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CHAPTER ONE

INTRODUCTION

Inspite 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.

The first civilian regime, which ruled from 1960-1966, adopted a market-oriented approach to economic management with strong planning and control. The second regime that held power between 1966-1975 focused its economic policy on demand management. The third regime, that ruled between 1975-1979, opted for a market system biased towards demand management, planning and control systems. The fourth regime, 1979-1983 decided to continue this market system with the introduction of heavy doses of austerity measures to control demand and the high escalating inflationary trend in the country. The fifth regime which ruled from 1983-1985 continued the market system of its predecessor, but introduced further control and stabilisation measures. The sixth regime, which ruled from 1985-1993, favoured a strict market system with a package of structural adjustment programmes. The seventh regime was an interim government that lasted for less than a year, in 1993, and opted to continue with the deregulation policies of its predecessor. In the period between 1993-1998, the regime embraced a market-oriented management philosophy with a bias towards guided deregulation.  The civilian regime that was voted into power in 1999, and is still in power, still continues this market system (Ndiomu, 2000:14-18). However, the current regime has also introduced the dimension of a private sector-led development strategy by speeding up the privatisation of nonperforming public enterprises. It achieved some measure of recovery in terms of dealing with corruption and diversifying the economic base of Nigeria (OECD-ADB, 2006:421).

This analysis aims to show that, though different economic development policies and strategies have been pursued in the past by the various governments in Nigeria, none has been able to redirect the economy to the path of growth and recovery. However, the current civilian regime, which came to power in 1999, has demonstrated its commitment to leading the country toward achieving the international growth target by 2015.      

Ake (1996:1) asserts that political conditions in Africa, and also in Nigeria are the single greatest impediment to development. African politics would appear to have been constituted to prevent the pursuit of development and the emergence of relevant and effective development paradigms and programmes. The commitment of leadership to development is problematic. The difficulty is not that they do not want development, but rather that these are really not attempting to bring it about. Their intentions and actions filter through complex layers of self-interest, and the policies that emerge effectively cease to be policies for development, as opposed to, for instance, strategies for survival, power or accumulation (Ake 1996:64). Initially, most African leaders hoped that someone else would take on the burden of development, while they concentrated on the struggle for power and accumulation, concludes Ake.    

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