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    Critically Assess The Problems of Budget Implementation in Nigeria

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    Oketa Daniel
    Budget implementation problems can arise from several factors in Nigeria. The approved budget may be unrealistic, creating uncertainty around available resources. There can also be extra-budgetary funds outside the budget process and significant payment arrears. Accurate reporting of expenditures is important to assess government performance over time and ensure funds are spent as intended. For effective budget implementation in Nigeria, budgets must be prepared realistically with transparency and accountability, and execution must be closely monitored.

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    Critically Assess The Problems of Budget Implementation in Nigeria

    Uploaded by

    Oketa Daniel
    14K views5 pages
    Budget implementation problems can arise from several factors in Nigeria. The approved budget may be unrealistic, creating uncertainty around available resources. There can also be extra-budgetary funds outside the budget process and significant payment arrears. Accurate reporting of expenditures is important to assess government performance over time and ensure funds are spent as intended. For effective budget implementation in Nigeria, budgets must be prepared realistically with transparency and accountability, and execution must be closely monitored.

    Original Description:

    WHY WE HAVE NOT IMPLEMENTED OUR BUDGET ACCURATELY IN NIGERIA

    Original Title

    Critically Assess the Problems of Budget Implementation in Nigeria

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    Budget implementation problems can arise from several factors in Nigeria. The approved budget may be unrealistic, creating uncertainty around available resources. There can also be extra-budgetary funds outside the budget process and significant payment arrears. Accurate reporting of expenditures is important to assess government performance over time and ensure funds are spent as intended. For effective budget implementation in Nigeria, budgets must be prepared realistically with transparency and accountability, and execution must be closely monitored.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14K views5 pages

    Critically Assess The Problems of Budget Implementation in Nigeria

    Uploaded by

    Oketa Daniel
    Budget implementation problems can arise from several factors in Nigeria. The approved budget may be unrealistic, creating uncertainty around available resources. There can also be extra-budgetary funds outside the budget process and significant payment arrears. Accurate reporting of expenditures is important to assess government performance over time and ensure funds are spent as intended. For effective budget implementation in Nigeria, budgets must be prepared realistically with transparency and accountability, and execution must be closely monitored.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    The document discusses several topics related to education including teaching methods, challenges faced, and strategies to address issues. It highlights the need for innovative approaches to engage students and better prepare them.

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    A budget is a list of all planned expenses and revenues. A budget according to


    macroeconomic analysis and objectives of country is a core of public finance in
    revenue generation and public expenditure. In Nigeria, the Federal government,
    States and Local governments prepare budget every fiscal year to define basic
    expenditure profile and revenue estimation, channels and evaluation. That is,
    the budget of a government at any level in Nigeria is a summary or plan of the
    intended revenues and expenditures of that government.

    Budget implementation is the actual functioning, performance and execution of


    a specific revenue and expenditure estimation. Budget implementation has been
    very low in most less developed countries including Nigeria. One of the many
    problems facing budget implementation in Nigeria are highlighted in the issues
    in budget implementation which shall be discussed herein. The scope of this
    topic discussion is to know those challenges of budget implementation and the
    various possible ways of addressing them. The importance of a realistic budget
    cannot far fetch from its implementation such that ; a realistic budget is
    implemented with few significant derivations from plan; Low level of
    corruption in public expenditure ; high transparency in public finance ; public
    funds spent for authorized public purposes ; reported expenditure corresponding
    to actual expenditure; reliable external and/or internal controls and where
    spending units have reasonable certainty as to the funds that will be available .
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    ‡Release of funds
    ‡Control and monitoring of expenditure ± by the Ministry of Finance

    c
    ‡Control and monitoring of revenues ± by the Ministry of Finance
    ‡Cash and debt management
    ‡Internal controls, including over payroll and procurement
    ‡In year modifications of the budget
    ‡ In-year financial reporting
    ‡Reporting externally on budget i mplementation
    ‡External audit of budget implementation
    Problems in budget implementation systems may reflect lack of incentives for
    good budget implementation, rather than lack of capacity. What are the
    incentives for compliance or non -compliance ± institutional issues are
    important, not just ³technical´ fixes? 

    To what extent are donors and their requirements part of the problem - project
    µring fencing´ requirements and non use of country systems , -lack of
    predictability of donor funding, both project funding and budget support .for
    example IMF, World Bank and others.

    Greater complexity with unified budgets covering al l level levels of government


    i.e Federal, State and local governments etc. This can be manifested in the Lack
    of adequate information provided by the Finance ministry on fiscal activities of
    subordinate governments in Nigeria.

    Budget implementation problems arises especially when the implemented


    budget varies from the adopted one such that; The variance between the adopted
    and implemented budget depends on the country¶s fiscal conditions, stability
    and certainty in the country¶s finances, the role of the finance ministry, and the
    type of budget system. For instance, a highly itemized budget may experience
    more variance than one which gives ministries spending discretion. The trend in
    contemporary public management is to give spending units more flexibility in
    implementing their budgets.

    r
    Budget Implementation problems as a result of poor budget preparation. These
    arise such that; Problems in budget implementation may reflect a poorly
    formulated budget ± for example lack of credibility/realism. And lack of a
    comprehensive budget may complicate implementation ± for example separate
    timetable and rules for capital budget, extra-budgetary funds. And, also, where
    spending ministries have not been fully involved in their budget formulation so
    that they understand and own their budge 7t.

    Also implementation problems can be reflected in lack of correct prediction of


    economic, social and political scenario or circumstances and the outbreak of
    situations like war, famine, natural disaster etc can hamper budget
    implementation. In Nigeria, the emergence of the civil war in May, 1976 really
    hinders the effective implementation of that fiscal y ear¶s budget.

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    ‘ The approved budget is unrealistic, so actual spending must be less than


    authorized

    ‘ Extreme uncertainty concerning available resources, with quarterly or


    monthly allotments. E,g in Nigeria drop in crude oil prices due to world
    economic depression.

    ‘ Extra-budgetary funds outside the budget process, hoarded by spending


    units.

    ‘ Significant arrears which are not included in financial statements that


    requires attention in the current budget execution. (diversion)

    ‘ Significant discrepancy between actual and reported expenditure for


    certain activities.

    ‘ Funds diverted to unauthorized purposes or private accounts (corruption)


    i
    ‘ Lack of civil society involvement in budget preparation and
    implementation process in Nigeria

    ‘ ›elayed publication of financial statements (lack of transparency and


    accountability.)

    ‘ Lack of expert inclusion in the budget preparation to effectively forecast


    economic variables.

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    The importance of implementation underscore the basic functions of budgeting
    and implementation in Nigeria since, much time is spent by the Nigerian
    government (often with World Bank, IMF assistance or encouragement)
    preparing elaborate po verty reduction focused budgets. A budget guides the
    government on a developmental plan that most times needs to be consolidated
    to achieve a meaningful aim. Budget implementation is importance because it
    assesses government performance over time, that is, it measures government
    score card and effective comparison can be made. An effectively implemented
    budget improves and strengthens the various macro-economic various suck as
    poverty, unemployment, inflation, and the financial systems. In total, an
    efficient and implemented budget encourages

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    Ê; Assurance that budget aggregates are
    sustainable over the medium-term and promote economic stability

    ‘ '' 
    6  
    Ê7 Assurance that public money is spent in
    accord with national priorities and on programs that are effective in
    achieving public objectives and effective distribution of wealth

    ‘ ''

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      6
    7 Assurance that public services are
    delivered in an efficient, fair and courteous manner, and are accessible to
    citizens.

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    I have been able to establish that budget implementation problems can arise
    from socio-economic factors as well as inadequate budget preparation , donor¶s
    unredeemed pledges as well as inadequate data from the finance Ministry and
    spending ministries. I can therefore affirm that for an effective budget
    implementation to be achieved, there must no leak in the preparation process
    and involvement, transparency/accountability to curb public officer¶s excesses,
    execution monitoring and correct estimation of macro -economic variables. Also
    that,‘ ‘  ‘ ‘ 
      ‘  ‘ ‘  ‘ ‘  ‘  ‘

     ‘ 


    ‘ ‘  ‘ ‘   ‘ And again, ensuring
    that the basic requirements are met; timely realise of funds, cash planning and
    effective control o expenditures.

    ' Ê 
    $&&8( +-$+785-..+ (2003). Y    
     .
    Pearson Prentice Hall Pub.

    ML Jhingan: (2008 ) Macro Economics Analysis Vrinda Publication : New


    ›elhi.
    
    -(+/ 5$0+(8" 99)5 m m        
    Y . J.M. Buchanan review.

    :. (2005). Element of Public Administration„Lagos: MC grace


    Academic Resources Publishers.

    $+;-(/< (1956). Government Budgeting, New York: John Wiley Inc.

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