BUDGET IMPLEMENTATION IN NIGERIA : A REVIEW OF 2010-2014 BUDGET YEARS

Description

BUDGET IMPLEMENTATION IN NIGERIA : A REVIEW OF 2010-2014 BUDGET YEARS

ABSTRACT

This research work titled Budget implementation in Nigeria: a review of 2010-2014 budget years with specific reference to Enugu state, the researcher examined the poor budget implementation effect on the growth and development of Enugu state, lack of budget supervision and evaluation effect on the success of 2010-2014 Enugu state budget years, late budget preparation and weak legislature effect on the budget implementation and evaluated budget policy and decision in Enugu state.

Data for the study was sourced from two main sources which include primary and secondary sources of data collection. Primary data: Questionnaires and oral interviews were used to collect information from the respondents. Secondary data: Journals, Magazines and other relevant materials relating to the area of my investigation were reviewed. Extensive literature review was carried out on direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open ended question. Simple tables and percentage was used in treatment of data while T-Test was used in testing the four hypotheses. Based on the analysis, the researcher found out that poor budget implementation has effect on the growth and development of Enugu state, lack of budget supervision and evaluation has great effete on the success of 2010-2014 budget years of Enugu state, budget implementation is been affected by late budget preparation and legislature. Conclusions were drawn and recommendations were also made in the last chapter of this work which is the fifth chapter.

CHAPTER ONE 

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

The president and commander in chief of Nigeria’s Armed forces, Dr. Goodluck Ebere Jonathan on Wednesday 15 December 2010 presented the 2011 appropriation bill to the join sitting of National Assembly. According to the president, the 2011 appropriation is a budget of fiscal consolidation, inclusive economic growth and employment generation. The president went further to say that the budget proposal is underpinned by four pillars that are to foster inclusive growth and job creations; optimize  capital spending by rationalizing recurrent expenditure and maximizing government’s revenues, accelerate the implementation of reforms to enhance the quality and efficiency of public expenditure and reinstate greater prudence in the management of the nation’s financial resources. While giving account of happening in 2010, the president said despite global challenges, Nigeria’s economy has remained resilient as a result of this administration’s efforts to maintain macroeconomic stability and promote socio-economic development.

Real Gross domestic product growth is robust, increasing from 7.36 percent in the first quarter of the year to 7.86 percent in the third quarter. While the non-oil sector remains the key driver of our economic growth, the oil sector has recovered significantly in recent times, with oil production rising due to the favourable investment environment fostered by the Niger Delta Amnesty programme.

The 2011 budget is not inspiring; its full of rhetoric which Nigerians have been feed over the years. There is still poor implementation of 2010 budget akin to what was expended in 2009 and previous years. As earlier observed, the major distraction for the consideration and implementation of the 2011 budget will be politics as it will be a year of trade off and payment of political union by whoever wins the 2011 elections, even if the incumbent wins. Tuesday Daily SUN newspaper 2011.

The new budget has N1.005 trillion set aside as a capital vote out of a total of N4.2 trillion budget, this is still unhealthy given the deplorable state of many of our social infrastructures. Nigeria is still largely import dependent and mono-culture having to depend on crude oil According to Jide O. 2014.

According to Odoh N. (2012), A budget is a framework within which nations and individuals align plans with a practical set of processes and procedures to meet specific goals. A budget is nothing more than a fantasy if it is not designed to be implemented. Without budgets, nations and individuals float like drift wood on water. Their destinations are uncertain and their destiny unsure. The thought that the 2014 budget has not been reviewed, amended and passed by the National Assembly (NASS) is a matter of major concern to the house. It plays up the fragility and fickleness of the process of short term planning in the country.

According to His Excellency, Sullivan Iheanacho Chime on the occasion of the presentation of the year 2014 budget proposal to the Enugu State House of Assembly on Tuesday December 10. 2013, I make bold to say that the 2013 budget was consistent with our development framework designed to impact positively on our people across the entire state. From the onset, we made our intentions clear that this government would give priority attention to constructing new roads and rehabilitating numerous others in various state of disrepairs. Our reason was simple, it was meant to improve travel times, enhance connectivity with our rural communities and reduce read accidents and other vices associated with bad roads.

According to Onyebuchi S. (2013), the policy thrust of the 2013 budget tagged “Budget of sustainability” include consolidating on the gains of the 2012 budget, completion of ongoing projects, increased involvement of private sector in development of the state and provision of socio-economic infrastructure in rural and urban areas. Onyebuchi said that the government would continue with the construction of new classroom blocks and the rehabilitation of existing ones in the primary, secondary and tertiary institutions in the state in its quest to create the right teaching and learning environment in the schools.

1.2     STATEMENT OF THE PROBLEMS

Despite the fact that budget spells out the policies which the government intends to use to improve the quality of the citizen through the promotion of economic growth, development, full employment etc. There are many loopholes inherent in the system such as poor budget implementation, late budgetary preparation and weak legislative oversight, uneven budget policy and decision, poor budget evaluation and supervision. Indeed it is utterly worrisome that budget forecast figure is subject to change during allocation as well as the budgeted material due to poor leadership skills in management of budget implementation. It is paramount to note that the researcher will seek to provide alternative solutions to the identify problems in the course of the study.

1.3     OBJECTIVES OF THE STUDY

The primary aim of this research work is to examine budget implementation in Nigeria a review of 2010 to 2014 budget years of Enugu State. But in order to make reasonable conclusion, specific objective of this study includes the following:

1.          To determine whether poor budget implementation affect the growth and development of Enugu state.

2.          To examine whether lack of budget supervision and evaluation affect the success of 2010-2014 Enugu state budget

3.          To examine whether late budget preparation and weak legislature affect budget implementation.

4.          To evaluate budget policy and decision in Enugu State whether is evenly distributed.

1.4     RESEARCH QUESTIONS

1.          Does poor budget implementation affect 2010-2014 Enugu state budgetary?

2.          Whether lack of budget supervision and evaluation affect the success of 2010-2014 budget implementation of Enugu State?

3.          Does late budget preparation and weak legislature affect 2010-2014 Enugu state budget implementation?

4.          Is Enugu state budget policy and decision evenly distributed?

1.5     RESEARCH HYPOTHESIS

The researcher formulate research hypothesis using the above research questions. Thus, both Null and Alternative hypothesis were formulated.

Hypothesis 1

Ho:  Poor budget implementation does not affect 2010-2014 Enugu State budgetary.

H1:  Poor budget implementation affect 2010-2014 Enugu State budgetary.

Hypothesis 2

Ho:  Lack of budget supervision and evaluation do not affect the success of 2010-2014 budget years of Enugu State.

H1:  Lack of budget supervision and evaluation affect the success of 2010-2014 budget years of Enugu State.

Hypothesis 3

Ho:  Late budget preparation and weak legislature does not affect 2010-2014 Enugu State budget implementation.

H1:  Late budget preparation and weak legislature affect 2010-2014 Enugu State budget implementation.

Hypothesis 4

Ho:  The budget policy and decision in Enugu state is not evenly distributed.

H1:  The budget policy and decision in Enugu state is evenly distributed.

1.6     SIGNIFICANCE OF THE STUDY

The above study will be of benefit to the researcher hence the study/research topic has to do with the researcher’s discipline. Indeed, in the course of the study, more knowledge will be acquired. Thus, no knowledge is a waste.

Moreso, the study will be of benefit to other forth coming researchers especially to those researcher who may wish to carryout a similar research work with this very topic. Thus, the documentation/report of the researcher will serve as reference material.

Furthermore, the study will be of beneficially to Enugu state government and the society at large on attempt in embarking on budget implementation.

1.7     SCOPE OF THE STUDY

The scope of the study on budget implementation in Nigeria, a review of 2010-2014 budget years of Enugu state is not far from the topic. The scope of the study is Enugu state in attempt to examine and review their budget system from four (4) years ago (2010-2014).

1.8     LIMITATION OF THE STUDY

This study faced a lot of constraints which hindered an in-depth study and research on the topic, like the time limit allotted to the paper which made it difficult for the researcher to source for information needed for the study.

1.9     DEFINITION OF TERMS

Budget:  Is an itemized estimated expected revenues and expenditure for a given period in future.

Budget Preparation:   Is a process of negotiation that involves a balance between what it will cost to meet an organization objectives and expectations of income from the relevant source of revenue.

Revenue Budget:  This refers to the source i.e. identification and enumeration of revenue sources and the qualification of what would accrue from each source.

Implementation:  When finally  approved, the budget authorizes expenditure and communicates the plan to all ministries, states and all budget holders.