A PANACEA FOR SUSTAINABLE GROWTH AND DEVELOPMENT IN THE RURAL AREAS OF EBONYI STATE
1.1 INTRODUCTION
Revenue and perhaps human and technical resources
constitute the major factors of any developmental project. However, revenue
plays a leading role because human and technical resources are been driven by
effective revenue mobilization. As Egwu, puts it, at the centre of any economic
activities is finance.
Development
is capital intensive and therefore depends mainly on availability of adequate
revenue. Development refers to a sustained socio- economic transformation. It
touches virtually every aspect of human endeavor. To the individual, self
development and actualization depends mainly on the level of income and
prudence. In a business enterprise, development may reflect in expansion,
market domination, enhanced staff welfare, improved product quality and
quantity, consumer satisfaction etc. All these are dependent on the
availability of capital and effective utilization of surpluses or profit
revenues accruable to the firm.
On the part of the government,
development is measured interns of the level of output, per capita income and
the peoples’ standard of living.
Running of government at the federal,
state or local level is capital intensive. This is because the government owe
it as a duty to maintain law and order, develop the economy and provide
essential services for the people. In the provision of these essential services
attention has been shifted to the rural areas by all levels of the government.
This is perhaps in an attempt to balance the socio economic development of
society. Thus one of the major focus of the government today is the development
of the rural areas. The success or failure of this programme will however,
depend on effective and efficient revenue mobilization and management. No
wonder, effective and efficient revenue mobilization and sound fiscal policy is
said to be a very serious business of the government. Ugwu 2011, emphasized
that the capacity of the government, local state or federal to provide adequate
public services, maintain these service as well as undertake additional
development projects is severally hampered or deterred if these is short of
fiscal revenue.
In Nigeria, government revenue come
from two major sources. The first is allocation which comes from the federation
account to the three tiers of government every month. This is supported with
the internally generated revenue (IGR) which is usually sourced locally by the
respective government. How far the internally generate revenue could go (if
effectively and efficiently managed) in promoting rural development in Ebonyi
State is what this paper settees to discuss.
A paper of this nature, in view of
the immense importance of its focus ought to be very extensive and
comprehensive. However, owing to resource constraints, especially as it affects
time, finance and data, attention will be briefly given to the following
areas:-
i. The
meaning of internal generate revenue (IGR)
ii. IGR
in Ebonyi State
iii.
The need for
rural development in Ebonyi State
iv.
Revenue and
development __________the need for efficient management of the IGR
v.
Revenue
management guide/technique
1.2 WHAT
IS INTERNAL GENERATED REVENUE (IGR)
Perhaps it is best to start by understanding that
revenue simply means monetary income. To an individual, revenue relates to
personal income which could be earned from farm proceeds, salary/wages or
returns from investment. To a business enterprises, revenue refers to earned
profit, donations or returns from other investments etc.
On the part of the government,
according to Macmillan dictionary of modern economics, government revenue
refers to all money received other than from issue of debt, liquidation of
investment agency and private trust transitions. As noted early, government
revenue in Nigeria could come from the federation accounts or internal sources.
Ugwu noted that the federal government assigns the tax base and the range of
tax rates. The state and local government can increase or expand the tax base
by improving their tax administration and increasing the tax rate within the
legal range. According to him government revenue simple refers to various firms
of taxation, levies, interests and other returns on government assets. He
further noted that money received by the government through borrowing (public
debt), sale of government fixed assets and trust transaction are not part of
government revenue. The are capital receipts. Internal generated revenue
therefore refers to incomes sourced internally or locally by the government
within the limit of the tax law.
1.3 INTERNAL
GENERATED REVENUE IN EBONYI STATE
Ebonyi, like every other state in Nigeria relies
mainly on money from the federation accounts and its internally generated
revenue for running the government. Unfortunately, Ebonyi is said to be one of
the least paid in the federation accounts. Yet internally generated revenue in
the state is grossly insignificant. This is due to the small size of the state,
underdevelopment, lack of commercial and industrial market, poor road net work
and almost complete absence of industries.
The sources of internal revenue in
the state includes personal income tax, company tax, property tax, and
loyalties. Others includes fines, licenses, rates, payments for public
utilities, surpluses from such public utility departments etc.
Every effort to obtain a report of
the state internal revenue in the recent time failed. However it was gathered
that the internally generated revenues have improved in the state. This is due
to the intensified revenue derive by the present administration in resent time.
1.4 THE
NEED FOR RURAL DEVELOPMENT
Development is a very complex phenomenon. It has no
straight forward definition. Some regard development as a total transformation,
while others describe it as a gradual socio-economic reformation.
In this paper development will be explained
as a sustained change for good, an improvement that is consistent and
sustainable. Rural development is therefore the socio-economic transformation
of our rural areas. The rural dwellers, like other citizens whose income are
directly affected by the government expenditure, expect government to do more
to improve their welfare.
The primary objective of the rural
development programme of the government are to:
i.
Reduce economic
inequalities.
ii.
Ensure even
distribution of social amenities.
iii.
Alleviate social
indiscipline.
iv.
Reduction of
rural-urban drift.
v.
Reduce pressure
on urban amenities.
vi.
Reduce social
crimes.
vii.
Increase/ promote
agricultural productivity.
viii.
Improve on the
standard of leaving of the rural dwellers and thereby close the gab between the
rural and urban man.
ix.
It is a good
means of income redistribution.
x.
The people are
compensated for their tax and gift of natural resource in their localities
being tapped for the development of the entire state.
1.5 REVENUE AND DEVELOPMENT THE NEED FOR
EFFECTIVE AND EFFICIENT MANAGEMENT OF THE INTERNAL GENERATED REVENUE
Considerable attention has been given to the meaning
of revenue in this paper. But then the relationship between revenue and
development. Every revenue is meant for development of some kind. The
indispensability of remove in the area of development is not in doubt. Idam
2008, observed that generally, every business, whatever the type, starts with
fund. He described finance/revenue as the lubricant that ensures the proper
functioning of every business and other social systems. According to Idam,
finance determines the success or failure of every economic activities and it
makes the difference between wealth and poverty.
One more thing is the need for
effective and efficient revenue management. Research into the failure of
business has identified two major causes. Poor finance, and poor financial
management. In Nigeria today, the bane of our economic and social system is
financial crimes. Misappropriation of public fund, diversion and embezzlement are
the order of the day.
It is in the light of this mistrust
that considerable attention is now focused on internal control, planning, cash
flow and sources or means of collection. Also to be monitored are approval for
usage, handling charges, and detailed spendings. Transpiercing and
accountability are therefore to be the watchword of those entrusted with public
funds. This is to ensure prudent and judicious management of public funds.
Idam asserted that any business that
does not manage its finance efficiently will inevitably collapse. Lawrence and
Ama noted that for an organization to properly position itself for the
requirement of the competitive environment, it must balance effectiveness and
efficiency. According to them, effectiveness occurs when a manager uses the
resources available to achieve set objectives; little or nothing is wasted
while meeting the target at the planned period. But efficiency is achieved when
the available resources is used to surpass the targeted objectives at the end
of the planned period. Thus in efficiency, achievement, resources that could
have been regarded as little or insignificant are managed judiciously. This is
the level of management needed in handling internally generated revenue in
Ebonyi State to make provisions for our rural development.
RECOMMENDATIONS ON REVENUE MANAGEMENT
AND CONTROL
v The personnel in-charge of collection and possibly disbursement of public revenue must be
properly identified and must be people of proven integrity – to reduce
financial crimes.
v Revenue receipt booklet must be officially designed
and monitored to avoid forgery or unauthorized duplication.
v Strict remittance measure should be put in place. For
instance all money collected could be lodged in the bank within twenty-four
hours and trailers submitted at the appropriate office(s).
v The life span and the expiry date of each revenue
receipt issued must be clearly indicated.
v There should be daily summary of collected revenue in
each department.
v Periodical report of public revenue should be prepared
for routine cheek.
v Estimate of expected revenue should be made at the
beginning of every financial year. This will be useful in evaluating be annual
revenue report/ accounts.
v Proper account of public revenue must be kept in line
with the standard according system. Also, there must be a statement to show
approvals and detailed expenditure made.
CONCLUSION
Rural development is a global effort toward poverty
alleviation and social equity, and Ebonyi State will not be left out.
Since money from the federation account is grossly
inadequate, rural development must be financed from the internally generated
revenue.
Internally generated revenue in the state is also
grossly insignificant. Hence, there is great need for effective and efficient
revenue management.
Revenue derive must be intensified. The people and
business firms should be educated on the need to pay their taxes. Tax
administration in the state should be made in line with tax principles of certainty
convenience etc for easy collection. And transparency and accountability must
be ensured.
REFERENCES
Linus
Egwu Idam (2008), Business Finance (INNARROK Enterprises, Abakaliki).
Lawrence
C. Okafor and Amah A. Udu (2005), Business Management
(Ehyce kere Publishers, Enugu)
Odi
Nwankwo ACIB (2005), Dimensions of Financial Management. (Jones Communications Publishers,
Enugu).
Igwe
B. N. (2007), Taxation for Tertiary Institutions (Destiny Creative print and computers, Abakaliki).
Ugwu
Monday J. Okereke (2011), Public Finance in Nigeria, An Integrated Approach
(Ugub’s Printing & Publishing Co. Abakaliki).