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Budgeting and Development Policy in Nigeria
Budgeting and Development Policy in Nigeria
Budgeting and Development Policy in Nigeria
Temitope A. Osanyintuyi
Learning Objectives
(a) define budgeting and explain its links to the development process;
(b) outline the budget process in Nigeria and discuss its shortcomings;
(c) relate elements of recent budget reforms in Nigeria; and
(d) articulate the need for greater inclusiveness in budgeting
Introduction
Budgeting could be viewed as the chain of activities and processes through the
gamut of identifying expenditure needs, and mobilization and allocation of
resources to meet the needs. It also covers the monitoring and control of
expenditure. In this regard, budgeting serves directly as a tool of development
policy since it is the means through which governments allocate resources to
provide the goods and services – health, education, infrastructure, security etc
needed to improve the well-being of people.
Budgeting can also be conceived of as the process of formulating and
implementing a budget, which in its simplest conception, refers to a statement
of intended expenditure and its sources of finance over a definite period. In
this regard, Olaloku (1994) states that government budgeting is essentially an
exercise in the planning of government revenues and expenditure. To put this
definition of budgeting in proper context however, it is important to note that
a budget represents a statement of both the resources to be made available to
the budgeting entity and the priorities of those who manage it. This implies
that budgeting goes beyond ‘mere’ revenue and expenditure projections and
relate to the plans, goals and objectives of the budgeting entity, and how
these are to be achieved. Seen in this broader context, government budgeting
represents an important aspect of economic management, and the budget can
be regarded as a tool of government policy. In its capacity as a policy tool, the
ultimate goal of budgeting is to improve the lives of the people.
The stated objectives of government budgets in Nigeria have in some way or
other, always reflected the nation’s development challenges and aspirations.
Consequently, annual budgets have been given names such as “Budget of
Reconstruction and Development”. For the most part, however, it is felt that
budgeting in Nigeria has not successfully served as an effective tool of
development policy in terms of actualizing stated policy goals. Several factors
related to the budgeting process have been responsible for this. This paper
therefore examines the budgeting process in Nigeria and highlights recent
reforms in the budget process. In doing this, it identifies perceived
shortcomings in the budget process and examines the role of greater
participation in the budget process.
Though civil society, the organised private sector and the media have some
opportunities to attend budget readings and hearings during the legislative
phase, there is currently no real scope or time for these role-players to make
substantial contributions to the budget debate within the Legislatures.
Poor access to and quality of budget information further also undermines the
ability of civil society and the media to research, monitor and comment on
government budgeting.
In addition to these, the award of contracts for the execution of projects under
the budget is expected to pass the test of Due Process Certification. Budget
reforms have also included elements of performance budgeting (by requiring
MDAs to specify the exact targets that they want to achieve and costing these)
as well as improving the accessibility of budget information through budget
publications and publishing of budget estimates and allocations. Such
publications are now readily available through the websites of the Federal
Ministry of Finance (www.fmf.gov.ng) and the Budget Office of the Federation
(www.budgetoffice.gov.ng).
2005 BUDGET
Education 120,035,527,79 8.86% 6.67%
9
Defence/MOD/Army/Airforce/Navy 111,868,968,87 8.26% 6.22%
6
Works 109,563,456,02 8.09% 6.09%
9
Power and Steel 93,294,415,519 6.89% 5.18%
Police Formation & Command 80,719,812,145 5.96% 4.48%
Water Resources 73,074,011,548 5.39% 4.06%
Health 71,685,426,092 5.29% 3.98%
Presidency 69,748,749,844 5.15% 3.88%
2006 BUDGET
Education 166,621,653,75 10.97% 8.77%
8
Health 106,940,000,00 7.04% 5.63%
0
Defence/MOD/Army/Air Force/Navy 101,451,944,76 6.68% 5.34%
3
Works 91,075,000,001 6.00% 4.79%
Police Formation & Command 85,983,000,000 5.66% 4.53%
Water Resources 80,245,530,703 5.28% 4.22%
Power and Steel 78,093,004,102 5.14% 4.11%
2007 BUDGET
Works 191,435,617,22 10.41% 8.45%
2
Education 185,771,774,92 10.11% 8.20%
9
Health 122,399,999,99 6.66% 5.40%
9
Defence/MOD/Army/Airforce/Navy 117,314,507,40 6.38% 5.18%
7
Power and Steel 104,651,569,54 5.69% 4.62%
0
Police Formation & Command 95,500,000,000 5.20% 4.21%
Water Resources 94,896,811,319 5.16% 4.19%
Source: Appropriation Acts, various years
Conclusion
Budgeting in Nigeria has, for the most part, failed to serve as an effective tool
of implementing development policy. The reasons for these are varied and
include poor plan-budget link and coordination, lack of fiscal discipline,
ineffective monitoring and evaluation, corruption, a focus on inputs and non-
participatory planning and budget processes. While recent reforms have tried
to correct the observed lapses to varying degrees, greater inclusiveness is still
needed to promote a more effective planning and budgeting process and
ensure that budgeting results in an improvement of the living standards of the
people. Budgeting can also be improved through a greater focus on
performance, rather than inputs.
References
Agusto, Olabode M. (2005). “The 2005 Budget and its Implications for Business
and Investment”, Presentation by the Director-General, Budget Office at the
Nigerian-British Chamber of Commerce Business Luncheon, 22 April, 2005
Ubani, Chima and Abiola Akiode-Afolabi (2005). “Policy and Legal Framework of
Budgeting” in Centre for Democracy and Development (CDD). A Handbook on
Budgeting: A Guide to the Due Process Approach (Lagos: CDD). Chapter 2.
UNIFEM (2002), The Budget Process in Nigeria: Issues and Challenges for
Gender Responsive Budgeting. (UNIFEM)