ABSTRACT
The federal structure in Nigeria, a case study of Uyo LGA constrains local governments’ ability to mobilize and use revenue to meet their obligation in a sustainable way. Local government system as the third-tier of government deserves adequate finances to enable it cope with numerous developmental activities within its jurisdiction. This paper is divided into five segments. Part one is the introduction of the theme, while part two deals with theoretical issues. Part three concentrates on the local government finances and revenue utilization. In order to finance some viable projects, local government must be given adequate tax power and also share major tax bases with other tiers of governments. Part four highlights the problems and prospects of local governments, Revenue, Mobilization, Utilization and Corruption.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
One of the recurrent problems of the three-tier system in Nigeria, a case study of Uyo LGA is dwindling revenue generation as characterized by annual budget deficits and insufficient funds for meaningful growth and viable projects development. Local governments are the nearest government to the people at the grassroots in Nigeria, a case study of Uyo LGA; they are strategically located to play a pivotal role in national development. Since they are responsible for the governance of about 70 percent of the population of Nigeria, a case study of Uyo LGA, they are in vantage position to articulate the needs of the majority of Nigeria, a case study of Uyo LGAns and formulate strategies for their realization (Ekpo and Ndebbio, 2001).
Local administration in Nigeria, a case study of Uyo LGA can be traced to the colonial period. Available record shows that the first local administration ordinance was the Native Administration Ordinance No. 4 of 1916 which was designed to evolve from Nigeria, a case study of Uyo LGA’ s old institutions the best suited form of rule based on the people’ s habits of thought, prestige and custom (Bello-Imam 1990). These local administrations were used in the north eastern and western parts of the country while the indirect rule was introduced in the rest of the north.
For example, in 1926, a centralized budget system was introduced. Following the creation of Northern, Western and Eastern regions in 1946, a decentralized public revenue structure began to emerge. The first revenue commission was set up in 1946. During the colonial period, four revenue commissioners were created. The principles, criteria and allocation formulas recommended by the commissions are well documented (Ekpo, 2004).
Macpherson constitution of 1948 initiated some remarkable changes; the regions introduced some reforms in their local administrations in the 1950s which aimed at enhancing performance. Though, the reforms gave local administrations to collect rates and levy pools and income taxes to finance their activities, the regions had overall control of the taxes. Local administration lacked self-determination, hence their resource were inadequate. Though, the local authorities were partially successfully in the North but unsuccessfully in the Eastern and Western regions.
