The 774 Local Government Areas (LGAs) in Nigeria can earn enough revenue to stay afloat and remain independent of the state governments if they push further to harness property rate, parks, animal tax, business premise and signage rate, among others.
In spite of these revenue windows, there are concerns by LGA administrators, civil societies and analysts, that the LGAs are at the mercy of governors of the 36 states due to the lack of financial autonomy, causing a deliberate dependence on the states’ coffers to run the affairs of the local government, which is the third tier of the Nigerian government.
This LGAs’ dependence is portrayed by the Central Bank of Nigeria (CBN) in its annual economic report for 2021 where the 774 LGAs generated just N570.42 billion in 28 years, from 1993 to 2021 as their Internally Generated Revenue (IGR). The federal and state governments gave the LGAs N24.13trn, bringing the total revenue to N24.768trn during the period.
From the N570bn IGR by the LGAs, the highest revenue of N38bn was generated in 2017 but began a sharp decline to N32.5bn in 2018, N32.6bn the next year, N29.3bn in 2020 and N26.4bn last year.