers are mostly administered in a discretionary manner and prone

to manipulation (Bello-Imam,1992:2). This by implication has resulted in

most cases in inability of local councils to perform functions constitutionally

assigned to them because of financial and political incompetence.

Therefore, there is urgent and clarion call Njikoka local government to

look inward for revenue generation as alternative to external transfers. The

mobilization of revenue and utilization of internal sources of revenue will

place Njikoka local council on a better financial position as it complements

the statutory allocation. Again it grants more financial autonomy and helps

them to discharge their assigned responsibilities effectively and efficiently. It

is evident that Njikoka local council has not been able to generate enough

revenue via the internal sources. This is due to the fact that either (i) some of

the officials have failed to tap internal sources (ii) that some internal sources

of revenue generation open to local governments are not viable and /or. (iii)

lack of tax power to collect taxes, hence, the problem of internal revenue

generation (Adedokun, 2007:17).

 79

What then are the causes of poor internally generated revenue in

Nigerian local government system with particular reference to Njikoka local

government?

This chapter examines the causes of poor internal revenue generation

in Njikoka local government. By so doing, our formulated hypotheses are

tested in this chapter.

4.1 NEGLIGENCE ON THE PART OF REVENUE OFFICERS

IS A MAJOR PROBLEM TO INTERNAL GENERATION OF
REVENUE IN NJIKOKA LOCAL GOVERNMENT.

Test of Hypothesis and the implications H1: Negligence on the part of

revenue officers constitutes a problem to Internal Revenue Generation in

Njikoka Local Government Area.

Negligence should be viewed as “omission of that which ought to be

done”, it is leaving things undone or unattended to. It should be seen as

disregard, lack of due diligence or care, heedlessness. In this section it is

measured in terms of the efforts the local government revenue officers have

made to improve internally generated revenue despite all the factors

militating against internal revenue generation in the local government.

 80

Attention here is to determine whether the local government has made

concrete effort(s) to enhancing internally generated revenue.

One will agree with me that despite all the limitations to internal

revenue generation of the Njikoka Local government, something must be

done. This section summarily inquire to know the steps taken by the local

government to improve its revenue via internal source.

To test the above hypothesis, data generated from constructed instrument

were used (see appendix 3).

Table 10: Negligence and Internally Generated Revenue Level of agreement

Item Description of items Strongly Agree Strongly Disagree Total

agree disagree
7 Indicate the extent to which 37 37% 5% 17% 90

you agree or disagree that 41%

Njikoka local neglect its

sources of internal revenue

generation

a There is no lay down 35 15 27 13

procedures for revenue 38% 16% 30% 14%

 81

collections

b. Lack of facilities like vehicle 40 25 15 10

for revenue drive 44% 28% 175 11%

c. The revenue officers are not 36 34 14 6

trained 40% 37% 16% 7%

d. Poor supervision 27 23 12 28

30% 26% 13% 31%

e. The Revenue staff are not 40 30 15 5

enterprising 44% 33% 17% 6%

f Tax collectors do not go out to 49 11 7 23

collect fees and taxes 54% 13% 8% 25%

Source. As analysed from the instrument (item 7).

Calculation of x2

Table11: Observed and Expected value of Negligence on the part of

Revenue officers and internally generated revenue in Njikoka local
government.

Item Description of items Agree Expected Observed Expected Total

observed agree
7 The nature of the
negligence of internal
revenue sources
 82

a. There is no lay down 50 608 40 292 90

procedures for revenue
collections
b. Lack of facilities like 65 60.5 25 29.2 90
vehicles for revenue drive
source
c. The revenue officers are 70 60.8 20 29.2 90
not trained
d. Poor supervision 50 608 40 29.2 90

e. The revenue staff are not 70 608 20 29.2 90

enterprising
f. Tax collection do not go 60 60.8 30 29.2 90
out to collect fees and
taxes
Total 365 175 540

Source: As analysed from the instrument

Using the formula x2 = E (0-E)2
E

Where O is the observed values, E is the expected values

Substituting

(50-60.8) + (65-60.8)2 + (70+ 60.8)2 + (50-60.8)2

60.8 60.8 60.8 60.8
 83

(70-60.8)2 + (60-60.8)2 + (40-29.2)2 + (25-29.2)2

60.8 60.8 29.2 29.2

(20-29.2)2 + (40-29.2)2 + (20-29.2)2 + (30-29.2)2

29.2 29.2 29.2 29.2

= 1.918 +2.901+1.392+1.918 +1.392 + 1.052

+3.994+6.041+2.899+3.994+2.899+2.191 =32.591.

X2 = (0.05)= 5
Based on the above calculation, therefore, we accept the hypothesis

which states that Negligence on the part of revenue officers constitutes a

problem to internal revenue generation in Njikoka local government because

tabulated value is less than calculated value. Hence from the data analyzed,

20 out of 90 respondents disagree that Njikoka local government did not

neglect its sources of internal revenue while 70 respondents were of the view

that the local government neglected its internal sources of revenue

generation. This means that 22 percent of the respondents were of the opinion

that Njikoka local government taps properly its internal sources of revenue

while 78 percent had a contrary opinion. On how Njikoka neglects the

internal sources of revenue open to it, the following were given-

a) no laid down procedures for revenue collections,

b) tax collectors do not go out to collect fees and taxes,

c) Revenue Officers are not well trained,

 84

d) poor supervision,

e) revenue staff are not enterprising and

f) lack of facilities like vehicles for revenue drive.

On no laid down procedures for revenue collection, 35 respondents

strongly agree, 15 respondents agreed, 27 respondents strongly disagreed

while 13 respondents disagreed. This implies that 50 respondents which is 54

percent agreed that there is no laid down procedures for revenue collection,

40 respondents that is 46% maintained that there is laid down procedures for

revenues collection. It is evident that there is laid done procedures for

collection and management of revenue of local government as it is contained

in Local Government Financial Memorandum of 1991. The question now is

how does this procedure solve the current problem of internal revenue

generation in the local government.

On the lack of facilities like vehicles for revenue drive, 65 respondents

which is 72 percent agreed that there is lack of facilities for revenue drive, 25

respondents that is 28% held a contrary view. On whether revenue officers

are well trained, 70 respondents that 77 percent agreed that revenue officers

are not well trained while 20 respondents which 23 percent disagreed that

they are not trained. On poor supervision of revenue officers, 27 respondents

 85

strongly disagreed that there is poor supervision of revenue officers. On

whether the tax collectors go out to collect fees and levies from the members

of the public when they do not come to the local government to pay their

taxes, 49 respondents strongly agreed while 11 respondents agreed that the

tax collectors do not go out to collect tax and 23 disagreed that tax collectors

do not go out to collect taxes. This implies that 67 percent were of the view

that the tax collectors do not go out to collect taxes from the public when

they do not come to pay by themselves, 33 percent were on the contrary.

Finally, 40 respondents strongly agreed and 30 respondents agreed that

revenue staff are generally not enterprising. Only 15 respondents strongly

disagree and 5 disagreed that the revenue staff are not enterprising. This by

implication means that 77 percent of the respondents agreed, while 23

percent disagreed on this point.

This finding is not surprising because revenue generation in Njikoka

local government shows a clear indication of negligence and non-

commitment of revenue collectors. Njikoka local government have not less

than one hundred and nineteen (119) source of internal revenue generation,

but these internal revenue sources are left untapped. For instance, the local

government has the power to collect liquor license fees from liquor sellers
 86

within the locality, but it was noticed that only 98.850 was generated from

the source in the year 2008 when there are more than 3000 liquor sellers.

Again, another major source of internal revenue generation which has

received little attention from the local government is marriage registration

fees. A lot of people are getting married by the day, but Njikoka local

government does not ensure that these people come for marriage registration.

The local government estimated that six hundred thousand naira would be

realized from the source in 2008. At last what the Njikoka local government

got from the source in that year was eighty-eight thousand naira (88,000).

The local government expected to realize much from the source but the

revenue staff were too lazy to actualize their dream. This boils down to the

fact that the revenue officers of the local government are not enterprising and

committed to their duty. It would also be stated that the local government

does not generate much revenue via internal source because it has failed to

perform certain functions assigned to it by the constitution. As we can see in

Njikoka Local Government Estimate of Recurrent Revenue 2008, item 54

under Health, sub-heading E, the local government can earn revenue from

Environmental Sanitation services. The local government budgeted to earn

one hundred and twenty thousand naira (120,000) from the source, but
 87

unfortunately nothing was realized from the source. This can be attributed to

the fact that the local government does not go out to carry out their sanitary

inspection. There are thousands of households that do not keep their

environment neat. If the local government does its job, these people who do

not keep their environs clean would be subcharged to pay some fines which

will in turn form a good source of revenue generation for the local

government.

It is clear that Njikoka local government has neglected its sources of

internal revenue generation. An examination of the different sources of

internal revenue generation reveals that the local government has for long

forgotten. This phenomenon can be explained in part by the fact that

agriculture in early sixties used to be the main source of revenue to Njikoka

Local Government. Oil boom in early seventies created a condition of over-

reliance on oil revenue in Nigeria. Hence agriculture and other

entrepreneurial activities were neglected. Njikoka local government does not

make a concrete effort to generate revenue internally via the internal sources.

In addition, there is shortage of well trained and qualified personnel which

suppose to serve as tool for collection of taxes and rates at the local level,

even the few available are not properly trained in efficient budgetary and
 88

financial management systems. The local government lacks the capacity to

attract and retain the right caliber of staff to articulate plans and execute

programmes and projects in order to transform the lives of the grassroots

people in a short period,

Furthermore, insincerity of the council/staff on field assignment poses

greater problem because most of them usually divert collected council

fund for their perusal usage thereby denying the council of the needed

funds for its operations. Some of the local government top finance officers

connive with members of the public to avoid paying taxes. In some cases,

some of the staff and the Chairman deposit the local government

subventions into savings and loans companies in which the local

government had no account. The staff see this as an avenue to divert

council’s funds for personal use.

4.2 Lack of Financial Autonomy and Internal Revenue Generation in

Njikoka Local Government

Financial Autonomy is literally defined as to be self-governing in matters of

money. It is a right or the power to engage in certain actions without

externally imposed restraints and interference. Local Government system in

Nigeria needs a moderate amount of financial autonomy to be able to

 89

discharge its responsibilities. Public revenue in a federal system like Nigeria

assumes that there should be revenue decentralization.

Public revenue decentralization occurs when lower tiers of government have

statutory power to raise taxes and carry out spending activities within

specified legal criteria.

It is in recognition of the importance of financial autonomy that both

the Originators of Local Government Reform of 1976 and 1999 Constitution

of Federal Republic of Nigeria granted such autonomy to the local

government.

The local government autonomy include among other things, ability to make

its own laws, rules and regulation.

Despite this statutory provision for local government financial

autonomy, the state government has continued to interfere in affairs of the

local government. Accepting the fact that the state government interferes in

financial affairs of local government system, President Ibrahim Babangida

during his budget presentation stated that:

All forms of control, overt or covert, which

have hitherto been exercised by the state
government on the financial dispensation of
local government must cease forthwith
 90

In this section, we are going to examine limitations to financial autonomy of

Njikoka local government as regards to internally generated revenue. Our

focus should be on

(a) Tax-raising Capacity of the local government in relation to other tiers of

government

(b) The state government interference in revenue generation in the Local

Government, and

(c) The state government control of financial management of Njikoka Local

Government.

Test of hypothesis and the implications H2 Lack of financial autonomy

constrains revenue generation of revenue via internal sources in Njikoka

Local Government Area.

To test the above hypothesis, data generated from constructed

instrument were used (see appendix 1).

 91

Table 12 Lack of Financial Autonomy and internally generated revenue

Level of agreement

Item Description of items Agree Expected Observed Expected Total

observed agree
8 Indicate the extent to 27 23 6 4 60
which you agree or 45% 38%
10% 7%
disagree that Njikoka
local government lacks
financial autonomy

If the answer to 8 above

shows lack of financial
autonomy, indicate the
reason for this
a. Infringement by state 32 18 3 7 60
government on source of 53% 30%
5% 12%
internal revenue
generation of Njikoka
Local government
b. Narrow revenue base 25 23 2 10 60
42% 38%
3% 17%

c. Lack of tax-raising power 22 18 8 12 60

37% 30%
13% 20%
 92

d. Lack of power to make 18 19 10 13 90

bye-laws 30% 32%
17% 21%

Source: As analysed from the instrument (items 8)

Calculation of x2

Table 13 observed and expected value of lack of financial autonomy

by Njikoka local government and internally generated revenue.
Agree Disagree
Item Description of item Observed Expected Observed Expect Total

8 The reason for lack of

financial autonomy
a. Infringement by state 50 42.8 10 17.2 60
government on soruces of
internal revenue generation
of Njikoka local
government
b. Narrow revenue base power 48 42.8 12 17.2 60

c. Lack of tax-raising power 40 42.8 20 17.2 60

D Lack of power to make 33 42.8 27 17.2 60

bye-laws
Total 171 69 240

Source: As analysed from the instrument using the formular x2 = E (0-E)2

E
 93

Where O is the observed values, E is the expected values

Substituting

(50-42.8)2 + (48-42.8)2 + (40-42.8)2+

42.8 42.8 42.8

(33-42.8)2 + (10-17.2)2+ (12-17.2)2 + (20-172)2 (27.17.2)

17.2 17.2 17.2 17.2 17.2 =

Based on the above calculation, were accept the hypothesis which

states that “lack of financial autonomy constrains generation of revenue via

internal sources in Njikoka local government because tabulated value is less

than calculated value. From the data in the table above, 27 respondents out of

total of 60 respondents strongly agreed that Njikoka Local government lacks

financial autonomy, 23 respondents admitted the same fact that the local

government lacks financial autonomy 6 respondents strongly disagree that

the local government lacks financial autonomy and 4 respondent disagree.

This means that 83 percent of the total respondents agreed that the Njikoka

Local government, actual lack financial autonomy to generate revenue only

17% of the respondents that have contrary opinion. On the reasons why local

government lacks financial autonomy, the following reasons were giving-

that the state government infringe on the sources of internal revenue

 94

generation of the local government, that local government lacks tax raising

power and that the local government does not have power to make bye-laws.

On the infringement of state government on the internal sources of

revenue generation of Njikoka local government, total of 50 respondents

agreed that the state government infringes on internal sources of revenue

generation of the local government while 10 respondents disputed this claim.

This implied that 83 percent of the respondents agreed that the state

government infringe while only 17 percent that held contrary view. Again,

while 48 respondents agreed that the local government has narrow revenue

base, 12 respondents disagreed that the local government does not have

narrow revenue base. This implied that while 80 percent agreed that the local

government has narrow tax-raising power 40 respondents agreed that Njikoka

local government lacks the power to impose tax, 20 respondents disagreed.

Finally, while 37 respondents agreed that lack of power to make bye-laws

affects internal revenue generation of Njikoka local government 23

respondents disagreed that lack of Njikoka local government 23 respondents

disagreed that lack of power to make bye-laws affects internally generated

revenue of Njikoka.
 95

It is clear that financial autonomy has eluded Njikoka local

government. There is divergence between sources of revenue and functional

expenditure obligations in the local government. In a balanced fiscal

federalism, there is need for fiscal decentralization and devolution.

According to Nwanegbo (2004:190), “a unit of government needs to be

sufficiently self-reliant to be qualified to be called a government” There

should be clear and well spelt out fiscal jurisdiction and sphere among the

federating units and each unit must respect the sphere of other unit. Njikoka

local government, like any other local councils in Nigeria, has sources of

internal revenue as spelt out by the 1999 Constitution, but the local

government cannot fully explore these sources without interference from

Anambra State Government.

Despite the fact that there are constitutional provisions for statutory

allocations and internally generated revenues, Njikoka local governments are

tightly controlled and subordinated by the state governor through sundry

mechanisms including manipulation of the disbursement of financial transfers

to it. For instance, constraint is imposed on the local government revenue

mobilization capacity through state control over the local government budget,

which is made to pass through many levels of approval in the hands of the
 96

state government. Even after approval, post-budget controls still impose

further restrictions on what the local government can do (Roberts, 1998:171)

According to some people interviewed, sometimes, it takes the state

government up to 3 months before approving the local governments annual

budget. This delay in the passage of annual budget for the local government

poses a great problem to the local government. Invariably this will cause

delay in execution of local government functions including paying of the

staff salaries.

In furthermore, some of the respondents interviewed stated that the

Financial Memorandum of Local Government 1991 granted the state

government power of financial surveillance over the local government. With

this, the state government dictates and directs the expenditure of the local

government. In some cases, the state governments even go to collect taxes

that belong to the local government’s tax jurisdiction. For instance, it falls in

jurisdiction of the local government to collect license and fees in the village

markets and also to collect store permits. The local government used to

collect these fees and permits; but as of now the state government collects all

these taxes. To worsen the case, the state government has refused to conduct
 97

local government elections in the state so that the Governor will remain at the

helm of affairs in the local government.

It is also noticeable, as we have mentioned before that not only that the

state government has failed to give to the local government the 10 percent of

internally generate revenue as stipulated by the 1999 Constitution, the state

government has continued to tamper on statutory allocation of the local

government. Some of the respondents interviewed stated at least the local

government has not received any grant from the state government since 2003

to 2010 except 2008 when the local government received two million naira

as a grant from the state government.

Dr Martins Iwuanyanwu, while calling President Goodluck Jonathan to

separate local government’s share of revenue from their states, flayed the

manner governors had rendered local governments prostrate by mismanaging

monthly allocation meant for development According to him,

The continued tying together of the local

government share of revenue from the federal
allocation with that of states will encourage
undeniable impetus to the state governors to
mismanaged funds, as experience had shown.
It is a known fact around the country that the
state government does not disburse to the
local governments as expected, their share of
the revenue from the federal allocation. The
 98

practice, as clearly seen, is that the governors

collect the joint revenue whatever pleases
them to the council chairman who in turn
signs for the governors that they have
received their due share of the revenue in
order to remain in the good book of the
governors, (Nation Newspaper, Thursday 26
July 2007:39)
This Iwuanyanwu’s assertion summarized what goes on between Njikoka

local government and the state government.

The three major internal sources of revenue generation of Njikoka

local government are- development rate, market fees and motor parks. These

three internal sources yield highest revenue for the local government. Table

5, under the revenue Head 1004, “Earning from commercial undertakings”

Njikoka local government estimated to realize 2,500,000, 5000,000 and

600,00; 1, 500,000 from market fees and motor park in 2007 and 2008

respectively. It was noticed that in 2008 Njikoka local government was able

to generate N39,350 from motor park and nothing was generated from

market fees and license. It does not mean that these two sources were

neglected. The fact is that even though that the revenue right of these sources

belongs to the local government, the Anambra State Government administers

and collects fees from these sources. Instead of the local government revenue

officers collecting fees from these sources, the Anambra state revenue
 99

officers do the collection of the fees. The table 13 below buttresses this fact

further.

Table 14 Nigeria’s major taxes, Jurisdiction and Right to Revenue

1999

Tax Law Administration Right of

and collection revenue
1 Import duties Federal Federal Federation
account
2 Excise duties Federal
3 Companies Federal Federal
income tax
4 Capital gains Federal Federal
tax
5 Personal Federal Federal
income tax
6 Licenses, fees Federal Local Local
on television
an wireless
7 Stamp duties Federal Federal Federal
8 Capital Federal States States
Transfer tax
(CCT)
9 Value added Federal Federal /states Fed/states
tax /local
 100

10 Motor State States state

vehicles and
drivers
liences
11 Pool betting
other betting
taxes
12 Motor parks
13 Entertainment
tax and
survey fees
14 Property State Local Local
taxes and
rating
15 Market and State State Local
trading
licences
Sources: Constitution of the Federal Republic of Nigeria 1999.

From the table above, it is inadvertent that the federal government

controls the major taxes and as such there is over dependence of the sub-

national governments on the Central (federal government) on the issues of

revenue. In words of (Chete 1998: 59, Aigbokhn, 1999:110):

it is evident that revenue assignments do not

provide adequate resources to sub national levels
 101

(especially local government) to match their

expenditure responsibility.

There is significant vertical imbalance in fiscal federalism

arrangements, with more expenditure responsibilities decentralized to local

authorities than resources for carrying out these responsibilities

 102

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION,

5.1 Summary

This research work focused on the internal revenue generation of Njikoka

Local Government of Anambra State; we examined the source of revenue

generation of Njikoka Local Government. These sources include- the

external and internal sources. External sources are defined as the statutory

allocation and grants –in-aid from Federal and State Government to Njikoka

local council. Internal sources are those sources by which the local

government can raise revenue constitutionally aside from the statutory

allocation and government grants to Njikoka local government. All these two

sources were well treated in details in this work. We also mentioned in this

work that grants from both the federal and state government from the external

revenue of the local government.

We went further to examine the strength and ability of the Njikoka

local government to explore especially the internal sources of revenue in

order to maintain financial balance. Facts and figures as presented in the

 103

tables were used to demonstrate how the local government depends on

external sources for its revenue generation.

The two research hypotheses which state that negligence on the part of

revenue collectors and lack of financial autonomy of Njikoka local

government were also tested. By our findings, we were able to show that

internal revenue generation in the local government due to negligence on the

part of revenue collectors and lack of financial autonomy. We defined

negligence as habitually neglecting duties, responsibilities etc; lacing

attention, care or concern. Financial autonomy was defined is this work as to

be self-governing in matters of money, with its attendant benefits and evils.

We stated that absence of this financial autonomy in Njikoka local

government has affected its internally generated revenue.

The reasons for lack of financial autonomy were given as follows-

a) infringement on internal revenue sources of the local government by the

state government,

b) centralization of tax base that resulted in a narrow revenue base of the

local government,

c) lack of tax raising power to impose certain taxes and collect fees and

licenses and
 104

d) absence of powers and ability to make bye-laws which will help the local

government to expand its revenue base.

The research work also proffered solutions of how to enhance internal

generated revenue in Njikoka local government. Some of the solutions

proffered by the work are-

a) employment of high-ranking officers for revenue collection and

management,

b) orientation and education of revenue collectors,

c) motivation of revenue collectors,

d) involvement of traditional rulers and chiefs in mobilization of revenue

e) modification and expansion of existing revenue sources

f) punishment of defaulters, reduction of tax evasion and exemption,

g) decentralization of tax power,

h) respect for financial jurisdiction of local government by both federal and

state government etc.

5.2 Conclusion

The major problem of internal revenue generation in Njikoka local

government is the over concentration on sharing the national cake without

 105

much attention on baking it. Njikoka local government relies on external

transfer for about 90% of its revenue. There is shift in the emphasis from

internally generated revenue to external revenue as a means of financing

local government over the years (Omapariola and Aewale, 1998:139). This

phenomenon can be explained in part by the fact that in early sixties,

agriculture used to be mainstay of the Nigerian economy. The oil boom

created the condition of over dependency on oil revenue in Nigeria and the

country basically became a mono-cultural economy that relies mainly on oil

for its survival. This over reliance on oil revenue has made virtually all the

local governments in Nigeria to focus unceasingly on it without blinking.

Hence agriculture and sources of income was neglected

Again, tax jurisdiction in Nigeria has not changed significantly from

the beginning of federalism in Nigeria till date; what has changed has been

the revenue sharing rights among the different tiers of government (ovwasa,

1995:160). The conclusion that can be reached from the above is that while

responsibilities for the administration and collection of major different types

of taxes would seem, on the surface, to approximate an optimal distribution, a

more closer look will reveal that the federal government has cleverly chosen

the mix to ensure that the lion share of total Nigerian revenues is collected
 106

and retained by it (Onuoha and Nwanegbo 2007:195). In fact over ninty

(90)percent of the total Nigerian government revenue are collected by the

federal government. The federal government continues to achieve this feat by

tinkering with the rights of other tiers of government to collect revenues.

The Constitution made adequate provision for the autonomy and

effective take off of the local governments as third tier of government in

Nigeria. This work calls for proper implementation of the provision of the

1999 Constitutions as it affects local government statutory allocation if thes

local government system is expected to perform in a free and unencumbered

atmosphere.
 107

5.3 RECOMMENDATION

To improve the financial capacity of Njikoka local government, it is

necessary to enhance the internally generated revenue. This will reduce the

over dependence on external sources of fund. To do this, the following steps

should be taken:

1. Firstly, there is need to employ and involve the service of higher-

ranking officers in financial management of Njikoka local government.

High-ranking officers are likely to have greater ability for revenue

collection than low ranking inexperienced officers who lack reward

feelings. Again experienced officers can assist in taking vital financial

decision that can enhance internal revenue generation in the local

government. To make this more result oriented, it is suggested that these

high-ranking officers could make use of available records at ward and

community levels. Through this means, it will be able to compare the

revenue yield at any moment with the total expected from each unit, ward

or community. In essence one of the functions of these superior officers

would entail mobilizing the communities to live up to their civic

responsibilities by discharging their financial obligations to the local

government promptly.
 108

2. Again, there is need for proper re-orientation and training of low-rank

officers. The orientation of revenue officers of the local government will

build in them a high sense of challenge, importance and achievement. It

will increase their knowledge of how to keep proper account of the local

government. The trained revenue officers at least will know how to use

his/her initiative to improve internally generated revenue instead of waiting

directives from the superiors. The high rank officers should best assist in

this area. Also staff should be properly motivated through adequate

incentive package like improved remuneration and revenue drive should

also be provided.

3. It is also suggested that poor attitude to work of revenue collectors

should be checked. Cases of proven dishonesty should be seriously

handled and adequate punishment meted out to deserving officers.

Sanitations should be enforced. In the Model Financial Memoranda for

Local Government (1991) (39,3), offences and sanitations are stipulated as

regards irregularities in losses to local governments due to either fraudulent

activities of the functionaries or due to their negligence or competence,

irregularities not directly or immediately resulting in losses to the local

government but which infringe upon budgetary control and proper financial
 109

management and irregularities arising from poor or inefficient management

of accounts and which may result in losses. Again, as Adewale and

Omapariola, (1994:189) suggested, local government officials must

comply with all applicable rules and regulations, be consistent with good

accounting principles, provide accurate financial reports and spend

government money on real and legitimate objectives.

4. Again, most tax payers in Nigeria can hardly pay in absence of official

action. Therefore, revenue collectors have to be at heels of the tax payers to

ensure compliance. Effort should be made to bring more people into tax net.

Traditional rulers and Chiefs would then be engaged in helping to get the

defaulters to pay. Enjoyment of certain services should be tied to payment

of taxes. Effective computerization will also help in respect of accuracy and

voluntary compliance by taxpayers.

5. On revenue sources of the local councils, as Ademoloekun (1983:49)

had noted that the “dominant theme in intergovernmental relations is the

administration of federal finance to the satisfaction of each level of

government”. Danjuma (1994:28) also noted that the existence of a federal

system with its accompanying political units necessitates a revenue sharing

arrangement to enable its unit to carry out its constitutionally assigned

 110

responsibilities. In a federation, the logic that underlines the allocation of

tax powers (revenue sources) must tally with the logic that underline the

assignment of constitutional responsibilities. There is need to bridge the gap

between the revenue obligation and revenue sources to all levels of

governance. For this to be effective and efficient, however, it has to have

clearly stated objectives and equitable formulae, principles and criteria. Tax

must be decentralized and more tax base should be given to local

government. A mechanism that gives more revenue sources to local

government should be evolved. This will not only expand the revenue base

of the local government but invariably overcome horizontal fiscal

disparities between localities and vertical fiscal imbalance between tiers of

government.

6. For balanced fiscal federalism to exist, each federating unit must

respect and stay clear from revenue jurisdiction of other tiers. There should

not be any interference and intervention of any level of government in the

affairs of others. Local government councils will be accorded full

administrative autonomy and allowed to operate in accordance with the

spirit and letter of the constitution. Local government council will also

enjoy their full financial autonomy in this regard, all forms of control, overt
 111

or covert, which have hitherto been exercised by the state government on

the financial dispensation of local government cease forthwith (Oyelakin,

1994). Local government should be given power to make bye-laws. Local

government council should be free to take decisions and enact bye-laws that

would concern financial matters. They should be allowed to expand their

revenue base to match their expenditure through bye-laws

7. Similarly, for effective revenue generation in the local government

council, it is necessary to ensure that the existing sources of local

government revenue are fully tapped Nwankwo (1998:87), also suggested

that the existing revenue yielding sources should be modified. For

example, taxes and rates may be modified to include local entertainment

tax, laws which will centers on getting money from things like- title taking,

birthday parties etc. Rural property (tenement) rates can also be modified

to include designing appropriate property rates on rural residential

mansions. Local government should also generate new revenue yielding

areas. These may include mass transit transportation programmes, petrol

filling stations, rural pharmacy houses and medicine stores, establishment

of poultry farms / fish ponds and nursery schools and day care centers

(Oguonu 2003: 150).

 112

8. The kind of financial relationship that exists between the state government

and the local government should be restructured, such that assigning of

tax powers tax bases etc. would be left to the appropriate tier of

government. A situation where the state government collects virtually all

revenue is unhealthy. Certain lucrative taxes should be left to the local

government. The weak administrative machinery should be strengthened

to enable Njikoka local government major taxes for further development.

9. The state government should also complement the revenue raised

internally by the local government with special grants to the local

government. Anambra State government should desist from tampering

with the monthly allocation of the local government. Both the two levels

of government should operate separate account to dislodge the state

government from having access to the local government money.

Finally, it should be noted that despite the various provision made on

accountability and rules for effective revenue generation, not much can be

achieved, unless the concerned officers are committed. There is no doubt that

the implementation of the above recommendations will enhance revenue

generation and management in Njikoka local government system in Nigeria.

 113

BIBLIOGRAPHY

BOOKS
Adedeji, A. (1969) Nigerian Federal Finances, Its Development, Problems
and Prospects, London Hurchthinson Educational Ltd.

Adamolekun L. (1983) Public Administration, Nigerian and Comparative

Perspective, Longman: New York.

Anyafo, A.M. O. (1996) Public Finance in a Development Economy: The

Nigeria case. Enugu: B and F publication UNEC

Asika, N. (2010) Research Methodology in the Behavioural Sciences; Lagos:

Longman Nigerian Plc.

Bello-Iman, I.B (1990) Local Government Finance in Nigeria, Ibadan

NISER.

Ezeani. O. E (2004) Local Government Administration, Enugu: Zik-Chuks

printing pres.

Ikejiani-Clark (1995) “Pathologies of Local Government Administration:

Corruption and Fraud” in M. Ikejiani-Clark and F.C. Okoli (eds.) Local
Government Administration in Nigeria; Current Problems and Future
Challenges, Lagos: Mangrove Publication.

Kerlinger, F.N. (1973) Foundations of Behavioural Research, Holt Rinehart

and Winston Inc.

Musgrave, R. A. (1989) Public Finance in theory and Practice, 5th Ed.

Singapore: McGraw-Hill.

Musgrave, R. A. (1959). The Theory of Public Finance, New York:

McGraw-Hill.
 114

Nwanegbo, C. J. (2004) “Local Government under Nigerian Federalism:

Restructuring the System for Better Operation / Performance” in A. E
Obi and O. S Qbikeze (eds) Federalism and National Integration in
Nigeria, Onitsha: Book Point Publisher 5

Nwanegbo, C.J. (2007) “Concepts and Models of Intergovernmental

Relations” in J. Onuoha and C. J. Nwanegbo (eds) Theory and
Practical of Intergovernmental Relations in Nigeria. Enugu:Quintagon
Publisher.
Nyerere, J.K. (1972) Freedom and Development. Dar se Salam: Oxford
University Press.

Oates, W. (1972) Fiscal Federalism. New York: Harcourt Brace

Jovanovieh, Inc.

Obi, C. (2000)”The Impact of Oil on Nigeria Revenue Allocation: Problems

and Prospect for National Reconstruction” in Amuwo, K et al (eds)
Federalism and Political Frustration in Nigeria: Ibadan: Spectrum
Books Ltd.
Obinna, O. E. (1995) “Local Government Financing” In M. Ikejiani-Clark
and F.C Okoli (eds) Local Government Administration in Nigeria.
Current and Future Challenges, Lagos: Mangrove Publication.

Oguonu, C. N. (2003) “Public Accountability of the Executive and the

Legislature Arms of Local Government” in Ezeani. O. O. (ed) Public
Accountability in Nigeria: Perspectives and Issues. Enugu: Academic
publishing Company.
Okonjo, I. M. (1979) “The Objectives of Government Grants - in – Aid to
Local Government” in Adedeji, A. and L. Roland (eds) Local
Government Finance in Nigeria. Ife: University of Ife Press.

Olalokun, F .A (1979)”Nigeria Federal Finance: Issues and Choices” in A.B.

Akinyemi et al (eds) Readings in Federalism- Lagos NIIA

Orewa, G & Adewumi S (1983) Local Government in Nigeria. Benin city:

Ethiope Publishign Corporation.
 115

Orewa, G. (1986) . Local Government Finance in Nigeria. Ibadan: Oxford

University Press.

Owens et al (1991) Local Government: An International Perspective.

Amsterdam: North-Holland,

Unanka, G.O. (2002) Statistics for Political Sciences, Social Relations and
Administration. Owerri: All Ages.

White, L.G. et al (1983) Political Analysis: Technique and Practice. U.S.A:

Brooks/Cole Publishing Company.

JOURNALS

Anyanwu, J. (1994) “Revenue Allocation and Stable Fiscal Federalism in

Nigeria”. Journal of Economic Management (2) October 1-27

Cameron, D. (2001), “The Structures of Intergovernmental Relations”

International Social Science Journal vol. 5 No. 2.

Chete, L. N. (1998) “Fiscal Decentralisation and Macroeconomic

Management in Nigiera” Journal of Economic Management. NCEMA:
Vol.-5.

Danjuma T. Y. (1994) “Revenue Sharing and the Political Economy of

Nigerian Federalism. The Nigerian Journal of Federalism, Vol 1, no 1.

Olugbemi, S .O (1989) “A Systems Approach to Intergovernmental

Relations” Quarterly Journal of Administration xvi (2)

Ovwasa, O. L. (1995) “Fiscal Federalism in Nigeria: A Historical Analysis”,

Trans African Journal of History, Vol. 24,.
 116

WORKSHOP/ CONFERENCE PAPERS

Adedokun, A.A. (2007) “Local Government Tax Mobilisation and Utilisation
in Nigeria: Problems and Prospects”. Book Presentation in
Polytechnic, Ibadan Nigeria.

Aigbokhon, B. E. (1999) “Fiscal Federalism and Economic Growth in

Nigeria” Proceedings of the Annual Conference of Nigeria Economic
Society.

Bello-Iman, I.B. (1988) “A Comment on Central Local Government

Relations in Nigerian” Annual of the Social Science Council of
Nigeria, No. 1, January December.

Bello-Iman (1992) Intergovernment Relations with Reference the Local

Government in Nigeria in Ekoko A.E et al, Proceedings of National
Seminar on the Political Economy of Local Government Reforms and
Transition in the 3rd Republic, Edo State University.

Ekpo, E. E. (2004) “Intergovernmental Relation of Fiscal Federalism in

Nigeria in Nigeria UNO Conference paper, New York: June 8-12

Nwankwo B. (1998) “Local Government Financing, Options for Maximizing

the Internally Generated Revenue” Paper Presented at a National
Wokshop on Quality Management and Services Improvement at the
Local Government Level held at Imo Concorde Hotel Owerri

Oguonu, C. N (1995) “Motivating the Revenue Collectors Towards Effective

Revenue Collection at Local Government level” Proceedings of
National /Workshop and Prospects for Local Government Officials
(U.N.N Catchment Area)

Omapariola. O. & Adewale A. (1998) “Effective Revenue Generation &

Management in Government” National Orientation Workshop for
Chairmen of Local Government Care Takers Committees, Abuja
 117

GOVERNMENT DOCUMENT

Federal Republic of Nigerian (1979) The 1979 Constitution of the Federal

Republic of Nigeria Section 149 (5), Federal Ministry of Information,
Lagos

The 1999 Constitution of the Federal Republic of Nigeria

Federal Republic of Nigeria (1991) Model Financial Memoranda for Local

Government (2nd Edition) Government Printer, Lagos.

Federal Republic of Nigeria (1976) “Guidelines for Local Government

Reform Government Printers, Kaduna

Federal Republic of Ngeria (1985) Federal Government White Paper on

Dasaki Report. Government Printer, Lagos

Njikoka Local Government 2007/2008: Njikoka Planning Unit.

Anambra State of Nigeria (1976) Financial memoranda Issued Under section

93 of the Anambra State Local Government Edict No. 9

Anambra Sate Edict of 1976 Section 5 No 2.

 118

APPENDIX II

Department of Political Science

University of Nigerian,
Nsukka.
21st March 2010.

QUESTIONNAIRE
Dear Sir/Madam
This questionnaire is part of a research work being undertaken at the
above University. You are please requested to give honest answers to the
questions by ticks or written responses as appropriate in the boxes/spaces
provided. There are no rights or wrong answers. You are assured that all
information so supplied will be treated in strict confidence.

PERSONAL DATA

1. Department …………………………………………………………

2. Sex: (a) Male (b) Female

3. Age group (a) Under 25 (b) 26 – 40

(c) 41 – 45 (d) Above 45

4. Rank/Position ……………………………………………………..

5. How long have you served the State Govt. or Local Govt.

…………………………………………………………………………
 119

6. What are your qualifications?

(a) WASC, GCE, O/A LEVEL ……………………………………

(b) Teacher’s Grade Two Certificate, OND, MCE ……………….

(c) NCE, HND, B.Sc. B.A …………………………………………….

(d) M.Sc. and above …………………………………………………..

SECTION B

PROBLEMS OF REVENUE GENERATION IN NJIKOKA L.G.A

7. Indicate the extent to which you agree or disagree that Njikoka local

neglect its sources of internal revenue generation.

A B C D

Strongly Agree Agree Disagree Strongly Disagree

If the answer to 7 above shows that the Local Govt. neglects its

internal sources of revenue, indicate the nature of negligence.

 120

Items A B C D

Strongly Agree Disagree Strongly

Agree Disagree

(a) There is no laid down

procedures for revenue

collections

(b) Lack of facilities like

vehicle for revenue drive

(c) The Revenue Officers are

not trained

(d) Poor supervision

(e) The Revenue staff are not

enterprising out to collect fees

and taxes
 121

SECTION C

INTERNALLY GENERATED REVENUE AND LACK OF

FINANCEIAL AUTONOMY

(8) Indicate the extent to which you agree or disagree that Njikoka Local

Government lacks financial autonomy.

A B C D

Strongly Agree Agree Disagree Strongly Disagree

If the answer to 8 above show lack of financial autonomy, indicate the

reason for this.

Items Strongly Agree Disagree Strongly

Agree Disagree

(a) Infringement by the State

Government on sources of internal

revenue generation of Njikoka Local

Government.

(b) Narrow revenue base

(c) Lack of tax-raising power

 122

(d) Lack of power to make bye-laws

9. Other problems that hamper effective Local Government financing

especially as regards generation of internal revenue are:

A …………………………………………………………………………

B …………………………………………………………………………

C …………………………………………………………………………

D …………………………………………………………………………