The relationship between internally generated revenue and government financing in Kwara state: a critical evaluation
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Date
2014
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Accounting, Adekunle Ajasin University
Abstract
Overreliance on federal allocation by Nigerian Sates placed them in an invidious financial position that led to agitation for consistent review of allocation formula as well as call for increased funding of the states. This study evaluates the extent to which internally generated revenue could finance Kwara State expenditures between 2002 – 2011 using secondary data relating to Internally Generated Revenue (IGR) , Total Revenue (TR), Total Expenditure (TE), Capital Expenditure (CE) and Recurrent Expenditure (RE). A ration/trend analysis of the relationship among the variables was carried out to determine the ability of the state to meet its capital project financing while satisfying employee demands in the absence of federal allocations while a regression analysis to measure the relationship among the variables is also carried out. The study reveals that IGR is insufficient to either finance RE or CE individually not to talk of combining the two while its reliance on federal allocation is perilous, IGR constitute an insignificant proportion of TR and contribute minimally to economic growth of the state. The study therefore recommends effective capturing of existing revenue base, identification of other revenue sources while effective revenue administration should be entrenched to ensure maximum revenue collection and remission with a view to block tax avoidance /revenue leakage for effective deployment of IGR towards government financing.
Description
Keywords
revenue, government financing, financial status
Citation
Olaniyi, T.A., Olanrewaju, Y.E., Abiola, W.O. & Sakariyahu, O. R. (2014): The relationship between internally generated revenue and government financing in Kwara state: a critical evaluation. AAU Annals of Accounting, Educational & Social Research. 1 (2); 1:18