The Impact of Internally Generated Revenue on Infrastructure Development in Enugu State (2018 to 2024)

The capacity of Nigerian states to generate revenue internally has become increasingly crucial in the context of dwindling federal allocations and rising infrastructure deficits. This study examines the impact of internally generated revenue (IGR) on infrastructure development in Enugu State from 2018 to 2024, focusing on capital investment in roads, health, and education. The study is grounded in the Fiscal Federalism Theory, which posits that subnational governments with stronger revenue autonomy are better positioned to deliver public goods and services tailored to local needs. A longitudinal research design was employed, utilizing secondary data sourced from the Enugu State Internal Revenue Service, the State Ministry of Finance, and the Office of the Accountant General. Ordinary Least Squares (OLS) regression analysis was applied to assess the relationship between IGR and infrastructure expenditure. Findings indicate a statistically significant positive relationship between IGR growth and infrastructure investment, with each ten percent increase in IGR corresponding to an approximate eight percent rise in capital infrastructure spending. However, IGR collection efficiency remains hampered by tax evasion, informal sector non-compliance, and weak enforcement mechanisms. The study concludes that improving IGR mobilization is central to bridging Enugu State's infrastructure gap. It is recommended that the state government intensify tax administration reforms, expand the tax net to cover informal sector operators, and adopt digital revenue collection platforms to reduce leakages.

Keywords: Internally generated revenue, infrastructure development, fiscal federalism, Enugu State, tax administration