EFFECT OF REVENUE GENERATION ON RURAL DEVELOPMENT OF LOCAL GOVERNMENTS IN NIGER STATE

Abstract

Dwindling revenue base of local government councils in Nigeria which poses a major constraint to the viability and performance of the third tier of government premised and necessitated this study.
Rural underdevelopments of local governments in Nigeria are consequent upon paltry uneven vertical statutory federal allocation and inadequate internally generated revenue as revealed by extant literatures. These problems are cogwheel and bane to rural development of local governments’ administration in the country. Therefore, this study explores the effect of revenue generations on rural development of local governments in Niger State. Census sampling technique was utilised, hence the entire 25 local government areas were sampled for a period of four years (2018-2021). The study utilized secondary data, which were analyzed via multiple regression technique, and processed in Statistical Data package (STATA) version 14.2. Rural development was represented by primary health care, agriculture and natural resources, and works and services. Revenue generations on the other hand were proxied with internally generated revenue (IGR), and statutory federal allocation (EGR) funds. Decentralization theory was used to underpin this study. Findings reveal that IGR has a positive influence on rural development, indicating their potentials to finance critical infrastructure and services effectively. In contrast, Statutory Federal Allocation (EGR) exhibits a negative impact, suggesting inefficiencies or misallocation in these funding streams. The study underscores the need for policy reforms to enhance the efficacy of Statutory Federal Allocation, while strengthening the mechanisms for IGR to ensure sustainable rural development in Niger state.