ABSTRACT
This study investigated the effect of budget implementation on Nigeria’s economic development, with focus on AkwaIbom state. The major objective of the study was to examine the extent to which budget implementation had impacted on the per capita GDP of Nigeria for the period 1999 to 2017. To achieve this broad objective, a model was formulated based on empirical and theoretical reviews. The model used per capita GDP as the dependent variable while government’s capital budget, recurrent budget and the rate of implementation of annual budgets were the independent variables of the model. The Ordinary Least Square (OLS) model was used in the data analysis. In order to ascertain the data properties, unit root test was utilized and preliminary results showed that per capita GDP and Capital budget were stationary at first difference while Recurrent budget and implementation rate were stationary at level. The mixed order of integration necessitated the ARDL Bounds test for co-integration which showed that there is a long run relationship between budget implementation variables and per capita GDP in Nigeria. Consequently, the ARDL model revealed that capital budget decreased GDP per capita significantly in the short run while in the long run, it increases per capita GDP but not significantly. Recurrent budget and budget implementation rate were positive in the short run but recurrent budget remained positive in the long run and significantly too while budget implementation rate turned negative and insignificant on the economy. The conclusion is that the rate of implementation of the budget has not directly achieved the purpose for which it was meant. Budget implementation in Nigeria has not been optimal and it has been mostly tilted towards recurrent expenditures with the capital expenditure still falling short of expectations. The recommendation made was that the government should make every effort to ensure that capital budgets are fully implemented in addition to the Government putting in place effective machinery that will ensure the strict adherence to due process and total implementation of annual budget provisions and avoid misappropriations.
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The hallmark of any economic development of a country is traceable to its budget implementation. In the words of Abdullahi (2007), a government budget is a political and administrative instrument by which the executive and legislative bodies endeavour to allocate scarce resources among the various organs of government either at state levels or federal level. It is basically a tool for selecting a particular mix of public and private goods and services. In the public sector, budget performs the same allocative functions that the price mechanism performs in the private sector (Abdullahi, 2011).
According to Olomola (2009), the role of budget in an economy cannot be overemphasized. A budget is an important economic instrument of national resources mobilization, allocation and economic management. It is an important economic instrument for facilitating and realizing the vision of government in a given fiscal year. A budget had to be well-designed, effectively and efficiently implemented, adequately monitored and its performance well evaluated. Very recently, budgeting, in Nigeria 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 were that implementation cannot be discussed without appropriate planning and reassessing coupled with proper monitoring to facilitate it efficient implementation.