Asian Journal of Economics, Business and Accounting

Internally generated revenue (IGR) is a vital funding source for local governments in Nigeria, yet its effectiveness is undermined by challenges such as corruption, weak transparency, and poor accountability. This study assessed Internally Generated Revenue (IGR) and its effect on community development in Alimosho Local Government Area, Ikotun, Lagos State. It identified the main sources of Internally Generated Revenue exploited by Alimosho Local Government, assessed the effect of Internally Generated Revenue on Community Development in the Local Government, and also investigated the challenges hindering effective Internally Generated Revenue Generation in the Study Area. These were with the view to assess Internally Generated Revenue and its effect on Community Development in Alimosho Local Government Area. This study adopts a descriptive research design, which accurately and systematically describes a population, event, or situation. There were 400 workers in the Alimosho Local Government Area, Ikotun, Lagos State. This sample size covered 400 workers in the Alimosho Local Government Area, Ikotun, Lagos State. Both primary and secondary sources of data were employed for this research. Data were collected primarily through questionnaire and interview. Sixty (60) copies of structured questionnaire were administered representing 15% of the total population of staff working in the Local Government. The copies of questionnaire were administered using random sampling technique and later analyzed by the use of simple statistical tools such as frequency distribution and simple percentages, and also chi- square statiscal test was utilized. Interview was also carried out on ten (10) respondents selected from five (5) revenue officers who dealt mainly with the collection of revenue proceedings and five (5) senior staff at the management level of the local government. Secondary data such as theses/ projects, journals, text books, newspapers, and internet were also consulted. Findings revealed that Internally Generated Revenue was primarily sourced from taxation, market fees, licenses and permits, fines and penalties, rates and levies, and other service-related charges. While these revenues had produced notable improvements in healthcare delivery, selected infrastructure projects, and administrative transparency, the overall developmental effect remained limited. Major constraints included political interference, inadequate infrastructure, absence of reliable statistical data, corruption, insufficient staffing, low public awareness, and minimal adoption of technology in revenue operations. The research was anchored on the New Growth Theory, which emphasizes human capital, innovation, and institutional development as drivers of long-term growth, and the Intergovernmental Fiscal Relations Theory, which underscores the importance of fiscal decentralization, equitable revenue allocation, and efficient expenditure management in enhancing local autonomy and service delivery. By integrating these theoretical perspectives with empirical evidence, the study addressed a critical knowledge gap, providing local-level insights into how IGR, when effectively managed, can drive sustainable community transformation. The study concluded that Internally Generated Revenue has mid-way contributed to community development in Alimosho Local Government Area, Ikotun, Lagos State.