STATISTICAL ANALYSIS OF THE FEDERAL GOVERNMENT’S EXPENDITURE AND REVENUE
CHAPTER ONE
1.0 INTRODUCTION
Public finance is an economic discipline concerned with how the government raises funds, how that money is spent, and the impact of these activities on the economy and society.
The topic of public finance includes the country’s expenditure and revenue. In a developing economy, such as Nigeria, however, management of moderate deficit financing is geared toward useful and development-oriented projects. This required me to concentrate my attention on the amount of expenditure and revenue generated in Nigeria over the previous years.
The government generates revenue from a variety of economic sectors, which are classified as oil and non-oil revenue:
1. Oil Revenue: This is the revenue generated by the economy’s oil sectors, which include:
a. Petroleum profit taxation and royalties
b. Other factors, such as revenue
from export sales, domestic sales, petroleum product taxes, rents, and so on.
2. Non-Oil Revenue: This is revenue generated by sectors of the economy other than the oil sector, which includes:
a. Corporate income tax
b. Customs and excise duties
c. VAT (Value Added Tax) (V.A.T)
d. Independent revenue of the federal government, which includes revenue from interest payments on government properties, personal income tax on armed forces, police, external affairs, and federal capital residents.
e. Other, which include customs levies, education taxes, and so on.
Revenue generated by various sectors of the economy is allocated to:
1. Federation accounts, which include transfers from domestic oil sales to federation accounts.
2. Value-added tax (VAT) pooling accounts
3. The AFEM surplus account
4. The Petroleum Trust Fund
5.
Payment account JVC
6. Debt service funds from outside sources
7. Funding for national priority projects
8. Transfers to special and excess reserves, as well as the education fund
The proceeds from various sectors of the economy are spent on:
1. Administration, which includes:
a. Oversight and administration
b. Protection
c. Internal safety and security
d. National legislature
2. Economic services that include
Agriculture (a)
b. Highways and construction
c. Transportation and communication
d. Additional economic services
3. Social and community services, which include:
a. Instruction
b. Physical well-being
c. Other people
4th. Transfers
a. Interest on public debt
b. Residential
c. International
d. Gratuities and pensions
e. F.C.T. and others
1.1 THE STUDY’S HISTORICAL BACKGROUND
The National Bureau of Statistics (NBS) began as a small office in 1928.
The statistics unit is part of the cabinet secretariat of the British Colonial Administration’s office of the colonial secretary.
A more focused reorganization occurred in 1947, with the establishment of a statistics section in the department of customs and exercise, which later evolved into a full pledged department of statistics.
With the adoption of the federal system of government in 1968, the departments’ responsibilities were expanded to form the nucleus of a centralized national statistics office for the country. With the adoption of the federal system of government in 1968, central and regional governments had their statistics establishments incorporated into a decentralized National Statistics System (NSS). The statistics act of 1937 failed to provide a legal framework for statistics operations in Nigeria. The act supported a decentralized statistical system but advocated for
Collaboration and coordination of activities between the central and regional statistical offices.
When Nigeria gained independence in 1960, the department of statistics was transferred from customs and excise to the Federal Ministry of Economic Development, and its name was changed to the Federal Office of Statistics (FOS). In the 1980s, further reorganization of the Nigeria statistics system (NSS) resulted in the Central Bank of Nigeria collecting financial statistics and the National Population Commission collecting population statistics, including conducting censuses.
The National Data Bank was established in 1989 as a completely computerized data management agency.
(NDB). NDB is a data warehouse that was created to store time series data dating back to 1914, when Nigeria was founded. The agencies FOS and NDB had a complicated and intertwined relationship with other members of the National Statistical Offices (NSO). When the federal office of statistics (FOS) merged with the National Data Bank in 2004, reforms began to reposition it. The statistical master plan (SMP) produced by the Federal Government of Nigeria with assistance from the World Bank is driving the reforms.
The merger of FOS and NDB resulted in the establishment of the National Bureau of Statistics (NBS) to provide the agency with a National perspective as the apex. All three levels of government have their own statistical agency. The NBS is expected to coordinate the system of official statistics production for all federal ministries, departments, and agencies (MDAS), state statistical agencies (SAS), and local government councils (LGC). The 1957 Statistics Act has been reenacted, and a new bill has been passed to provide legal support for the NBS.
1.2 AIM OF THE STUDY
Using regression analysis, conduct a statistical study of the federation’s public finance, i.e. revenue and expenditure of the federal government of Nigeria (2003-2008).
1.3 OBJECTIVES OF THE STUDY
1. To gain an understanding of the amount of revenue generated and spent from 2000 to 2011.
2. Using correlations analysis, demonstrate the relationship between revenue and expenditure.
3. Using correlation analysis, determine the degree of occurrence between expenditure and revenue.
4. Using time series analysis, forecast future revenue and expenditure.
5. Make any necessary recommendations based on the analysis
1.4 SCOPE OF THE STUDY
The study will be based solely on the federal government’s revenue and expenditure for the time period. This project’s data is given in billions of Naira and is only on an annual basis.
Data is the collection of specific information that allows the researcher to understand the environment under study and achieve specific goals.
The data for this project came from the National Bureau of Statistics (NBS). It is secondary information derived from their statistical bulletin.
1.5 DEFINITION OF TERMS
Public finance is an economic field concerned with how the government raises money, how it spends it, and the effects of these activities on the economy and society.
Budget: A forecast of expenditure and revenue for a specific time period.
Revenue is a government’s total income from all sources that is used to pay for a country’s expenses.
Recurring income: This includes both tax and non-tax receipts during the fiscal year.
Capita revenue: This includes receipts from non-financial assets that have been used in production for more than a year.
Expenditure: An outflow of resources from the government to other sectors of the economy, whether requested or not.
Recurrent expenditure: Payments for non-payable transactions that occur within a year.
Capital investment: Are payments made for non-financial assets used in the manufacturing process for more than a year.
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