REVENUE GENERATION AND RURAL DEVELOPMENT: EVIDENCE FROM ASA LOCAL GOVERNMENT OF KWARA STATE

Abstract

Revenue generation remains pivotal to financing sustainable rural development, especially in developing nations like Nigeria where local governments face persistent infrastructural and social deficits. Despite the constitutional mandate for internally generated revenue (IGR), most local governments remain heavily dependent on federal allocations, limiting their developmental capacity. Against this backdrop, this paperassessed the impact of revenue generation on rural development in Asa Local Government, Kwara State. The study adopted a positivist paradigm and a quantitative descriptive survey design, utilized a sample of 186 respondents drawn from local government administrators, finance officers, planning officers, and community leaders. Primary data were collected through structured questionnaires. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to test the hypothesized relationships among variables. Findings revealed that internally generated revenue which comprised taxes, levies, and user chargescontributes positively to rural development (β = 0.931, P = 0.000), particularly in enhancing education, healthcare, and access to potable water, though its effect on road infrastructure remains modest. The results also showed that revenue generation is significantly constrained by low tax compliance, corruption, weak institutional capacity, and political interference, all of which negatively impact service delivery(β = -0.022, P = 0.332). The paper concludes that while IGR contributes meaningfully to rural development in Asa Local Government, its effectiveness is undermined by systemic challenges that limit its sustainability. It recommends strengthening institutional frameworks such as adoption of digital tax administration platforms to minimize leakages for revenue collection, promoting taxpayer awareness and compliance, reducing political interference, and diversifying revenue sources to ensure adequate funding for infrastructural and social development in rural communities.