An Appraisal of Utilization of Local Government Funds in Edo State, Nigeria: 2006 To 2017

Abstract

It is believed that the only reasonable form of development is that which comes from within, the sustainable development that comes through the will and desires of the people. The idea behind the creation of Local Governments in Nigeria is that the people at the local level will have the fullest awareness of their needs.  Every local jurisdiction has its unique economic, social and physical characteristics and its historical tradition which are better understood by its people.  Thus, the Local Government Areas are created to provide the services which the Federal and State Governments cannot easily undertake due to their remoteness from the local communities. This paper appraised the utilization of Local Government Funds in the Nigerian Local Governments with focus on Edo State. The study suggested feasible and pragmatic ways to maximize internal revenue generation in the local governments. It observed that prior to the 1976 Local Government Reforms; most local governments were able to maximize their internal revenue generation and thus discharged their primary responsibilities with little or no financial assistance from the higher tier governments. However, with the introduction of statutory allocations to the local governments following the 1976 Reforms, most of the local governments abandoned the hitherto viable internal revenue sources in preference to the revenue from the statutory allocation. This unwholesome attitude of most local governments, among other things was identified as the bane of internal revenue generation at this level of government. The paper concluded that unless the local governments looked inwards to maximize their internal revenue sources, they would not be financially self-reliant. The implication of this is that they cannot enjoy a reasonable degree of autonomy as a third tier of government if they continue to be heavily dependent on the financial assistance from both the federal and the state governments to function effectively. This is because, as the saying goes, “he who pays the piper dictates the tune.”