The effect of federal allocations on local government revenue generation in Ilorin East Local Government Area, Kwara State
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- 1-5 Chapters
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- Table of Content: Available
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- NGN 5000
Chapter One: Introduction
1.1 Background of the Study
Federal allocations represent a significant portion of revenue for local governments in Nigeria, influencing their ability to provide essential services and meet developmental goals. In Ilorin East Local Government Area (LGA), Kwara State, the revenue from federal allocations plays a central role in funding infrastructure, education, healthcare, and other public services. However, despite these allocations, local government revenue generation in the area remains constrained, with dependency on federal allocations affecting the overall economic autonomy of the LGA (Akinyemi & Musa, 2024).
The study aims to explore the relationship between federal allocations and local government revenue generation in Ilorin East. It seeks to understand how allocations from the federal government influence the financial independence of the local government, and whether such allocations enhance or hinder revenue mobilization efforts at the local level. Additionally, it will assess whether federal allocations serve as the primary revenue source or if local governments are able to effectively generate revenue through other means such as taxes, fees, and local businesses.
1.2 Statement of the Problem
While federal allocations constitute a critical revenue stream for local governments in Nigeria, there is growing concern over their dependency, which often limits local governments' ability to independently generate revenue. In Ilorin East LGA, despite receiving federal allocations, there are challenges in effectively mobilizing and diversifying revenue sources, resulting in the local government’s financial dependence. This study will investigate how federal allocations affect the local government’s capacity to generate its own revenue and how these allocations are utilized for development projects.
1.3 Objectives of the Study
- To assess the impact of federal allocations on local government revenue generation in Ilorin East LGA.
- To explore the revenue generation strategies employed by Ilorin East LGA beyond federal allocations.
- To evaluate the effectiveness of federal allocations in enhancing the financial autonomy of Ilorin East LGA.
1.4 Research Questions
- How do federal allocations influence the local government revenue generation strategies in Ilorin East LGA?
- What are the other sources of revenue generation for Ilorin East LGA aside from federal allocations?
- How effective are federal allocations in fostering the financial independence of Ilorin East LGA?
1.5 Research Hypothesis
- Federal allocations significantly influence the revenue generation strategies of Ilorin East LGA.
- Ilorin East LGA’s dependency on federal allocations has hindered its capacity for effective local revenue generation.
- The utilization of federal allocations has not significantly enhanced the financial independence of Ilorin East LGA.
1.6 Significance of the Study
This study will provide valuable insights for local government authorities, policymakers, and financial planners on the role of federal allocations in local government revenue generation. The findings will highlight the strengths and weaknesses of relying on federal allocations and propose strategies for diversifying and strengthening local revenue sources. Furthermore, it will offer recommendations on how to optimize the use of federal funds for sustainable development in Ilorin East.
1.7 Scope and Limitations of the Study
The study will focus on Ilorin East LGA in Kwara State, examining the impact of federal allocations on local government revenue generation within the area. Limitations may include difficulty in obtaining accurate data on federal allocations and local revenue generation, as well as potential biases in the responses from local government officials.
1.8 Operational Definition of Terms
- Federal Allocations: The financial resources allocated by the federal government to local governments through revenue-sharing formulas based on national income and other factors.
- Local Government Revenue Generation: The process through which local governments generate funds to finance public services and development through taxes, fees, and other sources.
- Financial Autonomy: The ability of a local government to independently generate and manage its revenue without significant reliance on external financial sources.
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