Internally generated revenue efficiency in rural local governments: evidence from Gwarzo and Kabo LGAs, Kano State, Nigeria

Purpose: This study investigates how local governments generate and manage internally generated revenue (IGR) in Gwarzo and Kabo Local Government Areas of Kano State, Nigeria, with the aim of understanding its effect on public service delivery. The research is motivated by concerns over limited revenue capacity and its implications for the provision of essential community services. Methodology: A quantitative comparative case study design was adopted. Structured questionnaires were administered to 100 local government employees across both LGAs. Data was analyzed using descriptive statistics, independent sample t-tests, and Pearson correlation to assess differences in revenue generation, management efficiency, and their relationship with service delivery outcomes. Results and conclusion: The findings show that both LGAs rely on similar revenue sources, including market taxes, business permits, motor park levy, and tenement rates. Internally generated revenue was moderate in both areas, with no statistically significant differences observed. Efficiency in revenue management and institutional challenges were found to have weak and insignificant effects on service delivery and overall revenue outcomes. The study concludes that structural and systemic reforms are critical for enhancing the financial performance of local governments. Implication of findings: The results highlight the need for capacity building, improved transparency, and stronger revenue enforcement mechanisms. Expanding the revenue base, improving collection efficiency, and reinforcing accountability are essential to ensure effective service delivery and foster grassroots development in rural local governments.