Abstract
The main objective of this study is
to assess the factors responsible for budget failure in Nigeria. To achieve
this broad goal, the econometric model of Analysis of variance (ANOVA)
regression test was employed for analysis and time series data span from 2010
to 2015. The finding shows that budget in the public sector of Nigeria has
almost become a ritual or a yearly affair which though good in content but
without appreciable result. The issue of budget failure in Nigeria is of
concern to the general public. The dependent variable was represented by
budgeted amount for the selected period, while the independent variable were
gross domestic product (GDP) which represent the economic planning, and poverty
index represents social development. The results revealed that budgeting has a
strong relationship with Nigerian GDP. The results further showed a strong
relationship between budgeting and poverty index (PI). The study recommends
that government should enact an enabling law that will ensure the workability of
its budgets according to plans and increase the proportion of capital
expenditure to recurrent expenditure so that the budget can have impact on
economic planning and social development; budget preparation should start in
good time; more capital expenditure should be included in the budget plan to
speed increase in the value of social development; money not accessed during
the period of budget implementation could be moved to a more viable project.
TABLE OF CONTENTS
CHARPTER ONE
Introduction
Statement
of the Problem
Objectives
of the Study
hypotheses
Conceptual
Issues
CHAPTER TWO
The
Concept of Budget
Policy
and Budget
The
Budget cycle in Nigeria
Factors
Responsible for Budget Failure in Nigeria and Recommendations
Theoretical
Framework
CHARPTER THREE
Research
Methodology.
CHARPTER FOUR
Result
and Analysis
Conclusion
CHARPTER FIVE
Recommendations
References
CHARPTER ONE
Introduction
In any modern state, for a meaningful
national economic management and development, public budget is an important
instrument. The state’s desire to be democratized, and having adequate civil
society participation, prompt response to development and desire to eradicate
or reduce poverty level in the country has altogether caused the focus on
budget to assume a greater importance. The budget is the principal instrument
of fiscal policy. Budget policy exercise control over size and relationship of
government receipts (revenue) and expenditure (Edame, 2010). In Nigeria, return
to civil rule has given budget its proper status, because the due process of
articulating it is guided jealously by the legislature. During military rule
budget is only prepared and read to the nation. But under civilian rule
budgeting involved wider consultation because of its importance towards nation
building and developmental issues.
The annual budget is a document which
contains the entire programmes of the government in a given fiscal year. It
shows the expectations and intentions of the government in a particular fiscal
year. Most importantly, it contains the expected revenue and expenditure of
government within a given financial year. Olomola (2009), observed that the
role of budget in an economy cannot be overemphasized. A budget is an important
economic instrument of national resource mobilization, allocation and economic
management. It is an important economic instrument for facilitating and
realizing the vision of government in a given fiscal year. A budget has to be
well- designed, effectively and efficiently implemented, adequately monitored
and its performance well evaluated.
Statement of the Problem
Development in the public sector is
attributed to the fiscal and monetary actions of the government. These actions
propel the need for effective allocation of resources, social cohesion and
fairness dealing with structural development at all unit of the society. But
the Nigerian economy is faced with series of imbalances in their implementation
of budget and economic policies, despite the availability of the various source
of fund to the government. Several budgets have been designed with the sole
purpose of economic planning and social development, but have not led to higher
level of better service delivery, more accomplishment, more improvement or more
resolution of public problems because there are so many variables such as
resource leakage, poor management and contractors characteristics that militate
against its success. This paper is designed to assess the causes of budget
failure with the view to proffer policy recommendations on how to eliminate it.
Objectives of the Study
The objective of this study is to
assess the causes of budget failure in Nigeria. Specifically, the study seeks
to:
a.
determine the budgetary role in the economic
planning of Nigeria;
b.
examine the effectiveness of budgeting in
social development of the Nation.
The
study tests the following hypotheses Hypothesis
I
Ho: There is no significant relationship
between budgeting and economic planning in Nigeria.
Hypothesis II
HO:
There is no significant relationship between budgeting and social development
in Nigeria.
Conceptual Issues
Ikelegbe (1996:164) define budget as
a statement of purpose, anticipated revenue work proposed to be performed and
money allocated to achieve work proposed. The public budget is a financial
plan, a programme of action, a management planning and control technique, an
evaluation technique and a performance improvement tool. Budget as a plan could
be used for economic planning in specifying revenue and expenditure outlines,
and as a programme it could be used to execute the social policies as what is
to be done or achieved. Budget is the main instrument by which the state
manages the economy to ensure growth and stability in the social circle. The
fiscal and economic policies in the budget help to stimulate and direct
economic growth and stability; it is the instrument by which government affects
public welfare.
According to Uchendu (1998) budgets
are economic tools deliberately designed through political process to aid in
the allocation of available resources among competing demands. He further added
that “a public budget is an economic tool deliberately fashioned through the
political process to assist in the management of public sector”.
But Tosin, (2003:108) viewed budget
as a financial and/or qualitative statement prepared and approved prior to a
defined period of time of the policy to be achieved during that period for the
purpose of attaining a given objective. According to Bello (2005:88), a budget
is a plan of financial operation embodying an estimate in proposed revenue and
expenditure as well as the proposed means of financing them for a given period
usually a year. He explained further that budget can also be seen as an
instrument of economic planning and implementation of social policy, which is
to ensure that policies are translated into concrete and feasible objectives.
Budget allows the government to decide about each individual revenue and
expenditure throughout that period of the plan.
Edame, (2010) on the other hand; sees
“Economic planning as a deliberate governmental attempt to coordinate economic
decision making over the long run and to influence, direct and in some cases
even control the level and growth of a nation’s principal economic variables
(income, consumption, employment, investment, saving, exports, imports etc.) to
achieve a predetermined set of development objectives. The budget then becomes
a link between financial resources and human needs or behaviour. It becomes a
means of meeting the people’s needs, that is, policy objectives and political
development.
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