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07030248044CHAPTER ONE
INTRODUCTION
Background of the Study
The Federal Republic of Nigeria's 1999 constitution recognizes local government as the third level of government in Nigeria, with the state and federal governments acting as the superordinate ones. In Nigeria, this government collaborates with the State and Federal governments to provide for the needs of the populace, including infrastructure (Okpata, 2004). The third tier of government, local government is viewed as a public sector institution with statutory duties, financial management, and allocated roles and responsibilities for maintaining itself and serving its constituents(Uguru, 2011). In Nigeria, local government authorities serve as the third tier of government and play a crucial role in carrying out both central government policies and programs. It is the closest government to the people and deals with their issues. The connection between the state and federal governments is excellent (Buhari, 2022).
A major turning point in the political history of Nigeria was the establishment and acceptance of the local government system as the third tier of government.The local government authorities, who are the branch of government closest to the people, are legally responsible for managing things like general cleanliness, sewage disposal, rural health, feeder roads, market stalls, public restrooms, motor parks, play areas, cottage industries, etc (Benga, 2019). According to Uguru (2011), local government is a third level of government established for the goal of administering areas effectively and efficiently.Angaha (2018) asserted that most governments worldwide work to balance their economic development in a way that will assure the equitable and meaningful coexistence, survival, and development of her people. This is in keeping with the huge duties assigned to local governments.This is the main cause of various Local Government councils in Nigeria's lack of development. In Edo State, Etsako West Local Government is not exempt from the problem of inadequate internal revenue production. This has been one of the issues that Etsako West Local Government has had to deal with (Abubakar, 2018).
Etsako West is a Local Government Area of Edo State, Nigeria. Its headquarters are in the town of Auchi. Etsako West is made up of six clans: Uzairue, Auchi, South Ibie, Anwain, Jagbe and Aviele. The major towns in this LGA includes Auchi, Jattu, Agbede, Ughiole, Odighie, Egho, Ubiane, Iyamho, Iyuku, Ayogwiri, Apana, Iyora, Afowa, Afashio, Ikabigbo, Irekpai, Ogbido, Ayaoghena, Ikholo, Uluoke, Ugbhenor, Idato, Ayua, Imeke, Elele, Sabo Iyakpi, Ibienafe, Ughieda, Iyerekhu, Egbogio, Jagbe clan (Ikhwa, Imiokono, Inhianmhen, Imogian) and Awain clan {Ewora, Idegun, Ama, Ibhioba}. The Agbedes were originally the makers of the artifacts that are seen in Benin. There was a threatened elimination of the Agbedes in Benin, which led to the evacuation of the Agbede people from the Benin Kingdom (Nigerian Media, 2018). It has an area of 946 km2 and a population of 197,609 at the 2006 census.It also has the Prestigious Federal Polytechnic attended by students all over the state.
However, the expansion of the local government area was severely harmed by this. In most of the states in the nation, particularly with reference to Edo State, low internally generated revenue continues to be one of the grave issues impeding effective and efficient local government administration and growth. Local governments now rely almost exclusively on federation allocations as their main sources of income, which isn't even enough to cover employee salaries. This problem of poor revenue base has almost led to the collapse of most grass root government in Nigeria (Aborisada, 2022). The inability of the local government administrators to use in sourcing techniques for funds to finance the council through internally generated revenue is a thorn in the flesh of meeting up their constitutional development responsibilities such as the provision and maintenance of social services (education and health care) payment of the worker’s salary and so have given rise to whether to scrap or restructure local government systems in Nigeria.
The several levels that make up the federation share the duties of governance under the federal system of government. Similar to this, the federation's financial resources are allocated among the federating units such that each level receives enough money to carry out its duties independently of other levels. To do this, the higher-level government provides funding to the peripheral agencies, enabling them to develop the rural communities where the majority of the population resides (Azu, 2017). The provision of services to the populace is significantly influenced by the local government. Any local government's success depends on its capacity to use both human and financial resources to fulfill its mission, which is to provide the community with the services it needs.According to Nwanegbo (2004), a unit of government must be sufficiently autonomous to be able to claim the title of government; otherwise, it may be mistaken for an administrative division of the sponsoring government.
Recent years have seen a rise in poor revenue production for the level of government most efficiently tasked with grassroots development, which has made rural development a severe concern. The local government system is generally recognized as the most effective tier of government for rural development because of its close closeness to rural communities (Adeyemo, 2020). The main responsibility of the local administration is to guarantee that the hinterlands grow quickly.To achieve this goal of rural development and ensure efficient local government administration and governance, local government finances must be greatly improved both internally and externally. This is possible thanks to the local government executives' strong political resolve and administrative prowess, as well as another relevant personnel council (Hepworth, 2017).The reliance on external funding sources should be reduced, and efforts to increase internal revenue streams should be encouraged, as the current finance pattern and procedure for local government will not lead to rapid rural development and will make it challenging to bring government closer to the people at the local level. As a result, Nigeria's third tier of government's objectives of national integration and rural developmentwhich are socio-economic tasks of local governmentare unsuccessful (Jumare, 2019).All finance officials, related local government workers, and the executive should adopt a new mentality in order for the local government to efficiently improve its financial situation. Studies on the effectiveness of local government have, according to Asobie (2000) in Nwali (2018), concentrated on the council's inability to generate and increase revenue. This concern is due to the fact that the local government cannot effectively carry out its duties without a solid financial foundation.To function effectively, local government needs to be financially stable; otherwise, it will continue to depend, as in the past, on the generosity of other levels of government (Adeymeyo, 2020). The third tier of the government's revenue base must be enhanced before this responsibility can be successfully carried out, despite the fact that the Nigerian local government system was created to deliver socio-economic services to the people at the local level.The laws, rules, values, and customs that serve as a guide for the collection and management of local government revenue must be the foundation for strategic functions in a democracy like ours (Keshav, 2018). It is based on this background that the present study seeks to examine the impact of revenue generation and local government in Etsako West Local Governemnt of Edo State, Nigeria.
The issue of revenue distribution has persisted as the most pressing and divisive in interactions between local governments, the third tier of government, and the other two tiers, namely the federal government and the states, within the boundaries of Nigerian federalism (intergovernmental relations).The 2016 Local Government Reform, which heavily borrowed from Brazilian practice and became deeply ingrained in Nigeria, included local government in the core of the nation's intergovernmental fiscal relations, with a defined share of the federation account, among other statutory provisions and administrative arrangements (Akindele &Olaopa, 2012). The reform, which was hailed as a significant advancement, elevated local government by enabling them to create legal entities that allowed them to carry out specific duties outlined in the Federal Republic of Nigeria constitutions of 1979, 1989, and 1999. (as amended). The recognition of revenue sharing and administration arrangements has led to a number of problems, which Adamolekun (2019) divided into six categories: intergovernmental conflicts, structural organizational problems, financial problems, a shortage of qualified manpower, the role of traditional authority in local government, and political and bureaucratic corruption. Despite the fact that the reform explicitly stated the idea of a three-tiered federation in Nigeria, the recognition of these arrangements has led to a number of problems (Murana, 2015).
These problems remained largely insoluble inside the Nigerian political system even during the fourth republic. These problems have been made worse by the 1999 constitution, which maintains the institution of local government in Nigeria as a residual concern for state governments (particularly in terms of its creation and control).The most frequent issues in Escor West local governments in Nigeria encounter relate to finances, a substantial mismatch between their statutory tasks and obligations, the flow of financial resources available to them, and the stifling limitations of their capacity to raise taxes or fiscal jurisdictions (Murana, 2015). Statutory allocations to Esccor West local governments, along with internal revenues, have become woefully insufficient in light of the rising costs associated with operating local governments, including the provision of secretariats, staff salaries and allowances, rental and building costs, provision of utilities, and rising expenditures on ongoing and new projects.It is against this backdrop that the study seeks to examinethe impact of revenue generation on local government development ofEtsako West Local Government of Edo State, Nigeria.
The following research questions were derived to give the present study a direction;
1.4 Objectives of the Study
The main objective of this study is to examine the impact of revenue generation onlocal government development ofEtsako West Local Government of Edo State, Nigeria. Other specific objectives of the study include;
Significance of the Study
From the outlook, there is need for the local government to improve their performance. However, the research is significantly considering the closeness of local government to the grassroots’ people and theneed to utilize substantial revenue for its various sources in addition to federal and state statutory allocation for developmental purpose.
The study will help to identifying some means of generating revenue that has been neglected over years.
It will also be beneficial to the grassroots because improved revenue generation means improved standard of living in form of provision of social amenities such as road, hospital, park, drinkable water, rural electrification etc. The study will be educative as it will be a reference point for researchers.
The findings of this study will also fill the dearth in literature about the impact of revenue generation on local government development of Etsako West Local Government of Edo State, Nigeria.
This study is limited to the revenue generation and local government development of Etsako West Local Government of Edo State, Nigeria.The research is intended to be carried out using primary data.
This study has some limitations andit include;
Fist is the small sample size which did not cover theresidents of Etsako West Local Government of Edo State.
Second is the non-challant attitude of respondentsin responding to the questionnaire
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