The Challenges Of Budget Implementation In Nigeria

Project and Seminar Material for Economics

The Challenges Of Budget Implementation In Nigeria


Abstract


This study is on the challenges of budget implementation in Nigeria. The total population for the study is 200 staff of ministry of budget and national planning, Abuja. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made statisticians,computer operators, senior staffs and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


Chapter One


Introduction:

1.1 Background of the Study

A Budget is commonly understood as the focus by a government of its expenditure and revenue for a specific period of time. The general budget can be defined as a government plan for revenue and expenditure for the coming fiscal year.

According to Prof. Udabah S I, budgeting has been in operation in Nigeria and indeed other countries for a fairly long period, to assist in policy making and planning and also, to provide the basis for controlling income and expenditure. To him, the major source of anticipated revenue to backup budgetary expenditure by government is from indirect taxation because of the difficulty in the assessment and collection of direct tax from taxable individual. The inefficiency of tax officials and the corruption of some of them make it difficult for adequate revenue to be realized by government through direct tax.

Budget was employed to attain the objective of full employment in the economy, price stability, raising growth in National output, Balance of payment equilibrium and equity in income distribution.

The united state of America experienced a budgetary system which places greater emphasis on the revenue than expenditure. The trend of development which places more emphasis on revenue was carried over to all the British colonies. However, in Nigeria, experience was derived from a more mature British system because, the national system was adopted during the time of independence between 1957-1960 in spite that Nigeria did not fail to encounter avoidable problem in the budget.

Ude M.O. emphasised that government budgeting emerged out of representative democracy. Originally, in England, government budgeting was used as the instrument whereby noble compelled the monarch to be accountable to them for the expenditure of the proceeds from tax imposed by the monarch on the people later periods of Middle Ages. Fiscal and economic policy changes by government at times have destabilizing effect on the entire economy as that of Nigeria should not be disturbed with frequent policy changes.


1.2 Statement of the Problem

The Nigerian Economy is faced with series of imbalances in their implementation, despite the availability of the various source of fund to the government. Several budgets have been designed with sole purpose of arresting decline growth in the production sector, check inflationary pressure and correction of Balance of payment deficit and maintaining a reasonable foreign exchange reserve. However, the important question that arises is “Why is it that the objectives of government budget have not been achieved in most developing countries like Nigeria”. This has lead to an increase in the level of unemployment and equally to a general low level of standard of living.

This project work, therefore, seek to have a look at loopholes that have been responsible for rendering the budget implementation ineffective, thereby not achieving the desired objectives. Though an insight into some budget have being done in the past to generally help in drawing critical analysis of the effect of budget in the economy.


1.3 Objective of the Study

  1. To study the nature of government budgeting basically in Nigeria.
  2. To find out why targeted goals have never been achieved in Nigeria.
  3. To find out the best revenue allocation formula that is suitable for economic growth and development.
  4. To find out such other factors that is likely to affect budget implementation.

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: there is no nature of government budgeting basically in Nigeria
    H1: there is nature of government budgeting basically in Nigeria
  2. H02: there is no best revenue allocation formula that is suitable for economic growth and development.
    H2: there is best revenue allocation formula that is suitable for economic growth and development

1.5 Significance of the Study

  1. The result of the work will help policy makers in the area of public finance to know how to tackle some of their problem which has been researched on.
  2. It is also indeed anticipated that this research work will be of immense help to the academic and others who may find study invaluable source of material for their future research work.
  3. This research will help to correlate, compare and co-ordinate the financial administration of the various government departments.

1.6 Scope and Limitation of the Study

To cut down on the constraint this might be encountered in form of death of data and other related constraints to a manageable proportion. the scope and the coverage of this study has been narrowed down, to cover (21years).The study will cover whole of Nigeria and will be limited to an evaluation of the problem of budgetary implementation in Nigeria using some target variable to make a generalization such as government budgeted revenue and government budgeted expenditure for the period 1986-2006.There were constraints such as sourcing of data and financial constraints sourcing of data from various government institution such as central bank is not an easy task as these institutions were not ready to co-operate, carrying-out a study of this nature need a lot of money and as a student, there is always a problem of inadequate fund.


1.7 Definition of Terms / Concepts

Public Expenditure:

These are expenditures that government render on some project like roads, hospitals, street lights, schools, etc.

Capital Reciepts:

This refers to loan or grants made to the government. They can be made by other arms of the government or by international organization.

Recurrent Revenue:

These are income received by the government annually by way of taxation, fines etc.

Recurrent Expenditure:

These are expenditure on running cost of government such as salaries and interest on public debts.

Economic Services:

These are expenditures on productive activities such as agriculture, fisheries, forestry, transportation and communication.

Transfer:

These are expenditure that is made not on direct productive activities; examples are interest payment on national debt, unemployment benefit, pension payments, and help to other countries.


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was on challenges of budget implementation in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of budget implementation in Nigeria


5.2 Summary

This study was on challenges of budget implementation in Nigeria. Four objectives were raised which included:To study the nature of government budgeting basically in Nigeria, to find out why targeted goals have never been achieved in Nigeria, to find out the best revenue allocation formula that is suitable for economic growth and development, to find out such other factors that is likely to affect budget implementation.In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of ministry of budget and national planning, Abuja. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made statisticians,computer operators, senior staffs and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


5.3 Conclusion

The essence of this study is to identify problems that militate against implementation of budgets in the Nigerian public sector and to suggest measures to stem the tide. If budgets are properly implemented, the objectives of the budget will be achieved and that will effectively enhance the living standard of the citizens. Democracy dividends can only be felt by what is available not what was earmarked. A vibrant Nigerian economy will enhance the resources needed for provision of basic necessities of life and this will further boast the economy. Nigeria must develop a culture of early presentation and passage of appropriation bills, curb not eliminate corruption, adopt responsibility accounting and all the operators in the Nigerian public sector must develop a proper synergy so that objectives of budget in the Nigerian public sector will be realized.


5.4 Recommendation

The study recommends effective budget planning, adoption of responsibility accounting in the budgeting system and elimination of corruption which has continued to thrive. There is need for early preparation and presentation of appropriation bills to the legislature by the executive and early passage of the bill by the legislature. The study also recommends early release of funds for capital projects. This will assist in early completion and thereby positively affecting the lives of citizens. All actors in the budgeting system in the Nigerian public sector, Government, legislature et cetra should collaborate in determining benchmarks or indices for budget as well as in monitoring of the execution of the projects stated in the budget.


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