CHAPTER ONE

1. INTRODUCTION

1.1   BACKGROUND OF STUDY

Budgeting is one of the most important areas of policymaking. Through budgets, governments indicate how much it is willing to spend on public purposes, set substantive policy priorities within overall spending levels, determine the amount that must be borrowed in order to finance approved spending levels, and thus influence the economy. The ability to make timely and sensible fiscal choices is therefore regarded as one of the hallmarks of sound governance (Galston, 2012).

Budgeting in Nigeria is problematic especially when it comes to implementation. Budget implementation problem occurs when the desired result on the target beneficiaries is not actualized. The problem with budget implementation is due to Nigeria’s monoculture economy, deficit budgeting, delayed in passage of the budget by the legislature and ineffective oversight by the legislative arm of government.

The success of any organization both government and private, is in its ability to plan, quantify the plan, organize, direct and control its implementation. The relationship between plan and budget is that budget is a quantified plan control is closely involved in planning in the sense that every plan by implication comes with its control procedures. To this extent Morse (1981: pg. 368) states that when all the planning and control topics are fuztapositioned a very dynamic budgeting and performance evaluation cycle appears.

The assumption of the cycle starts with the present budget and as the budget period elapses, the actual operational achievements and results are gathered and matched with the present budget in the form of feedback control and performance report. The various levels of controlling managers on receiving these reports burdening on the areas of variation from the responsible managers.

Of the truth, corruption is the biggest problem that leads to implementation gap in Nigeria. Implementation problem comes in this regard when huge amount of money are earmarked for a project but the officers in charge of implementation steal such amount or a substantial part of the budgeted money. A budget is a framework for revenue and expenditure outlays over a specified period usually one year (Olurankise (2012).

It is an instrument stipulating policies and programmes aimed at realizing the development objectives of a government. Meigs and Meigs, (2004) defined budgets as a comprehensive financial plan, setting forth the expected route for achieving the financial and operational goals of an organization”. Earlier before then, Omolehinwa (2003) viewed Budget as the plan of dominant individuals in an organization expressed in monetary terms and subject to the constraints imposed by other participants and the environment indicating how the available resources may be utilized to achieve whatever the dominant individual agreed to be the organization’s proprieties”.

Very recently, budgeting in Nigerian has continued to spring up various controversies as to the modality for preparation and administration in the country due to continuous change in government and consequential change in policy and ideology. Most especially with the understanding that a large percentage of the country’s population has gotten, this has made them advocate the need to review the size of governance in order to push up the provisions available for more necessary projects. Only recently too was the controversy over the oil benchmark that has hindered the national assembly from the passage of the 2013 budget due to dispute over the price that must be used for budgeting purposes. It is important to state here that implementation cannot be discussed without appropriate planning and reassessing coupled with proper monitoring to facilitate it efficient implementation.

1.2   STATEMENT OF THE PROBLEM

        Budget is a comprehensive plan in writing, stated in monetary terms that outline the expected financial consequences of management’s plans and strategies for accomplishing a particular mission for the coming period. The challenge with the effectiveness of budgetary appropriation could be as a result as of an emergency; this is to say that most of the times that funds are being allocated for a particular project in the country; they tend to divert the funds to some other thing that was not in the original arrangement. Other could be that the persons in possession of this money might want to do away with the money thereby not accomplishing the task for which it was being budget for. Finally, several research has been carried out on the effect of budget but not even a single research has been carried out on the effectiveness of budgetary appropriation in Nigeria.

1.3   AIMS AND OBJECTIVES OF STUDY

        The main aim of the study is to determine the effectiveness of budgetary appropriation in Nigeria. Other specific objectives of the study include;

1. to determine the factors affecting budgetary appropriation in Nigeria.
2. to examine the effectiveness of budgeting in development of the Nation.
3. to determine the influence of budgetary appropriation in the economy sector of Nigeria.
4. to proffer possible solutions to the problems.

1.4   RESEARCH QUESTIONS               

1. What are the factors affecting budgetary appropriation in Nigeria?
2. What is the effectiveness of budgeting in development of the nation?
3. What is the influence of budgetary appropriation in the economy sector of Nigeria?
4. What are the possible solutions to the problems?

1.5   STATEMENT OF RESEARCH HYPOTHESIS

H0:   Budgetary appropriation has no significant effect in Nigeria.

H1:      Budgetary appropriation has a significant effect in Nigeria.

1.6   SIGNIFICANCE OF STUDY

        The study on the effectiveness of budgetary appropriation will be of immense benefit to the entire Nigeria in the sense that it will educate the government on the budgetary appropriation supervision, this is to say that the government after allocating the funds to any area or project must be careful to watch if the assignment is being carried out and more also, the different areas to which funds are allocated to must be able to render an accurate and convincing account to the government for the benefit of the country. Finally, the study will contribute to the body of existing literature and knowledge to this field of studies and basis for further research.

1.7   SCOPE OF STUDY

        The study on the effectiveness of budgetary appropriation is limited to Nigeria.

1.8   LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9   DEFINITION OF TERMS

Effectiveness: Effectiveness is the degree to which something is successful in producing a desired result; success.

Budgetary:      Budgetary is relating to or in accordance with an estimate of income and expenditure.

Appropriation         It is an amount of money that a government or organization reserves for a particular purpose