LOCAL GOVERNMENT FINANCE AND COMMUNITY DEVELOPMENT IN NIGERIA

Abstract

Using the Ordinary Least Square (OLS) method, the research investigates the effect of local government budget on community development in Nigeria. The findings show that the overall loan taken out by local governments has a negative and significant effect on human development. Additionally, it was discovered that municipal governments' overall spending had a somewhat favourable effect on human development. Additional research revealed that local governments' present revenues significantly and favourably affected human development. The rate of population expansion had a detrimental and severe impact on human development. The total amount borrowed by municipal governments also had a detrimental but little effect on life expectancy. The results also demonstrated that local governments' overall spending, current revenue, and real GDP growth rate all had a favourable and significant impact on life expectancy. Local government autonomy is recommended. With local government autonomy, federal allocation (revenue) as well as other revenues will come direct to the local governments and not through the state governments. This will ensure higher revenue for the local governments to carry out development-oriented projects and programmes. Also, local government authorities should utilize available revenues in bringing about desired community development in the areas of human development in Nigeria. Local government autonomy is recommended so that revenue from the federation accounts and other revenues could go directly to local government, not through state governments. This could improve on local government revenue base and bring about desired human development in Nigeria.