The major source of local government revenue is

Analyze the question: The question asks for the major (main) source of revenue for local governments, especially in Nigeria.

Concept: Local governments collect some money themselves (internally generated revenue), such as:

• Rates (tenement rates), market fees, and licences
• Fines and court fees
• Income from investments or property
• Donations and loans

However, these sources are usually small. Most local governments in Nigeria depend mainly on statutory allocations. These are grants from the Federation Account, which are shared among the federal, state, and local governments. Local governments also receive a share from the state's revenue. This means the bulk of their funds comes from higher levels of government.

Solution, option by option:

• A. Donations: occasional and small, so not a major source.
• B. Income from investments: most councils have few profitable investments, so the amount is small.
• C. Loans: borrowing is irregular and limited, and it is not a routine source of income.
• D. Grants from the central authority: these are regular and make up the largest share of local government funds.

Answer: D. Grants from the central authority.

Tip: When you see "major source of revenue" for local governments in Nigeria, think "allocation from the Federation Account", which means grants. Internally generated revenue is usually the minor source.