ACCESSING THE EFFECTIVENESS OF THE 2016 BUDGET AS A ROAD MAP FOR CORRECTION, DIVERSIFICATION AND INDUSTRIALIZATION OF NIGERIA ECONOMY ASST
1.1 Introduction to Budget in Nigeria
The heightened level of poverty in Nigeria has prepared the ground for people to extensively embark on the act of philosophizing on the roles budgeting play in the National economy, especially as a case of management tool for planning, controlling and decision making. It has become a routine that governments at all level prepare and approve into law a summary of plan of the intended revenues and expenditures which are made in advance of government fiscal year concern a document called budget. A budget which means qualified financial plan for a forth coming accounting period In Nigerian context of public sector governance, budget preparation on annual basis has become standard practice backed by legal provisions such as the constitution and financial regulations of the various states.
Studies of Luceey (2002), Adams (2004), Lewis, 2007 and Babalola (2008) have shown that at both public and private sectors budget is pivotal mean of translating the overall aims and objectives of an organization into detailed packages of actions, and determining the sources and uses of funds in order to allow performance evaluation of the people who are entrusted with the resources.
Government is held accountable to the citizenry on allocation, custody and use of the state resources through budget. The above functions are expected to b performed in accordance with established rules, policies and practices contained in the government financial regulation. Politicians, public analysts and scholars agreed that a well formulated and properly implemented budget has the capacity to promote socio-economic well being of the people, finance economic development projects and support public service administration. In spite of the potential benefits accruable from budgeting, there is a general skepticism on budget performance in Nigeria. This is not peculiar to Nigeria alone as 85% of the governments all over the world fail to provide adequate information for the public to hold them accountable (The Guardian, 2009). The time has come for imbibing integrity as part of the budget process in government to foster industrialization and diversification of the Nigerian economy.
Concentrated efforts are being made in Nigeria and other countries of the world towards maximizing benefits accruable from public spending via monumental waves of budget reforms in the public sector. The needs for these reforms were necessitated by perceived unsatisfactory performance when compared with the expectations of the budget provisions. Budgets in public sector arise from the need to demonstrate accountability with the attendant goal of general improvement in the life of people. The international federation Accountants (IFAC) (1991) crystallizes the place of budget in public sector as a means to evaluate whether resources were obtained and utilized in accordance with legal requirements and provide adequate information for evaluating the government or unit’s performance in terms of costs, efficiency and accomplishments. These aims are hardly attained by many governments world over (IFAC, 1991).
Budget as the art and science of balancing competing demands for scarce resources at the disposal of the government is expected to be a reflection of government policy, priorities, planning and implementation process for delivery of goods and services so as to improve the well being of the citizenry. However, the present levels of infrastructures and economic conditions in Nigeria cannot be said to be in consonance with the acclaimed level of budget performance at all tiers of government. It is the order of the day for governments at all levels to argue that available public resources have been utilized to improve the well being of the citizenry, while in fact that improvement can neither be seen nor appreciated by the citizenry.
Studies on budget in public sector have focused on issues as dominance level of various organs of government, effects of subordinates participation on budget formulation and implementation, evaluating with budget when subordinates might have introduced slack to improve their performance evaluation without benchmark. Others are dominance of cash based basis of accounting on budget accounting in public sector, incremental budgeting as the most applicable improvement technique, impact of citizens participation and the effect of organized trade union on expenditure of government.
Therefore, this research focuses on accessing the effectiveness of the 2016 budget as a road map for correction, diversification and industrialization of the Nigeria Economy.