CHAPTER ONE
INTRODUCTION
1.1      BACKGROUND TO THE STUDY
Nigeria is the most populous country in Africa, with a population of 170 million, 65 percent of whom live in rural areas. In the pursuit of development at the grassroots, local government was created to provide efficient services to dwellers at the local levels. Everywhere in the world, irrespective of the system of government, local government is created to ensure efficient services at local level.In Nigeria, local government is the third tier of government whose major responsibility is to provide efficient services to the rural dwellers, a service that hinges on proper financing.
Finance, otherwise known as money or fund occupies a very prominent position in organisationsn, be they private or public. Indeed of the many factors that do affect organizational performances, none is greater than finance. Finance is the engine room of all organizations including local governments (Idahosa and Nchuchuwe cited in Olojede, Fajonyomi and Fatile, 2011).
It has become imperative in view of the fact that in recent time, since 1976, the roleof the local governments as a veritable instrument for rapid development of rural, and even the urbanareas have taken a central stage albeit without a corresponding access to prerequisite financialresources to meet this expectation. Interestingly, the sources of funds for this tier of administrativeauthority have continued to dwindle over the years with the ascendancy of both the central and state asthe key actors in the Nigerian political economy. The local government is relegated to the backstage.
Adedokun (2012), clearly made this situation explicit by asserting that “the federal structure of Nigeria constraints local government’s ability to mobilize and use revenue to meet their obligation in a sustainable manner”. He notes further that One of the recurrent problems of the three-tier system in the country is the dwindling revenue generation as characterised by annual budget deficits and insufficient funds for meaningful growth and development.
Therefore, it behoves the students, scholars and other stakeholders of public administration to tarry, and ponder on how this meagre financial resource could be properly and effectively harnessed in order to enable local governments implement their constitutionally assigned functions and responsibilities.
Undoubtedly, Finance and its prudent management are the bedrock of effective functioning of local government. It is against this backdrop that Tonwe (cited in Ojo 2009) argues that local government require finance to perform their statutory functions. The ability of the local government to do this is largely dependent on availability of fund, coupled with efficient management which constitutes the required catalyst necessary for timely execution and completion of their development projects.
Nigeria’s experience in local government administration, whether in military regimes or in democratic era, has clearly shows that local government is faces with daunting challenges in their mandate to promote development and provides essential services to the rural dwellers. Sadly, local government which is statutorily established to be the closest tier of government to the people is not doing its bidding coupled with the fact that resident population in it is denied the benefits of its existence. The failure of the local governments in the area of services delivery has made the citizens to lose their trust in government as an institution. In some areas, council officials are better known for the harassment of citizens than service delivery (Ajibulu cited in Adeyemi, 2013).