Impact of Internally Generated Revenue on Economic Growth of Lagos State
CHAPTER ONE
Objectives of the study
The broad objective of this research is to evaluate the effect of internally generated revenue on the economic growth of Lagos State.
The specific objectives are;
- To examine the relationship between internally generated revenue and economic growth in Lagos State.
- To ascertain the extent which value added tax has contributed to government developmental effort.
- To evaluate the extent to which internally generated revenue has contributed to the economic growth in Lagos State and it various sources.
CHAPTER TWO
LITERATURE REVIEW
Conceptual Review
Economic Growth
The notion of economic growth and its determining factors belong to the main topics of economics discipline. The interests result from the principles of human being, the necessity of satisfaction of unlimited needs. Its sources form and effect was high on the agenda of economist.
According to Arabian economic thinker IbnKhaldum In 1377 provided one of the earliest descriptions of economic growth in his famous mugadima (known as prolegomena in western world) the idea of economic growth then was that increasing either population or tax rate could generate more surplus money for the crown or the country. Adam Smith (1776) saw economic growth (output) to depend on the amount of input (land, labour and capital) and the output is determined by population growth, increase in investment and land and total labour productivity growth, David Ricardo approach to growth was gained through advantageous trade but trade
with other nation on equal term was disadvantageous. Solow (1956) in his growth model emphasize that capital accumulation and exogenous rate of exchange in population and technological progress as the sources of growth, Romer (1986) based his idea that long run growth is determined by economic incentives.
In view of the above, the concept of economic growth refers to growth of potential output. That is production at full employment which is caused by growth in aggregate demand or observed output.
It is theoretically defined as the increased in the value of goods and service produced by an economy. It is conventionally measured as the percentage rate of increase in real GDP.
Gross Domestic Product (GDP) is the monetary value, in local currency, of all final economic goods and services produced in a country during a specific period of time. It is the broadest financial measurement of a nation‘s total economic activity. The total goods and services bought by consumers encompass all private expenditures, government spending, investments, and exports but exclude imports that take place within a designated country. Below are three different approaches to the GDP formula.There are three methods or formulas by which GDP can be determined:
CHAPTER THREE
RESEARCH METHODOLOGY
Research Design
The study adopted ex-post facto research design which provides empirical solution to research problems by using already existing data.
Sources of data
The secondary data were collected from the Central Bank of Nigeria (CBN) Statistical Bulletin from 1981 to 2016.
Method of data collection
The data were collected on Real Gross Domestic Product (RGDP) being proxy for economic development, and on the predictor variables which were the Total Internally Generated Revenue (TIGR), IGR accruing to the Federal, States and Local Government Councils.
CHAPTER FOUR
RESULTS AND ANALYSIS
Introduction
This chapter reports the result of the approaches employed in the study. This is aimed at attaining the objectives and testing the hypothesis stated in chapter one.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
One of the IGR collection hindrances identified in the study is the inadequate provision of goods and services that will benefit common people and also boost economic growth. Based on this challenge people do not see payment of taxation and other levies as a civic responsibility (NGF, 2015). The study revealed that the impact of IGR on economic development in Nigeria is robust and positively significant. Everyone believes that government expenditure is high but lacks physical evidence due to corruption. Targets of achievable projects from IGR should be set and vigorously pursued.
Policy recommendations
Base on the findings of the study, the following recommendations were made:
- The state government should imbibe the culture of fiscal discipline as well as huge capital expenditure so as to ensure growth in output level in the state.
- The government should ensure that more funds are being expended on developmental project rather than stomach infrastructure couple with adequate and properly monitoring in order to achieve inclusive growth of output.
- The rate of interest should be market determined in order to encourage investment inflow into the state.
- Price control mechanism should be put in place with the aim of checkmating the undesirable effect of inflation rate on the economic output of the state.
Further research is recommended on investigation of the physical application of IGR on government expenditure in comparison with the IGR inflows in all the states and local governments in Nigeria.
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