Abstract

Local governments occupy a position of importance in the lives of their residents. This is because

local governments are saddled with the responsibilities of providing essential public goods and

services which have positive impact and directly affect the day-to-day lives of their inhabitants.

Such services include; protection of people‟s lives and properties, establishment and

maintenance of schools, health centers, markets, cemeteries, construction of feeder roads and

drainage. These statutory functions would not be achieved without adequate fund. In order to

finance these primary responsibilities local governments in Nigeria have two sources of revenue,

namely, internal and external sources. However, internally generated revenue of local

governments in Nigeria is very low and the 1985 federal government committee on the review of

local government administration in Nigeria rec