THE ROLE OF LOCAL GOVERNMENT INTERNALLY GENERATED REVENUE ON THE SOCIOECONOMIC DEVELOPMENT

THE ROLE OF LOCAL GOVERNMENT INTERNALLY GENERATED REVENUE ON THE SOCIOECONOMIC DEVELOPMENT

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CHAPTER ONE

                                                            INTRODUCTION`

1.1       Background of the Study

The expediency for the creation of local government anywhere in the world stems from the need to facilitate development at the grassroots. Thus, the importance of local government is a function of its populace (Abubakar, 1989:10). All forms of government,regimes or political systems have so far ensured the attainment of this goal. Such strategy for ensuring national administrative development and political efficacy is found in the concept and practice of local government. Whatever is the mode of government, local government has been essentially regarded as the path to and guarantor of national integration, administration and   rural  development.

According to Asaju (2010), the implication of the foregoing definitions of local government is that local government must be a legal entity distinct from the state and federal government and must be administered by democratically elected officials. Besides, local government must have specific powers to perform a range of functions assigned to it by law and enjoy substantial autonomy to perform an array of functions, plan, formulate and execute its own policies, programmes and projects, and its own rules and regulations as deemed for its local needs. This autonomy includes power to control its finance, recruit and discipline its staff. However, for local government to discharge its functions effectively, especially as it affects rural development, adequate revenue is required. As such, local government revenue and the grass root development had since, become of great interest to academicians and practicing managers despite the inherent problems, especially in the developing and Third World Countries such as Nigeria.

Nonetheless, what is known today in Nigeria as local government system has indeed, a chequered historical origin. It could however, be traced to colonial penetration and administration in the country (Ubah, 1985). Although contact with Europeans dates back to the fifteenth century, it was not until 1861 that the first steps were taken to establish local administration by Britain. The colonial administration that was established was based on indirect rule. This requires that the administration should be carried out through traditional rulers and institutions. This led to the establishment of native authorities in their most rudimentary forms from the 1890s to the 1930s. The main function of the native authorities was to maintain law and order. The first native authority ordinance recognized traditional rulers as native authorities.

It is therefore, this system of rule in which the colonial masters administered the various communities through the existing indigenous ruler came to be called indirect rule

system or native administrative system (Kirk-Greene ed, 1969). However, some modifications were made on these indigenous political systems by colonial administrators before they were used. With these modifications necessary to ensure the observance by the traditional rulers of fundamental laws of humanity and justice, the colonial administrators, led by Lord Lugard himself proceeded to constitute the various Emirs into Native Authorities, and established Native Courts and Native Treasuries throughout the Northern protectorate under the appropriate ordinances (Ofoeze, 1997).

Thus, having observed with satisfaction the apparent success of the indirect rule system in the North and apparently unmindful of the historical, cultural and other institutional differences between the peoples of the North and South, Lord Lugard, on amalgamation of the protectorates of the Northern and Southern Nigeria in 1914, introduced the Native Authority (or Indirect rule) administration to the South as well (Ofoeze, 1997). To put this into effect therefore, the South which hitherto consisted of only three divisions was now split into nine provinces each of which was placed under a Resident supported by a team of District Officers (Kirk-Greene, ed, 1969). The Native Authority Ordinance of 1914 introduced to the South the judicial system which hitherto applied only to the North. With all these in place, the British colonialists proceeded to introduce all the other components of the Native Administration to the South, first in the West and later in the East. In the West, carried away by the seemingly absolute authority of the Yoruba Kingship, Lugard, under the Native Authority ordinance of 1916, constituted the Yoruba Obas, who in reality were nothing more than prince primus inter pares into sole Native Authorities (Kirk-Greene ed, 1969).

However, in the Eastern provinces where it was not easy to find traditional rulers wielding sufficient authority the colonial administrators resorted to making people chiefs by

Warrant and constituting such person into Native Authorities or as Lord Lugard has been quoted as saying;The first step was to endeavor to find a man of influence as chief, and to group under him as many villages or districts as possible and to teach him…. to support his authority and to  inculcate in him, a sense of responsibility (Kirk-Greene ed, 1969: 12)

However, as things turned out shortly afterwards, as a result of a plethora of factors including the alien nature of this system, corrupt practices on the part of the operators – Chiefs and Obas – including the over-bearing arrogance and high-handedness of these Chiefs and Obas, the incompatibility of the entire system with the culture of the people the system in its entirety in the South, unlike in the North, was rejected by the people and hence, it was a monumental failure (Orewa and Adewunmi, 1983).

This necessitated the first reforms in the 1930s and the 1940s culminating in the establishment of chiefs-in-council and chiefs-and-council in place of sole native authorities. The Chief-in-Council is made up of the chief and members of council. The chief presides at all meetings and acts in accordance with the majority of opinion in the council. But if he disagrees with the council, he would take whatever action he thought best and inform the Governor of the region. Contrarily, in the Chief-and-Council, the chief has no power to act against the decision or advice of the council. Under this arrangement, people particularly representatives of missionaries and British trading interest were appointed into the native authorities. The process of appointment of nominated members by the colonial government meant that nationalists were not appointed to serve on the councils. This led to further agitation for reforms in the native authorities. The adoption of a Federal System of government in 1950 marked another stage of Local government development in Nigeria. The composition of the country into three regions impacted on the Local government system. Each

region decided to adopt its own type or form of local government system. The regional systems of local government, until the collapse of the first republic in 1966, so prevailed with various refinements (Igbuzo, 2009).

In the years 1950-55, the first largely elected local government council based on the British Whitehall model emerged in Lagos and the former Eastern and Western regions. Traditional rulers constituted not more than 25 percent of most council in the then Western region and Lagos. However, in Northern Nigeria, the changes were more gradual. The legal framework for local government at this period was provided by the Eastern region local government ordinance of 1950, the Western region local government law of 1952 and the 1954 Native Authority law in Northern Nigeria. By this time, the councils were given a wider range of functions including primary education, health, police, and judiciary. This was in line with the implementation of the colonial government’s ten-year welfare and development plan (1946-1956). The councils also enjoyed a great measure of autonomy in financial, personnel and general administrative matters. It can therefore be said that the 1950s was the era of pupilage for councils in modern local government throughout Nigeria (Igbuzo, 2009).

Obviously, with the division of Nigeria into three regions in 1946 by the British colonialists, there were remarkable changes in the structure and functions of local government administration among the three regions – East, West and North in the country. Thus, the Eastern House of Assembly, after extensive research work, produced and enacted into law the 1950 Local Government Ordinance. This formally abolished the Native Authority Administration and instituted a radically different local government system in the region (Wrath, 1972). Structurally, the new system introduced three – tiers local government comprising the County, District, and Local Councils, each level of which operated more or less independently. The same was the case in the Western region with the introduction of

three-tier local government structure namely Divisional, District, and Local Councils in 1952 local government law. In the North however, the Native Authority system was perceived as compatible with their traditional institutions and there was less effort at modification of the system (Wraith, 1972).

Between 1960 and 1966, there was a decline in the prestige and responsibilities of local authorities. In the former Western region, the local government (Amendment) law 1960 abolished the powers of councils to levy education and general rates on the basis of need. In Lagos, there was a high rate of default in the payment of property rates including government institutions, which reduced the revenue of the local councils. The situation in Eastern Nigeria was similar to the West before the outbreak of the civil war in 1967. In Northern Nigeria, there were gradual changes in the structure of the councils with increasing numbers of elected or appointed non-traditional office holders becoming members of local authorities. The result was that the local authorities had a stable administration, which enabled them to assume responsibility, with some degree of success for more complex services like primary education. Between 1969/71, some state government introduced some changes in the structure of their councils (Igbuzo, 2009). The Military takeover of government according to Gboyega (2001) has had severe repercussion for local government system which was radically changed to accommodate not only the hierarchical military command structure, but also to redress the abuses that the system had been subjected to. The restructuring was also meant to meet the aspirations of the people for greater political participation and empowerment in local government area. Despite the imposition of military rule and command structure, the regions and their successor, states, still retained control over local government policy-making and were thus able to carry out reforms that were deemed appropriate to their circumstances. The On inception of democratic governance in Nigeria in 1999 and in order to correct the foregoing anomalies in local government system in Nigeria on 17th June 2003, the forum of the 36 Governors met and resolved to push for constitutional amendment to empower State Governors to appoint council chairmen and councilors (Thisday, June 18, 2003). A day later the Governors met with the President at the Council of State meeting where they decided to set up a technical committee on the Review of the Structure of Local government Councils in Nigeria. The terms of reference of the committee are as follows:

•       Examine the problem of inefficiency and high cost of governance with a view to reducing the costs and wastages at the three tiers of government

•       Review the performance of local governments within the last four years and consider the desirability or otherwise of retaining the local government as the third tier of government. In that regard consider, among other options, the adoption of a modified version of the pre-1976 local government system of government.

•       Examine the high cost of electioneering campaign in the country and consider among other options, the desirability of whether political parties, rather than individual office seekers, should canvass for votes in elections, and

•       Consider any other matter, which in the opinion of the technical committee are germane to the goal of efficient structure of governance in Nigeria (Thisday, June 18, 2003:16).

The reasons given for setting up the committee include the non-performance or gross under-performance of the local governments; the high cost of governments and near prohibitive costs of electioneering campaigns to individual political contestants in Nigeria and atomization and continual fragmentation of local government councils including impractical division of towns and cities into unworkable mini-local governments (Thisday, June 18, 2003). There were three curious issues regarding the membership and terms of reference of the Technical committee on the Review of the Structure of Local Government Councils in Nigeria. First, all over the world, participation of ordinary people in governance is being promoted. This recognizes the fact that governance issues are not necessarily technical issues that people with relevant experience cannot handle. Secondly, a traditional ruler, the Etsu Nupe, heads the committee. Thirdly, the terms of reference clearly states that the committee should consider, among other options, the adoption of a modified version of the pre-1976 local government system of government (Igbuzo, 2009)

1.2 Statement of the Problem

Local  government  world  over,  is  a  product  of  decentralized  administration.  It  is generally  seen  as  a  veritable  agent  of  development  and  grass-roots  participation  in  the democratic process (Ezeani, 2004). More still, local government refers to a political sub-division of a national or (in a federal system) state, which is constituted by law and has substantial control of local affairs, including the powers to impose taxes or to exert labor for prescribed purpose. “The governing body of such an entity is elected or otherwise locally selected” (United Nations office for public administration cited in Ezeani, 2004:254)

Globally, various strategies and approaches have been adopted or used by government for the purpose of good governance, and in their efforts at distributing the state resources to reach  the  people  at  the  grassroots.  However,  there  has  not  been  congruence  or  general agreement on which strategy is the best, especially in the administration of the rural areas.Decentralization  constitutes  the basic  and  principle basis  for the  establishment  of  Local government (Asaju, 2010)Manhood (cited in Dalhatu, 2006) avers that too much concentration of political and

economic power at one level would ultimately and inevitably lead to managerial constipation.

According to him, the basis of Local government is inextricably woven around the principle

of decentralization.  Local government is the product of decentralized administration. He further defined decentralization as:

an arrangement by which the management of the public affairs of a country is shared by the central/ state/province and local government in a manner that the Local government is given reasonable scope to raise funds and to use its resources to provide a range of socio-economic services and establish programmes to enhance the welfare of those resident in its area of authority (see Manhood cited in Dalhatu, 2006:20)

In    any  case, the importance of local government  is derived  from  its  role   in complementing the effort of central or federal and state governments in the provisions of services within the areas of authority. In this way, it is seen as an efficient agent for providing services that are local in character. Besides, local government assists in the maintenance of law and order, sensitizing and mobilizing the various communities in its areas for effective participation in policy making process and over all development of the rural areas. While indeed, local government system has efficiently and effectively continued to perform the foregoing functions and other ones in developed economies such as the United States of America and Canada, in developing and third world states including especially Nigeria, the noble objectives of local governments have largely been distorted if not completely eroded by different  militating factors  such              as corruption, paucity of    skilled  manpower, inter-governmental fiscal relations among others. As a result of inefficiency of local government system in Nigeria to discharge its statutory responsibilities, several changes and reforms have been instituted to address the problem. Thus, the Nigeria’s post-independence era, especially from 1976 to 2003 witnessed the institution of one reform policies or the other aimed at repositioning the local government system in the country to its constitutional role of fostering grassroots development and socio-economic and political mobilization for national development. Despite the reforms however, local government system in Nigeria, including Nsukka local government, has continued to suffer from many problems. Part of these problems according to Gboyega (2001) has been traced to military intervention in Nigerian government and politics. He observes:

The Military takeover of government in 1966 has severe repercussion for local government system which was radically changed to accommodate not only the hierarchical military command structure, but also to redress the abuses that the system had been subjected to. The restructuring was also meant to meet the aspirations of the people for greater political participation and empowerment in local government area. Despite the imposition of military rule and command structure, the regions and their successor, states, still retained control over local government policymaking and were thus able to carry out reforms that were deemed appropriate to their circumstances. The period of military rule from 1966 to 1975, therefore witnessed extensive experimentation with different theories and patterns of local government with quite mixed results (Gboyega, 2001:21).

 Objectives of the Study

        This study has both broad and specific objectives. The broad objective of this study is to explore internally generated revenues and grassroots development in Enugu state, using Nsukk local government council as case study. However, the specific objectives include the following.

1.      To ascertain whether official corruption undermined the capacity of Nsukka local government council to generate internal revenues for grassroots development

2.      To examine the relationship between the paucity of highly skilled manpower necessary to generate internal revenues in Nsukka local government council and its grassroots development problems

3.      To ascertain whether of poor auditing and monitoring of rural development projects contribute to the internally generated revenues and grassroots development problems of Nsukka local government council

 Significance of the Study

This study has both theoretical and practical significance. The theoretical relevance of this study derives from its focus on determining if; (1) official corruption undermined the capacity of Nsukka local government council to generate internal revenues for grassroots development; (2) the relationship between the paucity of highly skilled manpower necessary to generate internal revenues in Nsukka local government council and its rural development problems; and (3) whether poor auditing and monitoring of rural development projects contribute to the internally generated revenues and rural development problems of Nsukka local government council. These have however, provided a new theoretical framework under which the problems associated with internally generated revenues and grassroots development in Enugu state and Nsukka local government council could be explained and analyzed. In addition, the study will enrich the existing stock of scholarly literature on internally generated revenues and grassroots development in Enugu state through its major findings and therefore, will serve as a source of references material or data for scholars whose interest would eventually be aroused by this study to undertake further studies in the area.

At the practical level, this study will be of interest and immense importance to Nigerian government, Enugu state and local government scholars interested in the problems militating against internally generated revenues and grassroots development in Enugu state and Nsukka local government council in particular. The issues discussed will not only enhance the understanding of local government internally generated revenues and grassroots development problems in Nigeria but will provide valuable information/data that will assist

local government scholars and law makers in articulating potent policies that will help to address the problems.

Scope of the Study

The scope of this study shall be limited to the exploration of local government internally generated revenues and grassroots development in Nigeria generally and Nsukka local government council of Enugu state in particular since 1999. To this end, Nsukka local government council remains the population of study, but through sampling techniques, our sample size were selected. The sample size constitutes both literate and semi-literate of the local government staff. However, data for this study are limited to primary sources such as questionnaires and interviews. Moreover, some references were drawn from secondary sources such as Nsukka local government council financial books and documents, journal articles, textbooks, commentaries in newspapers/magazines and research studies.

In addition, some limitations have been identified in this study. First, this study is limited by paucity of fund and time allocation. In no doubt, the quality of scientific research like this study is always the function of the available resources and time allocation. Thus, the time allocation and non availability of fund actually contribute a very big constraint to this study. Again, bias on the side of the respondents can equally not be over emphasized. The validity of this study is affected by the responding bias attitude in responding to the questionnaire and interviews. Fi


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