• Background of the Study

One of the recurrent problems of the three tiers system in Nigeria is dwindling revenue generation a characterized by annual  budget deficits and insufficient funds for meaningful growth and visible projects development.  Local government areas the nearest government to the people at the grassroots in Nigeria, they are strategically located to play a pivotal role in national development. Since they are responsible for the government of about 10 percent of the population of the majority of Nigerians and formulate strategies for their realization (Bello-Iman 1990).

Local  government in Nigeria receives statutory allocations from  the two higher tiers  of government federal and state. At the present revenue sharing formula, local government receives 20 percent from the federal account. They are also statutorily entitled ten percent of state’s internal revenue. As regards to value added tax,  local government receive 30 percent in 1998. This was shared to local government on the following basis  equality (50 percent), Adisokonu Nwankwo, 2004.

The federal government controls all the major sources of revenue like import and export duties, mining  recent  and royalties, petroleum sales tax, petroleum profit  tax and companies icon tax among other revenue,  local government taxes are minimal hence limits their ability to raise independent revenue.

So they depend solely on allocation from federal account. Much of the revenue collected by the federal government and distributed among the different tiers of government using the vertical revenue allocation formula is from the federal government. But the federal government seems to exercise too much control that incapacitate local government from performing their best to do project (Emenuga, 1993 and Ekpo, 1994).

Local government has the responsibility for economic planning and development, citizenship development and empowerment through  primary vocational education  and capacity enhancement through health  care provision cannot be effectively executed. In a study carried out by United Nations Development Programme  (UNDP) and the state/Local government department of the presidency, out of an aggregate of 23,6027 claimed by the respondent. Local  government, only 5,291 are linked to National grid for electricity supply while 33 percent do not have electricity at all even in their headquarters (UNDP, 1989) yet  between 1995 and 1997 the local government executed only 122 rural electrification projects nation wide. Sixty percent of the local government inhabitants have no access to telecommunication facilities yet as local government  are still confined to their traditional with just a little improvement.

  • Statement of the Problems

Recently, citizens are interested on the development of their local government which yearn towards improved standard of living. Local government actualize the development goals through revenue mobilization. The more the revenue, the more the development, but local government administration is faced with challenges which causes development backwardness in Nigeria and in Ehime Mbano Local Government Council of Imo State and such  problems are as follows:

(Ejike, 1993).

Over control of public revenue by federal government and state government, there is no lucrative fund left to local authorities which weakens administrative machinery, lack of mission, lack   of comprehensive functional role, lack  of proper structures. The role of local government in development process are not known, low quality staff which include dishonest staff and untrained personnel who are suppose to save as tools for development at the local government level, even the few available ones are not  properly trained in efficient budgetary and financial management systems.  The delay in the passage of annual budget in addition to insincerity among the council staff on field assignment poses greater problems  because most of them usually divert collected fund for their  personal usage, thereby denying the council of the needed funds  for it operation.

It is on this not that this study sought to investigate whether generated and statutory revenues have been properly utilized for moral development or not, with a view to proffer possible suggestions.

  • Objectives of the Study

This research study is aimed at examining on the area in which revenue generation, utilization and grassroots development is actualized in our society.

  1. To examine revenue generation and utilization in the development of Ehime Mbano Local Government Area in Imo State.
  2. This study is aimed at ascertaining the sources of revenue in Ehime Mbano Local Government Area of Imo State.
  • To find out whether corruption has hinders the development of Ehime Mbano Local Government.
  1. To identify factors to be considered in the allocation of revenue by both federal , State and Local Government.


1.4 Research Questions

  1. To what extent does revenue generation be utilized in the development of Ehime Mbano Local Government Area, Imo State.
  2. What are the success of revenue in  Ehime Mbano Local Government Area.
  3. Does corruption hinders the development of Ehime Mbano Local Government Area.
  4. How can internally generated revenue be utilized for the development of Ehime Mbano Local Government Area.


  • Research Hypotheses

Based on the explanation contained in the background of this study, we propose the following hypotheses:

  1. Revenue generation, utilization and grassroot development encourages development at the grass root level.
  2. It also provide for job opportunities for the citizens at the local government area. This helps in reducing the quest to migrate to urban centres in search of better loving among the people at the local government level.


1.6 Significance of the Study

The importance of the study is very necessary for government  in all tiers that comprises both federal, state and local government. Also  to students and researchers

  1. This research will serve as a study material to both students and fellow researchers in higher institutions.
  2. It will enlighten on various government programmes, and funds that are provided by local government that students can benefit from.
  3. It will assist in improving standard of living of indigenes that lead to increase in income of our parents that will enable proper funding of our education.
  4. Private organizations and individuals will see the need to support government programs and policies and comply accordingly.
  5. It will help me as a public administrator to utilize the opportunity created by the local government effectively.
  6. It will strengthen the administrative arm of government and suggest meaningful ways of overcoming local government challenges.


  • Scope and Limitation of the Study

The scope of this study will be limited to Ehime Mbano Local Government of Imo State. Due to inconvenience, limited time, and financial constraint. This study will focus on revenue generation, utilization and grassroot development in Nigeria.


  • Definition of Terms
  1. Government: it is an agency through which the will of the state is realized of formulated.