Proper Accounting and Budget Implementation in Nigeria



In the preceding part, we stressed the importance of laying a theoretical foundation for clearer understanding of the scope and limitation of the study. We also handled the importance and objectives of the course of our study. We have a concept that if our investigation is not purely grounded in relevant theories and concepts, we shall unknowingly rob our profession of its fresh and ethics thus jeopardizing the mechanical affairs of the profession.

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The adaptation of its wheels will breakdown and it will be unable to accommodate the tremendous changes of our time.

Concepts and theories provide functionally the framework for problem identification and structuring. The experience of the past is generally summed up in concepts and theories and a foundation is thus laid for the analysis of present and future states.

In this case, we are to discuss the budget system the objective of the budget, contents of the budget document, budgetary procedures. Repetitive budgeting, the effect of inflation, politicians and the political system, budgetary implementation, budgetary administration and the estimation of accountability in Nigeria private and public sector.


MEANING: the word “budget” may be defined as a collection of document which is the tangible representation of the government unit plans.

As ivory. H. Evans put, budget means the present meaning of annual estimate of revenue and expenditure and statement of financial policy. Thus to budget, means to estimate or make proper provision for meeting once expenses.

A budget as defined by CIMA is a financial and or statement prepared and approved prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining a given objective.

Going by the encyclopedia Britannia, it was defined as a balance sheet of estimated revenue and expenditure designed for financing an entity of a future period. The period there must be a financial year possibly 12 months. In the encyclopedia Britannica, a period of 12 months is just the best for a budget, as this would allow for comprehensive comparison guarantee accurate forecasting.

From the above definition we can now conclude that government budget is not money ready to be spent by government but it merely estimates of expenditure to be embarked upon within a year.. The misconception by many that government budget is the amount of money ready to be spent is hereby corrected. The view that government money is the money to be spent is not true. Budget is therefore the government’s plans within a given period of time. It is a plan of expenditure targeted to be incurred within fiscal period and the means by which the plans could be financed.

Budget word was derived from the French world.” Budgette “which means “a little bag”. Even now, the British Chancellor of the Exchequer is still said to open his budget or receptable of document and accounts when he makes his annual financial statement. The rule of budget was first established in England. Other countries followed but with less variances. The British budget is made of three sections.

  1. A review of collected expenditure incurred changes in the composition of national debt and the other matter related to the year just ended.
  2. An estimate of expenditure during the forthcoming year, both from consolidated fund, which is not debited in the house and of the extent to which it is expected to be, covered at existing tax rates.
  3. Proposals of such changes remission on increase of tax as may be required by the expenditure proposed and more recently by the generally economic situation. Let us take that government budgetary are exclusively of them. By this, the writer means that surplus of the previous years budget is not and cannot be carried forward to the current years budget. We don’t talk of physical cash in the budget. It also pertinent to note that the means of financing the government expenditures depend on the ability of the budgeters to forecast accurately the resources and the extent of realization. The best budget is little avail if there is no resource for its execution. The main problems of budgeting are related mainly to insufficient fund and mismanagement of funds made available. The unity of budget means that presenting the full estimate of revenue and expenditure in one mass and in one account should preserve budgets. But sometimes some countries offend this principle by dividing the budget into parts. Ordinary or non-recurrent revenue and expenditure. This tends to laxity and the manipulation of ordinary side and weakens the incentives to deal at once with emergency expenses. Sometimes, additional budgets are appended to the main budget. Repetitive budget providing a part for special services like post pipe borne water, telegraphs, telephones, railways and so forth.

When such additions infringe the unity of the budget, they are to be depreciated to vividly clarify the writers mind, let me bring in some of the comments made by some governors of different states during the tenure of their offices. While making his 1988 budget speech the them governor of river state colonel Anthony S.I Ukpor stated as follows:

On salary and wages payment, payment of workers salaries and allowances in the state public service received priority attention in 1987. Consequently, the government spent the sum of N192.2 million more than the budgeted amount? On the project Implementation, he has this to say.

The state made significant strides in the area of capital development in 1987,through the execution and completion of many capital projects will physically take place this year. Due to our peculiar geographic environment. The planned capital expenditure on capital projects in 1987 was N153.3 million.

From the above statement, it could be deduced that the budgetary plans are not well implemented. Then the governor stated that they spent N192.2 million instead of N175.6 million on the payment of salaries initially budgeted. The question is from where did the river state government raise the money to financed unbudgeted amount spent, that is N16.7 million?

This financed is very minimal when compared with that obtainable in project implementation. Later, a sum of N153.3 million was the actual expenditure on capital projects during the year in question. Yet in the budget, the amount of N9.56 million was estimated. The question is whose fault is it? Is it the fault of the planners or is it the implementers that failed to do their jobs well? They might have implemented more than what was planned and estimated. From where did the money come? This money was not estimated, yet, it was spent. To whomever the blame may go to, the writer wants to know and emphasize clearly that the budgetary plans have not been properly implemented.

From the statement made by the river state governor in 1988 that budgetary plans are not properly implemented. This is based on many variables that could not respond, to the taxies because there had been improper accounting of the previous taxies paid. No taxpayer would have the zeal to pay tax any more if the essence of paying tax is not achieved.

As we can observe from many comments made by many heads of states and governors of different regime we can conclude that there is poor implementation of budgetary plan.

The case now is that what then are the causes of this poor budgetary implementation? It would be helpless to answer this question by identifying some of the possible explanation; of why planning in Nigeria and other developing countries have not particularly successful in the sense that the full implementation is yet to be achieved. The poor implementation is yet to be achieved. The poor implementation of budgetary plans is lack of statistical information, shortage of professional staff, and uncertainty of funds. The inadequacy of statistical data in terms of the quality information obtained, availability of information needed and timeless in the most basic areas of trade, production, investment and savings, demography and employment make every attempt at comprehensive budgetary planning a heroic undertaking. The machineries of the professional staff in the field of planning and implementation are the major problems in the undeveloped countries.

Nigeria lack some professionals such as qualified accountants, qualified urban and regional planners and the statisticians who would give the state the required plan on which the implementation could be based. Even in the area of leadership, the leaders are our levy problems. The type of leaders we have since independence and the method of their leading has impeded the implementation of plans in our states and national budgets.

The few planners we have do not possess the required skill to tackle this effectively or if endowed with this skill, they may not be enshrined with heroic minds. Many are selfish only thinking of them all the times and thus digress from the standard they are required of and be doing other things all together. They plan and implement what is mot beneficially required by the society hence they can benefit.

If the writer should open the wound sustained in her mind on the ills through which those in the helm of affairs inflict in the citizenry, the government, as an authority will have nothing but to get her arrested and detained. But let me just briefly mention some capital projects as samples of learning. The millions of naira wasted on the importation of condom by the ministry of health right from the time of general Ibrahim Babaginda headed by the Minster professor Ransom Kuti has been a crazy plan and implementation. We have people dying of hunger, young graduates and youth unemployed, people dying of different sicknesses and so many of our mineral resources lying waste. Yet the government has time to encourage sexual immorality. Why not invest these funds in any of the reasonable and profitable projects instead of wasting money. In unprofitable ventures. So as not to allow those of us who are engaged by lust to end up with many consequence there in.

Another strong example of where this poor implementation of budgetary plan is crowing as a harbinger of economic abomination is the delay in the payment of workers salaries. Taking health sector for example the crisis of salary payment in the university teaching hospital Enugu in the year 1993 till 1995, constituted some economic mess to the nation.

Other factor that jeopardize the fully implementation of this budgetary plans is the uncertainty of fund and the expected resources. The revenue collected always thanks their God anytime they are appointed for revenue collection. They albeit the taxpayer not to pay directly to the officials collection receipts. These taxpayers pay some of these tax collectors some bribes and that ends the whole case. When then was at a loss? It is the same government.

Even if the estimate is expected to be accurate, there is no guarantee that the collection will be 100% okay. The revenue could be collected accurately but the remittance of the accurate amount to the government is always zero. Therefore, there is always an uncertainty everywhere in the sector of the government revenue allocation and collection.

In this respect, what then determines the effective budgetary implementation? The quality of budgetary implementation is determined by:

  1. The character of the plan and its demands on execution capacity.
  2. The adequacy of executive capacity in relation to the above demand.
  3. The behaviour of the foreign aids donors.
  4. The performance of the economy whether the economy is capable of providing the real resources require for implementations.
  5. The political system and the interest of politicians.

In summation the quality of the plan implementation is dependent on the plan itself, nature and the character of the plan. If the plan is desirable what ways should it be financed? Will it be through domestic or foreign means or both? Moreover are our leaders or implementers ready to execute the plan effectively.

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