1.1 BACKGROUND TO THE STUDY
to Abdullahi (2007), a government budget is a political and administrative
instruments by which the executive and legislative bodies endeavour to allocate
scarce resources among the various organs of government either at state levels
or federal level. It is basically a tool for selecting a particular mix of
public and private goods and services. In the public sector, budget performs
the same allocative functions that the price mechanism performs in the private
sector (Abdullahi, 2011).
budgetary reforms objectives of the federal government of Nigeria adopted in
1999 was aimed at reducing the excessive share of the budget being allocated to
the public service by way of personnel and overhead costs (estimated at over
60%), reducing the cost of governance in general, improving resource management
by curtailing wasteful expenditure and increasing the level of productivity and
efficiency through budget discipline. Paradoxically, the government expenditure
has lost its objective as it becomes more concerned with recurrent expenditure
and less concerned with capital expenditure (Ige, 2004). The habits of
contractors making remobilization claims before reviving abandoned projects
also contributed to high cost of governance and poor budget implementation in
Nigeria. The result of this, was that large sums of money were released and the
economy overheated with cheap money resulting in lack of any real progress in
project implementation (Nzewi, 2011). In terms of ensuring good budget
implementation in Nigeria, public officers in Ministries and extra ministerial
departments are yet to imbibe the culture of incurring expenditures only for
essential purposes, in order to control costs. Public officers instead see
government resources (money) as a “national cake” (Abubarkar, 1999). Budget
failure is not new in Nigeria and it cannot be blamed on the global economic
crisis experienced in 2008-2009. The reason June be that the executives both at
the federal and state levels have often diverted public funds into their
personal foreign and local banks accounts.
A budget is
also a tool for management direction and control of the work which an agency or
department plans to do. A budget has four characteristics; equilibrium,
comprehensive, unity, periodicity (Abdullahi, 2011). In Nigeria, budget
implementation has been a major issue of concern. Issue of poor implementation
has constrained achievement of most spelt-out development goals and objectives.
This are manifested in many abandoned development projects. Poor implementation
has also made execution a weak link in the budget process.
to Abogun & Fagbemi (2011), challenges to the full implementation of the
annual Federal Government Budget has been of major concern to the Federal
Government in recent years. This necessitated the Government implementing
several policies aimed at improving on its revenue generation and collection,
and spending effectiveness and efficiencies. In this regard, the Government
through the Federal Ministry of Finance/Budget Office of the Federation has
been engaging key stakeholders to workout optimal budget implementation strategies.
These included engagements through Workshops (including “Strengthening budget
implementation for enhanced project execution & service delivery”;
and “Enhancing Internally Generated Revenue (IGR) generation, collection &
remittance system in the federal public service”.
reforms involve making changes to the ways and manner in which the budget is
formulated, implemented and evaluated for the purpose of facilitating
effectiveness, efficiency and economy (World Bank, 2011). It is about
restructuring the process and/or management of a nation’s budgeting system in
order to improve its feasibility as a fiscal policy vehicle. By implication,
therefore, budget reforms must have direct impact on the level of
implementation, otherwise it would be unnecessary.
1.2 STATEMENT OF THE PROBLEM
objective of this study is to analyze the impact of budget reforms on budget
implementation in Nigeria.
The budget process in Nigeria
before 2005 had been facing numerous challenges and had come under different
reforms from one government to another. The main challenges have been lack of political will and commitment to abide by
stipulated rules and budget guidelines; inability to develop a macro-economic
framework for budget formulation and ambiguities in the roles of various
agencies involved in the formulation and monitoring of budgets; periodic
changing of budget line items classifications, which inhibited the formulation
and monitoring of the budget. This has continued to affect budget
implementation. All these has made it necessary to determine the influence of
the reforms on implementation which is being focused upon in this study.