The primary source of fund for local government is ________?

1. Analyze the question The question asks for the primary (main) source of revenue for local governments in Nigeria. "Primary" means the largest and most dependable source.

2. Explain the concept Local governments in Nigeria raise money from several sources:

• Statutory allocation: the share of the Federation Account that local governments receive. Under the 1999 Constitution, the Federation Account is shared among the federal, state and local governments, and the local government share is paid through the State-Local Government Joint Account.
• Grants: extra funds from higher levels of government, often for specific projects. They are occasional, not the main source.
• Loans: borrowed money. This is rare and needs approval, so it is not the primary source.
• Fines: money from penalties and court charges. The amounts are small and unpredictable.
• Other internally generated revenue: rates (tenement rates), market and motor park levies, licences and fees. These are usually small compared with the allocation.

3. Solution

• Grants are irregular and usually tied to special purposes, so they are not the main source.
• Loans are a last resort, not a regular income.
• Fines bring in very little.
• Statutory allocation is paid regularly, and it makes up the bulk of most local governments' budgets, since many have weak internal revenue.

4. Answer The correct option is C. statutory allocation.

5. Tip Remember: "Primary = Federation Account share." If a question asks about local government revenue, look for the word "allocation" first. Grants and loans are supplementary, while fines and rates are minor internal sources.