The autonomy granted to Nigerian local governments has automatically created multiple levels of functionalities that could be harnessed to transform the country’s vast rural society. This clearly shows how long the Nigerian people have been constrained by the 36 state governors over the past two and a half decades of democratic governance. It is crucial to understand that becoming the chairman of a Nigerian local government comes with a responsibility comparable to being the president of some small countries in Africa, Asia, Europe, the Americas, and Australia. There are nations across the globe with smaller populations and landmasses than many local governments in Nigeria. However, these countries generate revenue, manage their economies, and achieve high-income status in terms of GDP per capita, like Seychelles in Africa.
There are numerous significant duties essential to promoting and sustaining the economy of any political system, which are not exclusive to the central government under extant laws. I will outline some of these for the sake of clarity as you read further.
Even though the victory of the free-market model of production, advocated by Western capitalism, was solidified through the fall of the Soviet Union, the proto-Soviet model of production that gained traction in Africa throughout much of the 20th century has, today, propelled China into the position of the world’s largest economy by purchasing power parity through what scholars now refer to as State Capitalism. This development illustrates that local governments, too, have the potential to evolve into business empires. The resources currently flowing into local governments as profits from legal autonomy are minimal, especially when viewed in relation to exchange rates, but the model suggests much larger gains are possible with proper economic structuring.
Local governments can attract investment by improving infrastructure such as roads, electricity, and water supply. A transparent regulatory framework and reduced bureaucratic bottlenecks can also encourage businesses to thrive. This can become possible within the shortest time through a conscious negotiation with organised private sectors that can engage in concessioning for “Build, Operate, and Transfer”. The partnership works all over the world and citizens often prefer to pay for it over time than to suffer poor infrastructures. local business owners can enjoy easy access to markets across the country and stimulate local industries and reduce unemployment.
When critical infrastructures are in place, it won’t be challenging for local governments to collect tenement rates and property taxes, and also improve property assessments and ensure compliance. This could include levying taxes on residential, commercial, and industrial properties within the locality, issuing business permits and licenses, collecting market dues, and charging levies on transport operators, such as motorcycle and taxi drivers.
Proper administration of land use charges and fees for services like building plan approvals, land registration, and land leases can be another source of income.
Charging for waste disposal and environmental sanitation services can generate revenue, especially in more urbanized local areas.
Encouraging local agriculture by providing support (e.g., land, inputs, training, and access to markets) to farmers can help generate income. The local government can establish farm settlements and cooperatives to boost agricultural productivity
Developing or improving local markets (e.g., for food, crafts, and textiles) to enhance trade activities and attract traders from surrounding areas. A portion of market transactions could be taxed as local revenue.
Supporting local industries such as pottery, weaving, food processing, or metalworking can help generate income and create employment. Offering grants, training, or microcredit to artisans can stimulate these activities.
If the area has cultural or historical significance, the local government can develop tourism sites. Festivals, cultural exhibitions, or eco-tourism initiatives can attract visitors and generate revenue through entry fees, accommodation taxes, and sales of local crafts.
Through PPP arrangements, local governments can collaborate with private investors to develop critical infrastructure such as markets, transportation hubs, and energy projects (e.g., solar power initiatives), and share the revenue generated.
Industrial Parks: Establishing small-scale industrial parks where local entrepreneurs can set up manufacturing or service-based businesses can promote local production and contribute to the economy.
If the local government has access to mineral resources (e.g., sand, limestone, or other mining activities), it can generate revenue by leasing mining rights or establishing controlled mining operations.
Local governments can also sustainably manage and exploit forest resources, collecting fees from logging and timber sales while enforcing reforestation practices to ensure sustainability.
Local governments can apply for grants and soft loans from federal government programs, international organizations, and NGOs for specific projects such as agriculture, education, healthcare, or infrastructure.
World Bank and Development Projects: Many international bodies provide funds for local development initiatives, particularly in areas of rural development, health, and education. A proactive approach to seeking such opportunities can help fund local government initiatives.
Local governments must enforce financial discipline by ensuring that all revenue collected is accounted for and spent transparently. This can be achieved by using digital platforms to track revenue collection and expenditure.
Effective Budgeting and Planning: Local governments should focus on realistic budgeting, aligning expenditures with revenue expectations, and prioritizing projects that can have a lasting impact on the local economy.
Investing in local educational institutions, especially vocational training centers, will help develop a skilled workforce capable of driving local economic activities. Training youths in trades such as carpentry, tailoring, and IT can empower them to become self-employed or employable.
Healthcare Services: Providing affordable healthcare services ensures a healthy workforce, reducing absenteeism and boosting productivity. Revenue can be generated through modest service fees in health centers and clinics.
Encouraging the establishment of cooperative societies in agriculture, retail, or housing can promote self-sufficiency and productivity within the local economy. Cooperatives can also access funding and technical support from the government and international bodies.
By adopting these strategies, local governments can build a sustainable economy, reduce dependence on federal allocations, and improve the quality of life for their communities.
Odey Otunu
Public Affairs Analyst
odeyotunutom@gmail.com
