CHAPTER ONE

1.1  INTRODUCTION

Since 1954 Nigeria has been operating three levels of government as a federation. During the era of the parliamentary system of government, local government services as sub-decision of the require government, the local government area made up the region. The 1979 constitution which ushered in a presidential system of government gave the impression that just as there was separation of government into federal, state and local government with each level of government in complete control.

       Therefore, local government made up the states and the states making a nation, which is constituted by law and has substantial control of affair, including the power to impose taxes for prescribed purpose.

       From the description above, a number of important factors could be seen very clearly, first that a local government compared to that of a federal government. Secondly, it is set up by laws and have certain responsibilities.

       Whalen (1975), made additional contribution as to territory population and legal identify when he said that each unit of local government in any system is assumed to process the following characteristics, given territory and population and institutional structure as a separate legal identify.

       A range of power and of function authorized by delegation from the appropriate central or intermediate legislature and lastly with in the ambit of such delegation autonomy system always to of reasonableness.

       The constitution of Nigeria’s second federal republic provided a federal system of government made up of federal government, a state government councils and 301 uniform local government for Nigeria. Where as local government has existed in Nigeria since the nation was founded, there has not been any constitution, law or ordinances which was so specific as the 1979 constitution. The constitution state that the government of every state shall ensure existence of local government under a law which provided for their establishment, structure, composition, finance and function. Fourth schedule of the constitution outline the general function of local government, there by ensuring that they were no longer solely a state affair.

       The 1979 Nigeria constitution gave much impression that it had elevated local government to an independent third level of government.

       The constitution among the things provided that:

a.    The national assembly shall make provision for statutory allocation of public revenue to local government council in the federation.

b.    The house of assembly of a state shall make provisions for statutory allocation of public revenue to local government councils with in the state. It is in pursuance of the above provision of the constitution that the National Assembly Passed the finance law of 1982 which provided that 10 percent of the total revenue that accrue to the federation be paid as direct allocation to the local government in the federation. The act also provides that ten percent of the revenue of each state be paid to the local government with in the state using the finance law.

c.    The letter has now been modified to ten percent of the internal revenue of each state in other to carry out their function.

       Delta state was cradled from the defunct bender state on the 27th of August, 1991, with its capital situated at Asaba.

       In delta state there exist twenty five local government among which is the Isoko North local government Council and they are expected to carry out functions, such as making of recommendations to a state commission on the economic development of the area, the collection of rates of license, the construction and maintenance of roads, streets, parks, shops, provision and maintenance of primary education, the development of agriculture etc. as stipulated in the constitution.

       However, Isoko North local government Council of Delta State which is the area under review is not an exemption.

       The success or failure of local government to carry out the above functions effectively to a large extent depends on the internal revenue generated as well as the management of local government resources, particularly their human resources.

       In spite of the huge financial resources of the local government, most project embraced upon by the local government particularly the Isoko North Local Government Council, are abandoned of left uncompleted. It is in this context that researcher thought it wise to examine the problem of local government financing in Delta State as well its possible prospects.

1.2  STATEMENT OF PROBLEM

       To most Nigerians including those who are quote informal and deeply interested in public affairs, the subject of local finance appears so trivial and unimportant that it is usually discussed with a wave of hand.

       The prevalent attitude seems to be that the topic of local finance is about the operation of a net work in the country. But the formal format of public authority as enshrined in the law and constitution of the attitude and approach ought to be treated with paramount importance and keen internal as it includes both the revenue and expenditure of local authorities.

       Besides, the bottom line of judging the effectiveness of local bodies is the amount of funds at their disposal to meet their obligations.

       The fact that local government have enormous financial resources base available to them, one would expect that the local government should be able to generate enough internal revenue, to one’s dismay. The reverse seems to be the case. The question that arise therefore, what is responsible for the inability of the local government to generate sufficient internal revenue? The answer to this question is the basis for this research paper.

1.3  RESEARCH QUESTION

1.    What has been the major source of revenue in Isoko   North, Local Government Council. Since 1998-2010 data?

2.    Is there any other source of revenue that exist in        Isoko North, Local Government.

3.    Do you agree that source of revenue to Isoko North,   Local Government Council are strong revenue       resource base to facilitate sufficient revenue   generation internally?

4.    To what extant is it true that ineffective machinery     for revenue collection is responsible for poor revenue     generation in Isoko North, Local Government?

1.4  RESEARCH OBJECTIVE

The major objective of the study is to

1.              Identify the general problems of local government     financing (Isoko North, Local Government Council)        and highlight some of the ways in which the local       government can boost their capability to generate          higher levels of internal revenue.

2.              Identify and analysis the source of Isoko North,        Local Government Council between 1998-2010.

3.          Make recommendation as to how to overcome the      problems identified so as to make the local government council.

1.5  SIGNIFICANCE OF THE STUDY

i.     The study among other things will contribute to   improving the effectiveness of management of Isoko North, Local Government Council and management   (revenue and expenditure)

ii.    It will also enhance knowledge of local government     officials experts and students of local government affairs.

iii.    Recommendation will be a veritable tool for policy       technocrats.

1.6  RESEARCH METHODOLOGY

       The study would be considered in complete and inaccurate if there is no adequate data collection to back it up. In the course of the study, various methods including both primary and secondary source were employed to obtain facts. Oral interview and questionnaire were administered.

       The secondary source includes the library research and official documents the library research necessitated reaching a text books journals and publications with particular reference to literatures on local government, where as the official documents were annual reports to state government, annual estimate for, accurate statistics on revenue. Statistical methods were also used to analyze and internal the finding of data collection.

1.7  SCOPE OF THE STUDY

       The study was meant to cover Isoko North, Local Government council of Delta State. It was however, limited to the finances of the said local government between the period 1998-2010.

1.8  LIMITATION OF THE STUDY

The study was limited by information as a result of financial constraint time constraint and others.

       There was not enough time to carry out an extensive research.

       The time expended on the study was so limited due to academic pressure. It was not easy to get all the relevant information of the said local government, so the few text books that the researcher could come by had to be used for the study. But be that as it may, what is available would be sufficient to achieve the stated objective.

1.9  DEFINITION OF TERMS

1.9.1      LOCAL GOVERNMENT

       This is the system of government of a town, a community or by an area by elected representative of the people who live there or the organization that is responsible for the government of the local area and for providing services.

1.9.2      LOCAL

       This is connected with the particular place or area where people live.

1.9.3      GOVERNMENT

       This is a particular system or method of controlling a state or a country. It can also been as a group of people who are responsible for controlling a country or a state or the affairs of a local government.

1.9.4      FINANCE

       This is the activity of managing money especially organization. It is also seen as money used to run a business activity or a project.

1.9.5      REVENUE

       It can be defined as the money that a government, (federal, state or local government) generates or receives from taxes or that an organization receives from its business.

1.9.6      INTERNAL REVENUE

       This is seen as the revenue generated with in the locality where, for example government is situated or within a country or a nation.

1.9.7      BYE-LAWS

       These are laws elected by a local authority, local government and that applied only to that area and not the entire country.

1.9.8      ALLOCATION

       This is an amount of money space, etc, that is given to a person or the government, for example, local government for a particular purpose.

1.9.9      TAXES

       Taxes are compulsory levies imposed by a public authority on the income, profit or wealth of an individuals, family, community or unincorporated body etc for the public purpose and to enable the government meet the financial obligations and responsibilities.

1.9.10    GRASS- ROOTS

       These are the ordinary people (the masses) in the society or an organization  rather than the government, leaders or the people who make decisions.

1.9.11    EMBEZZLEMENT

       This is an unholy act of stealing money that one is responsible for or that is placed under somebody care is been used not for the purpose.

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