THE IMPACT OF POOR REVENUE GENERATION ON THE DEVELOPMENT OF LOCAL GOVERNMENT AREAS (A CASE STUDY OF UHUMWONDE LOCAL GOVERNMENT, EDO STATE)

ABSTRACT

Revenue generation is the nucleus and the path to modern development. Thus, the study was to assess the impact of poor revenue generation on the development of Local Government Areas. This is because local government in the third tier of government and the closest to the people especially in the rural areas needed revenue to provide basic social amenities to the people. But it is unfortunate to note that the local government management have not lived up to expectation especially to provide basic social amenities to the rural people. Thus, the objective of the research was to analyze the extent to which poor revenue generation had affected the development of those areas. The researcher used primary and secondary methods of data collection to generate the needed data. The data obtained through questionnaire was presented in tables and expressed in simple percentages. The following were some of the findings which included poor development of the areas, lack of basic social amenities to the rural people and lack of revenue to maintain the existing infrastructures. The researcher therefore recommended that the local government should provide basic amenities of high quality. By doing so, the people’s interest would be geared towards giving their maximum support to the local government which would lead to the development of the rural area.

TABLE OF CONTENT

COVER PAGE                                                                                 II

APPROVAL PAGE                                                                          III

CERTIFICATE                                                                                 IV

DEDICATION                                                                                  V

ACKNOWLEDGMENT                                                                             VI

ABSTRACT                                                                                     VII

TABLE OF CONTENT                                                                    VIII

          CHAPTER ONE

1.1     BACKGROUND OF THE STUDY                                        1

1.2     STATEMENT OF THE PROBLEM                                      2

1.3     OBJECTIVE OF THE STUDY                                                        3

1.4     RESEARCH QUESTIONS                                                     4

1.5     SIGNIFICANCE OF THE STUDY                                         4

1.6     SCOPE AND DELIMITATION                                              4

1.7     LIMITATION OF THE STUDY                                             5

1.8     DEFINITION OF TERMS                                                      5

CHAPTER TWO

LITERATURE REVIEW

2.0     DEVELOPMENT OF LOCAL GOVERNMENT IN NIGERIA 7   

2.1     SOURCES OF REVIEW GENERATION IN LOCAL 
GOVERNMENT                                                                     9

2.2     THE NEED FOR REVENUE GENERATION IN THE 
DEVELOPMENT OF LOCAL GOVERNMENT AREAS.     13     

2.3     THE PROBLEMS OF REVENUE GENERATION                15     

2.4     THE IMPLICATION OF REVENUE GENERATION ON THE DEVELOPMENT OF LOCAL GOVERNMENT AREAS   17

2.5     TAX AS A MAJOR SOURCE OF REVENUE                      20

2.6     PROBLEMS ASSOCIATED WITH TAX COLLECTION IN          UHUMWONDE LOCAL GOVERNMENT AREA               21

CHAPTER THREE

3.0     RESEARCH METHODOLOGY                                            25

3.1     RESEARCH DESIGN                                                            25

3.2     AREA OF STUDY                                                                 26

3.3     POPULATION OF THE STUDY                                           27

3.4     SAMPLE SIZE AND SAMPLING TECHNIQUES                28

3.5     INSTRUMENT FOR DATA COLLECTION                          28     

3.6     SOURCES OF DATA COLLECTION                                    29     

3.7     VALIDATION OF INSTRUMENT                                        30

3.8     METHOD OF DATA ANALYSIS                                         31

CHAPTER FOUR

4.0     DATA PRESENTATION AND ANALYSIS                         32

CHAPTER FIVE:  

5.1     SUMMARY OF FINDINGS                                                   44

5.2     RECOMMENDATION                                                                    45

5.3     CONCLUSION                                                                       46

REFERENCES                                                                       47     

APPENDIX

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Development is a sine qua non for modern civilization. In a crusade and struggle to carryout development at all nooks and crannies of the society, the local government as the tier of government and nearest to the people is saddled with the responsibility of direct development of the people to a certain level.

Development is highly associated with fund, much revenue is needed to plan, execute and maintain infrastructures and facilities at the local government level. The needed revenue generated for such developmental projects. Like construction of accessible roads, building of public schools, health care centers, construction of bridges among others are soles generated from taxes, royalties, haulages, fines and grants from states, national and international governments.

Thus, the Local government cannot embark, execute and possibly carryout the maintenance of these projects and other responsibilities without adequate revenue generation.

This is the basic reason why development is skeletal at some Local Government councils in Nigeria. The issue of poor revenue generation is not exceptional to local government in Edo State. This has been one of the problems encountered by Uhumwonde Local Government Area.

This however pronouncedly affected development negatively in local government councils. In this research project, the issue to address is how far this poor revenue generation can affect development especially in Uhumwonde Local Government Area.

1.2     STATEMENT OF THE PROBLEM

The Local Government Council takes direct care of the grassroots people in the rural areas. This group of people sometimes lacks essential facilities and condition of modern civilization. They lack pipe bore water to drink, do not have electricity, accessible roads, poor educational infrastructure and facilities to mention but a few.

This is one of the major reasons of rural-urban migration of movement. This has made our cities to be congested and increase in many criminal activities. Based on the above and foregoing assertions, it is obivious that the impact of poor revenue generation on the development of the rural area is a serious problem. This might be as a result of poor revenue generation. If Nigeria is to achieve her desired goal of vision 2020 and possibly meet the millennium development goals (MDGS) target, the issue of revenue generation must be addressed squarely.

Hence the researcher is bothered to find out the impact of poor revenue generation on the lives of people at the rural area and how it has affected development in general especially in Uhumwonde Local Government Area Area.

1.3     OBJECTIVE OF THE STUDY

The broad objective of the research is to evaluate the impact created by poor revenue generation on the development of Uhumwonde in Edo State.

          The other objective of this study includes:

i.                   To determine the level of modern social amenities available in Uhumwonde.

ii.                 To find out the level of poverty associated with the rural people as a result of poor development

iii.              To find out the degree of rural-urban migration.

iv.              To make useful suggestions to solve the problem of poor revenue generation as development depends on revenue generated.   

1.4     RESEARCH QUESTIONS         

i.        What are the impacts of poor revenue generation on the development of Uhumwonde?

ii.       Are there adequate modern social amenities in Uhumwonde?

iii.              Is the poverty level of the rural people high has a result of poor development?

iv.                Has poor revenue generation in Uhumwonde contributed to rural-urban migration?

v.                 How can revenue generation in Uhumwonde be improved?   

1.5     SIGNIFICANCE OF THE STUDY

The significance of any human endeavour is measured by its relevance to solving human problems. The findings of this study would help Uhumwonde Local Government Area to identify the problems associated with revenue generation and its consequences on development.

1.6     SCOPE AND DELIMITATION

The study is focused on the impact of poor revenue generation and how it affects development of the local government areas. It will also involve the analysis of problems associated wit revenue generation and its impact on the development of Uhumwonde Local Government Area.

1.7     LIMITATION OF THE STUDY

The researcher was constraint by time as time frame for the submission of this research was short for an expansive research.

The researcher equally encountered financial limitation as lack of sponsorship from corporate bodies thus; the researcher’s little resources could not cover more areas.

The willingness of most local government staff to supply the needed data was another major problem.

1.8     DEFINITION OF TERMS

LOCAL GOVERNMENT

          According to Lawal (2000) Local Government as a political sub-division of a nation in Federal system which is constituted by law and has substantial control of local affairs which includes the power to impose taxes or exact labor for prescribed purpose.

REVENUE

          Public revenue could be defined as the funds generated by the government to finance its activities. In other words revenue is the total fund generated by government (Federal, state, local government/ to meet their expenditure for a fiscal year.

EXPENDITURE

          Public expenditure refers to the expenses which the government incurs for its own maintenance, in the interest of the society and the economy in order to help other countries.

TAX

          Tax can be defined as a compulsory levy by government on goods, services, income and wealth. It provides definite source of revenue for government expenditure. (Udeh O.S. 2008)

TAX EVASION     

          Tax evasion means illegal reduction in one’s tax liabilities, thereby paying less than the appropriate amounts and not paying at all.

INFRASTRUCTURE

He basic physical and organizational structures and facilities (e.g. buildings, roads, and power supplies) needed for the operation of a society or enterprise.

DEVELOPMENT

Economic development is a policy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. (Wikipedia 2015).