Neco 2018 Government Question 49

A local government council receives three sources of revenue: statutory allocation (45 % of total revenue), internally generated revenue (IGR) (10 % of total revenue) and grants (45 % of total revenue). It plans to allocate its total revenue as follows: 45 % to capital expenditure, 35 % to recurrent expenditure and the remaining 20 % to development projects. The law requires that at least 25 % of the capital expenditure be funded from IGR, and that at least 20 % of the recurrent expenditure be funded from the statutory allocation. Determine whether the proposed allocation satisfies these legal requirements. If it does not, calculate the minimum increase (in percentage points of total revenue) needed for IGR to meet the capital‑expenditure condition while keeping the total percentages unchanged.