CHAPTER ONE

INTRODUCTION

 BACKGROUND TO THE STUDY

A government budget, according to Abdullahi (2007), is a political and administrative vehicle by which the executive and legislative bodies attempt to allocate finite resources among the many institutions of government, whether at the state or federal level. It’s essentially a method for determining the best balance of public and private products and services. The budget in the public sector serves the same allocative purposes as the price mechanism in the private sector (Abdullahi, 2011).

The federal government of Nigeria adopted budgetary reforms in 1999 with the goal of lowering the excessive share of the budget allocated to the public service in terms of personnel and overhead costs (estimated at over 60%), lowering the cost of governance in general, improving resource management by curtailing wasteful expenditure, and increasing productivity and efficiency through budget discipline. Surprisingly, government spending has lost its purpose as it has grown more preoccupied with recurring expenditure than than capital expenditure (Ige, 2004). Contractors’ tendencies of filing remobilization claims before resuming abandoned projects also contributed to Nigeria’s high cost of governance and poor budget execution. As a result, large sums of money were released, and the economy became overheated with cheap money, preventing any real progress in project implementation (Nzewi, 2011). In order to control costs, public officers in Ministries and extraministerial departments in Nigeria have yet to adopt the culture of incurring expenditures only for essential purposes. Instead, government resources (money) are viewed as a “national cake” by public officials (Abubarkar, 1999). Budget failure is not a new occurrence in Nigeria, and it cannot be attributed to the global economic crisis of 2008-2009. The explanation for this could be that federal and state executives have frequently siphoned public monies to their personal foreign and local banks.

A budget is also a management tool for directing and controlling the work that an agency or department intends to do. The four properties of a budget are equilibrium, comprehensiveness, unity, and periodicity (Abdullahi, 2011). Budget execution has been a key source of worry in Nigeria. Poor execution has hampered the achievement of most clearly defined development goals and objectives. Many abandoned development projects are evidence of this. Execution has also become a weak link in the budget process due to poor implementation.

Challenges to the complete implementation of the annual Federal Government Budget, according to Abogun & Fagbemi (2011), have been a key source of concern for the Federal Government in recent years.  As a result, the government had to establish a number of measures targeted at increasing revenue generation and collection, as well as enhancing spending effectiveness and efficiency. In this regard, the government has been working with key stakeholders through the Federal Ministry of Finance/Budget Office of the Federation to develop optimal budget implementation measures. Workshops (such as “Strengthening budget implementation for increased project execution & service delivery” and “Enhancing Internally Generated Revenue (IGR) generation, collection, and remittance system in the federal public sector”) were used to conduct these engagements.

Budget reforms entail making changes to the way the budget is written, administered, and reviewed in order to improve its effectiveness, efficiency, and economy (World Bank, 2011). It is about reorganizing a country’s budgeting process and/or administration in order to increase the system’s viability as a fiscal policy tool. Budget reforms, by implication, must have a direct impact on the level of execution; otherwise, they are pointless.

STATEMENT OF THE PROBLEM

The primary goal of this research is to examine the influence of Nigerian budget reforms on budget implementation.

Prior to 2005, Nigeria’s budget process had faced significant obstacles and had undergone various revisions from one government to the next. The main obstacles have been a lack of political will and commitment to follow prescribed rules and budget guidelines; an inability to develop a macroeconomic framework for budget formulation and ambiguities in the roles of various agencies involved in budget formulation and monitoring; and periodic changes in budget line item classifications, which hampered budget formulation and monitoring. This has hampered the implementation of the budget. All of this has necessitated determining the impact of reforms on implementation,

OBJECTIVES OF THE STUDY

The following are the study’s objectives:

  1. To investigate the impact of Nigerian budget reforms on budget implementation.
  2. Examine the current developments in budget reforms and other budget policies, taking into account their benefits.
  3. To determine how Nigeria’s budget execution might be improved.

RESEARCH QUESTIONS

  1. What effect do budget changes have on Nigeria’s budget implementation?
  2. What are the current trends in budget reforms and other budget policies, as far as their benefits are concerned?
  3. How may Nigeria’s budget execution be improved?

 HYPOTHESIS

HO: In Nigeria, there is no significant link between budget reforms and budget execution.

In Nigeria, there is a strong link between budget reforms and budget execution.

SIGNIFICANCE OF THE STUDY

The following are some of the study’s implications:

This study will provide some important information for all tiers of government and non-governmental organizations who use budget in Nigeria, given the growing necessity of ensuring that budgetary provisions match the outcomes.
This study will add to the body of knowledge in the domain of the impact of personality traits on academic achievement in students, thereby forming the empirical literature for future research in the field.

SCOPE/LIMITATIONS OF THE STUDY

This research will look at the relationship between Nigerian budget reforms and budget implementation.

LIMITATION OF STUDY

Financial constraints – A lack of funds impedes the researcher’s efficiency in locating relevant materials, literature, or information, as well as in the data gathering procedure (internet, questionnaire and interview).

Time constraint: The researcher will be working on this subject while also doing other academic tasks. As a result, the amount of time spent on research will be reduced.

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