The adverse situation in the various local government areas of Nigeria has led the researcher to go into this very topic. Hence, the purpose of this work is to enlighten people, mostly students in the school of financial studies on how revenue is generated in local governments, problems confronting them as regards revenue generation as well as prospects to the problems. However, local governments are expected to use the fund generated in embarking on income earning projects, projects, that come under fee or bill charging utilities like portable water, electricity, construction of market squares etc.
However, before fund can be generated, one must make ways of getting the funds like grants given to local governments for some purposes by the federal government. The central government also determines the sources, extent, purpose and maximum duration for which borrowing is to embark upon by the local government and not just going ahead to borrow.
Local government raise loans to purchase plants and equipment, as well as other projects whose costs are too great for them to embark on at a time.
Furthermore, local authorities in Nigeria are responsible for the establishment and maintenance of public motor parts, bad roads, market squares etc.