Problems and Prospects of Budget Implementation in Nigeria

See the Problems and Prospects of Budget Implementation in Nigeria. A budget is an estimate of government income and expenditure for a specified period of time, usually one year. It is a list or quantitative expression in a summary of likely income and expenses. According to Adams (1998), a budget serves as a receptacle for the revenue and expenditure for the state.

The Nigerian government gets the bulk of its income from taxes and oil. This income is split among the levels of government and states of the federation. The budget shows how the income that would be received in a year would be appropriated.

In better description, a budget is a comprehensive document that outlines what economic and non-economic activities the government wants to undertake with special focus to policies, objectives and strategies for accomplishments that are substantiated with revenue and expenditure projections.

A budget is known as an ‘appropriation bill’ before it goes through the necessary sittings and becomes the budget. Budgets are made at the different levels of government, from the federal government, to the state government and local government. The Federal Government’s budget serves as the budget for the country.

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FINANCIAL MANAGEMENT

Financial management in government consists of three major categories which are

– Budgeting ( The process by which resources are generated, allocated and managed)

– Accountability, which serves the stewardship purpose, since government and public office holders are entrusted with public funds. Thix aims at honesty and judicious plus efficient use of public funds.

– Control – This provides a basis for evaluation of effective implementation. This stage involves checking actual figures with projected figures and evaluating how well the implementation process has gone.

BUDGET IMPLEMENTATION

Budget implementation is the final stage of the budgeting process before the control lap. This involves the actual usuage or application of public funds in carrying out the activities and projects that have been enumerated in the budget.

The officers that have been entrusted with these funds now have to properly channel such monies to the right places. Contracts will be given out, commitments would be made and results should be expected.

Although the planning stage is the most important process, the implementation stage is where the action takes place, which makes it very essential. However, before we go further, let’s take a look at some principles of budgeting that should make the budgeting implementation process easier to understand and follow.

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PRINCIPLES OF BUDGETING

The principles of Budgeting are:

1) Clarity: The budget should be clear and simple to understand for reasonable decisions and conclusions to be made from it.

2) Comprehensiveness: The budget should cover all the necessary angles. The budget should contain all the necessary financial estimates that the government intends to work with to prevent extra-budgetary expenditure.

3) Regularity: The budget should maintain a great deal of regularity. The budget should be presented at a time suitable to go alongside the beginning of every fiscal year end and last for a specified period.

4) Accuracy: The figures in the budget should be correctly estimated and stated, and should be close enough to reality.

5) Publicity: The budget should be made available to everybody it affects… The citizens, most importantly. This is why the budget is usually read at the beginning of every year to the general public.

6) Adequacy: The budget should to a very reasonable extent be adequate to cater for the needs of the government and the citizens of a country. It should represent the goals and needs for the year to which it relates and also identity the future aspirations and problems of the government and the economy.

TYPES OF BUDGET

1) Surplus Budget: This is simply a situation where the expected revenue is greater than the estimated expenditure.

2) Balanced Budget: This is a situation when the expected revenue equals the estimated expenditure.

3) Deficit Budget: This occurs when the estimated expenditure surpasses the expected revenue. It means that the government expects to spend more than it earns.

4) Supplementary Budget: This is the budget that is made after the main budget has been passed. It is drawn up to ‘supplement’ the main budget, especually when the amount appropriated by the Appropriation Act (Budget) is discovered to be insufficient.

5) Development Budget: This refers to a budget plan over a long period of time.

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BUDGETING PROCESS

The budgeting process involves all the activities and players involved in the development of a budget. Estimates are first collected from all the governments. The identification and setting of developmental goals is key before budgetary policies are set based on the development plan. The President is responsible for the preparation and submission of the budget at the federal level. At the state level, it is the Governor who is responsible, and at the Local Government level, it is the local government chairman.

When all levels of government, ministries, departments and agencies send their estimates, their estimates are reviewed and approved. It is also reviewed again for conformity.

After this process, budget implemetation comes in. Money is disbursed to the various departments for expenditure. They can be capital or recurrent expenditure. This stage is very crucial. Hence, poor implementation can strike a huge blow. The final stage is the budget control which is the external control and evaluation of performnance and effectiveness.

PROBLEMS OF BUDGET IMPLEMENTATION IN NIGERIA

After explaining the budgetary process and giving a clear explanation of what a budget is and how important the budget implementation process is, we can now discuss the problems faced at this stage.
They are:

1) CORRUPTION AND MISMANAGEMENT

This is the very first and prime problem that the Nigerian budget implementation process is faced with. Corruption has eaten deep into the roots of the Nigerian system that fighting it looks almost like a lost battle. Government officials entrusted with public funds think about themselves first and misappropriate the funds carelessly. They stash the funds in their private accounts in Nigeria and foreign lands, building enough money pile to last generations. They see government office as a goldmine, hence the budget implementation suffers since the real purpose the money was disbursed for was not achieved, or was poorly achieved.

2) Nepotism and Tribalism

This is another major problem. The government gives out contracts for capital expenditure and supplies for their recurrent expenditure. However, they do not give to the right people. They give to their family members and friends. This accounts for the saying ”getting contracts depends on who you know and who knows you”. Hence, the most qualified people are not given these contracts, jobs and money to properly manage.

3) Unqualified Personnel

Another problem is the heavy concentration of unqualified personnel in government offices today. They got there through politics, so they might not really be the best for the job. Most don’t have good leadership and management traits. Hence the process suffers.

4) Poor Public Participation

The participation of the people in this process is very low die to high illitracy level and poverty rate. Also people are so busy with their own businesses and trying to make ends meet that they don’t have time to participate. Only a select few, especially the rich ones actually run everything.

5) Finance

This is a problem of concern especially in budget implementation at the local government level. Most of the local councils sources of income have been taken over by the state governments. They are small in size, hence, have little resources from which to generate resources internally. They are closer to the grassroots and should be given more consideration.

PROSPECTS OF BUDGET IMPLEMENTATION IN NIGERIA

– The grassroot government should be given more consideration as they are closer to the people and will be able to meet their needs quicker.

– Corruption should be fought with all power and might. However, corruption in Nigeria can only be solved when individuals start changing themselves first. It is not a ”top” problem. It is a general problem, since it is people from the bottom that still rise to the top and continue the act.

– Proper management, checks and balances should be put in place to make it more difficult for one person to manipulate things to his or her advantage.

– The improvements in technology would make things more transparent and monitoring easier. Technology is the solution to Nigeria’s corruption problem. With technology, every citizen very soon would be able to monitor their government’s activities and spending.

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CONCLUSION

The future is bright. The government implementation process would be improved with technology and increased awareness. The budget implementation process is very crucial to the development of the country, and thus proper attention should be payed to it by everyone.

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