Effect Of Underground Economic Activities On The Performance Of Public Sector In Abia State ( A Study Of Ministry Of Finance, Abia State)

ABSTRACT

The study examined the effect of underground economic activities on performance of public

sector in Abia State from 1990 to 2017. The specific objectives were to determine the effect

of size of underground economic activities on performance of public sector in Abia State

and to ascertain the relationship between the size of underground economic activities and

performance of public sector in Abia State The adopted ex-post facto research design. The

secondary data was used for the study and the data was sourced from central bank of Nigeria

Statistical Bulletin. The data was analyzed using trend and simple regression analysis. The

result of the study revealed that size of underground economic activities has negative and

significant effect on performance of public sector in Abia State and that size of underground

economic activities has positive and significant effect on total tax revenue losses. It was

recommended that governments should block all known avenues of tax revenue losses

arising from underground economic activities by minimising attractions/inducements to

operate in the shadow. This can largely be achieved by providing inducements for

entrepreneurs to operate within the official economy through less stringent business

registration and operating requirements, greater government commitment to the provision of

public goods and infrastructure and such other conditions that favour of public sector

performance