Chapter One: Introduction
1.1 Background of the Study
Nguru Local Government in Yobe State, located in northeastern Nigeria, has faced a variety of economic challenges, including limited revenue generation capabilities, which has hindered its capacity to fund development projects and provide essential services to its citizens (Ahmed & Musa, 2023). Local government fiscal policies are crucial tools in the mobilization of resources and the management of public finances. These policies determine how effectively local governments can generate revenue through taxes, fees, and other financial instruments, which are essential for local development (Oluwole & Tijjani, 2023). In Nguru, fiscal policies have been shaped by both state and federal regulations, but local challenges such as low tax compliance, limited industrial activity, and a reliance on federal allocations have contributed to weak revenue generation (Dogo & Ibrahim, 2023).
The local government has implemented several fiscal strategies, including enhancing revenue collection methods and exploring alternative revenue sources such as internally generated revenue (IGR) from local taxes and levies. However, these fiscal policies have had mixed results in terms of their effectiveness and sustainability (Suleiman & Danladi, 2023). This study aims to investigate the impact of these fiscal policies on the revenue generation capacity of Nguru Local Government and assess the overall effectiveness of these policies in improving local financial autonomy.
1.2 Statement of the Problem
Despite the implementation of fiscal policies aimed at increasing revenue generation, Nguru Local Government has struggled to achieve substantial financial autonomy. Issues such as low tax compliance, poor infrastructure, and a lack of effective revenue collection systems continue to undermine the effectiveness of fiscal policies in boosting local revenue (Ismaila & Lawan, 2023). This study will assess the challenges facing Nguru Local Government in terms of fiscal management and explore potential solutions to enhance revenue generation.
1.3 Objectives of the Study
1. To evaluate the effectiveness of fiscal policies in generating revenue for Nguru Local Government.
2. To identify the key challenges affecting revenue generation in Nguru Local Government.
3. To recommend strategies for improving the fiscal policy framework to enhance revenue generation in Nguru Local Government.
1.4 Research Questions
1. How effective have local government fiscal policies been in generating revenue in Nguru Local Government?
2. What are the key challenges faced by Nguru Local Government in implementing fiscal policies for revenue generation?
3. What strategies can be adopted to improve fiscal policies and revenue generation in Nguru Local Government?
1.5 Research Hypothesis
1. Local government fiscal policies have a significant impact on revenue generation in Nguru Local Government.
2. Low tax compliance and inadequate infrastructure are the primary challenges hindering effective revenue generation in Nguru Local Government.
3. Strengthening local tax systems, improving infrastructure, and enhancing public awareness will improve revenue generation in Nguru Local Government.
1.6 Significance of the Study
This study is significant because it provides insights into the fiscal policy framework of Nguru Local Government and the factors influencing its revenue generation. The findings will be useful for policymakers, local government officials, and financial experts in identifying gaps and opportunities for improving local revenue systems. The study will also contribute to the broader discourse on fiscal decentralization and local governance in Nigeria.
1.7 Scope and Limitations of the Study
This study is focused on Nguru Local Government in Yobe State, with a specific emphasis on the impact of local government fiscal policies on revenue generation. It will examine fiscal policies within the context of the current economic and administrative challenges faced by the local government. Limitations include potential difficulties in accessing data on local government financial management and the reliability of local reports.
1.8 Operational Definition of Terms
• Fiscal Policies: The policies that govern the management of public finances, including taxation, budgeting, and public spending, aimed at achieving economic and financial stability.
• Revenue Generation: The process through which a local government collects funds through taxes, fees, and other financial means to support its activities and development goals.
• Internally Generated Revenue (IGR): The revenue generated by a local government from local taxes, fees, and other sources within its jurisdiction.
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