THE IMPACT OF LOCAL GOVERNMENT FINANCE AND IT’S UNDER UTILISATION IN PLATEAU STATE

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CHAPTER ONE

1 Background to the study

Local government is a government at the grassroots level. According to Ojofeitimi (2000), the word “local” connotes that councils are meant for small communities and the word “government” means that they have certain attributes of government. Thus, local government can therefore be defined as “… a political sub-division of a nation (or in a federal system, a state) which is constituted by law and has substantial control of local affairs including the power to impose taxes or to demand labour for prescribed purposes. The main responsibilities of local governments in Nigeria as noted by Obinna (1998) include mobilization of local resources, promotion of social and economic improvement and development as well as national unity. They are also expected to carry out regional policies with respect to agriculture and selected industries, thereby helping to ameliorate unemployment. Part of the responsibilities of local governments includes revenue generation, budgeting, development planning, provision of services and community mobilization.

 

Given these multifarious responsibilities, local governments were equally bestowed with many sources of revenues to cope with these demands. Unfortunately, many local governments in Nigerian have taken this to be a filial responsibility as many local governments lack basic social amenities like pipe borne water, good road, recreational facilities etc.

An incisive look into local government administration in Cross River state is nonetheless different, as development in the rural and urban areas Cross River state’s local governments evenly spread to accelerate socio-economic development within its local jurisdictions. Despite this measure, most of the local government areas are far from the dream land. Faced with many challenges, the major challenge of local government administration in Cross River state and Nigeria at large is finance.

Finance as noted by Amujuri (2004: 109) is the brain as well as the central nervous system of any organization. It is the lubricant that makes administrative machinery especially of formal organizations work. Although, local governments require finance to

 

perform their statutory duties, the need for efficient management of available funds cannot be overemphasized (Tonwe, 1995).

Financial management has to do with the efficient use of funds. It is a method of showing and ascertaining the financial position of government or business from time to time (Light, 1974). Buoyed by the need to enthrone development within the local government areas in Nigeria, various financial regulations have been put in place to enhance good governance, accountability and transparency. But sadly enough, these regulations are rarely adhered to, as funds mend for development initiatives, most times end up in private accounts or pockets of principal officers of the local governments through various forms of corruption