THE PROBLEMS OF EFFECTIVE UTILIZATION OF REVENUE AVAILABLE TO LOCAL

GOVERNMENTS IN NIGERIA

(A CASE STUDY OF ANINRI LOCAL GOVERNMENT AREA OF ENUGU STATE)

ABSTRACT
When the researcher chose this topic: THE PROBLEMS OF EFFECTIVE UTILIZATION OF
REVENUE AVAILABLE TO LOCAL GOVERNMENT, she was inspired by the high rate of
embezzlement, poor leadership, low rate of accountability, general laxity of the finance
department and corruption in Nigeria Local Government, and Aninri Local Government in
particular. To do this, the researcher developed four (4) Questions. This questions were
administered inform of questionnaires to 195 staff who were selected as a sample of the
population. Apart from this, secondary data were used. In organizing and presenting data
collected, tables and percentages were used as well. The data analysis revealed that
ineffective utilization of revenue in the local government had created a negative impact
in Aninri Local Government Area. The researcher therefore recommended that the
revenue available to local government should be handled by honest and accountable
personnel, those who posses sound knowledge about revenue generation and utilization.
The outcome would be an effective and efficient management and utilization of local
government revenue in such a way that would deliver the needed development.

TABLE OF CONTENTS
Title Page
Approval Page
Dedication
Acknowledgment
Abstract
Table of Content
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Purpose of the Study
1.4 Significance of the Study
1.5 Delimitation/Limitation of the study
1.6 Research Questions
1.7 Definition of Terms
References

CHAPTER TWO
2.1 Theoretical frame work
2.2 Brief History of Aninri Local government
2.3 Functions of Local Government Councils
2.4 Sources of Revenue to Local Governments In Nigeria
2.5 Summary of Aninri Local Government recurrent revenue and expenditure

2.6 The problem of effective utilization of Revenue of Local Government

2.7 The impact of the problems of effective utilization of revenue available to local
government
2.8 Solutions/way forward to the problems of effective revenue utilizations
References
CHAPTER THREE
3.1 Research Design and Methodology
3.2 Sources of data
3.3 Area/location of Study
3.4 Population of the Study

1
3.5 Sample and Sampling Techniques
3.6 Establishing the validity of the instruments
3.7 Establishing the reliability of the instruments
3.8 Method of data analysis
CHAPTER FOUR
4.1 Data presentation and analysis
CHAPTER FIVE
5.0 Summary, Conclusion and Recommendations
5.1 Summary of Findings
5.2 Recommendations
5.3 Conclusion
Bibliography
Appendixes
CHAPTER ONE
1.1 BACK GROUND OF THE STUDY
Nigeria as a sovereign nation operates a federal system of government i.e the
federal government, state government and the local government councils.
Onwo (1992) Observed that each level of the three tiers of government derive its
powers not from the magnanimity of the central government but from the constitution;
each level of government has defined responsibilities assigned to it by the constitution.
The implication of this is that the three segments of governments are mutually
interrelated in a unified effort to make life worth – while for the masses.
Aninri local government area was created out of Awgu local government in
October 1996 by the late head of state General Sani Abacha. As one of the new local
government councils, it is facing a very serious crisis of development since its creation.
Some problems facing the council include: insufficient office accommodation, staff
quarters and office infrastructures. These problems seem to be insurmountable.
Indigenes of the local government are desirous of enjoying modern facilities,
improved means of transportation, such as good road network and mass transit transport
services. These desires are in line with stated objectives of the local government such as
construction and maintenance of roads, provision of health services such as maternity
homes, health centers, sanitization, provision of primary education and many others – as
sponsored by the federal military government. The federation (Nigeria) years book of
1983, outlined the aims of the local government system in the country. According to that
document, one of the cardinal aims of the local government system is to make
appropriate services and development activities, responses to local wishes and needs by
delegating authority to local representative bodies.
The citizens expect the council to excel in developmental activities. They would
like to please the community or communities in the local government area through the
provision of functional feeder roads and public utilizations.
The council administration in the other hand complains of inadequate finance to
meet up with the numerous responsibilities yearning for attention. According to the
guidelines for local government reforms or 1976, “it must be recognized that if
meaningful local government is to be expected in Nigeria, much larger financial
resources are needed” they also complain that staff salaries alone drain a high
percentage of the monthly allocation. Financial experts postulates that money is at the
center of developmental projects. Acquisition and proper accountability of funs are the
pivot upon revolves. Adedeji (1979) capped it all when he declared that the success or
failure and the effectiveness and ineffectiveness of local government depend on the
financial resources available to the individual local government and the way these
resources are utilized.
From the foregoing, it seems that an empirical study into the revenue base of the
local government system at this harsh economic period is not only useful but very vital.
It is therefore against this background that this project work is being undertaken
with a view to discovering the problems of Effective Utilization of Revenue Available to

2
Local Governments with particular reference to Aninri local government area of Enugu
state.

1 .2 STATEMENT OF THE PROBLEM

The relevance of the local government councils as the government at the
grassroot level is measured by the quality and quantity services rendered to the rural
dwellers.
For the council to render meaningful services, in form of provision of basic
amenities, construction and maintenance of roads, creation of employment opportunities
for the citizens and pay staff salaries as and when due, money is undoubtedly required.
Without the availability of revenue, a local government council will not only be
incapable of serving the people but will undoubtedly crumble. It therefore, follows that
for the local government to discharge its statutory functions effectively, it should not only
be adequately funded but such fund should be efficiently applied.
1. One of the fundamental problems in local government financial administration is
the issue of Effective Utilization of Revenue Available to the Local Government.
Aninri local government council may have tits unique problems that militate
against its financial administration.
2. The problem of delay in payment of federal/state government grants to the local
authorities.
3. The problems of accountability in the local government council.
4. Another problem is that of ineffective financial control and management both
internally and externally.
5. Fifthly, the problem of financial mismanagement and embezzlement of available
funds in local government council.
Finally, the problem of corruption as stated by Oluwale (2000) militate against the
utilization of local government revenue.
1.3 PURPOSE OF THE STUDY
The central focus of the study is to critically analyze the problems of effective
utilization of revenue available to Aninri local government area as a case study.
1. The study is meant to identity the major revenue sources available to local
government .
2. To ascertain the problems that confront the council’s administration in utilizing
revenue for their services.
3. To find out whether or not the revenue is adequate for the council’s expenditure.
4. To investigate the system of financial control in the local government council.
1.4 SIGNIFICANCE OF THE STUDY
The significance of any human endeavour is measured by its relevance to solving
human problems. Therefore, the significance of the study is measure by its relevance to
solving the problems of effective utilization of revenue available to local governments in
Nigeria.
The project will be of benefit, first and foremost to the Aninri Local Government
administration, as it will expose to them potential sources of generating of revenue
internally.
Secondarily, it will help the council to strengthen its financial bases as this study
would highlight some identified problem hampering the utilization of revenue in the
council.
Thirdly, it will also be useful to the indigenes of Aninri local government to co-
operate with local council administrators to enable them build a viable local government
by paying their taxes and rates promptly.
Fourthly, the project will be useful to various institutions especially Caritas
University, for gaining greater knowledge and understanding of the problems of effective
utilization of revenue available to local government.

3
 Finally, the project will be useful to the general public, organizations, companies
etc that may have interest in the project.
1.5 LIMITATIONS OF THE STUDY
i. Delimitations (scope) of the study: This is centered on the problems of
effective utilization of revenue available to local government in Nigeria but due to the
wide or vast nature of Nigeria, the researcher now chose Aninri local government as a
case study to deal with this particular problems in other local government in Nigeria.
The study is also centered on the sources of revenue available to local
government both the internal and external sources of revenue.
ii. Limitations (constraints) of the study: In the effort of carrying out this
research bathe researcher was faced with the problem of time, finance and visitation of
Aninri Local Government, the case study of the research work.
The researcher being a student, found it difficult to get exeat out of the school
premises and the time frame given was so limited in carrying out the research work.
Also, the distribution and collection of the questionnaire to the staff of Aninri Local
Government was not easy for the researcher as the respondents were not always
available.
The study was carried out under a lot of constraints. The class work and financial
constraints were other limitations which made it uneasy for the materials to be ready
available at the appropriate time.
1.6 RESEARCH QUESTIONS
In the effort of carrying out this research, the following questions were
formulated:
1. Are you aware of the constitutional provision of revenue sources to the tiers of
government in Nigeria?
2. By what means has Aninri Local government planned the expenditure of available
revenue?
3. What systems of financial control measures are used by council administrators?
4. Has the utilization of the Revenue Available to Aninri Local Government produced
positive or negative effects?
1.7 DEFINITION OF TERMS
Some concepts and terms required proper explanation or definition to enhance
our understanding of the theme where necessary opinions of scholars will be cited to
illustrate the terms.
Democracy
The Ancient Greeks defined democracy as a government of the people, by the
people and for the people. This political arrangement allowed every adult male citizen to
participate in government activities.
Dare (1981) Postulated that modern democracy is a system of government which
gives to individual maximum freedom and periodical opportunities to choose their leader
and programmes. Multiple party-systems are a vital characteristic of a democratic
government.
Pragmatism
The term pragmatism is derived from the Greek from which practical action arise.
It could simply be referred to as philosophy or practical consequences or result
orientedness. In our context, it is used to describe political programmes aimed at
betternece living standard of the masses.
Rural Development
Rural development is a strategy designed to improve the socio-economic life of
the rural dwellers. It involves extending the benefits of development to the less
privileged in the society. When applied to local government councils as a third tier of
government, in the county, it means conscious efforts by the government, to carry
government programmes to the village level. In so doing, deliberate actions are initiated
to improve the rural population.
Accountability

4
 Owing to the fact that local government provides local services like sanitation,
education, transportation etc to the people of the area, it is logical that it is accountable
to the local people within its area of jurisdiction.
This principle of accountability is better ensured by making local government or
local government bodies elective institutions. If they function below expectation, they
may be criticized by the people or voted out during the next elections.
Absence of local accountability may make them indifferent and insensitive to the
need, feelings and aspirations of the local people.
REFERENCES
Ugoo, E. A. (2007) Local Government Administration in Nigeria. issues and practice.
Enugu: Fourth dimension publishers.
Ani, O. W. (2009) Local Government Finance. Enugu. Fourth dimension publishers
Okoli, E. (2005) Theory and Practice of local Government. Enugu: John Jacob’s classic
publishers.
Owo, O. (1992) Local Government in Nigeria. Enugu: Fourth dimension publication.

CHAPTER TWO
LITERATURE REVIEW

2.0 THEORETICAL FOUNDATION OF THE STUDY

This research work employs the principle of responsibility popularly associated
with Kautilya. He also prescribes the principle of responsibility not only for the king but
also for the government officers. To quote the famous dictum in Arthasastra “in the
happiness of his subjects lies his happiness, in their welfare his welfare, the king is, as it
were, the aggregate of the people.
According to Okoli (2002) the management of revenue constitutes the most
crucial and central components in the management process of the local government.
Furthermore, Chime (1998) said for the local government to function effectively in
Nigeria, the revenue allocation formula should be changed. Large percentage of the
revenues allocation should go to the local government in order to enhance grass root
development. The percentage should be changed from 20% to about 30% to allow for the
development of rural areas which would prevent rural shift to urban centers.
From the above principle, it indicates that the superior should not be guided by his
personal self-interest, he has to demonstrate a genuine concern for the subordinates.
Thus, human relations should be guided by “what is dear to the subordinates” rather
than “w hat is dear to the boss”
2.1 BRIEF HISTORY OF ANINRI LOCAL GOVERNMENT AREA
Local government administration is one of the efforts of the federal government of
Nigeria to bring government influence to the rural dwellers.
Aninri Local Government Area of Enugu State is one of the Seven Hundred and
Seventy Four (774) Local Government Areas in Nigeria. The Headquarters of the local
government is situated at Nedeaboh.
According to Achikanu (2001) the entity now designated Aninri Local Government,
created in 1996 was formerly known as Egbo Etiti clan.
The Egbo Etiti clan is one of the four clans that constituted the former Awgu
Division or Local Government council. The others are Mbanabo, Mbanano and Enugu.
Achikanu reiterated that it was in 1981 that the name Aninri was adopted for the
envisaged now local government by a resolution of an assembly of leaders and people of
the clan summon to plan strategies for realizing the dream of the separate local
administration for the clan.
Ndukwe (2000) pointed out that Egbo-Etiti zone, which is now called Aninri is
made up of five communities. These are Ndeaboh, Nenwe, Mpu, Oduma and Okapnku.
Agreeing with the view of Achikanu (2001) Ndukwe maintained that it was on first
October 1996, that the former first Etiti in Awgu Local government was given the Aninri

5
Local government as a separate political entity. The council was created by the then
Nigeria Head of state general Sani Abacha .
The fertility of the soil is said to be a major asset of the people since their main
occupation is farming, Achikanu, stressed that the Area produced large quantities of food
stuff and crops and hence has been identified as the food basket of Enugu State.
Since, the creation of Aninri Local Government, some fourteen years ago, and the
council has not fully experience a rapid positive transformation.
2.2 FUNCTIONS OF THE LOCAL GOVERNMENT COUNCILS
The local government constitutes the third tier of government in the country. It is
in partnership with the federal and state government in making live worth living for the
people in the rural areas.
According to the Nigeria year book of 1981, it is believed that local government is
fundamental to building a stable government not just at the state but also at the federal
level through representative councils established by law, the councils exercise, specific
responsibilities within defined areas.
Udonsi (1978) states among other things that the local governments have wide
statutory powers to enable them discharge their functions effectively. He said that the
functions are discharged through the headship of different departments and supervisory
councilors.
The main functions of the local government are set forth in the 4th section 7 of
the constitution of the federal republic of Nigeria 1999. Local government functions are
broken down into three (3) major broad categories:- Law and order functions, mandatory
functions and permissive functions.
a. Law and order functions
Local government maintain law and order in their domain by:
i. Reporting any act that is likely to result in breach of peace to the
community.
ii. Prevention of breach of peace.
b. Mandatory functions
There are the functions that are exclusively preserved for local government and
they include:
i. Provision of market, motor parks and their subsequence maintenance.
ii. Construction of local roads within its area of jurisdiction
iii. Provision of facilities for general sanitation and also provision of
sanitary inspection and refuse disposal, night oil disposal where applicable.
iv. Provision for the control of viruses. That is any insect that gives
unpleasant biting or any of small animal or bird the destroy crops.
v. Construction and maintenance of public conveniences like slaughter
houses, slabs, cemeteries, community and reaction centers.
vi. Provision and maintenance of packs, gardens, open spaces and gazing
grounds.
vii. Licensing, supervision and regulation of eating houses and laundries
viii. Licensing, regulation and control of the sale of liquor.
ix. Licensing and regulation of bicycles, handcarts, and other types of
vehicles other than those mechanically propelled and canoed.
x. Control and keeping of animals.
xi. Control of hoarding.
xii. Control of land held under customary tenure.
xiii. Naming of roads and streets and the number of lots and buildings.
xiv. Control and collection of revenue from private forest estates.
xv. Collection of vehicles par charges.
xvi. Collection of community tax, property and other rates, death duties
etc.

6
c. Permissive functions
These are functions specifically meant for local governments but, where the fund
for such functions is not available, state or federal government can perform such jobs.
They include:
i. Provision and management of nursery, primary and adult education.
ii. Information and public enlightenment is done by local governments through
their designated councilors. This could be done through rallies and public
gatherings organized by local government.
iii. Health centers, maternity centers, dispensaries and health clinics, ambulance
services, leprosy centers, prevention health services, abattoirs and neat
inspection.
iv. Provision of scholarships and bursaries. This aspect is the most neglected local
governments or authorities.
v. Provision of public libraries and reaching rooms.
vi. Agricultural extension, animals, health extension, extension services and
veterinary clinics.
vii. Rural and semi—urban water supply.
viii. Fire services
ix. Provision of roads and streets (except truck roads), their lighting and
drainages.
x. Control of beggars, prostitutions and repatriation of destitute.
xi. Control of water and atmospheric pollution
xii. Provision of commercial undertakings.
xiii. Regulation and control of building.
xiv. Town and country planning.
Local government have the permissive function in the hands of the federal and
state governments. Their impact has not been seriously felt in the area.
2.3 SOURCES OF REVENUE TO LOCAL GOVERNMENT
to strengthen the local government administration, sources of revenue are open
to them. However, Oguma (1996) posited that generally, the local government has eight
main sources of revenue which include:
a. Stationary allocation
b. Rates
c. Grants
d. Fees and charges
e. Fines
f. Earnings and profits
g. Loans and miscellaneous sources.
According to the 1976 government reform, local government councils derived
their income from two main sources namely:
i. External and
ii. Internal sources
1. THE EXTERNAL SOURCES
The external sources are made up of the state grants which stands at 10% (ten
percent) of internally generated state revenue and the federal government which stands
at 20% (twenty percent) of distributable pool account. These make up the statutory
allocation to the local government finance.
Other sources of revenue includes:
a. Grants – block and specific from the central government. Block grant is the
usually monthly grant while specific grants is for specific project
b. Grant from state government
c. Loans to carryout special projects
d. Value added tax revenue (VAT)
2. INTERNAL SOURCES
The internal sources are as follows:

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a. Rate tenement, penalty for tenement state, state government grants in lien of
tenement rate etc.
b. Licenses, fees and fines
Obstruction fines, bicycles licenses, dog licenses, wheel barrow licenses, liquor
licence, vehicles emblem, motorcycle tollage etc.
c. Food control: slaughter and abattoir fees. Bake house licence, meat, fish, cold
room and butchers licence fees etc.
d. Social: Marriage registration fees, town union/organization, age grade
registration fees, cinematography, naming/registration of streets, temporal
booth permit, mobile open air preaching, betters minstrel fees etc.
e. Health: Registration/dislodging of septic/depot licence, improvement of stray
animals/registration fees, pest control and disinfectant fees, reinstitution of
births/deaths burial fees, dispensary/maternity fees, laboratory test fees,
environmental sanitation services fees.
f. Economic: Registration of contractors, petty traders permits, small-scale
industries permit, mechanic, welding, electricians permits etc.
g. Works/Engineering Survey: workshop receipts, hair charges, survey fees,
approval of building plans, mortgage/sub-lease approval fees, customary right
of occupancy fees and commission on transfer of plots.
h. Commercial undertaking: motor park fees, market fees, transport/mass
transits services, rent on local government properties.

2.4 SUMMARY OF ANINRI LOCAL GOVERNMENT RECURRENT

REVENUE AND EXPENDITURE
Table 2.4.1

8
Details of Actual Actual Estimated Actual Estimated
revenue revenue revenue 2007 revenue revenue revenue
(2006) 2008 2008 2009
Taxes 179050 600,000 830,000 615,000 850,000
Licence fees and
fines 881,481 140,500 1,621,000 1,377,475 2,087,000
Earnings from
industrial
undertaking 224,700 555,410 750,000 618,225 850,000
Rent on local
government
property - - - - -
Interest
payment and - - - - -
dividends
Grants - - - - 400,000,000
Miscellaneous 812,700 1,100,054 380,000 430,880 650,000
Statutory
allocation from
federation
account 410,500,425 520,125,315 560,000,000 629,908,000 700,000,000

State allocation - - 24,000,000 - 240,000,000

Vat 36.000,000 135,235,482 156,000,000 153,214,000 160,000,000
Total 446,500,425 655,423,797 740,000,000 783,122,000 884,000,000
Grant total 448,598,362 659,078761 743861000 786213580 1288537000

9
 Source: Estimate of Aninri Local government financial statement

SUMMARY OF ANINRI LOCAL GOVERNMENT RECURRENT

Table 2.4.2
Department Establishment Personnel cost Overhead cost Total
2008 2009
Chairman 29 38 35411163 41140000 76551163
Secretary 1 1 1945825 3750000 5695825
Legislators 10 10 15352204 9600000 24952204
Personnel 180 200 34768087 10400000 45168087
management
Finance and 78 86 22833870 2900000 25733870
supplies
Education 23 14 3356618 1685000 5047618
Health and 61 66
medical services
Agriculture and
natural resources 26 26
Works and housing
60 60
Miscellaneous - - - - -
Contribution to
local government
fund - - - -
-

Transfer to reserve - - - -
fund
Total recurrent
expenditure
468 504 160950359 9242500 253375359

10
Source: Estimate of Aninri Local government financial statement
2.5 THE PROBLEMS OF EFFECTIVE UTILIZATION OF REVENUE OF LOCAL
GOVERNMENT
Local government enjoy an improved revenue from 1976 till date, particularly
Aninri local government. Thus was achieved through increased revenue accruing to local
government. Despite this, Aninri local government still suffers some problems in its
revenue utilization.
According to the annual budge report (2008) of Aninri local government, the
estimated revenue of the local government was N1,288,537,000 actual revenue was
#786,213,580 and the total recurrent expenditure was N253,375,359. to be able to
determine if local government revenue are utilized effectively the income and
expenditure of the local government can be a good technique.
Olawale (2002) Posited that another problems which accounts for effective
revenue utilization is corruption. There exists high level of corruption in the local
government system. The internally generated revenue (IGR) of the local government are
kept as top secret. The leadership in most of the local governments are corrupt. The
revenue is there for them to carryout their functions but because corruption has become
something very common to them, hence they do otherwise. In some cases, the duty of
the leadership is to share their monthly allocation and own their staff salary. It is
unfortunate to observe that several local government were dissolve between 1978 and
1979 in more than half of the then nineteen states of the federation on the grounds of
official corruption.
According to Achikanu (2002) he noted that 99% local government areas are
known for farming as their major occupation, Aninri local government is not exempted.
Being the only means in which they earn a living, the local government has failed to
construct good roads, farm inputs, improved seeds and conducts seminars through
extension workers from their annual budget (2008) it is believed that budget were made
for the local government to construct good roads for easy transportation of their farm
produce, especially the central road between Nenwe, Oduma and Ndeaboh.

Table 2.5.1 EXPENDITURES IN THE AGRICULTURAL DEPARTMENT OF ANINRI LOCAL

GOVERNMENT

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Head Details of Expenditure Approved Approved Approved
Estimate Expenditure Expenditure
2008
A 4001 – agriculture and rural
development
1 Establishment local government
model farm
500,000

4,000,000

1.2 Land scaping and

erosion control within the
secretariat

500000

1.3 Procurement of fertilizer 2000000 200000

1.4 Procurement of agricultural tools

and equipment
1,000,000 1,000,000

1.5 Establishment of palm plantation

at the following wards:

I Amorji Nenwe Ward I 125000 -

II Agbada Nenwe Ward II 125000 -

III Uhueze/Emudo Ward III 125000 -

IV Ndeaboh Ward 125000 125000

V Amanasata Oduma Ward I 125000

VI Amanasata Oduma Ward II 125000 125000

VII Ezinesi Oduma Ward III 125000 125000

VIII Ohafia Oduma Ward IV 125000

IX Mpu Ward 125000 125000

X Okpanku ward 125000

Total 8750000

1.6 Agricultural show/ Aninri 500000 250000

cultural day

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 Grand total 9,250,000 2,305,000

Source: Estimate of Aninri Local government summary of recurrent expenditure

From the above table, it is important to note that the gap between the income
and expenditure in (Head 4001) agricultural and rural development of Aninri Local
government is not portraying effective revenue utilization. It is also pertinent to point out
the fact that the issue of fund as far as Local government is concerned is not only that of
revenue problem, it is also concerned with effective utilization or management (Bello
2003).
Agricultural sector in Aninri Local government is still backward compared to the
revenue provided for its development. During rainy season, most of the farmers find it
very difficult to visit their farms due to flood but the Local government has done nothing
about it. If a large amount of revenue is remitted and then misappropriated by handful of
Local government officials, a negative impact will be felt.
According to Aborisade (2004:4) finance is a thread that runs round the cloth, if
the thread is pulled wrongly at one end, it will affect the design of the cloth and destroy
its beauty. No Local government no matter how well endowed with resources can
function effectively without prudent management of the revenue or funds available to
them. Information obtained during the launching of the model financial memoranda
indicates that the problems of the (FM) Financial notwithstanding Local government chief
executives deliberately constitute obstacles to the efficient functioning of Local
government by insisting on the use of their seal before cheques are honoured by banks.
In addition, they raise funds from the Local government coffer without going through the
normal process. These actions do not augur well for efficient and effective functioning of
Local governments. The dishonesty of revenue collectors who print fake receipts and use
them to misappropriate the councils revenue into personal purse also contributes to the
dividing of Local government council’s revenue.
EXPENDITURE IN AGRICULTURAL DEPARTMENT OF ANINRI LOCAL GOVERNMENT
Table 2.5.2:
HEAD 4006 RURAL ELECTRIFICATION 2008
Provision of rural Estimate Approved Actual
electrification at: 2008 Estimate Expenditure
A Okpanku 1,000,000 1,000,000 750,000
B Mpu 1,000,000 1,200,000 1,000,000
C Ndeaboh 500,000 200,000 -

13
1D
0
0
0
0
0
0
1
,
0
0
0
,
0
0
0
1
,
2
0
0
,
0
0
0

NE Oduma 500,000 - -
e
n
w
e

14
 Total head 4006 4,000,000 3,400,000 2,950000
Source: Estimates of Aninri local government capital expenditure 2008.
The above shows the rural electrification expenditure of Aninri local government
area. The estimate made was above their available revenue and the expenditure made
was below their fund, which shows that the revenue was not well utilized to reach their
objectives.
To widen the gap between the grassroot government and the people, it is local
government inability to extend service especially electricity beyond the Headquarter
(Chukwu Emeka 2000) in most cases, like in Aninri local government. Even with all these
revenue provided for electrification, in Aninri local government, electricity is hardly
provided people or indigenes are in darkness for days, weeks and months. Even when it
comes, it epileptic and erratic. Small scale business like business centers are temporarily
closed down or at best operate at very low capacity because of poor supply of electricity.
EXPENDITURE IN HEATH DEPARTMENT OF ANINRI LOCAL GOVERNMENT
Table 5.5.3 HEAD 4010 HEALTH 2009
Erection of health clinic at: Estimate 2009 Provision of estimate 2009
B Amorji Nenwe Ward I 700000 1200000
C Agbada Nenwe Ward II 50000 50000
D Uhueze/Emudo Ward III 300000 400000
E Ndeaboh Ward 300000 400000
000
G Amanasata Oduma Ward II 100000 100000
H Ezinesi Oduma Ward III 200000 250000
I Ohafia Oduma Ward IV 400000 250000
JMpu Ward400000400000KOkpanku ward 200000200000Total head
40101314400014,250,000Source: Estimate of Aninri Local Government 2009.
Looking at the estimate and provision of revenue for health development above, it
is noticed there is almost a balance between the estimate made and the fund given. In
this table, one can ay there is no misappropriation of revenue or fund. According to Ajayi
(2000( grassroot development remains insignificant if it does not positively affect the
living standard of those in the periphery of decision making arrangement.
Local Governments in Nigeria especially in Aninri Local Government Area seem
not to have justified the reasons for which they were established.
From the table above, the Local Government council of Aninri Local Government
Area claim to have performed effectively and have utilized the revenue meant for health
development but the indigenes are not comfortable with it, because they are still visiting
their ancient hospitals. There is inadequate clinics and most of the women of Aninri
seldom go for their anti-natal care, and for this reason they experience pregnancy
complications at delivery. In the area of Aninri, lot of people still dies due to diseases that
have not been discovered like hepatitis, HIV/AIDS.
The table above also shows that ten clinics were erected, but from the
researcher’s observation and enquiry, Aninri has just four health center which were
equipped with the essential medical facilities part-time doctors and nurses who are
unskilled. Added to this, is the high const of medial treatment which has driven many to
resort to other local or native treatment in the comfort of their houses. And yet, the table
that a lot of money has been expended on the health centers
EXPENDITURE IN WATER RESOURCES AND SUPPLY DEPARTMENT OF ANINRI LOCAL
GOVERNMENT
TABLE 2.5.4 HEAD 4012 WATER RESOURCES AND SUPPLY
Collection of tap-water scheme to Nenwe and Estimate 2008 Provision
Ndeaboh communities
5,000,000 5,000,000
Total head 4012 5,000,000 5,000,000

15
Source: Estimate of Aninri Local Government
As the table above shows Aninri Local Government claimed to have connected to
tap water in the localities i.e Ndeaboh and Nenwe thereby bringing relief to its citizens
who can now freely have access to clean water. Onwuba observed in the daily star 2004:
Nov. 18) that although the Local Government of Aninri succeeded in putting in place the
infrastructures but fie to regular succession of management, there was no proper
maintenance of the facilities which has led to breakdown of all the bore holes except one
i.e Ndeabph area which other villages patronized. He went on to say that because of
excessive population of the people waiting for clean water at one borehole, many villages
resorted to their rivers and streams regardless of how unpleasant or dirty the water
might be and the consequences of unclean water have led to a lot of indigence to incur
diseases of different kind e.g guinea worm, cholera etc.
Reaching to the problem of effective utilization of revenue of the Local
Government, Bellow (2004) expressed regret, that inspite of far-reacting and
revolutionary policies aimed at making the Local Government functional, they have
continued to perform below expectations. He further noted that such non-performance
tends to contract the essence of the 1976 and 1988 government reforms.
Obasanjo (2005, June) president of Nigeria described the performance of Local
Governments as follows:
What we gave witnessed is the abysmal failure of the Local Government system.
It is on record that at not time in the history of the country has there been the current
level of funding accruing to local governments from the federation account, yet the hope
for rapid and sustained development has been a mirage as successive councils have
grossly under performed in almost all areas of their mandate. The guardian newspapers,
2005, June 19).
Another problem that affects utilization of local government revenue is the
problem of leadership (Okeke 2001). Today in Nigeria leadership is not based on merit
rather whom you know. By that we find out that many unqualified people find themselves
in leadership position who are there to do thing but they pocket the fund meant for
developments. These people have not cut agenda for the local government people
rather initiates ghost projects and siphon money into private bank accounts. Leadership
according to Nwatu (2000) is the ability for one to exert power or authority on the
follower, being that sub-ordinates would not willingly go about their task without being
directed or coerced to do so. He also stated that there are diverse styles through which a
leadership together with his sub-ordinates could achieve the goals of an organization.
Hence, Aninri local government has adopted democratic system of government which is
operational has been of nonchalance where government officials or civil servants are
controlled, directed, co-ordinated to performs the exact interest of the local government.
And because they are being allowed to contribute their initiate and ideas and given a
reasonable degree of freedom, and because it is employee oriented, the staffs tends to
take it for granted and performed irrelevant projects which is not the priority of the local
government thereby, boosting high the rate of corruption, embezzlement, electoral
rigging etc.

16
 Odofia (2009:25) in his report of unsuccessful progress in the local government,
he said that the reason for or why most of the local government today are not successful,
is as a result of their leaders as well as sub-ordinates working under them. He clearly
stated that when the head of bad, it contaminates the entire body and because the
leaders are not portraying good example for the followers, they go astray using the
finance, time, resources of the local government to perform their private business at the
detriment of the populace. The leaders does not care as he is only concern with how to
embezzle and bribe all those who are involved. So we find civil servants are mischievous
and determined to steal as much resources as they can lay their hands on and are
involved in favoritism, nepotism civil servants work with laxity and devote very little for
their time to government work, with their popular saying “government work is not my
father’s business”. Bad leadership has reined the local government sector as most of the
local government are sorry sights to be held with dilapidated areas.
Aninri local government is not exception to the areas suffering from poor
leadership, leaders who lack what it takes to influence, which lack vision, congruence,
stamina, intelligence and the rest. The major problem stems from the instilling of
competent and women who have not met the criteria in any way.
Most of the revenue officials, like market managers, valuation officers and host of
others lack professional training. The finance Department of most local governments are
not adequately staffed with well qualified and experienced financial managers,
accountants, auditors and property valuation officers who would apply skills and
initiatives to develop plans and strategies which would enable them harness and exploit
fully and effectively the revenue. The problem derives from two causes namely:
i. Inadequate skilled personnel at the middle and senior levels, especially in the
accounting and other professional sections.
ii. Desire for self-actualization or self – esteem outside official earning which are
usually realized through corrupt means in public office. It is now the latest in vogue
occupants of a particular political position to feel that a local government chairman, for
instance, should dress in a certain way or rude in a certain car etc. without addressing
the reality of what the office can guarantee vis-à-vis the monthly remuneration. It must
be stressed, however, that shortage of unskilled personnel as well as trained ones, itself
qualifies as a basic problem of local government towards efficient and effective utilization
of its revenue and performance of its roles. For instance, local government has not
especially Aninri local government, lived up to expectation in effectively competing with
the private sector organization and other sections in Nigeria (Asamolekun: 2002).

17
 Another problem is that of accounting. According to Olawu and Erero, that the
problem appears to be an endemic one for basic service delivering in local government
areas and has been argued to be the result of federal institutional arrangements where
local governments are overwhelmingly dependent on federal revenue transfer for the
discharge of their responsibilities. While some argued that the problems is lack of
adequate resources transfers to local governments to finance their e expenditure
responsibilities. While others ague that over dependence of local government on federal
transfers has undermined local accountability and created perverse incentives at the
local level to misallocate public resources. they argue that the pattern of evidence shows
that non-service delivery cannot be explained by lack of resources available to local
government. The problem is that of accountability at the local level in the use of public
resources or revenue transferred from the higher tiers of government, and about which
local citizens may not be well informed since they are not important. Local government
claim that deductions at source in essence lead to “Zero allocation” thereby preventing
them from carrying out any of their responsibilities for service delivery. According to the
World Bank, 2002, such uncertainty about resources actually available to local
government facilities local evasion of responsibility under the guise of fiscal
powerlessness. What local governments do receive as transfers is therefore sometimes
treated as the personal fiat of local politicians. Bahl argues that local government are
more accountable to citizens when relying on their own tax bases. By contrasts, they
would be less accountable when the pleasure of expenditure benefits is separated from
the pain of taxation. The weakness range from lack of control system for safeguarding
against abuse, misuse, fraud and irregularities to inefficient cash management, collusive
practices in procurement and weaknesses in internal control and audit.
According to Oluwa (2001) many local government do not produce information in
a timely manners for people to keep tack service delivery expenditure. Due to long
delays in conducting the audits and making results, the external audit is crippled as an
accountability mechanism.
One of the major problems of effective utilization of revenue at the local
government level is the inadequate information. Those responsible to not always posses
adequate knowledge of the total environment in which their local government operates.
This can only be achieved through adequate and accurate information by treasury
department as well as the auditor both internal and general; auditor. According to the
financial memorandum section (6) which states that the treasurer of the local
government is responsible informing the local government chairman about its financial
position, informing the auditor general about illegal and irregular payments made by any
officer as well as the chairman who is the head and has the final say in financial matters.
The financial statement and records in most of the local government are very scanty, ill-
kept and haphazard. In most cases, they are misplaced and sometime cost one finds in
some cases very conflicting figures of the same project contained in different files. This is
very serious. Where proper and systematic records maintenance is lacking, it would be
difficult for local government revenue to be effectively utilized and even manage their
projects effectively.
The duties of the treasurer as the head of finance department are as follows:
i. To ensure that there is strict compliance with the financial memorandum un the
treasury and other department.
ii. To ensure that all accounts and other records proscribed by the financial
memorandum to be kept by the treasury are properly maintained and kept up to
date.
iii. To ensures that accurate accounts are kept for monies received and disbursed, a
monthly check of the treasury cash book transactions is carried out by authorized
other than the cashier and a monthly bank reconciliation statement is prepared.
iv. To ensure safeguards, including the arrangement of duties on sound internal
check principles are laid down for protection against embezzlement or
irregularity.

18
 In most local government, we find out that the treasures are the neck to which
the head stands. The local government can not function well without the aid of the
treasury department (Ayika: 2002). The information given can play a vital role in
utilization local government revenue.
Another problem hindering the effective revenue utilization is the problem of
misplaced priority by the local government. The revenue allocates and generated local
government are always misplaced and mismanaged priorities are misplaced, projects are
done not according to or as demanded by the people by regrettably in tune with the
selfish leadership and aggrandizement of the political leadership in collaboration with the
senior bureaucrats at the local level administration.
According to Nwankwo (1999) that one of the reasons for establishment of local
government, is for the local governments to provide the basic needs of masses through
the federal and state government joint allocation. But most of the time, local government
carryout projects that are of no benefits to serve but rather, they tends to adopt the cut-
back strategy, even when the money is available. They spend more on the projects that
are less important to the people e.g. white elephant projects.
According to Amaikeheazi (2002) that apart from the complaints about adequate
of funds, the council also complained that even the promised funds are often not
released at the appropriate time. Late release of allocations either from the federation
account or the state grants also contribute problems to revenue utilization. There is thus
unholy alliance between the state government and the local councils. The federal
allocation account or the federal allocations to the local government are first deposited
into a particular adhoc account before calling for the committee meeting. Thus is a way
paves the way for the state government to plan for the local government and releases
the money in installments. The motive behind this is to divert the money to another thing
entirely which does nor have impact on he lives of the rural dwellers but that will be
beneficial to the state governor. Another thing is the interest that money will generate in
the bank. The implication of this, is that few of the local government chairmen who have
genuine intentions and are ready to perform are being discouraged. The overall effect of
this, is the negative impact it has in the people of the grassroots as they are getting
more and more alienated from development. Also illustrative and instructive is the arrest
and prosecution by the Economic and Finance Crime Commission (EFCC) of the former
Enugu state governor, Chimaroke Nnamani, on the allegation of diverting local
governments funds in the state. This shows the level of influence and control that the
state governors have over local governments in their respective states.
Finally, poor electoral body is another problem that constitute poor revenue
utilization. The electorates are not educated and enlightened of the dangers inherent in
money policies. They elect those who compromise their future and that of generation yet
unborn on the alter of election.
2.6 IMPACT OF THE PROBLEMS OF EFFECTIVE UTILIZATION OF REVENUE
According to Nwankwo (2001), the basic rational behind the creation of local
government is to meet the peculiar needs of the people at the grassroots, it is however
pathetic to note that the local government has demonstrated incompetence in regards to
its revenue utilization.
The resultance effect of the problems of revenue utilization is that some of this
local government end up in financial crises and are unable to tackle the challenges of
services delivery and mobilization of both human and material resources required for the
functioning and meaningful development of the local government areas. Therefore
underdevelopments continue to wage an as people are either ignorant of or indifferent to
the reasons for which local government are created.
As Onwujuba observed in the “Daily star” (2004:Nov; 18) because of excessive
population of the rural people wanting for one borehole, many villages resorted to their
rivers and streams regardless of how unpleasant or dirty the water might be and the
consequences of unclean water have led to lot of indigenes to incur disease of different
kinds e.g guinea worm, cholera etc.

19
 Chukwuemeka (2000) noted that due to the inadequate electrification of the local
government areas, the indigenes are left in darkness for days, weeks and months. Aninri
local government is not an exemption. This has led to the close down of some of the
small scale business and business centers.
The problems of effective utilization of revenue available to local government has
not created negative impact on the indigenes because their priority needs are not met,
thereby, making their standard of living low.
2.7 SOLUTIONS OR WAY FORWARD TO THE PROBLEMS OF EFFECTIVE
REVENUE UTILIZATION
For local government to utilize their revenue effectively, there are some certain
step which they need to adopt or take in their various local council.
Firstly, there is need for accountability of the local government. Accountability as
the ineluctable quest for control means that government revenue is often more devoted
to avoiding work out comes than to achieve the best one’s (Okereke:2004).
As Lucas [1999] has put it, accountability is a form of quality control of the local
government. We avoid the really bad but forego the really good. It is a price well worth
paying to avoid the great evil of mis- management of local government fund and mis-
government, but always, there will be some question whenever we are not faltering
discretion too much, and insuring too heavily, at the cost of making it possible for the
local government to discharge its commission . accountability of auditors both internal,
external and auditor –general, the council of the local government and various
department of the local government will go a long way in solving the problem or revenue
utilization in the local governments. It is their individual and join responsibilities to alert
the audit alarm committee before irregular and illegal payment are made, failure to do
so, will make them liable to appropriate share of punishment as provided under
guidelines.
The audit alarm committee was provided to make sure and prevent the chairman
of the local government who has the final say in all financial matter making any irregular
or illegal payment. The auditor general being the accounting officer, appointed by the
state government to check the financial position of the local government, has the power
to veto payment after he has been informed by his officers that the payment is illegal.
Based on that, audit alarm can be raised by informing the auditor –general of the local
government about the illegal payment to be made. Through there measures, local
government revenue can be well managed as well as preventing waste of revenue.
However, if our local government, Aninri local government in particular, should
take accountability measure or control in all the various department especially in the
treasury department effective utilization of revenue will come in place (Nwankwo 2002).
Another way forward to the problem of effective revenue utilization is the financial
and budgetary control (Eze 2000). The financial control according to him is based on the
old dictum that he who plays the piper dictates the tune. The money used by the local
government is supplied by central government and state government. It is also proper
for them to know how the money is being used. The case of joint account between the
state and local government as enunciated in 1999 constitution is an instrument of
financial control of local governments by the state government. This provision have
brought to question the whole philosophy of government as a third tier of government in
Nigeria.
Budgetary control is a very solid foundation for the control of all financial maters
of the local government. This budget contains and consist of all the envisage revenue
and expenditure of local government in a financial year . the treasure, the secretary and
the chairman in liaison with the finance and appropriation committee of the council are
responsible for control of the budget. The treasure ensure that each payment is covered
by a voncher daily signed by the secretary of the local government.
In the words Amecheta (2001) finance and general purpose committee control is
another body that helps in the control of financial management of the local government
as was contained in the Anabmra state local government Edict No. 9 1999. in summary,

20
financial and budgetary control is aimed art facilitating routines accountability in the part
of local governments and their staff. The objectives is to mains purity, effective utilization
in financial administration of the local government in Nigeria.
The principles of checks and balances is another measure by which local
government revenue can be utilized as stated by Axon and Jefferson (2009). Thus
principles of checks and balances means that power should be used to check power, that
no one arm of government should possess absolute power. “This is because power
corrupts and absolute power corrupts absolutely” That each of the three tiers of
government i.e the federal, state and local government should acts as a watchdog over
the other. In essence, the federal government should watch and control the state vis-a-
via from initiating bad policy or embezzlement of fund. That the budget of the local
government which contain the estimate made for the year, must past through the
ministry of planning and budget to the legislature, and must be approved by the
legislature. The state can control the local government through the appointment of the
auditor general of the local government. The state has acted as a check on the local
government.
The vote controllers of the local government is another body that can help in local
government financial prudence. The vote controllers must be responsible for his actions
and reactions. By responsibility, we do not means that a vote controller should not stand
in the way of development especially in a democratic dispensation that we currently
have on ground, where electorate are always eager to reap dividends as soon as
possible. The reasonability of a vote controller must be such that the votes must be
spent according to the exact purpose of the budgetary estimates except for some urgent
and highly compelling and genuine reasons. Through a vote controller, a great deal of
effective revenue utilization can be ensured. Unfortunately, all ages are always on the
chairman and other political as well as principal career officer, however, it is our
considered opinion that closer watch should be beamed on vote controllers for a better
clean bill of revenue prudence in local governments. (Oladoyin and Olaiya).
According to Ofoeze (2004) eradication of corruption in the local government as
well as corrupt – free personnel or officer in the local government will ensure effective
management of local government revenue. Indeed, as professor Achebe (1993) in his
book, “The trouble with Nigeria local government” as put it, “corruption has passed the
alarming stage and has entered the fatal stage, and Nigeria local government will dies if
it keep pretending that it is only slightly indisposed”. The local governments must allow
the virtues of democracy such as equity, equality, liberty, popular participation,
accountability, transparency, plurality of policy options etc. Nigeria local government,
Aninri local government is not exempted is sick from head to toe with corruption. What
we need now is how to make the present governments viable and more accountable and
reasonable too especially local electorates.
According to the chairman of the federal Island revenue service, Mrs. Ifueko
Omoigui Okauru, blamed the high rate of corruption at the local government on the on
the over dependence on oil revenue. According to her, revenue and its effective
utilization are critically important for the survival of the local government councils. She
said if only the local government could only look upwards to source of revenue through
tourism, and investment initiative, the temptation to wait for funds from the state and
federal allocations, only for it to be misappropriated would be minimally reduced.
There is need for the directors of finance of the local government to be corrupt
free because he is the local government chief accountant or chief account officer and in a
way the custodian of local government funds, he is the chief financial adviser to the
chairman of the local government, thus ensuing that the financial policies of the local
government are kept within bounds and limits. Arising from the foregoing, it is clear that
the directors of finance in all his capacities stated above can be seen as the chief
financial officer of the local government on whose shoulders, the efficient financial
management of the local government lies, and from whom explanation is expected for
any unconscionable and improper of local government revenue or finances. Other

21
personnels are not excluded especially the heads of various department (HODs) in the
local government, the councilor, etc as Okereke (2004) would note, that corruption is not
found in the local government, but among the personnels who operates in local
government. Although corruption can not be completely eradicated in the local
government councils, but should be minimized in a very high rate.
REFERENCES
Abubakar, H. (2002). Local Government Development in Nigeria. Ibadan: Longman
Press.

Achikanu, N. (2001). Local Government Administration in Nigeria. Enugu: Fourth

Dimension Publishers.

Adamolekun, O. (2004, Nov 18). “Embezzlement of Funds. Daily Times Editorial P. 18

Ajayi, K (2000). Rethinking Local Government Finance. AJPAS 22 (1) , 101-112

Amucheazi, E. (1999) Local Government Reforms and Mobilization for Rural

Development, Enugu: Fourth Dimension Publisher

Eze S. (2000) Theory and Practice of Local Government. Ado Ekiti, UNAD

Lucas D. C. (1999) Local Government in Nigeria. Ibadan, Dekaal Publishers

Ndukwe, J. (2002). Local Government in Nigeria. Benin: Denmark Press.

Nwankwo, (1999). New Local Government Boss Promises to Work Hard. Daily Star, P. 5

Ohiwa, F. (2001). Challenges Before Local Government Administrators. Democrat, 13(10)

P7

Okereke, O. (2001). O’Level Government Textbook for West Africa. Ibadan: Onibonge
Publishers.

Obasajo, O. (2005 June 19). Poor Administration of Local Government, World press, P. 4

Udonsi, J. (1978) Local Government Finance.Ibadan: Longman Press.

Ezema, M. 92000, July 4). Local Government Fame in Niger. Weekend Concord P. 17

Okore, F. (2002 September 18) New Local Government Boss Promises to Work Hard Daily
Star, P.5

Bello, A. C. (1998) Challenges Before Local Government Administrators. Enugu: Fourth

Dimension Publishers.

Ofoeze, J. (2004). Corrupt Local Government. Ibadan Longman Press

Lawal, E. (2010, June 12) Local Government Administration and Challenges of Rural
Development in Nigeria. Wordpress Newspaper P. 5-6.

CHAPTER THREE
3.1 RESEARCH DESIGN AND METHODOLOGY
Research design and methodology according to Cohen and Marion (1980) is
simply a plan that specifies how date should be collected and analyzed.

22
 In this sense, data is not just mere information, it is information gathered by
investigations with the aid of their instruments, techniques and the means. They are
clearly identifiable information collected under conditions that are precisely specified and
they have meaning only in relation to the particular problems being investigated.
Osondu (2004) defined research as the general approach executing the study. It
includes the specification of the types of design and followed in the study.
Research method has to do with methods adopted by the researcher to collect
data, which are relevant to the problem under consideration. The researcher of this
project made use of questionnaire.
Questionnaire according to Saliu (2004) is a common instrument of investigation
in a social science. The questionnaire is a sequence of questions designed to collect data
on a specific subject, usually from respondents. In some cases, the responders fill or
complete the questionnaire especially when dealing with literate respondents. However,
if the respondents are largely illiterate, the researcher or his agent completes the form.
3.2 SOURCE OF DATE COLLECTION
Data were collected from two main sources
1. Primary source of data
2. Secondary source of data
1. Primary Source of Data: Spiegel (1972) defined it as those collected first hand
information from original sources from the user’s express purpose. Such data are
usually obtained from the field through interviews, questionnaires, surveys, planned
experimental, observations or recording of official transaction
a. Questionnaire: This is a primary source of data collected and this formed the main
instrument of the research questions which were drawn bearing in mind the level
of education of majority of the workers or staff. Questions were designed in a
simple language as possible.
b. Personal interview: This is also another primary sources of data. Thus involved
conversation between the interviewers and the respondents, that is, face to face
interpersonal role, situation in which the interviewer asks the persons being
interview some questions. The researcher decided to use this instrument because
it is flexible in the sense that doubt can be cleared and cross – checking is
allowed. The researcher adopted a structured interview to help give qualitative
information that was not obtained from questionnaire. A few local government
staff were interviewed. Besides it being flexible, there would always be better
responses since the respondents could give information more willingly when
approached personally, it equally allowed for reliable information to be collected
to be collected due to its personal contact.
2. Secondary Source of Data: This are data obtained second hand from published or
recorded sources and used for a purpose different from that of the agency that
initially collected from the field. It could be gotten quickly and cheap compared with
data collected specially for the problem at hand. They include article, journals,
newspapers, note books etc.

3.3 AREA/LOCATION OF THE STUDY

Osundu (2004) said that area of study refers to the geographical location covered
by the study which is usually stated in teems of the country, state, education, political or
administrative zone local government area etc.
The researcher of this project made use of Aninri local government area of Enugu
state as suitable location for the study of the problems of effective utilization of Revenue
Available to local government in Nigeria.
3.4 POPULATION OF THE STUDY
Research population according to Osuala (2000( refers to the whole object for
which a sample is drawn.
The researcher of this peoject work used the total member of Aninri local
government staff, which has the population of 380.

23
POPULATION OF ANINRI LOCAL GOVERNMENT STAFF
Table 3.4.1
DEPARTMENT POPULATION %
A. ADMINISTRATION:
i. Senior staff 70 18.4
ii. Junior staff 30 8
B. FINANCE AND SUPPLIES
i. Senior staff 60 16
ii. Junior staff 28 7.3

24
25
26
ii. Junior staff 20 5.2
D WORKS AND HOUSING
i. Senior staff 36 9.4
ii. Junior staff 20 5.2
E EDUCATION AND COMMUNITY DEVELOPMENT
i. Senior staff 20 5.2
ii. Junior staff 15 4
F AGRICULTURE AND VETERINARY
i. Senior staff 15 4
ii.Junior staff123.1TOTAL380100 3.5 SAMPLE AND SAMPLING TECHNIQUES
Sample procedures is the method used in drawing sample from population which
gives a sample size for the study.
However, the Yaro Yamene formula was used by the researcher to determine the
sample size of the study formula:
= N______
1+N(e)2
n = Sample
N = Population
e = Limit of tolerance error
n = 380
1+380(0.5)2

n = 380
1+380 (0.0025)
n = 380
1+0.95
n = 380
1.95
n = 194.87179
n = 195 approximately
Sample size = 195

SAMPLE SIZE DISTRIBUTION

Table 3.5.1
DEPARTMENT % SAMPLE SIZE
A. ADMINISTRATION:
i. Senior staff 18.4 36
ii. Junior staff 8 16
B. FINANCE AND SUPPLIES
i. Senior staff 16 31
ii. Junior staff 7.3 14
C HEALTH
i. Senior staff 14.2 28
ii. Junior staff 5.2 10
D WORKS AND HOUSING
i. Senior staff 9.4 5
ii. Junior staff 5.2 10
E EDUCATION AND COMMUNITY DEVELOPMENT
i. Senior staff 5.2 10
ii. Junior staff 4 8
F AGRICULTURE AND VETERINARY
i. Senior staff 4 8
ii. Junior staff 3.1 6
Total 100 195

27
3.6 ESTABLISHING THE VALIDITY OF THE INSTRUMENT
Osondu (2004) defined validity as the procedure adopted in ensuring that the
instrument used had measured what it was designed to measure. It is very important to
establish and report one form of validity or the other for the instrument, so as to enhance
the strength of the work.
In order to establish the validity of the instrument ten of the local government
service commission staff were used for a pilot study. The questionnaires distribution were
scored they the way the researcher expected them to be scored. This showed the
researcher, that the group understood the instrument for what was intended and was
therefore valid.
3.7 ESTABLISHING THE RELIABILITY
Osondu (2004) said that reliability concerns the consistency with which an
instrument measures whatever it measures. The test and retest process is used to
establish the reliability of the instrument. This shows that the constructed questionnaires
were distributed at intervals more than once to the same group of persons, to discover
how consistence each element of the group is in the scoring of the instrument. Thus
shown by labeling the group from number one to ten. Corresponding to the given to the
reliable sample groups and distributed after 10 days, both first and second responses
were scored accurately and consistently. The researcher was satisfied that the
instrument was reliable because the responses from the group at different times
remained consistent.
3.8 METHOD OF DATA ANALYSIS
Frequency tables were used to analyze the collection of raw data. The raw data
were translated into percentage to enable the researcher draw reasonable conclusion
based on the information gathered.
Data analysis formula used
F x 100
N 1
F = frequency
N = Number of respondents
% = Percentage
REFERENCES
Cohen and Marrion (1980). Research methods in Education. United Kingdom: Croom
Helm.
Osuala, E. C (2005). Introduction to Research Methodology. Enugu: Africa – First
Publishers Limited (AFP) Academic Books.
Saliu (2004). A Guide on Research Proposal and Report Writing. Kwara: T. A Olayeri
Printers and Publishers.
CHAPTER FOUR
4.1 DATA PRESENTATION AND ANALYSIS
In this chapter, effort was made to present and analyze the facts gathered from
the respondents. The data presentation and description were guided by the researcher
questions, which were first stated, after which the data collected with regard to each of
the questions were descriptively analyzed in tabular form. One hundred and ninety five
(195) questionnaires were distributed to the respondents and one hundred and seventy
eight questionnaires were filled and returned. The researcher used the one hundred and
seventy eight (1978) questionnaires for her analysis. The researcher also used simple
percentage.
Research Question 1
Are you aware of the constitutional provision of revenue sources to the tiers of
government ion Nigeria?
Table I: Responses of the staff
Options Number of respondents Percentage (%)
Yes 178 100

28
 No 0 0.0
Total 178 100
From the above data, it is revealed that the total staffs of Aninri Local
Government were all aware of the constitutional provision of revenue sources to the tiers
of government in Nigeria. One hundred and seventy eight (178) of the respondents,
which represents 100% gave yes as their response while none of them answered No.
Secondly, the 178 respondents were able to identify the sources of revenue
available to local government, which they ticked to the internal and external sources of
revenue and thirdly, the respondents equally mentioned how Aninri Local Government
raises its internally generated revenue, which is through investments, taxes, fees and
fines on Local Government property, market toll licences fees, all these made up the
internally generated revenue of Aninri Local Government. Most of the respondent, under
the sub-question noted that due to the inadequacy of the internally generated revenue,
the council depended more on the federal and state allocation, grants from both the
state and federal government as well as Value Added Tax (VAT), which made up the
external revenue sources.
Research Question II
By what means has Aninri Local Government planned the expenditure of available
revenue?
Table II: Responses of the staff
Options Number of respondents Percentage (%)
A Budget/estimate 166 93
B Embezzlement 12 7
C None of the above 0 0.0
Total 178 100
From the table above, 166 respondents, representing 93% identified
budget/estimates to both the means adopted by Aninri local government council in
planning the expenditure available revenue while 12 respondents representing 7%
identified embezzlement to be the means. This is to say that budget estimate which have
the highest percentage, is the means used by the council to plan its expenditure but few
of the respondents still do not agree with that.
According to the sub-questions analyzed, the available revenue of Aninri local
government is adequate, though not up to the expected estimate. As the 12 respondents
identified that there is embezzlement of revenue in the council, that is, the reason why
the level of development in Aninri local government is unsatisfactory.
Research Question III
What system of financial control measures are used by the council administrator?
Table III: Responses of the staff
Options Number of respondents Percentage (%)
A Internal audit system 65 37
B External audit 33 18
C Annual financial record 30 17
D Budget 25 14
E Inter-departmental checking 25 14
system
Total 178 100
This research question was deigned to find out the financial control measures
mostly employed by the council administrators to enhance accountability on the part of
the those entrusted with the councils revenue.
The data collected revealed that 65 respondents or 37% identified internal audit
system as the measure used or adopted by the council administrator to control the
finance of the local governments. Thirty three (33) respondents, which represent 18%,
identified external audit system, 30 respondents of 17% identified annual finance record,
while equal number of respondents, that is 25 respondents identified budget and inter-

29
 departmental checking system to the financial control measures used by the council’s
administrators.
In conclusion, with the internal audit system as the financial control measure used
by the council and also being the option with the highest respondents and percentage,
the level of accountability from this measure was not satisfactory.
Research Question IV
Has the utilization of the revenue available to Aninri local government produced
positive or negative impact?
Table IV: Responses of the staff
Options Number of respondents Percentage (%)
A Positive impact 77 43
B Negative impact 101 57
Total 178 100

From the above table, 101 respondents which represented 57% identified that the
utilization of Aninri local government revenue has not produced positive impact while 77
respondents or 43% were of the view that positive impact was produced. With the level
development in Aninri local government, there has not been stong prudent utilization of
its revenue because of the general laxity on he part of the finance department.
In conclusion, the utilization of revenue available to Aninri local government has
produced negative impact on the people according to the above table.
To be able to know how the utilization of the revenue available to Aninri local
government produced negative impact on the people, the following question was
analyzed.
Question:
Which of the following projects have been embarked upon in accordance with the budget
of Aninri local government?
Options Number of respondents Percentage (%)
A Roads 0 0.0
B Agriculture 103 57
C Electricity 3 2
D Health 9 5
E Water 51 29
F Education 10 6
G Staff salary 2 1
Total 178 100

This question was designed to find out the projects embarked upon, in accordance
with the budget of Aninri local government. From the above table 103 or 57% identified
agriculture, 3 respondents identified water, 6% or 10 respondents went for education,
none of the respondents identified road and 2 respondents identified staff salary.
From the above analysis, it could be said that agriculture which has the highest
percentage of 57% is the project embarked upon with the budget of Aninri local
government. Although, agriculture is vital to the indigenes of Aninri local government,
but if the budget of the local government was not used to provide the basic needs of the
masses or embark on projects were more important to the people like roads, water,
electricity, staff salary, health and the rest, it would be taken to have created negative
impact on the people of Aninri local government.
In conclusion, it is believed that the utilization of revenue available to Aninri local
government has produced a negative impact because the number of respondents who
identified the pressing needs of the people was not encouraging.
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
In this chapter, efforts will be made to present the findings of this study, draw
some conclusions and finally make some necessary recommendations.
30
5.1 SUMMARY OF FINDINGS

31
 From the study, one could summarize that the problem of effective utilization of
revenue available to local government, in particular, Aninri local government as a case
study is not in the hands of the federal and state government, but in the hands of those
in the council especially those entrusted with the local government revenue.
On the problem that hinders the effective utilization of revenue available to local
government, it was deduced from the data collected that general laxity on the part of the
finance department top the list of the problem that hinders revenue utilization. In this
case, it means that the finance department to those entrusted with the revenue of the
local government are strict with the regulations when it comes to handling the local
revenue.
The collected and analyzed data revealed that the level of development on Aninri
local government is unsatisfactory, though the actual revenue is not up to the estimated
revenue, but the available revenue is not utilized to produce the basic amenities for the
indigenes of Aninri local government like good roads, electricity, pipe – bore water etc.
It was identified that the utilization of the revenue available to Aninri local
government produced negative impact on its indigenes. It has produced
underdevelopment in Aninri local government. There are no local industries where the
indigenes of Aninri can be gaily employed. Therefore, the standard of living of the people
of Aninri local government is very low.
According to the interview carried out by the researcher on one of the staff of
Aninri local government, he was of the views that, though the money is coming both the
statutory allocation and the internally generated revenue, but before the revenue gets to
the implementation stage, the revenue will be inadequate die to embezzlement of the
revenue by top officials.
Misplaced priority also hinders utilization of revenue of the local governments.
The revenue allocated and generated by local government are always misplaced and
mismanaged. As one of the findings of this study, priorities are misplaced projects are
done not according to or as demanded by the people.
The researcher also found out that lack of accountability constitute problem for
effective utilization of local government revenue, poor leadership, corruption, poor
electoral body at the local level, late release of fund from the state government and
inadequate skilled personnels. All these problems hinders effective utilization of revenue
available to local governments.

5.2 RECOMMENDATION
As a result of the findings of this research work, the researcher postulated that
without good leadership, corruption free personnel as well as the chairman,
accountability in every department of the local government, setting priority first, free and
fair election at the local level, there can never be prudent management of its revenue.
Therefore, in order to combat the problems of effective utilization of local
government revenue, so that intended development of Aninri local government is
enhanced and citizens enjoy modern items of development, the researcher
recommended the following:
i. Firstly, the electoral body at the local government area should carryout a free
and fair election. This will reduce the number of corrupt and unqualified
personnels in the local government.
ii. Secondly, the internal auditors to the council should be highly qualified senior
accounting staff to avoid being intimidated by other administrative officers of the
council.
iii. Thirdly, there should be an auditor general. Auditor general is very important
in local government, this is because the auditor general is a neutral person who is
appointed by the state government, and by so, he knows no one in the council,
and function without being partial.

32
iv. Fourthly, there should be checks and balances. This is because power corrupts
and absolute power corrupts absolutely. The three tiers of government should act
as a watchdog over the other.
v. Fifthly, an audit alarm committee should be established in the local
government so as to inform the auditor general when the chairman is making
illegal payment.
vi. There should be inter-departmental checking of all the department especially
the finance department i.e treasury department for accountability.
vii. Lastly, the state government should ensure to remit the share of local
government revenue when due or promptly.
5.3 CONCLUSION
After careful study of the data collected and analyzed, the researcher drew the
following conclusion
 That the major problem of the utilization of local government revenue
originated from electing corrupt and unqualified personnel who knew little of nothing
about being a leader or functionaries in the local government. When the head is
corrupt, certainly, the whole body fellow when the leaders or chairman of a local
government embark on illegal payment in the council without being cautioned, what
then become of the staff. The overall impact of the problem of effective utilization of
revenue available is to say that, it has produced underdevelopment such as lack of
social amenities like good road, tap water, electricity and other social infrastructural
facilities and poverty.
The research work has discussed critically and analytically the problems of
utilization of revenue at local government level, examining the problems associated with
revenue utilization, the impact and the solutions to these problems. It is the view of the
researcher that if those entrusted with the money of the local government are honest
and accountable, posses sound knowledge about revenue, reduce human factors and
posses accurate and reliable information etc. they will be able to effectively and
efficiently manage and utilize revenue at local government level in such a way that will
commend the support and approval of the people, ad deliver the needed development to
where it is most needed.
BIBLIOGRAPHY

Abubakar, H. (2002). Local Government Development in Nigeria. Ibada: Longman Press.

Achikanu, N. (2001). Local Government Administration in Nigeria. Enugu: Pan African

Publishers.

Amucheazi, E. (1999). Local Government Reforms and Mobilization for Rural

Development. Enugu: Fourth Dimension Publisher

Ani, O. W. (2009). Local Government Finance. Enugu: Valentine Printing Press.

Bello, A. C. (1998). Challenges Before Local Government Administrators. Enugu: Fourth

Dimension Publishers.

Cohen, M. R. (2008). Research Methods In Education. United Kingdom: Croom Helm.

Eze, S. (2000). Theory and Practice of Local Government. Ado Ekiti: UNAD.

Lucas, D. (1999). Local Government in Nigeria. Ibadan: Dekaal Publishers.

Ndukwe, J. (2002). Local Government in Nigeria. Benin:Denmark Publishers.

Ofoeze, J. (2004). Corrupt Local Government, Ibadan: Longman Press.

33
Okereke, O. (2001). O’Level Government Textbook for West Africa. Ibadan: Onibonge
Publishers.

Okoli, E. (2005). Theory and Practice of local Government.. Enugu: John Jacob’s Classic
Publishers.
Onwu, O. (1992). Local Government in Nigeria. Enugu: Academic Printing.

Osuala, E. C. (2005). Introduction to Research Methodology. Enugu: Africa – First

Publishers Limited (AFP) Academic Books.
Saliu, O. (2004). A Guide on Research Proposal and Report Writing. Kwara: T. A Olayeri
Printers and Publishers.
Udonsi, J. (1978). Local Government Finance. Ibadan: Longman Press.
0Ugoo, A. E. (2007). Local Government Administration in Nigeria. Enugu: Fourth
Dimension Publishers.

Yamani Yaro (1994). Statistics: An Introductory Analysis. New York: Harper and Row
Publishers.
NEWSPAPERS
Adamolekun, O. (2004, Nov 18). Embezzlement of Fund. Daily Times Newspaper P. 18
Ezema, M. (2000, July 4). Local Government Fame in Niger. Weekend Concord Newspaper
P. 17
Lawal, E. (2010, June 12). Local Government Administration and Challenges of Rural
Development in Nigeria. Wordpress Newspaper P. 5-6.

Obasajo, O. (2005 June 19). Poor Administration of Local Governmen., World Press, P. 4

Okore, F. (2002 September 18). New Local Government Boss Promises to Work Hard.
Daily Star Newspaper, P.5

JOURNALS

Ajayi, K. (2000). Rethinking Local Government Finance. African Journal for Public
Administration Study. (AJPAS) 22 (1), 101-112 .
Ohiwa, F. (2001). Challenges Before Local Government Administrators. Democrat, 13(10),
P 7.

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 QUESTIONNAIRE

APPENDIX A

Department of Public Administration

Faculty of Management and Social sciences
Caritas University
Amorji-Nike Enugu
Enugu State

APPLICATION FOR FILLING OF QUESTIONNAIRE

This is a research work to examine THE PROBLEMS OF EFFECTIVE UTILIZATION OF

REVENUE AVAILABLE TO LOCAL GOVERNMENT IN NIGERIA: A case study of Aninri Local
government of Enugu state.
Your objectives and prompt response will therefore be immense help to thus
research and all respond will be treated in high confidence.
Thanks for your co-operation

Yours faithfully

Ekwubi Cynthia C.
PA/2006/094
APPENDIX B

A. Personal Data of Respondent

1. Name:…………………………………………………………..
2. Department……………………………………………………..
3. Present post…………………………………………………….
4. Educational Qualification
WASSCE/GCE [ ]
ND/NCE [ ]
B.SC/HND [ ]
M.SC/MBA [ ] PHD [ ]
5. Years of working experience in this Aninri local government
1-5 years [ ]
5-10 years [ ]
10-15 years [ ] 15 years and above[ ]

35
 SECTION B
1. Are you aware of the constitutional provision of revenue sources to the tiers of
government in Nigeria?
a. Yes [ ]
b. No [ ]
a. If yes, what sources of revenue are available to local government?
i. Domestic and foreign sources [ ]
ii. External and internal sources [ ]
iii. None of the above [ ]
iv Any other source? Mention them if any
b. How does Aninri local government raise its internally generated revenue?
i. Investment [ ]
ii. Taxes [ ]
iii. Fees and fines on local government property
iv all of the above
v. Any other source? Mention them
2. By what means has Aninri local government planned the expenditure of available
revenue?
i. Budget/estimate [ ]
ii. Embezzlement [ ]
iii. None of the above [ ]
a. Is the available revenue of the council adequate for their expenditure?
a. Yes [ ]
b. No [ ]
b. What then is the level of development in Aninri local government?
i. Satisfactory [ ]
ii. Unsatisfactory [ ]
iii. None of the above [ ]
3. What system of financial control measures are used by the council
administrators?
i. Internal audit system [ ]
ii. External audit system [ ]
iii. Annual financial report [ ]
iv Budget [ ]
v. Inter-department checking system [ ]
a. Which of the following qualities is expected from this financial control measures
toward effective utilization of revenue of the council?
i. Fraud [ ]
ii. Accountability [ ]
iii. Purposeful development [ ]
iv Rich local government officials
b. How satisfied are you with these financial control measures of Aninri local
government?
i. Very much satisfied [ ]
ii. Satisfied [ ]
iii. Fairly satisfied [ ]
iv dissatisfied [ ]
4. Has the utilization of the revenue available to Aninri local government produced
positive or negative impact
i. Positive [ ]
ii. Negative [ ]
a. With the level of development in Aninri local government, could it be said that
there have been prudent utilization of its revenue?
i. Agreed [ ]
ii. No idea [ ]

36
 iii. Disagreed [ ]
b. w hat problems hinder the affective utilization of revenue available to local
government?
i. Revenue staff not properly educated [ ]
ii. General laxity in the part of the finance department [ ]
iii. Poor banking facilities [ ]
iv None of the above [ ]
c. Which of the following act have been embarked on in accordance with the budget
of Aninri local government?
i. Road [ ]
ii. Agriculture [ ]
iii. Staff salaries[ ]
iv Electricity [ ]
v. Water
d. Which of the following can be adopted by the council for effective utilization of its
revenue?
i. Establishment of audit akim committee [ ]
ii. Educated and qualified revenue staff [ ]
iii. Accountability on the side of the treasurer [ ]
iv all of the above

37