IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 10 NO. 6 2025
DOI: 10.56201/ijefm.v10.no6.2025.pg8.18

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Revenue Source Diversification and Deficit Funding in Bayelsa State

Confidence Joel IHENYEN PhD, Kelvin Eberechukwu EHIOGU, and Patrick ENEYE

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Abstract

This study investigates the nexus between revenue source diversification and deficit funding in Bayelsa State, focusing on the relationship between statutory allocation, revenue from taxes, licenses, and fines on debt funding from 2020 to 2024. The research employs an ex post facto design, utilizing secondary data sourced from the Bayelsa State Ministry of Finance and the Debt Management Office. Descriptive statistics and Spearman correlation analysis were used to assess the strength and significance of the relationships. The findings reveal that none of the revenue sources had a statistically significant relationship with debt funding, suggesting inefficiencies in how these revenue streams are utilized to manage debt. The study's practical and policy implications point to the need for Bayelsa State to rethink its debt management strategies and explore more effective ways of aligning its revenue sources with debt servicing. Despite the reliance on statutory allocation and taxes, these streams appear insufficient in managing debt, highlighting the potential benefit of diversifying revenue sources and improving collection mechanisms. The study concludes that a reassessment of fiscal policies is necessary to enhance financial sustainability and ensure more strategic utilization of state revenues for debt management.

keywords:

Revenue Source Diversification, Debt Funding, Public Finance

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