1.0 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
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.
1.1 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.
1.2 OBJECTIVE OF THE STUDY
- 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.
1.3 RESEARCH QUESTIONS
- Why is it that the objective of budget have not been achieved in most developing countries such as Nigeria
- What are the causes of poor implementation of budget
- Why targeted goals of budget have never been met up in Nigeria.
1.4 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.
1.5 STATEMENT OF RESEARCH HYPOTHESIS
H0: The problem of government budget implementation in developing countries has no significant impact on the economic growth.
HI: The problem of government budget implementation in developing countries has a significant impact on the economic growth.
H0: There is no significant relationship between the independent variable and GDP.
H1: There is a significant relationship between the dependent variables and GDP.
1.6 SCOPE AND LIMITATION OF THE STUDIES
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
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 DEFINITON 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