SOURCES AND MANAGEMENT OF LOCAL GOVERNMENT REVENUE IN NIGERIA [A CASE STUDY OF KWALI AREA COUNCIL, FCT, ABUJA]

CHAPTER ONE

INTRODUCTION

1.1 Background To The Study

Kwali Area Council is one of the six (6) councils in the Federal Capital Territory. It is situated on the South Eastern Fringe of the Federal Territory. The federal capital territory came into being with the promulgation of decree No. 6 of 1976. The decree vested the power of ownership and control of all the land within the territory on the federal government. In an effort for effective development, decentralization drive took place thereby establishing seven devilment areas which were later merged in 1987 to four (4) local government areas. The name local government was later changed to area councils.

Thus, this development brought about Gwagwa Lada, Abaji, Kuje and Municipal area councils. On October, 1996, two more area councils were created which include Kwali and Bwari area councils in the Federal Capital territory thereby increasing the numbers to six (6). Kwali Area council was carved out from Gwagwalada area council and it has about one tenth of the total population of the federal capital territory (FCT).

Kwali Area council has a total land mass of about 1,700 to 4 kilometer square. The settlement pattern is disperse, with the indigenous clustered type of settlement mainly within Kwali town, Yebu Leba, Dangara, Ashara, Shehda, Dahi Dahi, Pari Yangoji etc.

The main ethnic groups includes Gbagyi, Ganagana, Basa, Hausa, Fulani and other tribes. This study examines the sources and management of revenue generation using Kwali Area council as a case study.

1.2 Statement Of The Problem

The importance of revenue generation in an organization, local government inclusive, cannot be overemphasized as to give the effective and efficient implementation of the set policies and programmes in an organization.

Revenue can be seen as pivot on which an organizational policies and programmes revolves. It has been the bedrock of any government/area council as the case of federal capital territory, Abuja is in terms of effective implementation of its policies and programs and also the development of the rural areas. Indeed, the problems being  encountered on the process of generating the revenue has tended to weaken the performance of some area council/local government in realizing their aims and objectives. The glaring question is what role has revenue been playing in the performance of local government function with a particular reference to Kwali Area Council.

However, this research focus on the sources and management of revenue in local government in Nigeria using Kwali Area Council FCT Abuja as a case study.

1.3 Objectives Of The Study

The fact that the bulk of revenue raised is through many ways of sources, therefore the study tends to:

1.        Study management of local government revenue.

2.        Study the major sources of finances that accrue to the local government.

3.        Study the challenges of LG effective revenue management

4.        Offer some likely suggestions for improving revenue generation in Local Government Area Council which will enhance good performance of Local Government to the inhabitants of the Local Government Area.

1.4 Significance Of The Study

This study is timely to Nigeria Local Government Councils which has been plagued over the years with problems of revenue sources and management. The study will go a long way to explore means of improving the present trend of things towards improving revenue generation. It is hoped this will ‘”clean the tears” of local government on how things could be normalized in the local government system as our recommendations is mostly cockshy to improve the councils revenue.  

1.5 Scope Of The Study

This study covers only Kwali Area Council. My intention was to get in touch with other area councils within the Federal Capital Territory (FCT) and other neighboring local governments to the federal capital but due to some constraints, it is not going to be possible. I have therefore, restricted the scope of this study to Kwali Area Council, FCT, Abuja.  

1.6 Limitations Of The Study

In carrying out this research work, I faced a number of problems such as finance, time and unwillingness from the people of Kwali Area Council.

Finance: For a research work to be done successfully, money must be involved. A lot of money was spend in order for this work to see the light of the day. The money was not just forthcoming.

Time: This work was carried out within a short period of time which I also have to face my studies involving lecturers, assignments and tests, hence, the time available has apportioned and this limit the time that ought to have been spent on the project.

Unwillingness: The rate of unwillingness among the staff as to answering the questions prepared for them was a major problem. This is because they were afraid of disclosing the secret of the local government like telling the researcher the amount of money they generate monthly and the amount that come from the federally government.

1.7 Definition Of Terms

Sources: This is the means of getting the revenue in the area council such as;

l  Locally imposed taxes

l  Government grants

l  Miscellaneous receipts

Management: Management is concerned with handling, control, co-ordinating, direction and organization of persons and resources to pursue set of objectives in the area council.

Revenue: Revenue can be seen as pivot on which an organization policies and programmes revolves. It has been the bedrock of any government. It is the money received from taxes by the government or money that is available to an organization.

Local Government: Local government is the grassroots government recognized by law. According to Attah (2001), local government is that tier of government closest to the people which is vested with certain powers to exercise control of the affairs of people in its domain. According to United Nation for Public Administration (UNPA), local government is a political subdivision of a nation (or in a federal system) state which is constituted by law and has substantial control of local affairs including the power to impose taxes or exert labour for prescribed poses. The governing body of such an entity is elected or otherwise locally selected.