The purpose for this research is to determine the relevance of a critical
analysis of the sources of revenue and expenditure pattern of Enugu North Local
Government Area, with reference to Enugu North Local Government. The research
was carried out to discover the availability of expenditure and revenue in the
Local Government; this involved going to Enugu North Local Government to
administer questionnaire and interview on some key staff of the local
It was revealed among others that revenue and expenditure is available for all
categories of staff. Unfortunately, critical analysis of the sources of revenue
and expenditure pattern has not enhanced productivity of the local government.
It should therefore, be recommended that the local government should try as
much as possible to encourage those staffers who put their effort to enable
them contribute meaningfully to the advancement of the local government sources
of revenue and expenditure in the local government.
TABLE OF CONTENTS
Background of the Study
Statement of the Problem
Purpose of the Study
Scope of the Study
Significance of the Study
Definition of Terms
Review of Related Literature
History on Enugu North Local Government Area
Internal sources on Enugu North
External sources on Enugu North
Motor Parks and Market Fees
Patterns of Expenditure
Research Design and Methodology
Area of the Study
Population of the Study
Sample and Sampling Procedure
Instrument for Data Collection
Validation of the Instrument
Reliability of the Instrument
Method of Data Collection
Method of Data Analysis
Data Presentation and Analysis
Presentation and Analysis of Data
Summary of Result
Discussion, Recommendation and Conclusion
Discussion of Results/Findings
Internal Control Procedures
Implication and Research Finding
Suggestion for Further Research
Limitation of Study
1.1 BACKGROUND OF THE STUDY
The study of Local Government in Nigeria is traceable to the traditional
political system in the country local government administration. It was through
the instrumentalities of tradition authorities. By this is meant the Igwe,
Chiefs, age grades and village councils. It was through the societal
interaction that authoritative allocations of values were made for the society.
In the past, most of these local governments were created to score cheap political
points without due regard for their viability.
Apart from political and administration considerations that ought to be
carefully examined in determining the viability of a local government in
Nigeria, financial consideration is also a relevant factor that must be
scrutinize and ascertained before considering a certain geo-political entity
for a local government.
Local administration was strengthened further when Britain made its presence
felt in Nigeria, in 1900 Lord Laggard introduced the system of direct rule into
Northern Nigeria and by 1914 the system has spread to other parts of the
The colonial native authorities were established with the traditional rulers
having absolute powers. The native authorities provided form of stable local
administration which strengthened the base of the colonial government. However
the concept of the local administration charged to that of local government in
1946 after the defect of conservatives and the coming into power of the labour
Before the coming of the Britain into Nigeria as mentioned above the
institution of the traditional authorities were held sacred and is legitimized
their actions and decision. In the North, the Emirs ruled in the emirates and
developed a well organized fiscal system, a definite scheme of land tenure, a
regular scheme of local rule and established judiciary with trained personnel
interpreting the Islamic laws in the Southern part of the country. Local rulers
with defined administrative system through the fiscal system were less
Administrative consideration will include a number of factors, one of which is
purely government annually. This item includes councilor’s allowances, personal
emoluments of staff and miscellaneous expenditure like pensions and granitites
The financial considerations include a number of factors. One is the revenue
base the size and major sources of revenue such as taxes, rates and fees
including market and motor part fees, etc. Since tax is paid by the taxpayers
resident in the local government area of authority. The amount of revenue
derived from tax depends on the number of tax payers in the area.
Thus, the size of the local government in terms of taxable population becomes
important. There is also the ability of the area to execute development
projects from its internal sources or from short and medium term loan. The
magnitude of the council, reserves or end of year surpluses is another factor.
This research work is on the analysis of the sources of revenue and patterns of
expenditure of Enugu North Local Government Area of Enugu State for the period
of 1999 – 2001.
Enugu North Local Government Area is one of the Local Government Areas in Enugu
State. It was created in 27th August
1991 by the administration of General Ibrahim Babangida. The Local Government
Area was carried out from Old Enugu Local Government Area.
They have secondary schools and primary schools. Still before the creation of
Enugu North Local Government, the view of the society later became official
position of labour party, a policy which favoured and advanced the
demoralization of local Government. Thus, Local Government in this area was to
become a means not only of political but also of economic development,
performing functions which of had hardly concerned itself within the previous
The Local Government therefore assumed a development oriented posture.
The structure and working of the native authorities in the fears before 1950
all over the country had not pleased a number or educated Nigerians.
The Local Government is not richly endowed with many economic resources which
should form basis of income generation for both the people and local
government. With the establishment of town planning Authority of Enugu North,
it is hope that residential, commercial and industrial layouts will be
developed for the greater goal of the local government.
Markets and motor parks have been traditional sources of revenue for local
Mostly every local government and the surrounding communities have been
provided with pipe born water.
It is necessary to single out the problem of erosion, perhaps as the most
dangerous of all problems facing the Local Government Area. Even though none of
the autonomous communities has escaped the wrath of erosion on its soils, roads
and farms, some towns have sulfured more than the others. Particularly noted is
Obiagu under Enugu North Local Government where almost half of the town has
been gulped by gully erosion. The situation demands a comprehensive study of
the problem in the local government area and conscious intervention by both the
state, federal and international agencies.
1.2 STATEMENT OF THE PROBLEM
The sources of revenue available to local government are both internal and
external. The identifiable internal sources are community tax, rate or property
tax. License and fees, commercial undertakings, while loans, grants and
statutory allocation constitute the external sources from the revenue
generated, local government incurs expenditure in the form of recurrent and
capital expenditure. The extent generated internally and externally is inadequate
and therefore greatly affects the provision of basic services by the local
government. Not only are the available funds hardly adequate and sufficient to
meet with these expenditures, there also a general apathy on the part of local
government to explore new sources or revenue outside their traditional bases.
This project, therefore, will seek to analyze the available and potential
sources of patterns of expenditure of Enugu North Local Government area with a
view of ascertain whether such makes for grassroots development.
1.3 PURPOSE PF THE STUDY
The purpose of this study is to examine the extent to which the revenue pattern
sources of the local government are managed.
To bring out the need for an in-depth appraised of a project before it is
To analyze the problem associated with the generation of revenue and the
reasons for inadequate of funds available to Enugu North L.G.A.
To analyze the expenditure pattern of Enugu North Local Government Area.
To ensure the prospects of Enugu North L.G.A and make appropriate
recommendations based on the findings.
1.4 SCOPE OF THE STUDY
A study of this nature is quite a broad one. There are 774 local
government areas in Nigeria. Within the local government area there are many
aspects that could have been accommodated under this study.
However, the scope of the study shall be centered on the Enugu North Local
Government Area of Enugu State to the exclusion of the others further and
expenditure patterns of the council for period of 2 years 199 – 2001 to the
exclusion of other aspects.
1.5 RESEARCH QUESTION
The research work will try to find answer to the following questions.
To what extent does the shortage of experience staff constitute a problem in
the internal revenue generation of the Local Government?
Are the environments in which they operate suitable?
To what extent does fraud and mismanagement constitute a problem in the
internal revenue generation of Local Government?
1.6 SIGNIFICANCE OF THE STUDY
As no previous study has been undertaken on the finance and expenditure of
Enugu North Local Government Area, it is hoped that the results of the research
will be valuable to the following categories of people.
The outcome of this study will be beneficial to the inhabitants of the Enugu
North L.G.A. They will gain insight into the constraints that militate
against the execution of certain projects that would have enhance their taxes
and rates as at when due. In other words, it reduces the incidence of tax
It will also guide them in their future demands for facilities in their
localities from the local government.
Secondly, present and future administration of the local government area will
find the result of this study to be very useful especially on the
recommendation on new sources of revenue in order to strengthen their financial
base. Again it will help them to formulate foolproof policies to over come
some, if not all the constraints affecting the generation of revenue even from
the traditional sources. Still it will be a grid such that the expenditure
pattern will be geared towards the provision /improvement of new/existing
facilities to stimulate grassroots development in the area.
Thirdly, other research student interested in local government affairs may find
this work to be a variable source to guide further research into other aspects
of the local government; such as financial management accountability and
Finally, the result of this study may compel the research to seek employment in
Enugu North Local Government in order to translate some of the funding from
this study into reality thereby improving on the welfare of the rural populace.
1.7 DEFINITION OF TERMS
Local Government political subdivision of a state which is constituted by law
and has substantial control over local affairs including the power to impose
Indirect Rules: - A system where by administration is affected through the
administrative machinery which had been created by the natives themselves and
under which the chief, the natives court, native laws sand institutions are
recognized and controlled by the natives themselves.
Finance: - Money resources available to a person private or public
enterprises use in its maintenance and discharge of its duties.
Cost – Benefit Analysis: - The attempt to calculate all the direct
and indirect cost and benefit of a set of alternative projects or policies,
subject only to the provision that all cost and benefits be expressed in terms
of common denominator money.
Revenue: - The funds available to the local government from different sources
for the purpose of meeting its expenditures.
Expenditure: - Cost incurred by the Local Government in carrying out the
administration of the area.
Budget: - A budget is a comprehensive financial plan setting
forth the expected route for achieving the financial goals of an organization
for a specific period.
Tax Avoidance: - It involves the use of loopholes in the prevailing tax laws to
avoid the payment of tax. Its is not a criminal act.
Tax Evasion: - It is done either making fraudulent and incorrect tax returns or
not making any at all, true or untrue its is a criminal act.
TERMS AND CONDITIONS APPLY
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