CHAPTER ONE

INTRODUCTION

• Introduction

This chapter presents the introduction, theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

In revenue allocation analysis system, many issues such as the allocation formula, laws and policies that promotes it and its acceptance by the tiers of government involved, shape its process of formulation and final adoption. One obvious and indispensible challenge is that revenue allocation appears to be more political in nature than technical. This is because one could gather the necessary parameters and principles for the making of the formula, but the political dimensions might interplay to create distortions in the final outcome. This is because, within the discipline of political economy, the thrust is on the improvement of the economic circumstances of the people and in the last years, Nigeria’s federalism has emphasize more on compromise in the socio-economic and political interests than the technical approach in revenue allocation formula formulation.

1.1 Theoretical Background

Revenue allocation is an inherent trait of federations all over the world. Like most federal systems, Nigeria has a revenue distribution system in which the national govern-ment shares revenues with state and local governments. Two systems of revenue allocation had been practised in Nigeria as described by [2]. The first system was practised during the First Republic which allowed the North to keep the proceeds from its groundnut and cotton, the West to keep the proceeds from its cocoa, and the East to keep the proceeds from coal and oil produce. Then we changed the system so that the Federal Government got its hands on the proceeds from on-shore and off-shore crude petroleum proceeds. Since the early 1970s, the bulk of revenue has been collected by the national government. Much of this revenue has been derived from petroleum taxes and mining rents and royalties. The issue of revenue allocation remains very unstable and constitutes a major source of political and govern-mental tension in Nigeria. It has been a chronic problem facing fiscal federalism in Nigeria. According to [2] revenue allocation scheme in Nigeria remains problematic because not only do the various schemes rely excessively on explicitly political and technically unsophisticated factors of vertical allocations but also because Nigerian revenue allocation schemes usually fail to conform to global federal practice.

This scenario therefore necessitates the adoption of necessary measures to provide transparency and accurate computation/allocation of revenue to the different units in the federation. A proven measure that can aid this process is the utilization of the computer system to facilitate accurate record keeping and presentation of reports pertaining to revenue allocation when needed.

1.2 Statement of Problem

Resource disbursement is a fundamental fiscal issue in the practice of Nigeria federalism. This is largely so as the nation has federating units with their respective constitutional responsibilities to execute. Be it the federal, state or local government units the following problems exist:

1. There is high level of corruption in the allocation and utilization of funds disbursed.
2. This impedes the growth of the federating units and brings about continuous state of under-development due to the in efficient monitoring of allocated revenue.
3. There is no effective system to manage revenue allocation records.
4. It is difficult to get revenue reports.

To solve these problems, there is need for an effective system to record revenue allocation.

1.3 Aim and Objectives of the Study

The aim of the study is to develop a computerized revenue analysis system with the following objectives:

1. To create a database system that will keep record of revenue generated by the ministry of finance.
2. To design a system that will compute total revenue generated
3. To design a system that can aid the presentation of reports of record of revenue.

1.4 Significance of the Study

The significance of the study are:

1. It will enable the ministry of finance to keep accurate record of allocated funds, thereby fostering easy management of allocation records.
2. It will aid the instant presentation of reports pertaining to allocated revenue.
3. The study will also serve as a useful reference material to other researchers seeking for related subject.

1.5 Scope of the Study

This study covers Design and implementation of computerized revenue analysis system, a case study of Ministry of Finance, Ikot Ekpene.

1.6 Organization of the Research

This research work is organized into five chapters. Chapter one is concerned with the introduction of the research study and it presents the preliminaries, theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

Chapter two focuses on the literature review, the contributions of other scholars on the subject matter is discussed.

Chapter three is concerned with the system analysis and design. It presents the research methodology used in the development of the system, it analyzes the present system to identify the problems and provides information on the advantages and disadvantages of the proposed system. The system design is also presented in this chapter.

Chapter four presents the system implementation and documentation, the choice of programming language, analysis of modules, choice of programming language and system requirements for implementation.

Chapter five focuses on the summary, constraints of the study, conclusion and recommendations are provided in this chapter based on the study carried out.

1.7 Definition of Terms

Government: A group of people who have the power to make and enforce laws for a country or area.

Local Government: The government of a town, city, county, or region at a local level by locally elected politicians.

Revenue: The income of a government from all sources, used to pay for a nation’s expenses.

Allocation: Refers to an amount out of a larger sum shared to a unit.