THE IMPACT OF LOCAL GOVERNMENT REFORMS AND THE PROBLEM OF FINANCIAL MANAGEMENT IN THE LOCAL SYSTEM IN NIGERIA (A STUDY OF ANAMBRA WEST L.G.A ANAMBRA STATE)

ABSTRACT

The purpose of this study is to survey critically  some of the obstacles of effective local government financing especially as it affects Anambra West Local Government Area and the extant to which the local government reforms has eliminated these obstacles. In order to achieve the above, the research used both primary and secondary sources of data collection. Two hundred copies of questionnaire were distributed to staff of Anambra West Local Government Areas, after which one hundred copies were returned and used for the analysis of the data. From the data presented and analyzed, the following findings were observed: That the financial management strategy adopted by local government generally will improve the financial base of the local government areas if properly adhered to. That the local government reforms have great and unimaginable impact on the financial management system of local government, as 1976 reform ensure uniformity  in revenue collection of the local government. That irrespective of the above, some problems encountered in the financial management in the local government area before the reform still exist after the reform. Example problem of rate/tax collection, non-training of tax administration poor record keeping, tax evasion to mention but a few. It is based on the above findings that the following recommendations were made. That more funds should be allocated to training in local government especially rate/tax administrators. This will enhance their record keeping and other aspect of rate/tax collection, subsequently increasing the financial based of Anambra West Local Government. That enticing effort should be made to encourage the payment of tax/rate by citizens of Anambra West thereby avoiding tax evasion. Such effort may include: sound advertisement, provision of services to mention but a few. Effort should be made to ensure strict adherence to financial management strategies adopted by local government generally, for this will go a long way in improving the financial base of the local government in Anambra West.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Local government is a public organizational sector with assigned functions and responsibility, administrative structure and financial arrangement for both maintaining, itself and rendering its statutory assigned functions to its citizen. Therefore the generic centrality of financial and management performance is apply to local government.

In Nigeria, the 1979 constitution of federal republic accepted local government as a third of government as in the country of the world Nigeria  local government council perform multi various function.

If there functions are too effectively the council need money. The local government revenue has many sources opens to them and they include grants, taxes, licenses, fees, loans presents and donations and revenues allocation.

1989 formula stipulated that local government is entitled to percent of the revenues accruable to the federal government and ten percent of the internally generated revenue of the state government.

These are in addition to finance from traditionally internal sources of local government revenue.

However, the amount internally generated by each of the local government council is very small.

As a result of this the local government is in a situation whereby they depend on the Federal and State Government for funds in order to perform there statutory function of this paternalism is the financial uncertainty and instability of local government. These made them suffer seasonal peculiarly distress which distort their operation.

The peculiar circumstances of the creation and existence of the local government coupled with the predictability of its political and administrative environment in Nigeria largely account for the appeal of the topic.

The factors affecting local government finance and administration” to both scholars and practitioners. The result of these appeals has been sustained in seeking strategies stable financial administrative arrangement or the success of local government in Anambra West Local Government Area.

However, the amount internally generated by each of the government in Anambra West makes it difficult in meeting its dual commitment of maintaining itself and rendering services to the people.

The effectiveness and efficiency of any organization depends on the availability of the major importance of management personnel. The emphasis at providing effective government of the people has been laid on creating a strength functional and effective of local government system in Nigeria.

This is with a view to providing programs like political, social and economic Advancement, it brought the development of an efficient and democratic system of local government. It was the expectation of this. Policy to afford the people with a form of government that close to them and which must be capable of managing the service in a way in which it will help to ease the standard  of living and support the people at grassroot level.

Towards this attainment of these objectives, several attempts have been made by creating a viable local government system in Nigeria through a service of local government reform. The prominent among these reforms was the 1976 local government in Nigeria and also created revenue base of the local government. However, various research conducted after the 1976 reform indicated that local government have performed poorly  with  respect to their constitution functions because of lack of adequate finance generation arising mainly from lack of autonomy on the part of these local governments. It was identified that state government frequently interfere into the affairs of local governments, they either delay grants and statutory allocation form the federal government which from the lack of local government revenue refuse to  transfer such to them. The state government diverts fund that is meant for the local government into other uses on the neglect excuse the state government frequently intervene into the local government affairs tended to take away the autonomy of the local governments which the 1976 reforms instated to established.

The task of the local government through local government reforms has gone in servicing obstacles that block the way of effective revenue generation and mobilization in Anambra  West  local government area.

1.1.1 THE BACKGROUND OF THE STUDY

A BRIEF HISTORY OF ANAMBRA WEST LOCAL GOVERNMENT

Anambra West Local Government which is the case study of this research work is one of the local government that make up Anambra State. It is used to be part of what formed the Onitsha North District Council (ONDC) with headquarters at Ogidi. The area was to be among the constituents of Anambra country council with headquarters at Nteje after independence. With subsequent delineation and renaming Anambra West fell into Anambra division with headquarters at Otuocha. The status quo remained even after reformation of the local government system in 1976.

In 1981, the search for a separate identity for the people of resent day Anambra West took off. The agitation was champion by Igwe (Hon.) J.C Emeka, Eze- Anam”. This resulted in the creation of defunct – Mbamili local government council. Following the collapse of the second  republic  and all its administrative structures, the young Mbamili Council was dissolved  and the  area return once again to Anambra West local government which was created  in December 1996 with  Mr. Edwin Ndife and his pioneer  administrators. In March 1997, Chief Raphel Okeke emerged his first democratically elected Chairman. Following the collapse of the Abacha transition, the regime was terminated after fifteen months (one year and three months). Mrs. Franca Odukwe was appointed the chairman of caretaker committee who ran the affairs of the council from August, 1998 to may 1999 when Raphel Okeke was once again elected chairman. The unique features of Anambra West local government is that it is the only council in the state that has a language other than Igbo is spoken because the area is populated by both Igbo speaking and Igala speaking nationalities.

It is only Anambra West local government area that shares boundaries with three states and they are Delta in the west and Kogi in the north, and Edo  is also in the  west. Anambra State Local Government is made up of many towns, they  include  Mmiata, Umuoba, Umuenwelum, Oroma, Umuikwu, Iyiora,   Umudora, Umueze anam, Igbedor, Odeh, Igbokenyi, Nzam, Inoma, Odekpe and Allah-onugwe. These fifteen autonomous communities have fifteen traditional rulers.

1.2   STATEMENT OF PROBLEM

1. Inadequate financial base has been frequently identified as the cause of inability of local government in Nigeria to perform its duties.
2. Frequent intervention of state government into the affairs of the local government and lack of autonomy are among the factors that are causing the inadequacy in financial generation in local government.

The aim of local government reform was to make appropriate service and development activities responsive to local wishers and initiatives by developing or delegating them to local representative’s bodies and to grant great autonomy to the local government and to remove these obstacles to effective revenue generation. It is relevant in the height of the argument to ask the following questions.

1. What are the sources of revenue generation of Anambra West local government
2. To what extent has the local government reform of 1976 gone in improving the revenue generation base on Anambra West Local Government?
3. What are the basic problem associated with revenue collection and management in Anambra West Local Government?

1.4   RESEARCH QUESTION

1. How does Anambra West local government manage their finance?
2. What are the outstanding problems of financial management in the local system?
3. What ways to think that those financial problems can be solved?

1.3   PURPOSE OF THE STUDY

In a country like Nigeria, both large size of the country and diversified  in the  social  background of the people make it difficult  for any central  or state  government  to attempt  alone  to govern the  people  effectively  at the local level  form one  central  point. This  makes  it  urgent  to importance  of local government to function  effectively,  the  need  for adequate  financing  cannot be  overemphasis. Also for development of rural areas, there is need for prudent and strongly support management of local government finance cannot be underscore. The purpose  of this  study is to  survey  critically some  of the obstacles to effective  local government financing  especially  as it  affected  Anambra West  local government area and also examine  the level of the constitution of the local government reforms in eliminating such obstacles. With the view of identifying some of the causes of these problems and also trying to find proper solution to them.

The objectives of the study that the researcher wishes to accomplish are:

1. To identify the sources of local government revenue especially as it affects Anambra West Local Government since the reforms.
2. To find out if there has been an improvement in revenue generation in Anambra West local government since the reforms.
3. To identify and discuss the strategies of financial management adopted by Anambra West local government and to evaluate the relevance.

1.5   SIGNIFICANCE OF THE STUDY

        The available literature on leadership studies in Nigeria shows that the considerable work has been alone on financial management problem of Anambra West local government area in particular and in Nigeria local government in general.

In the various professional level such as the administrators, local government chairman, local government councilors, the treasures and financial  mangers at the local government level  will benefit  form this study. It is important for the general public  to know how their local government obtain their revenue and show  such revenues are been  spent, apart  form that,  the tax payers are  the actual  financial members of the local government club and they suppose to know their contributions which is in the form of taxes, fines and fees are spent.

Finally, it will exactly be a cheat if the representatives of the people of Anambra West local government do not have effective check on the finance of the local government.

1.6   SCOPE OF THE STUDY

        The scope of the study in this research work was aimed to asses the various financing management problems in local government.

The local government system in Nigeria  despite the 1976 reforms  have not addressed  the key issue  involved  in financial management  of local government system in Nigeria, Anambra West local government area being a case study.

1.7   LIMITATION OF THE STUDY

         The study should have covered many local government areas in the state as well as the country, but the research has been making more efficient to centre on Anambra West local government area of Anambra state limited resources in terms of finance which is lack of fund to travel in search of data and the non-availability of current relevant text which will give the researcher adequate information. Secrecy and confidentiality of staff and management of Anambra West local government area makes impossible to get relevant information about the local government area.

Finally, administrative bureaucracy, time constraint did a lot in wandering the perfect collection of the necessary data for the project work.

1.8 DEFINITION OF MAJOR TERMS

RATE: Rate is the local tax of the local government and it is generally one of its independent revenue sources.

GRANT: This is a financial aid which is given by the  central or  its functions effectively.

STATUTORY/REVENUE: This is share of revenue from state/central government as fixed by law.

FEES/LICENCES: These are payment which local government impose for certain services which they provide.

FINES: Fines are financial penalties imposed on individuals for breach of bye-laws of local government.

LOANS: Loans are capital raise by the local government for executing capital development project which are within the statutory functions.

MISCELLANEOUS: This includes gifts and donations, rents dividend levies. The local government can receive gifts and donations from individuals and organizations.

1.9     Organization of the Study

The study will be contained in five (5) chapters. Chapter one will be the introduction part of the work which will also contain statement of the research problem, research question and purpose, the study scope the limitation encountered in the course of the work. Chapter two (2) will review related literatures in the study context, this will enable the researcher to know what that has been done by other writers as regards to the study. This same chapter will also present the theoretical framework and historical background of the case study. Chapter three (3) will contain the methodology for the work; survey design will be adopted so as to enable the researcher to generalize the result of the finding. Taro yamane sampling techniques will be adopted for selecting the sample size from the population while structured questionnaires will be used as instrument for data collection. Chapter four (4) will contain the presentation and analysis of the data collected with the questionnaires and finally, chapter five (5) will contain the conclusion, summary and some pragmatic recommendations made by the researcher.

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