Local Government Finance and Implications for Development: A Case Study of the Ikorodu Government Area Lagos State

Abstract

Development which is a necessity in every society can be achieved to a great extent with adequate resources. Hence the various sources of local government finance have become very crucial in order to foster development at all levels of governance. Local governments created with administrative and financial autonomy have two sources of revenue (internal and external) to promote development at the grassroot. But presently, the level of development in rural areas since when local government authorities have been created is not encouraging. Since development demands a lot of capital, this study will critically analyze the relationship between local government finance system i.e. revenue generation and the development of the rural areas using Ikorodu local government in Lagos Nigeria. The survey research design was adopted for this study, with 414 staff of Ikorodu local government area as the population of the study. The research instruments used for data collection were questionnaire and interview. 203 copies of the questionnaire were administered to staff of Ikorodu local government who were simple randomly selected of which 188 (92.6%) were retrieved while 15 (7.4%) copies were not retrieved. Three local government officials were also interviewed. The data was analyzed using simple percentage and frequency for primary data and content analysis for secondary data. Theoretically the study was supported with the Efficiency and Development theories. The finding revealed that there is an average relationship between local government finance and development as other factors like proper utilization and administrative competence are necessary in development. Even though what the local government had generated from internal and external sources have impacted the area to an extent, local government finance system i.e. revenue generation still remains poor due to local government being unable to exploit revenue areas because of the interference of State Government in local government affairs. The study concludes that local government finance has a great impact on development as it is a major factor in getting adequate financial resources and has become a problem because of political inference in local government affairs. Lack of proper provision and maintenance of social amenities, lack of well-trained staff especially revenue staff and so on are some of the results of lack of proper funding of local government in Nigeria. It is therefore recommended that these factors that affect administrative functions be addressed; staff salaries should be paid early; the little resources at hand should be utilized in building infrastructural facilities, and the constitutional laws and bye laws should be reviewed for proper understanding of local government autonomy, power and functions as the third tier of government.