AN INVESTIGATION INTO THE CHALLENGES  OF GENERATING AND UTILIZING REVENUE  IN LOCAL GOVERNMENT ADMINISTRATION (A CASE STUDY OF BERTOUA LGA, CAMEROON)

CHAPTER ONE

INTRODUCTION

Background of the study

The only kind of progress that makes sense, according to (Adedeji , 2020), is progress that originates from within, progress that is driven by the people's wishes and will. According to Adedeji (2020), one of the main assumptions behind the establishment of local governments in Cameroon was that individuals living in specific areas would have the best grasp of their own needs. The people who live in a certain area have a deeper grasp of its history, culture, and distinctive physical, social, and economic features than anybody else. Because of their geographical separation, federal and state governments are ill-equipped to handle many local issues; hence, LGAs are established to fill this void (Aliyu & Kohen, 2019).  Local government administrations have a vital role in providing necessary services and infrastructure to communities. They primarily depend on income collected from many sources to finance their operations. Nevertheless, the difficulties related to generating and using money have been long-lasting and complex, creating substantial barriers to efficient government and service provision.  The fiscal independence of local governments is often restricted by several issues, such as limited sources of income, insufficient financial management systems, and reliance on higher levels of government for budget allocations. Local governments sometimes have challenges in generating money as a result of economic limitations, administrative inefficiencies, and political meddling (Bird & Slack, 2019). The difficulties are worsened in poor nations, where the ability of institutions and regulatory structures may be lower, impeding the efficient mobilisation and utilisation of resources (Martinez-Vazquez & Timofeev, 2017). A major obstacle encountered by local government administrations is their excessive dependence on conventional revenue streams, such as property taxes and intergovernmental transfers, which may not be sustainable or adequate to address the increasing requirements for services and infrastructure (Jimenez & Azizi, 2019). In addition, the unpredictability of income sources, especially during economic downturns or swings, adds more complexity to financial planning and administration at the local level (Huther & Shah, 2012).  Aside from economic concerns, governance problems also play a role in the difficulties faced by local government administrations in generating and using money. Corruption, opacity, and financial mismanagement erode public trust and confidence in the efficiency of local administration (Sharma & Chand, 2016). In addition, administrative bureaucracy and regulatory obstacles might hinder creative methods of generating money and allocating resources (Fjeldstad et al, 2012). Technological improvements have prospects for enhancing revenue utilization techniques in local government administrations. Utilising digital platforms and data analytics technologies enhances the effectiveness of tax collection, revenue forecasting, and financial reporting (Khalil & AbouAssi, 2018). Nevertheless, the implementation and assimilation of these technologies may need substantial financial commitment and the development of capabilities, especially in settings with limited resources. Therefore, the study investigate the challenges of utilizing and  generating revenue  in local government administration (a case study of Bertoua LGA, Cameroon). 

1.2 Statement of the problem

The provision of basic services and the encouragement of social and economic growth are two of the most important functions of local government administrations. To meet their obligations, however, many have enormous difficulties in making good use of and acquiring funds (Ademola, 2019). Local governments in poor nations like Cameroon often face challenges such as inadequate funding, ineffective taxation systems, and institutional shortcomings, making this issue all the more acute (World Bank, 2020). Furthermore, the problem is made worse by structural concerns including corruption and weak governance practices, as well as by the absence of proper plans for using revenues (International Monetary Fund, 2018). Revenue collection and utilization patterns are impacted by unique dynamics brought about by factors including increasing urbanization, population expansion, and a broad economic base (United Nations Development Programme, 2021). Hence, the study investigate the challenges of utilizing and generating revenue  in local government administration (a case study of Bertoua LGA, Cameroon). 

1.3 Objective of the study

The broad objective of the study is to investigate the challenges of utilizing and  generating revenue  in local government administration (a case study of Bertoua LGA, Cameroon). The specific objectives is as follows

Identify the methods used in generating revenue in Bertoua LGA, Cameroon. 

Examine the effectiveness of current revenue generation methods employed by Bertoua  local government.

Investigate the challenges faced by Bertoua local government administrations in generating revenue.

Proffer strategies to enhance generation and utilization of revenue in Bertoua LGA, Cameroon.

1.4 Research questions

The following questions have been prepared for the following

What are the methods used in generating revenue in Bertoua LGA, Cameroon? 

How effective is the current revenue generation methods employed by Bertoua  local government?

What are the challenges faced by Bertoua local government administrations in generating revenue?

What are the strategies aimed to enhance generation and utilization of revenue in Bertoua LGA, Cameroon?

1.5 Significance of the study

The findings of the study will be significant to the following

Findings of the study will be significant to policymakers as it will reveal the obstacles and inefficiencies in revenue generation and utilization, and by so doing, this study can inform the development of evidence-based policies and reforms aimed at enhancing fiscal sustainability and service delivery at the local government level. Insights from the research can guide policymakers in designing strategies to diversify revenue sources, improve financial management practices, and strengthen governance frameworks.

Academic Contribution: The study contributes to the existing body of literature on local government administration. Researchers and scholars can build upon the findings of this study to further explore related topics and develop theoretical frameworks to address similar challenges in other local government settings.

1.6 Scope of the study

The study focuses on the challenges  of generating and utilizing revenue in local government administration (a case study of Bertoua LGA, Cameroon). Empirically, the study will identify the methods used in generating revenue in Bertoua LGA, Cameroon, examine the effectiveness of current revenue generation methods employed by Bertoua  local government, investigate the challenges faced by Bertoua local government administrations in generating revenue and proffer strategies to enhance generation and utilization of revenue in Bertoua LGA, Cameroon.

Geographically, the study is delimited to Bertoua LGA, Cameroon.

1.7 Limitation of the study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. Insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection (internet, questionnaire, and interview), which is why the researcher resorted to a moderate choice of sample size. More so, the researcher will simultaneously engage in this study with other academic work. As a result, the amount of time spent on research will be reduced.

1.8 Definition of terms

Local Government Administration: The management and governance of a specific geographical area at the local level, typically carried out by elected or appointed officials. 

Revenue Generation: The process of obtaining income or funds for a government entity, typically through taxation, fees, fines, grants, or other sources. 

Utilization of Revenue: The effective and efficient allocation of generated income or funds by a government entity to finance various expenditures, projects, and programs aimed at meeting the needs and priorities of the community.