PROBLEMS OF LOCAL GOVERNMENT FINANCE IN NIGERIA: A STUDY OF OYO WEST LOCAL GOVERNMENT AREA, OYO STATE
Abstract
Local government is the third tier of government created to bring administration and development closer to the people within Nigeria’s federal system. Yet most councils operate with limited financial autonomy, weak revenue generation, and persistent interference from higher levels of government, all of which restrict effective service delivery. This study examined the problems of local government finance in Nigeria with Oyo West Local Government Area of Oyo State as the case study. A descriptive survey design was used. Data were collected through a structured questionnaire administered to staff of the council, yielding 62 valid responses. Frequency counts, percentages, and mean scores summarized perceptions, while Pearson Product Moment Correlation tested the hypotheses. Findings show that financial challenges significantly hinder sound financial management and that mismanagement directly undermines healthcare, education, and infrastructure development. The study also establishes a positive link between effective financial management and improved revenue generation. The research concludes that overreliance on federal allocations, inadequate internal revenue, and weak financial practices remain major barriers to local development in Oyo West. It recommends stronger financial controls, diversified revenue sources, technology-driven budgeting, firm anti-corruption measures, and active community participation to enhance financial autonomy and grassroots service delivery.
Keywords: Local Government Finance, Financial Mismanagement, Revenue Generation
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