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Revenue generation is the nucleus and the path to modern development. Thus, this study assessed the various ways of enhancing internal revenue generation in Adamawa state. The research methodology entailed the use of survey research design and purposive sampling method to select respondents from Adamawa State different Finance sections and Inland Revenue Office. The primary data were collected via structured questionnaire from respondents with total of 100 personnel. Data collected were subjected to descriptive statistics and linear regression analysis model to demonstrate the real drivers of IGR in the study area. The result of descriptive statistics revealed that there are several factors hindering IGR and the system of generation. Linear regression also showed that the Challenges like insecurity and corruption, poor man power rating, inaccessible tax were jointly having a positive correlation with IGR. However, despite the huge natural endowment of Adamawa State, Considering the dwindling federal allocations and the controversial allocation measures, it is therefore recommended (among others) that the States should widen its net for the Internally Generated Revenue to achieve meaningful economic development in the very near future. The study also revealed the various methods of generating internal revenue, which are the enforcement of tax personnel, contribution, and creating awareness to the public. The findings of the study however show that revenue administration agencies need to be reviewed to generate more revenue in the country.



1.1 Background of the study

Nigeria’s economic and political fortunes hang on a notoriously precarious but potentially advantageous fiscal federalist system. The system is made up of four cardinal component parts: the Federal Government, 36 state Governments, the Federal Capital territory, Abuja and 774 Local Governments. At least in theory, Nigeria operates on the principle of federalism with three tiers of government among which the constitution allocates varying revenue generation and spending powers. The increasing cost of running government coupled with dwindling revenue has left various state governments in Nigeria with formulating strategies to improve the revenue base. More so, the near collapse of the National Economy has created serious financial stress for all tiers of government. Hardest hit are the state governments all of whom have experienced unusual reduction in their share of the National Revenue from the Federation Account. Despite the numerous sources of revenue available to the various tiers of government as specified in the Nigeria 1999 Constitution, since the 1970s till now, over 80% of the annual revenue of the three tiers of government come from petroleum. However, with declining global oil prices putting increasing pressure on states to explore alternative ways to shore up their revenue earnings, only 11 of Nigeria’s 36 states improved their internally generated revenue (IGR) in 2015. The latest IGR report shows that Ogun, Anambra, Borno, Edo, Bauchi, Abia, Kogi, Nasarawa, Niger, Taraba and Sokoto as the only states that bettered their 2014 records of revenue generation performance in 2015. Among the 24 states that performed poorly included Kwara, Imo, Bayelsa, Adamawa, Akwa Ibom, Benue, Cross River, Delta, Ekiti, Enugu, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi, Lagos, Ondo, Osun, Oyo, Plateau, Rivers, Yobe, and Zamfara. And Ebonyi. Overall performance of the 36 states showed that the total IGR realized for the year dropped by 3.69 per cent, from N707.86 billion in 2014 to N682.67 billion. (NBS, 2016) The need for state and local governments to generate adequate revenue from internal sources has therefore become a matter of extreme urgency and importance. This need underscores the eagerness on the part of state and local governments and even the federal government to look for new sources of revenues or to become aggressive and innovative in the mode of collecting revenue from existing sources. Adenuga and Ogechi, (2013) observed that while the cost of administration by various level of governments keep increasing as a result of many factors, the source to finance these expenditure are drastically reducing, various State governments in Nigeria thus, need to formulate strategies to improve the revenues base. At National level and many states several ambitious strategies and projects have been adopted to find the ways of improving the IGR. It is also worthy to note that most of these efforts perfectly works for many and some policies still keep scoring an own goals in achieving their specified objectives and targets. Adamawa state with its unique socio-economic group, different sources of income and determinants of IGR, research has not been well carry out on this economic threatening area especially using quantitative analysis as this study trying to do. In view of these, this study was set out to look into ways of improving IGR as the state is approaching post Insurgency.


Limited work has been done on the methods with which revenue can be collected in local governments in Nigeria. A considerable number of empirical studies have examined the determinants and sources of local government revenues in Nigeria using different approaches and models. Some of these are cross-sectional studies, time series studies or panel studies (Yahaya etal, 2015). However, despite the number and the variety of studies, empirical evidence on the methods of collecting internally generated revenues in Nigeria has not been robustly examined, thus leaving a gap to be filled. This is more so in the light of the threatening global and nationwide financial crises affecting almost all the thirty six states of Nigeria. Nigeria is blessed with abundant resources, yet the government is unable to efficiently devise effective and efficient method to enhance the collection of internally generated revenue. Most states are currently in the heat of financial crises and majority of them have sought for bail-out from the Federal government. For example, some states in Nigeria are not able to adequately pay their workers, the local governments workers in some of the effected states are suffering from untold hardship; salaries ranging from 3 months to 11 months are yet to be paid to them. Recently the workers of Egor local government council of Edo state protested over nonpayment of seventeen (17) months’ salary and in addition to this, the rate of abandoned projects is on the increase. In fact, this has even encouraged social – vices and poverty in the land. Various steps and measures / methods by the government to ensure the collection of internally generated revenue have not produced the expected results. This has created a further gap in research domain to critically determine a model that is unique and efficient in the method of collecting revenue generated both at the Federal, State and the Local Government levels. The current administration of President Muhammadu Buhari recently came up with Treasury Single Accounts (TSA). The goal of this is to increase the revenue base of the government with a view to ameliorating the current financial problem facing the Nigerian economy. A mile stone progress seems to have been made by the government in this direction, given the over three trillion naira acclaimed to have been collected and deposited into this account – TSA. Besides the TSA, the Federal, States and Local Governments have sources of collecting internally generating revenues which includes Federal allocation, taxes (both direct and indirect taxes), grants, and donation among others. The governments hardly will account for the revenue collected from these aforementioned sources due to revenue leakages occasioned by weak internal control systems, high level of corruption as well as other factors that are both internal and external in nature. There is, therefore, no doubt in addition to these teething problems that lack of effective and efficient method of collecting revenue internally generated at the local government level in Nigeria is the most precarious problem contributing to some of the financial crisis currently being witnessed. Hence the need to come up with a study of this kind, that is not only a path breaking one, but aimed at providing the expected elixir to the government with a view to ensuring the discharge of primary responsibilities to the citizenries. Thus, the problem that this study tries to solve is how to boost the dwindling resources available to Local Government Councils in Nigeria following the gradual reduction of what comes from the Federation Account monthly. It is also to consider how to improve IGR in local governments.


The study has one main objective which is sub-divided into general and specific objective, the general objective is to examine the ways of improving internally generated revenue in post insurgency period. The specific objectives are:

  1. To ascertain the importance of establishing grass root revenue collection centers will have significant relationship with internally generated revenue (IGR) for the period under study
  2. Investigate if the use of communal/village heads will have significant positive relationship on IGR
  • To ascertain if there is any relationship between e-revenue system and the use of touts and agents in improving internally generated revenue
  1. To Ascertain which sources of IGR contribute significantly to IGR growth in the post insurgency period


The following research questions were formulated by the researcher to aid the completion of the study;

  1. Does the establishing grass root revenue collection centers have significant relationship with internally generated revenue (IGR) for the period under study?
  2. Does the use of communal/village heads will have significant positive relationship on IGR?
  • Is there any significant relationship between e-revenue system and the use of touts and agents in improving internally generated revenue?
  1. Which sources of IGR between e-revenue system and agent system contribute significantly to IGR growth in the post insurgency period?


The following research hypotheses were formulated by the researcher to aid the completion of the study;

H0: There is no significant relationship between e-revenue system and the use of touts and agents in improving internally generated revenue

H1: There is a significant relationship between e-revenue system and the use of touts and agents in improving internally generated revenue

H0: The establishing grass root revenue collection centers does not have significant relationship with internally generated revenue (IGR) for the period under study

H2: The establishing grass root revenue collection centers does have a significant relationship with internally generated revenue (IGR) for the period under study


Haven completed the study, the findings will be of significance to Policy makers, the governments, professionals, academia, future researchers, political office holders and heads of revenue units in the Local Government Councils among others will benefit immensely from this research. The policy makers will find the outcome of this study useful in formulating policies that will improve the methods used in collecting IGR at the Local Governments level, help them manage their finances, see the need to remove the barriers to financial autonomy which have been employed by all the State governors to financially cripple the smooth running of the Local Governments Councils. The Executive Chairmen and Heads of Accounts/Revenue Units will definitely find the outcome of the study useful. It will assist them to know how to properly and effectively harness the meager financial resources and employ the suggestible method of collecting IGR in order to enable them implement their constitutionally assigned functions and responsibilities. The Ministry of Finance, Ministry of Budgeting and Planning will find the study useful. The outcome of the study will assist the aforementioned Ministries and Departments to know the various sources and methods of collecting IGRs, enable them plan with it, check discrepancies arising between the expected and actual results.


The scope of the study covers an examination of determinants of improving internally generated revenue (IGR) for post insurgence period. But in the course of the study, there are some factors that limit the scope of the study;

AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study

TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

FINANCE: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.


Revenue: Is the cumulative income accruable to an organization (public or private) from one period to another.

IGR: Is the revenue (income) generated in the form of capital receipts and taxes, which includes local rates, market taxes, and levies excluding any market where state finance is involved.

Post insurgency period: Literally, insurgency is an adjective, which serves to describe the period immediately after a conflict is over


This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.