Economics Project Topics

Revenue Utilization and Economic Development in Enugu State: A Study of Igbo Eze North Local Government Area (2017 – 2022)

Revenue Utilization and Economic Development in Enugu State: A Study of Igbo Eze North Local Government Area (2017 - 2022)

Revenue Utilization and Economic Development in Enugu State: A Study of Igbo Eze North Local Government Area (2017 – 2022)

Chapter One

Research Objectives

Generally, the study intended to assess the impact of revenue collection on economic development in local governments. Specifically, the study intended:

  1. To examine the challenges Igbo Eze North Local Government Area faced in the collection of
  2. To examine how economic development in Igbo Eze North Local Government Area could be
  3. To establish the relationship between revenue collection and economic development in Igbo Eze North Local Government Area




This chapter’s goal is to make the deficiencies in the mentioned literatures clear so that they can be filled in the study. It also aims to make new discoveries about revenue collecting and local government. This chapter is divided into sections, with sections 2.2 and 2.3 presenting theoretical literatures, section 2.4 presenting empirical literatures, and section 2.5 presenting a conceptual framework.

General Overview About The Study

This chapter’s goal is to make the deficiencies in the mentioned literatures clear so that they can be filled in the study. It also aims to make new discoveries about revenue collecting and local government. This chapter is divided into sections, with sections 2.2 and 2.3 presenting theoretical literatures, section 2.4 presenting empirical literatures, and section 2.5 presenting a conceptual framework.

Ewujowo (1996: 68) asserts that money from the personal income tax originates from establishments connected to the government and its employees.

Ironically, the tax system in this country is progressive and the collection is prompt and efficient only when it comes to the organized private sector and the public sector (government ministries, parastatals, and government agencies). When it comes to the assessment and collection of direct tax from the nation’s self-employed citizens, who make up the wealthy members of society, it becomes challenging.

For instance, it was discovered that many highly positioned persons never paid tax because it was mandatory for candidates vying for political offices to do so in 1979. Because they paid their taxes in some regions retroactively, this raised the question of whether one should pay taxes when they are due.

However, the state’s continuous employment of revenue consultants is making things worse. Since then, the majority of other states no longer evaluate and collect revenues using revenue consultants.

Nzewi (1986: 108) claims that because of the unprogressive character and ineffectiveness of the system for collecting direct taxes, the powerful and wealthy in society pay less. Actual tax receipts typically decrease in an inflationary environment.

According to Ewujowo (1987: 62), the tax administrators’ incapacity to maintain control over and secure official papers led to a high degree of corruption among tax payers and officials, which led to bogus tax clearances. The inactivity of the entire taxation system in emerging nations, with special reference to Nigeria, has been attributed to certifications and a lack of stimulation in the new fields of tax through research. Also, it was shown that a lack of coordination between federal and state tax officials facilitates tax evasion, impedes development, and reduces tax income. A visit to any revenue officer, federal or state, will disclose a manpower deficit, despite the fact that millions of people are out on the streets and unemployed. No tax system, whether it be for income or property, will ever prosper, according to Olaruko (1988: 201).

Conceptual Review


Delivering or producing items, providing services, or engaging in other activities that make up the entity’s ongoing major, or central, operations results in inflows or other enhancements of assets, or settlement of liabilities. The fact that revenues are inflows is a crucial aspect. The business receives something in return for giving customers products and services. Also, supplying these products and services is one of the main operations of the business (FASAB, 2000). This speaks of the influx of funds that the government requests, earns, or receives as a gift. Revenues are inflows or other improvements to an entity’s assets or settlements of its liabilities (or a combination of both) by providing goods or services, producing them, or engaging in other ongoing main or central operations (FASAB, 2005). Revenue refers to the income of government. Revenue is critical as it determines to a large extent how much money will be available for spending.

Revenue collection

this covers revenue collection, client administration, debt and credit management, and registration and management of the poor. The fact that a significant number of municipal customers are impoverished and hence unable to pay for services must be taken into account when developing financial plans and business strategies (USAID, 2007)

Local government

refers to a political subdivision established inside a state to carry out the duties and responsibilities bestowed by legislative or constitutional laws. Local governments are quasi-sovereign or sovereign states’ infra-sovereign geographic divisions. Like other governmental units, local governments have a set territory, a population, an organization, the right to engage in, and the ability to carry out, public activities. In any political system, local government is the smallest administrative division. It is the lowest level of government in a contemporary state organization and is legally independent, having the ability to generate its own income and carry out tasks allocated to it by the constitution. It is the lowest tier possible for the exercise of representative government (Okotie, 2010).





This chapter deals with the description of the methods that were applied in carrying out the research study, how data were collected and analyzed. The chapter was organized under the following sections: section 3.2 presents area of the study; the research design in section 3.3, section 3.4 presets study population; section 3.5 sample size and sampling procedures; section 3.6 is data collection methods; section 3.7 presents data processing and analysis.

 Study Area

The Research was conducted at Igbo Eze North Local Government Area Council, Igbo Eze North Local Government Area Local Government in Enugu state, and the district chosen because it’s familiar to the researcher, and it’s relevant to the research topic.

Research Design

Research design is well understood as a logic plan of how to conduct a research (Kothari, 2004). This study used both qualitative and quantitative research approaches. Both approaches were used so as to complement each other and overcome the weaknesses of a single design, therefore enhance validity.

Qualitative research approach refers to all non-numeric data or data that have not been quantified and can be a product of all research strategies (Saunders and Thornhill, 2009). While Quantitative approach involves collection of quantifiable data which are normally in-terms of numbers, tables, charts and figures to mention a few. It is the approach which produces findings arrived at by means of statistical procedures or other means of quantification. One disadvantage of quantitative research is that the more structured data collecting approach may cause stress to the participants, thus not showing an accurate reflection of the true results, this disadvantage will therefore be overcome by using qualitative data collection which allows much flexibility to participants.

Therefore, a case study research design was used in this study because the researcher intends to gain a deep and thorough understanding of the phenomena and because of its flexibility of the data collection methods. A case study design was used because participants come from a single case, also an experimental study design is not appropriate because there will be no random assignment of participants into control and treatment groups. Also case study is mostly associated to qualitative research method.

Study Population

Population defined as the target group to be studied in a particular place while a sample is a part of population. Population is therefore, a total collection of elements about which one wishes to get information (Krishnaswami, 2002). This is the totality of objects under investigation (Kamuzora and Adam, 2008). For the purpose of the study, all staff of Igbo Eze North Local Government Area Local Government both at the Headquarters and at local government levels from whom a representative sample were drawn by the researcher to carry out this study.




This chapter presents the analysis, discussions and findings on the effectiveness of revenue collection on economic development in Igbo Eze North Local Government.




Basing on the main research objective or question of this research, that is to say examine the relationship between revenue collection and economic development in Igbo Eze North Local Government Area Local Government, It was established that economic development in Local authorities has a direct relationship with Local revenue collections. Largely, Igbo Eze North Local Government Area Local Government had registered a fundamental decline in economic development because of poor revenue collections.

Worth noting is that Local Revenue Collections could generally be improved by sensitizing the entire community from which revenue is collected. Therefore, even though Igbo Eze North Local Government Area Local Government undertook various procedures and plans to improve Local revenue collection figures to a certain extent, there is still much to improve the Local revenue collection for better economic development.

The study depicted that Enugu state faced various challenges as far as revenue collections was concerned, ranging from social, economic as well as political spheres of life. However, the study showed that such challenges were inherent in the political setup of the Local Governments and were deep rooted in all the social and economic structures of Enugu states.

The research findings showed that even though most of the challenges were inherent in the structures of the Local Government, they were not beyond control. It showed that low or poor revenue collections within Enugu state could be improved by implementing various policies, such as; motivate the tax authorities, check on political interference, sensitizing communities, privatization of revenue collection services, increase on Government grants to Local Governments. Significantly, the findings depicted the budget as an important financial as well as management tool as far as revenue collection and economic development were concerned. The research findings showed that the budget along with reports and records are key tools in the whole system of tax assessment, collection as well as administration. The findings depicted that economic development increased with increase in revenue collection and decreased with decrease in revenue collection. This could be noted from the various services like roads financed by Local Governments as well as services like garbage collection in urban centers within Enugu state.


Following the findings, the researcher calls to address the main challenges that contribute to the declining trend of Local revenue collections in Local authorities that include, political interference, poor tax collection systems, inadequate facilitation, traditional defaulting. Such challenges should be addressed using the following measures as analyzed below:-

  1. Motivating revenue collectors. The tax collectors should be highly motivated. For example, they should be given moral support from Enugu state authorities. Motivation should also be in form of incentives like high salaries, high wages adequate security or protection from the would be threats to the lives of the tax
  2. Trying to mobilize politicians not to interfere in revenue The politicians should draw a clear line between their role and that of the tax authorities. They should be called upon to be professional in the approach as well as ethical for the proper running of the District affairs. For example, they should not be a safe haven for the tax defaulters.
  • Assessment /Enumeration. There is need for proper tax assessment. This will enable the taxpayers to know the amount of revenue they are supposed to This may involve analyzing the various tax bases within the Local Government.
  1. Sensitizing the entire community. The masses should be sensitized about the benefits of paying taxes. For example, they should be enlightened that their contribution in form of taxes leads to effective economic development.
  2. Privatization of revenue sources. Enugu state authorities should privatize the collection of revenue in the District. This will enable increased revenue (income) as the private firms will ensure that the loopholes in the tax system are bridged or
  3. Training revenue The revenue authorities should be further sensitized about their role. For example through seminars, and others should be given scholarships by Enugu state to go for further studies and acquire more skills. This will help to check on inefficiency due to inadequate education.


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