CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Revenue is of great important in any organization especially one

which is concern with catering for and meeting the basic needs of its citizens
such as local government. Suffice to say that the federal government to the
best of its abilities is making financial provision for the local government;
such provision cannot be sufficient to carry out all the responsibilities at the
local government level. It is for this reason that the internal generation of
revenue by the local government council has become very important.

Some of the areas needing funds and attention of the local government
include health, education, transportation and the wealth-fare of the local
government indigenes as well as other dwellers.

Even though there seems to be various avenues from which revenue

could be generated, it is surprising that most of the local government seems
to leave most project undone or uncompleted due to inadequate fund.

The questions then arise, is it that the federal government allocation to

the local government is being misused, or is it adequate? Or is it that no real
effort is made by the local government officials to generate fund internally?
In retrospect to that past local government’s revenue generation activities,

1
will be observe that there has always been an ever dependence on allocation
from the federal account and other external revenue sources.

This implies that level revenue being generated (internally) by the

local government is inadequate to cater for their expenditure/

A critical examination will reveal that the internally generated

revenue by most local government councils are not commensurate to the
abundant sources of internally generated revenues potentialities at their
disposals.

As a result of this, project which should have been executed are left
undone. Such project includes supply of electricity, good road, health
services, education, transportation and the general welfare of the populace.
The resultant of the lapse is the hindrance of growth and development in
particular. The researchers has embarked upon the critical study of revenue
generating activities particularly the problems involved in generating fund
and the possible solutions.

1.2 Statement of the Problems

It is indispensable fact that local government in Nigeria and Kachia

Local Government in particular are short of funds to run their council. Yet
there are resources at their disposal un-harnessed which could improve the
present trend. This poses the major problem of the study. Unfortunately
different administrative in the local government seems not to do anything
about this problem, perhaps, it is because of the over dependence on the
2
allocation that causes the inadequate generation of funds in the local
governments. The main problem faced in putting together of the research
work is working the way funds are used in the council and the sources of the
fund generated from the local government. The fact remains that most of the
revenue are not used as appropriate to the problems faced by the locality
therefore this research is on knowing how revenue are been generated in
localities using Kachia Local Government as an object.

It is seem that some sources of internal revenue generation are being

neglected. The point is that most local government see some sources as in
material which the sources of fund in other sources they think can get.

Even when the available sources are fully taped, the problem of not suing
the fund for the basic need of the citizen arises.

1.3 Objective of the Study

The main aim of this study is to critically study these problems and
analyze them to come out with suggested solution to improve the level of
internal generated fund. The research also aims:

a. Is to generate adequate fund that will cater for the basic needs of the
population at local levels.
b. To stress out the possible sources that are available in generating
funds to local government.
c. For the local government to employ qualified personnel’s to serve as
tool for the collection of revenue.
3
 d. To see that the revenue allocation is increased to local government.
e. To study these problem and analyze them.
1.4 Significance of the Study

This research work would be of importance by venture of the fact that

it tends to point out the impediments in the generation of revenue internally
by local governments. This result to inadequate revenue being generated
from such internal sources. Hence, there is an over-dependence on external
revenue from the federal government.

This research work will be importance and benefit to Kachia Local

Government on one hand and the entire local government across the nation.
They will benefit from the recommendations provided by the research to
improve the generation and management of their funds reducing their over-
reliance on external sources.

Thus external sources include; allocation from federal account,

donation from private/corporate individuals, if the researcher
recommendation are carefully implemented, the government will overcome
the problem of dependence on external revenue.

This study will benefit students and furnish them with information
about fund generate activities of local government, the problems and
remedies of them.

It will be great important to student who would wish embarking on

similar study, it will serve as a guide line to them. Other people who desire
4
to know more about the revenues generation by government, this study will
benefit the general populace in that, it will erase the misconception as
regard why the local government are so much dependent in external revenue
to finance their projects. It will as well give the readers an insight into
revenues records being kept by local government, also, officer in-charge of
revenues activities and duties, problems encountered and possible ways of
curbing such are being revealed.

1.5 Scope of the Study

They are of the researchers interest as far as the study is concerned is

a very wide one, bearing in mind the number of local government across the
nation. Presently there are seven hundred and seventy four (774) local
governments in Nigeria. In view of the hundreds involved in the entire local
government, cannot be covered by this entire study. Hence, the researcher
has decided to limit the scope of the study to a study of Kachia Local
government area of Kaduna state.

1.6 Research Questions

In an attempt to arrive at a concrete conclusion on the factors which

local government over-dependence on external revenue, most especially
allocation from federal account, the researchers has come with the following
research question.

i. Does the problem of insufficient fund faced by the local government is

due to inadequate internally generated fund?
5
ii. Does the insufficiency of fund in local government is due to misused
or mismanagement of fund generate by the local government?
1.7 Statement of Hypothesis

Ho: revenue does not give much reliance for government to capitalize on
the source of funds.

1.8 Definition of Terms

The definition of terms has become necessary for the fact that terms of
the study could donate another meaning when use in another contest. Hence
some terms used are define in relation to the subject matter research to
enable the average reader comprehend properly the research report. The
following terms are defined;

Revenue: this refers to the returns from investment, taxes, fines, levies and
fees.

Tax: a compulsory levy required to be paid by individuals or corporate

bodies to the government.

Revenue collector: this term refer to any local government employee

authorized to collect and receive monies on behalf of the local government.

External revenue: these include loan, grant and allocations from outside the
local government.

6
Receipt: paper evidence given to tax payer to prove that payment has been
made of their liabilities.

Internal revenue: this term refer s to the money or income generated in the
local government.

Fund: this is the money available by the local government to be used.

Resources: this is something that can be used to help local government raise
their fund to achieve their aim.

Data: data is the fact or information gathered and is used to make decision.

Questionnaire: this is the list of question that are answered by a number of

people, so that information can be collected from the answers.

7
 CHAPTER TWO

LITERATURE REVIEW

2.1 Concept of Revenue

Revenue carry quite number of ideas or definitions, depending on the

person in an occupation of such a person defining the term. It could be said
to be money got from exchange of goods and services. It could also be
money received without the exchange of any goods and services e.g. gift,
grants and loans. The term has however been defined by various categories
of person thus.

According to Musa (2003) Revenue is the receipt in monetary terms

from the sales of goods and services rendered. The oxford advance
dictionary defines revenue as income especially the total annual income of
the state governments which collect money from public funds.

Asiodu (2003) in his speech on local government revenue generation

defines revenue as a return from investment, property, trade, business
vocation. He said it could be the annual periodic income e.g. Taxes,
customers and excise duties, fees or charge by a government. As far as the
subject matter is concerned revenue could be as total income accruing to the
local government from any, whether monetary terms or otherwise which
include returns taxes, levies, drugs, grants and fine etc.

8
 Longman Dictionary of Contemporary English defines revenue as a
business or organization receives over a period of time, especially from
selling of goods or services.

Adamolekun (1979) Talks about government grant to local

government in comparative respective. He takes a comparative look at the
system of grant (aids) and revenue allocation to local authorities in Nigeria
and some problems. He further examines; in broad outline, the revenue
structure of the new local government in the country. He also assesses what
roles the grants, internal revenue and local finance elements of their budget
should play in their present and future programme. He stressed out one
major problem is that most grants in Nigeria suffered. The problem is that
most grants are being paid in arrears and hence much depended on the
ability of the local authorities concerned to finance the entire project from
the federal government. More so, the manner in which the federal
government unilaterally ceased to pay certain grant was typically a habit.
Chairman of local government use to direct the allocation of their personal
accounts to generate interest for them. He finally talks about mobilizing the
citizen for communal development under the new system of local
government. I participating in community development through human
resources, material and financial resources, there is going to be enough fund
to run the affairs of the local government.

Ronald (1972) defines revenue as a threefold income from

government grant, locally imposed takes and miscellaneous receipts. He

9
glances at some ways in which local government spend their money. Though
it has been impossible make any useful generalization because work is
shared differently in different countries between local governments. When
he also got to the problem of how local governments get their money, it is
equally difficulty to generalize. He concluded that source of income and
expenditures are being determined by factors such as, development, political
environment, peoples enlighten by exposure.

Agada (2000) Talk about changes in revenue allocation in Nigeria.

The first revenue allocation commission in 1951-1955 and 1953-1959
operated before independent. Revenue allocation had been a serious policy
issue in the country finally adopted a federal federation revenue allocation
consisted principally on the principle of derivation, fiscal autonomy and
needs.

Daniel in his book public sector accounting defined revenue as

income generated from statutory allocations grants and internally includes
revenue. Thus, statutory allocation includes, funds from federal account,
value added tax, and state government account. Grant can come from the
federal government and from the state government.

2.2 Source of Local Government Revenue

The management and control of the public purse is the heart of

government administration. This is done by the highest tier of the
government source of revenue generation. The federation. The federation

10
government allocation of fund is the constant and regular source of revenue
for the local government.

Presently, the allocation rates are follows:

Federal government 52.68%

State government 26.72%

Local government 20.60%

Total 100.00%

Source: circular from federal government 2011.

Revenue is saved from other areas within the local government in

addition to whatever the federal government allocates. Some of the revenues
where money could be source include as identified by the head of the
revenue office in Kachia Local Government (2011);

Tenement rates: The include payment on commercial building banks, and

private hospitals, office complexes. The rate is fixed or changed according to
the rent collected.

Car parks: the includes gate fees, security charges, passenger commission,
that is the money paid for each trip made to the road transport union.

Taxes: these include levis and community tax.

11
Slaughter fees: this fees are normally charged on any eatable slaughter such
as goats, sheep, rams; cattle and also on.

Cattle tax: this is an amount charged per head of any cattle brought into the
slaughter.

Rents: These are monthly payment in the form of rent for every market
stalls including complete, shops and any opens.

Commercial charges: these are charged on the commercial outfit such as

industries and trading companies.

Parking charges: car parks are good revenue centers. Every market is
charged at certain amount. Also every car that is board on its way to its
destination is expected to pay a certain sum of money.

Shop/business permits: Before any business is expected to commence

operation, it must first be registered and obtain a business permit. For
instance, sellers of alcohol or any form of liquor must obtain licenses which
of course must be paid for. This is a source of revenue for the local
government.

Sanitation fees: These are fees paid to sanitary inspectors for offences
committed and for sanitary services rendered by the local government or
other agencies.

12
Development fund: This fund is provided by the state government. It
depends on how much was realized and it is used for construction of certain
infrastructure and construction work.

Others: Revenue could be gotten from other source like loans, grant, local
government enterprises and Parastatals, schools etc. In relation to the
necessity for fund in any government. Adeyemo in (1999) says that no
nation develops at its three levels (federal, state and local) without a
corresponding availability of fund” this is the reason why at this stage of
Nigeria’s development, the government is making frantic effort to tap
available resources. The ultimate goal is to ensure efficient harnessing of
scarce resources in order to provide socio-economic service to the people.

With the increasing emphasis on improved local government

performances and grass-root oriented development, the issue of careful and
concerted study of untapped avenue from revenue generated at the local
government level as assumed an important dimension more than ever before.
The pre-occupation of this group is to identify and articulate those potential
areas of revenue generation which have hitherto, either not being exploited
at all or haphazardly exploited. Having listed out those tapped area, the
group should be delve into postulation strategies for efficient mobilization
and management. This discussion become compelling because of the over-
dependence, federal government which depend largely on his revenue from
crude oil export, the effort of the federal government may not be adequately
fund the numerous developments needed both local and state government.

13
Potential Sources: Adeyemo (1999) Economic management at government
level identified the following potential sources of revenue to local
government level:

a. Statutory allocation from federal account

b. Statutory allocation from the state
c. Internally generated revenue by local government.

The above are the traditional source of revenue. Others are revenue
realizable from agriculture undertaking, commercial enterprises, industrial
activities and miscellaneous revenues

Agriculture undertakings:

Once agricultural practices forms the major occupation of the people

at the local government, there could be several sources of the revenues; this
could be generated, such as:

Strategic grains reserves: A local government could purchase

Once agricultural practices forms the major occupation of the people

at the local government, there could be several sources of the revenues; this
could be generated, such as:

i. Strategic grains reserves: A local government could purchase a

large quantity of grains at the harvest season and sells out later to
the needy companies or factories at a reasonable profit oriented
cost. The company in turn processes them into finished goods.

14
 ii. Local government could embark on live stock production and
making sale to organizations.
iii. Poultry farms/houses could be opened where varieties of chicks are
reared for either eggs production or meat. This could be sold at a
reasonable profit.
iv. Local government could come together and engaged in joint
ventures like embarking on plantation agriculture.
v. Orchards where economic trees are maintained such as guavas,
mangoes and oranges trees could generate appreciable proceed
from sale of their fruits; vegetable could be produced in
commercial quantities.
vi. Large quantities of cornstalk, rice stalk, and groundnut leave are
left to waste; such could be collected and sold to animal fattening
houses which will in turn use as hay.
vii. Piggery and farming could be as well be embarked upon by local
governments in order to generate revenue.

Commercial enterprises:

Revenue could be generated from the following area as:

i. Charging of entertainment or cinema houses.

ii. Transport services could also be introduced by local government
through provision of bases in routes that requires them.

15
 iii. Water tankers belonging to local government could be supplying
water to needy individuals on payment of money.
iv. Commercialized technical services by local government staff e.g
mechanics to individual on payment of some fees could generate
revenue.
v. Investment at this period of privatization policy local government
should seized the opportunity to purchase substantial shares, which
have the consequent effect of yielding dividends from the profit
realized from the companies.

Industrial Activities

The payment of fees by companies is under the state or jurisdiction.

Hence, they cannot be counted as a major source of local government
revenue. It is however contention to the group that business administration
charge could be paid to the local government for some recognition at the
local government level since the industries use these resources of the local
government in form of land or other social activities.

Mineral prospectors for example could be asked to pay some fees as a

precondition to get files opened up for them.

Miscellaneous Areas

i. Tenement rate: In state where local government are not allowed to tap
this, request for this should be made in order to secure this right.
Tenement refers to buildings erected for commercial purposes.
16
ii. Development levels or appeal fund could be introduced by local
government to generate fund. Where state collect levies from local
government, the levies should be shared out equally between the two
governments.
iii. Grand rent should be paid, classified, and rated as residential and
commercial so that they latter attracts more money.
iv. Cattle tax; this could be re-introduced where it has been abolished. An
upward review at the tax could also be considered.
2.3 Strategies for Efficient Mobilization and Management of Fund
Saka Saidu (2002) and member of his group in a report from the
national centre for economic management and administration have the
following to say as far as the efficient mobilization and management and
administration have the following to say as far as the efficient mobilization
is concerned. Three things are urgently required in order to have any
meaningful and efficient mobilization and management for effective
tapping of the propose revenue sources. These are:
a. Adequate legislative backing in form of favourable constitutional
provision and byelaws. The section will remove any ambiguity on the
rights and opportunity of each tier of government. It will also allow for
adequate sanctions in case of default which will have the resultant effect
of goods enforcement measures. In consequence therefore, judicial
bottleneck being experience when byelaws are promulgated by local
government and are to be drafted by the various ministers of justice. The

17
 state should appoint their own lawyers or seem services of private
practioners to render such services.
b. Local government should report appointment of special task force
committee on ad-hoc basis to enhance revenue generation. Such
committees are giving specific targets and time frame within to realize
the goals set.
2.4 Issue in Revenue Mobilization and Management
The major issues in revenue mobilization and management at the local
government center around the fiscal relationship among three tiers of
government. The level of economic activities, real income and taxable
capacity in the rural areas, the effectiveness at the machinery collection of
tax revenue and the effectiveness of planning and budget processes are
major issue. The ability to mobilize revenue and size of the revenue that can
be mobilized in the rural areas depend on the level of economic activities
that can be generated and sustained in these areas. The reason for this lies is
the fact that a majority of the Nigerian rural population is dejected poor.
Consequently the taxable capacity of the rural income is very low.
Finally, the mobilization of revenue is seen as an end itself but must
be efficiently managed and allocated. This is where the issue of effective
planning and budgetary comes into use of resources at the local government
level. Within the context of the policy reforms in the country, the local
governments are expected to plan for the provision of socio-economics
infrastructure in the rural areas and implement the relevant project by means
of realistic budget.
18
2.5 Resources Mobilization for Effective Performance of Local Governments
Local government gets their financing from internal and external
sources. The internal sources from the larger proportion of local government
revenue, it includes statutory allocation and grants from federal and state
government. For this reason emphasis is being placed on internal revenue
generation drive and mobilization of human and other local resources for
development purposes.
A vital factor to effective local government administration is the
quality of its manpower. It has been argued that development does not start
with only consumable goods and services but with people that have
orientation, discipline and response to policy, incentive and their
environment.

2.6 Roles of Local Government

Economic development could arrive through industrialization. It is an

effective means of self reliance and laying the basis for technological take
off. Rural industries provide job opportunity to the rural populace and help
to enhance their income. They also provide market for agricultural products.
There are about four categories of rural industries, cottage industries,
extractive industries and traditional pharmaceutical industries.

If about 80% Nigerians in the rural areas engage in one industry or the
other, then developing rural industries is an effective means of enhancing the
material well-being of the people.

19
2.7 Revenue in Local Government Administration

The 1976 local government reform guidelines defined the sphere

operation of the local government over specific functions.

Exclusive functions

i. the administration of market and motor park

ii. slaughter houses, slaughter slaps
iii. registration of birth, dead send marriage
iv. sanitary inspection, refuse and might soil disposal
v. parks gardens and public open places
vi. grazing grounds, fuel, plantations
vii. naming of road, streets and numbering of plots building

Concurrent List

This refers to the areas where local government shares responsible

with other tires of government they include:

i. abattoirs, meat inspection

ii. information and public enlightenment
iii. agriculture extension, animal health extension service
iv. fire services
v. rural and semi-urban water supply
vi. public housing programmes
vii. operation of commercial undertaking

20
 viii. provision of scholarship and bursaries
ix. regulation and control of building
x. town and country planning
xi. pipe sewage system

2.8 Necessary Books and Records for Revenue Generation

The model financial memorandum is the document that governs all

financial matters and duties of public offices some of the earning books
specific by the memorandum (2000) are:

1. Receipt books register be kept in the finance department in

accordance with the provision of memorandum to record all the
receipt of all the revenue earning books, the ultimate return of books
to finance department and their final disposal.
2. Postal remittance register: this register is supposed to be kept
according to form. The remittent received by post in any form
(cheques, cash, others and pay in slip) ought to be recorded here in by
the treasurer or any person authorized him.
3. Receipt book distribution register: This bookie for the purpose of
recording revenue and issues as a register obtains by each revenue
collector.
4. Revenue collector chat: it is the required of the treasurer in
accordance with the provision of the financial memorandum 1-3(14)

21
 to keep a revenue collectors chart. This document shows the day, the
month, when the account of each revenue collector is examined.
5. Tax register: the financial memoranda recommend the keeping of the
document section 10-13 of chapter 12. It comprises all tax income.

2.9 Effect of Inadequate Revenue in Local Government.

The effect inadequate revenue in local governments is the opportunity

cost

The effect of inadequate in local governments is the opportunity cost

of the amenities and service that would have otherwise been enjoyed by the
populaces .this includes the establishment of commercial and industrial
undertaking as a means of raising additional revenue. Such as markets and
major parks, provision of services at reasonable prices, this may be attractive
to investors.

The local government cannot possibly provide these services or

embark on any project that could lead to any production of services due to
inadequate revenue on a general note. Lack of fund could go a long way to
hindering the development and reducing the people’s standard of living.

22
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This chapter includes the steps, method, and procedures employed by

the researcher to obtain the data needed in the research work. The choice of
the researcher’s methodology will be highly determined by the situation and
environment of the study.

3.2 Instrument to Use

For the purpose of this study, the researcher prepared a set of standard
question, which were administered by an oral interview with the revenue
officer and revenue collectors or other duty post (market and shops) to
observe he revenue payer’s responses.

3.3 Data Collection Method

There are two basic sources of data collection. They include;

i. Primary source and

ii. Secondary source

Primary source: comprises of first heard information of knowledge as

eyewitness report, and original documents.

They are usually described as items origin to the problems being

investigated.
23
 Primary sources of data are very much more accurate but are difficult
to come by. The main primary sources are those got from personal interview
conducted for the revenue staff of the case study (Kachia Local
Government) also personal interview to people that remit income to the local
authorities is being conducted.

Personal observation of the responses to tax payment on co-visit to

some shops and market. Also personal to some local government staff in
charge of income generation are being conducted.

The researchers have also decided to make use of the questionnaire

due to the reaction of people when being interviewed personally. Most of the
local governments are not ready to seat down and answer the question on the
questionnaire paper.

Secondary data: comprises materials that cannot be described as

original. They include quoted encyclopedia, textbooks, reports and lecture
notes. They contribute immensely to a valid and reliable research work
considering the difficult access to handle primary data.

In this research work, the collection of data from the secondary source
was employed in chapter two: the reliance was on textbooks, journals,
memoranda reports and note book to form the literature review.

24
3.4 Population

This research work will have covered a total of seven hundred and
seventy four (774) local government councils, which account for all the local
government in Nigeria.

The population is quite a large one considering the size and number of
staff of all the local government in the councils.

For the purpose of this study and convenience of the research work,
the entire population of seven hundred and seventy (774) local government
has been reduced by the researcher to a simple size of one local
government. This is to make the work convenient, less vigorous, and
coverable within the giving period and to the extent of available resources.

3.5 Sample Size

This sample size for this research work represent 1/774 of the entire
population which is one local government (Kachia Local Government
Council), the number of staff of the councils is about hundred. But for the
purpose of this study the staff has been reduced to revenue staffs only; which
is about 10% of the entire staff forming a number of 25 revenue staffs. These
include eight revenue officers and seventeen revenue collectors.

Due to time constraints and accessibility to the officers on the part of

the research only seven (7) revenue officers and twelve (12) revenue
collectors were interviewed.

25
3.6 Interview Question (Formation)

A set of question was complied for both the revenue officers and tax
collectors. Each person’s response to the question posed is jotted down by
the researcher. The questions among others are the available sources from
which revenue generated from the local government. The efficiency of staff
in generating revenue, is the revenue realized sufficient for available
project? What are the possible problems faced in realizing those revenue and
situations to them?

The lash question is that: is the problem of insufficient fund faced by

local government due to inadequate internally generated fund or
mismanagement?

Thus, all the answers to those questions are being recorded from each
respondent which was later analyzed.

3.7 Method of Data Presentation

Data in a simple language and in line with responses received from

the revenue collectors and officers to question posed to them. This is in bid
to make the research work clear enough and easy to understand by any
reader.

Responses provide by revenue officers are considered first, followed

by those at the revenue collectors, also responses by revenue payers at the
market and shops are being recorded to obtain adequate data.

26
 Effort is being made for the presentation of data, as they were
collected. The use of table is employed especially where numerical
illustrations are involved. Some format of revenue books and record are
recommended for the local government councils.

3.8 Data Analysis

All the data obtained in the course interview and analyzed step by
step. Those personally observed and also analyzed after one obtained during
the interview. Where answers corniced i.e. the revenue officers are analyzed
simultaneously.

3.9 Area of Study

Kachia Local Government is situated between Zango and Jema’a

Local government of Kaduna State. The local government area was formally
in plateau state before new state was being created in 1991 during Gen.
Ibrahim Badamosi Babangida regime.

Kachia Local Government has about 700,000 people and they are
predominantly farmers and their major cash crops are yam, groundnut etc.
The local government is one of the Hausa speaking area with other minor
languages.

27
 CHAPTER FOUR

PRESENTATION ANALYSIS AND INTERPRETATION

4.1 Introduction

In an effort to answer the fundamental question raised by the research

project from the use of the various data gathering techniques employed. Data
ordinarily does not really make meaning unless they are being presented,
analyzed into meaningful information. This chapter presents and analyses
data collected in this research.

4.2 Data Presentation

This is the first section of the chapter. It present the data collected in a
modified way that can be easily understand. Thus, data are presented in the
table below.

i. What is your position in the organization?

The aim of this question is to identify and recognize the respondents rank
and his/her level of authority within the local government.

Most respondents are officers of the revenue and finance department. They
are found to give reliable information to satisfy this study.

ii. When did you commence your employment with the local
Government?

28
The aim of this question is to ensure that respondent have served for at least
a period of one year to be able to give reliable information.

All the respondent have served between two and three years.

iii. What are the types of accounting books maintained by the Local
government?
a. Main cash book
b. Petty cash book
c. General ledger only
d. All of the above

Table 1: No of Respondent 10

Options No. Of responses Percentages

A - -
B - -
C - -
D 20 100
Field Survey: 2020

Response to this question indicates that books of account are adequate.

iv. Is there any delay in receiving payment from tax payers and did any
efforts made to minimize it.

29
Table 2 (a) period of revenue collection

Options No. of Responses Percentages

A 5 25
B 15 75
Field Survey: 2020

Table 2 (b) Official receipt collected

Options No. Responses Percentages
A 15 75
b 5 25
Field Survey: 2020

v. What are the sources of revenue of this local government?

a. Grants from the federal government only
b. Grants from the stat government only
c. Internally generated revenue only
d. (a) And (b) above
e. (a)and (c) above

Table 3 Period of revenue collection

Options No. of Responses Percentage
A - -
B - -
C - -
D 5 70
E 15 75
Field Survey: 2020
30
vi. Is official receipt issued when revenue are being collected
(a) Yes (b) No

Table 4 : The Internally generated revenue at the local government

Options No. of Responses Percentages

A 14 70
B 6 30
Field Survey: 2020

vii. Who are the officers responsible for collection of the Internally
generated revenue at the local government?
a. Revenue official only
b. Other officers
c. (a) And (b)
viii. Table 5: Is there any delay in receiving payment from tax payer and
did any efforts made to minimize it?

Options No. Responses Percentages

A 18 90
B - -
C 2 10
Field Survey: 2020

ix. Are they specially trained?

(a) Yes (b) No

31
Table 6 Is official receipt issued when revenues are being collected?

options No. of Responses Percentages

A 15 75
B 5 25
Field Survey: 2020

xii. If yes, what type of training?

a. Attending seminars and workshops regularly
b. Attending special course designed for that purpose
c. On the job training only
d. (a) And (c) only
e. (b)and (c) only

Table 7: Are the officers responsible for the collection of the internally
generated revenue especially trained?

Options NO. of Responses Percentages

A 18 90
B - -
C 2 10
Field Survey: 2020

Are they specially trained?

(a) Yes (b) No

32
Table 8: Is there any form of malpractice, fraud and regularities by the
revenue officer?

Options No. of Responses percentages

A 15 75
B 5 25
Field Survey: 2020

x. If yes, what type of training?

a. Attending seminars and workshops regularly
b. Attending special course designed for that purpose
c. On the job training only
d. (a) and (c) only
e. (a)and (c) only

Table 9 : What are consequences of insufficient fund in the local

Government?

Options No. of Responses Percentages

A 2 10
B 3 15
C 5 25
D - -
E 10 50
Field Survey: 2020

i. What are consequences of insufficient fund in the local Government?

a. Inadequate social facilities

33
 b. Low level of education
c. Low job opportunity
d. Delay in project excursion
e. All of the above

Table 10 : Is there any form of malpractices, fraud and irregularities the

revenue officers?

Options No. of Responses Percentages

A - -
B - -
C - -
D - -
E 20 100
Field Survey: 2020

ii. Is there any form of malpractices, fraud and irregularities the

revenue officers?
(a) Yes (b) No

Table 11 : Could lack of fund management techniques affect the local

government activities?

Options No. of Responses percentages

A 18 90
B 2 10
Field Survey: 2020

34
iii. Could lack of fund management techniques affect the local
government activities?
(a) Yes (b) No

Table 12 : Is it possible to have excess fund in the local government

Options No. of Responses Percentages

A 20 100
B - -
Field Survey: 2020

i. Is it possible to have excess fund in the local government?

(a) Yes (b)No

Table 13: In the case of fund shortage, what preparation could be made to
curb the situation?

Options No. of responses Percentages

A 15 75
B 5 25
Field Survey: 2020

i. In the case of fund shortage, what preparation could be made to curb

the situation?
a. Setting up revenue mobilization committee
b. Provision of revenue collection materials
c. Implementation of byelaws

35
d. All of the above

Table 14: Is there adequate control put in place to enhance detention and
prevention of fraud and irregularities?

Options No. of Responses Percentages

A 3 15
B 1 5
C 1 5
D 15 75
Field Survey: 2020

i. Is there adequate control put in place to enhance detention and

prevention of fraud and irregularities?
(a) Yes (b) No

Table 15: Is there any planning (inform of project) for the future operation
of the local government to improve revenue Government?

Options No. of Responses Percentages

A 5 25
B 15 75
Field Survey: 2020

i. Is there any planning (inform of project) for the future operation of

the local government to improve revenue Government?
(a) Yes (b) No

36
Table 16 : Are there improvements in the annual revenue generation?

Options No. of Responses Percentages

A 5 25
B 15 75
Field Survey: 2020

i. Are there improvements in the annual revenue generation?

(a) Yes (b) No

Table 17 : Is insufficient of funds in the local government due to misuse or

mismanagement by the local government officials?

Options No. of Responses Percentages

A 18 90
B 2 10
Field Survey: 2020

4.3 Data Analysis and Interpretation

The data collected by methods prescribed in chapter three and

presented in table in this chapter are analyzed and interpreted below:

Table (1) one shows that the type of accounting. Responses to this questions
show that adequate

37
 Books are being kept by the local government. From table 2 there is a
little delay in receiving payment from tax payers. Though the delay is just
about 25%

Table 3 indicates that sources of revenue to local government is

mainly from grants from the federal government and internally generate
revenue though other sources contribute little.

Table 4 shows that official are not always issued to people that want
to pay to the revenue purse. This means there may be out stock of receipts.
Also wrong officers that are privileged to keep the receipt might have been
collecting revenues from the citizens.

Table 5,6 and 7 wants to know if the appointed or the right officers
have been collecting the internally generated revenue , especially trained
and type of training they have attended. This table shows that revenue is
being collected by the revenue officers, they are specially trained and they
are being trained in the job.

Table 8 shows that inadequate fund in the local government will lead
to inadequate social amenities, low level of education , low jobs
opportunities, delay in project execution and so on.

In Table 9, we can conclude that there are form of irregularities,

malpractices and fraudulent act by the revenue officers.

38
 Table 10 shows that lack of management techniques will affect the
operation of the local government.

Table 11. Indicate that it is possible to have enough revenue to

carry out the activities of the local government.

Table 12. Also shows that shortage of funds could be curbed by:

1) Setting up revenue mobilization committee

2) Adequate material for revenue collection should be provided.
3) Implementation of byelaws.

In table 13, show that there is adequate control put in place to enhance
detection and prevention of irregularities and frauds.

Table 14, show that there is no enough of planning inform of project

to improved revenue generation in the local government.

Table 15, there is an increase or improvement in the annually

generated revenue.

4.4 Test of Hypothesis.

Using the chi-square method to test the hypothesis, chi-square enables
us to measure the discrepancy that exists between the observed and the
expected frequency.
X2 cd=Σ(oi-ei)2
Ei
The degree of freedom can ascertain by:
Df=(R-1) (C-1) where

39
 R=number of column
Df is at 5%level of signified
Oi=observed frequency
Ei= the expected frequency

X2 =chi-square

Variable 1 2 3 4 5 6 7 Total
Yes 4 20 11 13 16 26 4 94
no 16 4 5 5 6 4 6 46
total 20 24 16 18 22 30 10 140
Computation of expected value (ei)

Yes NO
20
1,1 94×20 =13 2,1 46× =7
140
24 24
1,2 94× =16 2,2 46 × =8
140 140

16 16
1,3 94× =11 2,3 46 × =5
140 140

18 18
1,4 94× =12 2,4 94× =6
140 140

22 22
1,5 94 × =15 2,5 46 × =7
140 140

30 30
1,6 94× =20 1,6 46× =10
140 140

40
 10 10
1,7 94 × =7 1,7 46 × =3
140 140

Oi Ei Oi-ei (oi-ei)2 Oi−ei

ei
4 13 -9 81 6.23
20 16 4 16 1
11 11 0 0 0
13 12 1 1 0.08
16 15 1 1 0.07
26 20 6 36 1.80
4 7 -3 9 1.29
16 7 9 81 11.57
4 8 -4 16 2
5 5 0 0 0
5 5 0 0 0
5 6 -1 1 0.17
6 7 -1 1 0.14
4 10 -4 16 1.6
6 3 3 9 3
28.95

Calculation were made to the nearest whole number

Calculated X2 =28.95

Df = (R-1) (C-1) @ 5%
Df = (2-1) (7-1) @ 0.05%
1x6=6

41
Giving a calculated x2 =28.95
And the table x2 = 10.00

Decision Rule

If value of degree of freedom (DF) reject the null hypothesis (Ho) and
accept the alternative hypothesis (Hi)

Decision made by the researcher therefore reject the null hypothesis

and accept the alternative hypothesis since the calculated value 28.95 is
greater than the table value 10, which state hat revenue gives much reliance
for government to capitalize on the source of fund.

Problem of Revenue Generation in the Local Government

(1) Inadequate receipts: it was discovered that sometimes receipt booklets

become out stock and because of this, revenue collectors would become
handicapped, as they could not collect revenue without issuance of
receipt to the payers
(2) Transportation: collection of revenue involves travelling to the areas
where much can be collected. Where there is no transportation to ease
the burden of the officers concerned, the revenue that is suppose to
accrue will not
(3) Motivation: this is one of the points that the field revenue officers and
their head emphasized on. They were all of the view that they were not
adequately catered for despite their efforts.

42
 This sometimes lowers their morals at work. Thos is when the attitude of
“it is not my father’s work” set inn.
(4) Limit revenue sources: The number of available source of revenue
open to the local government is very small compared to state and federal
government .Thus; this will limit the amount of revenue to be collected.
More so, the little sources of revenue available are not regular.
(5) Lack of co-operation of tax officers: sometimes there are difficulties in
collecting revenue from the people due to misunderstanding between the
revenue payers. This is due to level of exposure of the revenue payers
and the level of training of the revenue staff.
(6) Illiteracy: most people at the local government or local settlement are
illiterates and cannot understand the benefit they will get by paying their
dues. Some villagers did not know that takes are compulsory levies to be
paid by all.

4.5 Summary of Findings

From the researcher’s overall interview and other methods adopted in

getting the necessary information, data have been able to be presented and
analyzed in a way that readers will understand.

The findings of the research reveal that proper books of accounts are
being kept in the local government. But there is a delay in collecting tax and
revenue from people. This has made many people to go back home and

43
avoid their payments. Also, officials’ receipts sometimes are not available
to be issued out.

More so, we can find out that inadequate internally generated fund is
responsible for the low level of fund in the local government. Thus misuse
or mismanage of funds does not occur by the local government management.

Finally, we also find out that there is annual increment in the revenue
generated. This implies that there are many untapped resources that can be a
good source of revenue to the local government.

44
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

This study was conducted with the sole intension of solving the
problems of insufficient funds and boost revenue collection in the local
government especially that of Kachia Local Government.

The findings of the research reveal that internally generated fund is

inadequate and that account for the reason of insufficient funds suffered by
the local government councils.

The study later identified some reasons or causes responsible for

inadequate internally generated revenue.

They include inadequate transportation for easy mobility of the

revenue staff, motivation in terms of better packages and allowances for the
staff.

The study also reveals that revenue collected for the past three years
showed an upward trend. There were percentage increase.

5.2 Conclusion

45
 The local government system in Nigeria for quite some time or years
now has continued to suffer lack of funds. The federal government despite
the view of policies in order to improve the lot of the local government has
not successfully achieved. Since the federal government could not meet the
needs (financial) of the local government could, it has always encouraged
them to source for fund internally.

The study reveal that inadequate fund in the local government is

sometimes being caused by the delay of allocation from the local
government. This research work also reveals that there are still some bottle
necks here and there in the process of revenue generation in these local
governments.

The fourth chapter shows the information collected and how they
were analyzed, chi-square method of analysis was used and conclusion was
reached which made the researcher to reject the null hypothesis and accept
the alternative.

This study further shows that the local government especially the
particular one of our case study has some very lucrative source of revenue
not yet exploited.

5.3 Recommendation
It would be un-useful, and waste of time and other resources used for
this study, a waste if to be completed without some suggestion and possible

46
solution to the problem of inadequate revenue generation in the local
government.

The researcher has the following recommendation with the belief that they
would improve revenue collection in Kachia Local Government.

REFERENCES

Adeyemo, A.O.(1999): Economic Management at the Local Government

Level, Kenwood Publishing house Ltd.

Adolf Langser, (1996): Wages and Salaries Administration (Revised

Edition) Pitman London.

Adamolem Olekun UR (1999) The New Local Government in Nigeria.

Heinemann Educational Books Nigeria Limited.

Asiodu, P. (2001): Lecture Note on Revenue Collection.

Busayo, O.(2000): Lecture Note on Revenue Collection.

Donald Wrath: Local Administration in West Africa, Double & Brendon

Ltd, Lagos.

Financial Impact (2000): 3rd Edition 2000.

Musa, F. (2001):Lecture Note on Financial Strategies and policies.

Otaigbe, ogbe: Revenue Generation in Local Government.

47
Olumadare, A. (1999): Understanding the Nigerian Constitution of 1999.
M.I.J. Professional Publisher, Lagos.

Olotu, Jacob Paul: Lecture Note on business research methodology.

APPEN DIX I

PPROJECT PROPOSAL

PROJECT TOPIC:

Problems and Prospect: Revenue Generations and Expenditure Control at

Local Government Levels in Nigeria.

Introduction

Revenue is of great important in any organization especially one

which is concern with catering for and meeting the basic needs of its citizens
such as local government to the people at the grassroots in Nigeria.

Some of the areas that need the attention of the local government
include health, education, transportation etc.

Statement of the Problem

In this research, it is the fact that the local government in Nigeria and
Kachia Local government in particular, are having difficulties in the

48
generation of revenue for its local government and how to manage the little
fund that is generated is also another problem to the local government.

Significance of the Study

The importance of this research work is of the fact that it tend to point
the impediments in the generation of revenue internally by local
governments.

Scope of the Study

The interest of the researcher as far as the study concerned is a very

wide one bearing in mind that the number of local government across the
nation presently is about seven hundred and seventy four (774).

This research work cannot cover the entire local government.

Methodology

Methodology is a set of methods, procedures and principles use by the

researcher to perform the research. This includes personal interview,
questionnaires and observation method.

Instrument to Use

The set of standard questions which the researcher prepared were

administered by an oral interview with the revenue officers and the revenue
collectors.

49
 APPENDIX II

QUESTIONNAIRE

1) Is there any delay in receiving payment from tax payer and did any
efforts made to minimize it?
Yes [ ] No [ ]
2) Is official receipt issued when revenues are being collected?
Yes [ ] No [ ]
3) Are the officers responsible for the collection of the internally
generated revenue especially trained?
Yes [ ] No [ ]
4) Is there any form of malpractice, fraud and regularities by the revenue
officer?
Yes [ ] No [ ]
5) Could lack of fund management techniques affect the local
government activities?
Yes [ ] No [ ]
6) Is it possible to have excess fund in the local government?
Yes [ ] No [ ]
7) Is there adequate control put in place to enhance detention and
prevention of fraud and irregularities?

50
 Yes [ ] No [ ]
8) Is there any planning (inform of project) for the future operation of the
local government to improve revenue generation?
Yes [ ] No [ ]
9) Are there improvements in the annual revenue generation?
Yes [ ] No [ ]
10) Is insufficient of funds in the local government due to misuse or
mismanagement by the local government officials?
Yes [ ] No [ ]

51