Impact of user fees and levies on community development projects in Southwestern Nigeria: Case of Osun and Oyo States

Abstract

Deficits in basic infrastructure have been acknowledged as one of the challenges of local communities globally and this is quite relevant in the Southwestern Nigeria. Due to shortage of government funding, infrastructural deficit has continued to limit developments in Osun and Oyo states. Hence, communities’ resort to the use of user fees in addressing the funding gap. This study examines the effect of user fees on community development in these selected states. The study employs structural equation model (SEM) to analyze the research objective among 3,672 households. The result suggests that informal user fees have a negative and significant effect on the extent of community development in Osun and Oyo States, although, the willingness to pay by households has a positive effect on community development projects. The study recommends joint collaboration of local community leaders, Community Development Associations (CDA) and community members towards contribution of user fees and monitoring of same to enhance and fast track community development projects.

JEL Classification: H20, H21, H72