SOURCES AND UTILIZATION OF LOCAL GOVERNMENT FINANCE IN NIGERIA . A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
Local government in Nigeria is the third tier of government. It supposes to communicate directly with the people through their representatives, it is through an effective local government system that is obligations and duties to the people will be idealized.
The concept of the new system of local government with its objective is aimed at standardizing and stabilizing the function and financial resources at the local government level.
The basic problems of the local government of the local government are revenue mobilization and its effective utilization especially now that they appear to be no comprehensive quite to the sources and uses of revenue in the local government.
The project intended to project rays on those source of finance available to the local government and effective means of harnessing resources, it also attempted to proffer advice on the optimum utilization of these resources.
Students, researchers and administrators of local governments will find in this project vital information that could pass out for a solution to impending problem.
1.1 BACKGROUND OF THE STUDY
The federal government of Nigeria creates the local government, which is the third tier of government. The purpose of its creation is for grass root development.
The local government is a growing organization whose raison is to provide socio-economic service to, and to contribute to raising the living standard of its people. It is able to achieve these objectives by making good of her existing financial resources.
The local government is ought to be primarily involved in the construction and maintenance of trunk roads, plants, and equipments, buildings and other assets.
Beyond this, the people of the area normally have expectations of improved service and facilities from the local government. These include tarmac surface roads and concrete drains and bridges incase of earth roads and drains and wooden bridges modern gas fired incinerators instead of the refuse being dumped in barrow pits, concrete structures and asbestos – roofed classrooms to replace dilapidated mud wall buildings.
The local government may also invest in viable projects to earn traditional revenue and provide employments opportunities for the people for these and other purposes; the local government need money as well as annual capital budget to plan and programmed the funding the capital projects and other obligations.
According to Adedesi and Row Lang (1970: 10) financial had always been the problem of the local governments in Nigeria. This was more significant when the local government system with compete and self-contained budget that would be effective and effectual. The local government became autonomous body of administration.