ECONOMIC TRANSFORMATION, BUDGETARY IMPLEMENTATION ANDTHE CHALLENGES OF THE LEGISLATURE IN NIGERIA

By

ESHIOBO, Sam Shola

(B.Sc.ed (Econ), M.Sc (Econ), M.Phil (Dev Econ), FCE (Nig), FCE (Ghana), FRHD)

ABSTRACTThis paper examined the issues surrounding economic transformation, budgetimplementation and the challenges of the legislature in Nigeria. The method ofinvestigation involves the use of documentary planning policies/evidences, Central bankstatistical data on federal budget and real gross domestic product of Nigeria from2000-2012. Economic transformation policy is the code name of economic reform policyof Nigeria’s 3rd Republic headed by Chief Olusegun Obasanjo in 1999. Loftytransformational policies have been evolved since 2000 and empirical result shows apositive relationship between real gross domestic product growth and the annualfederal budget expenditure. However, there is serious problem with the implementationof economic transformation programs by the government. The budget process toimplement the plan is bedeviled with slow/ weak operational framework, delayedpassage by the legislature, poor planning information from MDAs to the legislature,late release/non release of funds in some cases by the government, lack ofunderstanding of government’s visional programs by the legislature, poor budgetmonitoring/checks etc. All the budgets for the period of analysis were in deficits andmany ended with supplementary budgets which is an indication of poor budgetplanning/projections. A greater percentage of Nigeria’s federally collected revenue isfrom oil (73%) while transfers took the lion share of the expenditure (50%).Incorporating/integrating the expectations/desires of the people into transformationalprograms and priority budgeting is capable of eliciting co-operation, participation,sense of belonging, efficiency, and goal achievement of transformational programs.Aligning budgets with transformational investment plans, prompt/appropriate fundingof priority projects, efficient allocation and management of budget receipts at bothfederal and state levels, vigorous monitoring and request for refund of funds not spendon project that they are allocated by the legislature, quick passage of budget by the

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legislature will in no small measure improve the implementation of economictransformation programs for the overall development and welfare of Nigerians.

Introduction

Economic transformation can be seen as a new paradigm

or code-name given to economic reform programs of the

third republic which started in 1999 under the

leadership of Chief Olusegun Obasanjo. It is a strong

word that portends a radical restructuring of the

economy and a re-appraisal of previous reform programs.

Prior to 1999 various economic reform programs have

been put in place.

After independence in 1960, economic development

plans begins to emerge for rapid socio-economic

development of the newly independent nation. Military

intervention into the governance of the country in 1966

and the ensuing civil war (1967-1970) caused a lot of

damage to economic infrastructures. Post Nigerian civil

war plans were aimed at the reconstruction of the

destroyed social infrastructures as well as bringing

about political reconciliation.

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The political and economic challenges of the

nation worsen in the 1980s during the administration of

Alhaji Shehu Shagari. The period witnessed a sharp

decline in the international spot market price of crude

oil from $40 in 1980 to below $10 in 1981 causing a

sharp drop in the federally collectable revenue for the

implementation of the 1981-1985 development plan. This

situation lead to the introduction of the Economic

Stabilization Act of 1982 that declared Austerity

measures in Nigeria. The difficult economic situation

was one of the attractions cited for military back to

power in 1983 with General Buhari as the head of state

but who was later toppled by the military coup of 1985

that brought General Ibrahim Babangida to power.

Fundamental economic reform programs in Nigeria

were introduced by General Ibrahim Babangida in 1986

through the structural adjustment program (SAP). The

Nigerian economy was diagnosed to be having structural

problems that required urgent intervention/reform and

this was what SAP was meant to address. After SAP, the

economy still shows signs of ill health which require

further doses of reforms of various dimension by

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subsequent regimes of the military until the civilian

administration came in 1999.

The major challenge of the new administration of

Chief Olusegun Obasanjo was how to move the nation from

oil dominated economy to a private-sector driven

economy built on best international practices

(Chinweoke, 2011). Thus transformation objectives were

set by the government and articulated in various

policies such as; National Poverty Eradication Program

(NAPEP), National Economic Empowerment and Development

Strategies (NEEDS), Vision 2010, Vision 20:2020, 7-

Point Agenda, Transformation Agenda etc. Implementation

of Economic transformation programmes requires

committed budget provision, implementation and

legislative input.

The discussion of this paper becomes apt in taking

these activities one by one and examining their roles,

expectation and efficiencies in transforming the

economy for enhanced socio-economic development. A

fundamental question yearning for answer is, can

budgeting activities and legislative functioning

granger- cause economic growth and transformation? This

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and other pertinent questions are the focus of

discussion of this paper.

Perspective on Economic Reform and transformation

Programs in Nigeria

The Nigerian nation is no stranger to economic reforms.

Before the 1980s, reform programs were purely in the

form of extended national plans that attempted to

mobilize human, material and natural resources of the

nation to achieve the set goals of the plans. There

were series of plans viz; 1962-68, 1970-1974, 1975-1980

and the 1981-1985 Plan. Often, these Plans went beyond

mere economic prescriptions but were also to address

social, human and political goals. Thus, the 1970-74

Plan defined the fundamental national objectives to be

addressed by the plan. It was to build:

a.A united, strong and self-reliant nation;

b.A great and dynamic economy;

c.A just and egalitarian society;

d.A land of bright and full opportunities for all

citizens; and,

e.A free and democratic society. 

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Implementation of these Plans hardly involved any

fundamental restructuring of the national economy. They

were in the main, monetarist prescriptions that did

little or nothing to address the structural and

fundamental distortions in the economic, social and

political life of the nation. By the 1980s the need for

reforms paved the way for the Economic Stabilization

Act of 1982 which introduced Austerity Measures of the

Shagari Administration. The sharp drop in the

international spot market price for oil from $40 in

1980 to below $10 in 1981 resulted in a sharp fall of

the federally collectable national revenues. This

situation endangered the implementation of the 1981-

1985 plan, putting to peril all the budgetary

projections and planning for the period. The hurried

and fire-brigade approach to the emerging problem,

through the stabilization Act, failed to address the

root causes of the economic problems of the national

economy which was in great distress and structural

disequilibrium. This imbroglio was one of the raison

d’être for military come back to the political arena

under the disguise of massive corruption of the then

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civilian government which had caused the economic

impasse.

In 1986, the Structural Adjustment Program was

introduced by the Babangida Administration to address

the fundamental and structural imbalances in the

economy. The program was aim at diversifying the

economy, strengthen the currency, and build a viable,

sustainable industrial infrastructure upon which real

economic growth and development can be founded. The

reform exercise rested on a tripod of Liberalization of

foreign exchange transactions, Rationalization of public

sector agencies and parastatals, and Optimization of the

capacity for domestic production and the stimulation of

non-oil exports. Optimization encouraged inward-

looking, recycling of resources and the use of local

raw material for manufacturing.

Next on the line was the Vision 2010 introduced

by the Abacha’s regime in 1998. The aim of the program

was to “develop a blueprint that will transform the country and place it

firmly on the route to becoming a developed nation by the year 2010"

(Vision 2010 Report, 1998). The general objective was to

transform the country into “a united, industrious, caring and

God-fearing democratic society, committed to making the basic needs of7

life affordable for everyone, and become Africa’s leading economy”. The

Policy projected that by 2010, the Nigerian people

would re-discover themselves and revert to being God-

conscious and God-fearing, caring, sincere, honest,

accountable in their dealing with public trust, and

proud of their country and heritage.

Sadly, after more than fifty years of economic

reforms, Nigeria has painfully remained:

i. A public-sector led economy with a bloated

government presence in every facet of national

life;

ii. A nation with very weak private sector which

has grown a “rent-seeking and unproductive culture of over-

dependence on government patronage and contracts, with little

or no value added” (Harneit-Sievers, 2004 in Osiosomo 2012);

iii. A mono-crop economy with preponderant influence

of one commodity in determining the nation’s

revenue-expenditure profile and the balance of

payment position;

iv. An extractive and primary economy that produced

unrefined raw materials for export, either in

the form of agricultural products or crude oil.

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Manufacturing was at a very rudimentary stage,

and industrialization remained an

inconsequential factor in the nation’s economic

equation;

v. A nation without an effective industrial

infrastructure for economic take-off - no

petro-chemical industry to fuel the

industrialization process, no effective iron

and steel complex to produce flat steel, a

deficient power and energy sector, insecure and

inhospitable environment, and poor

communications;

vi. An economy with a weak and tottering national

currency that was the whipping boy of the

international financial community. (Osisioma,

2012)

The Nigerian economy shows the characteristic problems

of underdevelopment, which is often, attributed to the

failure of economic planning, ill adapted models and

economic development strategies. Some analysts said

Nigeria has a disarticulated economy; it produces what

it does not consume and consumes what it does not

produce. We produce crude oil and import refined9

petroleum products, we are blessed with large space of

land and majority of our population are farmers but we

import food for the teeming population. These over -

reaching problems arise from the structure of the

Nigerian economy, of production, consumption and

industrial structure.“Some analysts believed that the

Nigerian economic development process tends towards

industrial strategy that was essentially based on

import substitution with three policy objectives

mainly;

(1) to acquire technology to develop our industrial

sector,

(2) develop internal market through private sector to

stimulate local demand,

(3) to block economic leakages.(Chinweoke, 2011)

It is important to note that during this period, the

structure of the manufacturing sector in Nigeria was

dominated by low technology industries – establishment

of breweries, beverages, food and tobacco etc. while

South Korea decided to forge its industrialization

strategy policy on the development of tools and

machinery equipment’s for the manufacturing industries.

These stubbornly persisting economic problems, must10

have informed the administration of Chief Olusegun

Obasanjo to adopt a new dynamic name of

‘transformation’ in managing the economy to replace the

sluggish old fashioned name of reform in October, 1999.

Nigeria’s transformative agenda is essentially designed

to see that the country move from oil-dominated economy

to a more diversified economy; Change from public-

sector dominated to a private-sector driven economy;

Integrate the local economy with the global economy;

Transform a passive oil industry to a more pro-active

one; and, restructure the country from centralized

federalism to a more decentralized one with greater

political and financial powers ceded to local

governments towards empowering communities to manage

their development (Abdullahi, 2008). Nigeria’s New Deal

demands nothing less than this.

Transformation is a fundamental shift

in deep orientation of a person, an organization, or a

society such that the world is seen in new ways and new

actions and results become possible that were

impossible prior to the transformation (UNDP-LDP, Cited

by Asobie, 2012). It is a mandate for a radical,

structural and fundamental re-arrangement and re-11

ordering of the building blocks of the nation’s

economy. It portends a fundamental re-appraisal of the

basic assumptions that underlie our reforms and

developmental efforts which are to alter the essence

and substance of our national life. The expectation of

most Nigerians is for a development blueprint that will

transform the economy, reinvent the politics of our

nation, secure the polity, care for the

underprivileged, and provide responsible, responsive

and transformative leadership. The series of

transformative economic programs started with Chief

Olusegun Obasanjo’s administration. He introduced the

National Poverty Eradication Program (NAPEP) in 2001

and in 2004, introduced the National Economic

Empowerment and Development Strategy (NEEDS). The NEEDS

reform program rested on four key strategies (NEEDS,

2004):

* Reforming Government and Institutions;    * Growing

the Private Sector;

* Implementing a Social Charter; * Value Re-

Orientation.

The complementary tools for the realization of the

above goals include Pension Reforms, Energy and Power12

Reforms that led to the desegregation of NEPA into 18

successor companies, the GSM Telecommunications Reform,

the Extractive Industries Transparency Initiative, the

Corrupt and Allied Offences Commission, ICPC, the

Economic and Financial Crimes Commission, and the

Reforms in the Financial Sector.

With the advent of the Yar’Adua Administration in 2007,

the Federal Government articulated the 7-point Agenda

for national development with the Nigerian people:

1.Energy, 5. Wealth Creation and Poverty Alleviation

2.Education, 6. Land Reforms, and

3.Agriculture, 7. Security

4.Infrastructure,

The point was further made, that these reforms would

catapult Nigeria to the rank of one of the 20 most

developed countries of the world by the year 2020.

On April 16, 2011, President Goodluck Ebele

Jonathan won a pan-Nigerian mandate that swept through

the North and South of the nation. He ran on a promise

to radically transform the nation and overhaul every

aspect of the national life. The Transformation Agenda

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final report defines the goal of the reform in these

words:

During 2011-2015, the policies and programmes

directed at addressing governance will focus on

the public service, security, law and order,

the legislature, anti-corruption measures and

institutions, the judiciary, economic

coordination, and support for private

investment. These will be addressed through the

implementation of the recommendations in the

areas of public service reforms, judicial

reform, anti-corruption initiative, electoral

reform, land use reform, fiscal management

reforms, power sector reform, police reform,

financial sector reform, infra-structural

development reform, and information and

communication technology (Asobie, 2012).

The NEEDS program provided the common denominator upon

which the 7-point Agenda, the Vision 20 2020, and the

Transformation Agenda rest. The expectation was that

all the above reform measures would culminate in the

fulfilling of the 2001 Kuru Declaration:

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To build a truly great African, democratic country, politically

united, integrated and stable, economically prosperous, socially

organized, with equal opportunity for all, and responsibility

from all, to become the catalyst of [African] Renaissance, and

making adequate all-embracing contributions, sub-regionally,

regionally and globally (NEEDS: viii, 2004).

The mandate to reform and transform Nigeria has

been most emphatically communicated in the majesty

of the democratic process. The dream is for a bold

and audacious transformation programme that will

radically, fundamentally, structurally and

massively transforms the national economy, reinvent

the politics of the nation, secure the polity, care

for the underprivileged, and provide responsible,

responsive and credible leadership to Africa’s

largest and most promising economy.

Budgeting and Budget Implementation in Nigeria

A Budget in simple term is the future estimate of

revenue and expenditure over a certain period of time.

Budgeting activity has to do with individuals,

institutions, corporate and administrative bodies.

Budgeting in administrative or government palace is15

much more involving than the others. Budget at

national, state and local levels specifies estimates of

revenue and expenditure over a given period of time

(commonly one year) with legislative backing for its

appropriation. This is how budget system becomes linked

to parliamentary control. Budget is an important tool

in governance and used by the government to actualize

its development programs. Budgets are commonly

classified by the time lag set for expenditure or/and

the purpose of the expenditure. Thus there are the

i. Annual budgets: Budget which covers a period of one

year

ii. Short term budget: This covers a period of 2-

3years.

iii. Medium term budget: This covers a period of 4-

6years

iv. Long term or perspective budget: This covers a

period of 7 years and above. They are meant to

implement development plans.

v. Supplementary budget: This is a mini budget after

the main budget. It is designed to allocate fund

for purposes to which no amount was earlier

allocated in the main budget.16

vi. Functional budget: These are budgets prepared by

departmental heads of organisation to achieve short

term goals of the department/organisation.

Relating planned income to planned expenditure, a

budget can be:

i. Surplus budget: Situation where planned revenue

is more than planned expenditure

ii. Balanced budget: Situation where planned revenue

is equal to planned expenditure

iii. Deficit budget: Situation where planned revenue

is less than planned expenditure.

Deficit budgeting often leads a

government to borrowing from both internal and external

sources.

Budgeting at national, state and local government

levels requires legislative backing and approval before

implementation to ensure thoroughness in revenue drive

and prudence in expenditure outlays. It is to also

check arbitrary and spurious expenditure by the central

government. According to Udoma (2002), budget reformers

of the late 19th and early 20th centuries advocated

budgeting systems that would promote accountability

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over the use of resources, establishing thrift and

efficiency. The most important focus of the budget

system is to specify the item ceilings in the budget

allocation process and to ensure that agencies do not

spend in excess of their allocation.

Anyafo (1994) identifies the activities depicting

the budgeting process of the federal government.

Specifically, the process includes:

i. Presidential articulation and communication of

budget policy objectives.

ii. Call circulars for Ministerial meeting to further

amplify the president’s budget policy guidelines to

the federal ministries, extra – ministerial

departments and parastatals requesting an advance

proposal for the forth coming fiscal year’s budget.

iii. Ministerial budget briefing/defense and draft

estimates consolidations

iv. Federal executive council review of draft estimates

and approval of draft estimate.

v. Presidential presentation of draft estimate before

each house of the national assembly not later than

6o days before the expiration of each financial

year in the form of an appropriation bill.18

vi. Legislative discussion of budget policy objectives,

second reading and further considerations by

Appropriation committee and sub-committees,

legislative ministerial defense, national assembly

harmonization and approval of the appropriation

bill.

vii. Approved appropriation bill with presidential

assent produces an appropriation act for

implementation.

Appropriation Acts are enacted annually for the

purpose of not only regulating financial and accounting

matters, but also to principally provide authority

warrant for drawing from the Consolidated Revenue Fund

such sums of money as considered justifiable for the

recurrent expenditure including contribution to the

Development Fund for capital projects.

Prudent use of economic resources has been

observed to bring about economic development. Budget

planners refer to budget as a reformer activity.

According to Udoma (2002) budgeting system promotes

accountability over the use of resources establishing

thrift and to larger extent efficiency.

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Budget Preparation

Budget Approval

Budget Implementation Implementation

Budget MonitoringAnd Reporting

Function of the executive

The National House of Assemblies-Senate & House of Representative

Mobilization of financial resources to meet expenditure units by relevant agencies

Evaluation and progress monitoring by government Agencies to see if budget objective is being meant

Compilation of actual income earned and spent in each specific activity

According to Aruwa (2010), the federal government in a

federal system is more heavily engaged in economic

stabilization and redistribution functions. This

function of government provides it with the legal

authority to tax citizens and spend public monies to

provide and distribute socio-economic resources for

their well being. The Nigerian government at various

times is evaluated against the distributive function of

the federal government.

Budget implementation in Nigeria to achieve

stated socio-economic and political objectives of

government lives much to be desired. There is no doubt

that budget implementation is problematic and requires

surgical operation to chart a way forward.

Fig. 1: Budget implementation process in Nigeria

The budget process essentially consists of thefollowing chain action.

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Budget Auditing

Budget Review

Compilation of actual income earned and spent in each specific activity

Going over the budget policy from preparation and changing strategies or amend strategies of the budget. Also implementation strategies can be amended to better ones

Budget implementation, as already pointed out deals

with the mobilization of financial resources to meet

the budget objectives, as well as ensuring judicious

use of the resources, for the purpose it were meant.

From the above chart the prepared budget document

by the executive arm of government is presented to the

national assembly (House of Representative and Senate).

The House of Assembly scrutinize and give approval to

it if found good as Appropriation Act.

The next stage is that the various federal

ministries, parastatals, agencies put in place

machineries for the collection of the allocation for

their ministry or agency. The monitoring and reporting

stage involves the examination of flow of revenue and

21

expenditure for each unit or department on a quarterly

basis. This is to check the variances between the

budgeted amount and the actual amount that is really

involved to fine tune the policy to meet the budgeted

target.

The auditing process seeks to match income received

and expenditure incurred to the activities they are

tied to and looking out for areas of cost

effectiveness, misappropriation, misallocation etc. The

outcome of Monitoring Committee/agencies and auditing

report serve as basis for review of budget policy for

socio-economic development.

Table 1: Federal Budget 2000 -2012 year

RealGrossDomesticProduct(RGDP) @1990ConstantBasicPrice(Nmillion)

TotalFederally

CollectedRevenue(Nmillion)

TotalFederalExpenditure(Nmillion)

BudgetSurplus(+)Deficit(-)(Nmillion)

Federally

RetainRevenue(Nmillion)

2000412,332 1,906,159

.70 701,059.4 -103,777.3 597,282.1

2001431,783 2,231,600

.001,018,025.6 -221,048.9 796,976.7

2002451,786 1,731,837

.501,018,155.8 -301,401.6 716,754.2

22

2003495,007 2,575,095

.90 1,226,000 -202,724.7 1,023,200

2004527,576 3,920,500

.00 1,426,200 -172,601.3 1,253,600

2005561,931 5,547,500

.00 1,822,100 -161,406.3 1,660,700

2006595,822 5,965,101

.90 1,938,000 -101,397.5 1,836,600

2007634,251 5,715,600

.00 2,450,900 -117,200.0 2,333,700

2008672,203 7,866,590

.383,240,820.00 -47,378.50

3,193,440.00

2009718,977 4,844,592

.343,452,990.80

-810,008.46

2,642,982.34

2010

776,3327,303,671.55

4,194,217.00

-1,105,439.72

3,088,778.10

2011

834,00111,116,900.00

4,299,155.00

-1,158,518.40

3,140,636.70

2012888,893 10,654,72

4.874,605,319.72

-975,724.00

3,629,595.72

Source: - (i). Central Bank of Nigeria (2011). StatisticalBulletin, vol. 22 pg 97-98

(ii) Central Bank of Nigeria (2012).Statistical Bulletin, vol. 23 pg 100

From the above table (table 1), the total collectable

federal revenue from 2000-2012, increased significantly

in 2005 (N5.5trilion), 2008 (N7.9trilion) and 2011

(N11trilion). The expenditure profile shows an

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increasing non-decreasing trend over the period while

the revenue profile fluctuates. The budget is in

deficit in all the years under review. Implementation

reports about the budgets have been worrisome. Average

performance level of the budgets over the period is

conservatively put at 55%. Most capital projects were

not executed and there was no control system of

recovery budgetary allocations that have not been spent

on the project they were earmarked for in the fiscal

year.

The relationship between growth in real gross domestic

product (RGDP) and the total annual Federal budget

expenditure (AFEB) can be specified as:

RGDP = ao + a1 AFEB + Ut

a1 > 0; (apriori expectation)

RGDP = Real gross domestic product orincome of Nigeria is proxy for

economic growth and it isthe dependent variable of the model.

AFEB = Total annual Federal budget is theindependent variable.

24

a0, a1 = are parameters of themodel

Ut = White noise random error term orstochastic error term.

Empirical result shows that the relationship between

growth in real gross domestic product (RGDP) and the

total annual Federal budget expenditure (AFEB) was

significant from the least square regression result for

year 2000 - 2012:

RGDP = 348026 + 0.11074AFEB + et

T-Ratio = 24.2897 21.3177 Prob value [.000] [.000)

R2 = 0.97637, R2-Bar = 0.97422The t-ratios and probability values of the model shows

that real gross domestic product and annual federal

budget have significant in values. A unit change in

budget expenditure will change real gross domestic

product by 0.11074 units. This means a unit increase in

federal budget will increase real gross domestic

product by 0.11074. The R-bar is high showing that 97%

of the variation in RGDP was explained by the variation

in AFEB. Thus annual federal budget significantly

25

influenced the growth of Nigeria’s gross domestic

product over the period 2000-2012.

Role of the Legislature in Economic transformation and

Budget implementation.

The legislature is the law making arm of government in

the process of governance of a nation. The House of

Representatives and Senate formed the National Assembly

whose duties it is to make laws for the good governance

of nation.

The legislature is the organ that gives

authorization to government judicious expenditure

especially the expenditure for funding and financing

economic reforms/transformation programs. It is the

‘watch dog’ of the spending habit of the executive arm

of government to financing economic development

programs.

The legislature has a vital constitutional role to play

in the budget process to bringing about socio-economic

development of the nation.

Section 81 (1) of the 1999 constitution of the

federal republic of Nigeria empowers the legislature to

26

authorize expenditure from the consolidated revenue

fund to carry on the business of the state. It states

The president shall cause to be prepared and laid before each House

of the National Assembly at any time in each financial year

estimates of the revenues and expenditure of the federation for

the next following financial year.

Section 81(2) empowers

them to pass an Appropriation Bill to authorize the president to

draw money from the consolidated revenue fund to

finance economic program me. The legislature is also

empowered by Section 81 (4) to scrutinize the budget and

the economic programs priorities to ensure that

important project and enough funds are made available

for their execution while expunging less relevant or

low priority ones. They can review the amount provided

for each project or sector as the case may be by virtue

of section 81 (4a).

The legislature is also empowered to approve

contingencies fund for the federation and giving

authorization to the president for it (Section 83(1))

From the Constitutional provision stated

above, it is clear that the role of legislature is a

sine-qua-non to the implementation of budgets,27

budgetary provisions and the execution of economic

transformation programs.

Challenges of the Legislature in Economic

Transformation and Budget Implementation

As earlier discussed, the legislature is

constitutionally empowered with the enormous

responsibilities of:

i. Screening of persons and economic managers that

will implement and execute transformational

economic programs i.e. ratification of the

appointment of ministers, heads of some important

Federal government departments, parastatals etc.

ii. Be involved in social accounting of assessing

financial provisions of projects.

iii. Rationalization and making of scale of preference

of projects. Projects with maximum benefits or

value are recommended to government.

The time, energy, technical resources required to carry

out these assignments of the legislature in ensuring

the success of economic transformation programs are by

no means easy. The legislature thus faced the

following problems among others;

28

1. Insufficient budgeting information: The House

Committees on the various aspects of the economy

covered by the budget and transformation programs

require information to make inputs as to what is

most needed to stimulate growth/development in the

sector that they are in charged. They require

information from institutions or MDAs to be able to

do their job. However such information is hard to

get sometime from them. At some other time the

information is provided very late because it was

being ‘cooked’ (falsified to what will satisfied

the members of the Committees.) Much time is thus

wasted in passing the budget leading to delays in

budget implementation of the transformational

programs.

2.Expertise and technical problems: Some house

members are not vast technically with the method,

treatment and analysis of information given to them

for decision making. They often need the services

of a consultant in the area of activities of the

MDA concerned who will first educate them on what

he/she did as a consultant before they could come

up with a decision. This takes time to materialize.29

3.Delay problems from the executive. The executive

arm of government sometimes submits budget

proposals late and pressurize the legislature to

fast-track its passage without giving them the

opportunity for a thorough scrutiny. The result is

often poor decision leading to wastage of resources

in the form of hurried approval of jumbo projects

that will not benefit the citizenry.

4.Corruption and lack of transparency. Corruption,

which is endemic in the Nigerian society, touches

on the legislature.

Most of the delays in the passage of

Appropriation and other Bills useful to the economy

are often attributed to the fact that the

parliamentarians are waiting for settlement or

bribe or gratification before they can pass the

Bills. Sometimes the parliamentarians could jack up

the expenditure of a budget that favors or feather

their nest with a crowding out effect on the

execution of projects that are beneficial to the

masses.

5.Politicking and Political differences: The

legislature is sometimes engrossed with house30

politics where members of one political party can

gang up against the passage of a bill that is

perceived to benefit a member or members of the

other party. This is sometime extended to the

passage of the Appropriation Bill where one

opposition party will criticize the programs of the

ruling party which is brought before them for

ratification and approval. Ministerial and some

other key executive appointments are highly

sensitive to politicking.

6.Lack of Transformational vision: There is the

saying that if you don’t see a vision you cannot

interpret the vision. Most of our parliamentarians

do not see the vision of Mr. President and so could

not key in adequately to understanding what they

are expected to do. In this situation, puerile

contribution from the legislature becomes the order

of the day with little or no achievement made.

Conclusion

Economic transformation policies that can translate

to real growth in the economy require efficient

31

budget implementation process which has the inputs

and backing of the legislature.

Empirical result shows a positive relationship

between economic growth and total annual Federal

budget expenditure in Nigeria. However, economic

transformation policies, budget implementation

process and the role of the legislature face serious

challenges and problems. These challenges cut across

economic, political, social and institutional

factors.

There are poor revenue and expenditure projections,

while the implementation process is too exposed to

individual whim and caprices of political office

holders. These people double as suppliers of

estimates for the budget on one hand and contractors

on the other hand. The number of supplementary

budgets made over the period is an indication of poor

budget projections while the high budget deficit-GDP

ratios are a measure of poor performance. Huge

external debt and the resulting high service ratio

placed a heavy burden on economic and social

development programs while corruption and self

32

interest of many persons in field of governance as to

what they can grab for themselves and families

leading to self-contracting with the resultant

consequences of sub-standard projects/services if

executed at all.

From the forgoing, it is pertinent to recommend as

follows:

1.Transformational economic policies designed to

actualizing the vision of a government, should be

well explained to the legislature so that they can

buy into it and be committed. In this case the

economic and social objectives of the policies

should be clearly stated, well explained to them

and with adequate financial projections.

2.A bottom-top transformation and budgeting planning

system should be adopted to capture the needs of

the people at the grassroots in the development

process. The idea of which projects to execute

should at least be allowed to come from the people

at the lower level rather than from government

officials, executives or privileged politicians.

This arrangement will elicit their cooperation in

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the implementation of transformational economic

policies.

3.The legislature should not stop at just passing the

appropriation Act but to join other monitoring

agencies to help monitor the budget implementation

process and asked for a refund of the budgetary

allocation tied to any project that was not

executed in the fiscal year it was provide. This

will help reduce misapplication of budgetary

allocation of one project for another and help

build efficiency and accountability. This has been

one of the greatest problems responsible for budget

implementation failure in Nigeria. Some persons

just pocket such allocation while giving excuses of

not receiving it from the executive arm.

4.Government should be committed to the

implementation of the budget programs. There

should be constitutional provision for continuity

of projects started by a past administration to

completion before initiating new ones. The

executive arm of government should ensure prompt

release of allocated funds to

ministries/parastatals immediately the34

Appropriation Bill is passed. A budget without

release of fund for implementation is a wasted

exercise.

5.A not more than two-month time frame should be set

for the legislature to conclude the discussion and

pass into law the Appropriation Bill for the fiscal

year. This will ensure that the earnest

implementation of any annual budget in the 1st

quarter of the fiscal year not sine-die as is

currently the case. The presidency should also

stick strictly to the not more than two months

before the commencement of the fiscal year within

which to present the budget before the legislature.

6.Reliable and adequate information, vital statistics

devoid of ‘political trading figures’ should be

provided by the various departments of statistics

and research in ministries, departments and federal

office of statistics to budget makers/legislature.

7.Budget implementation process should be transparent

by making known to the public the projects to which

funds have been released, the time, the contractor

and amount released to the public. Open bidding for

contracts should be encouraged by the contract35

awarding committee to be made up of people of

integrity and honesty in each establishment. This

will reduced the incidence of corrupt practices and

encourage quality contract jobs.

8.High budget deficit (averaging 31% of GDP annually)

should be brought down to the healthy 5% technical

rate allowable if it cannot be avoided.

References

Abudullahi N. (2008), “Imperatives of the Seven-PointAgenda” in Agenda 20 2020: Redesigning Nigeria Future, Lagos, ANANPublication.

 Adebayo I. (2011), “Nigeria is 14th Most Failed Statein the World” Next Publication, June 22.

 Asobie A. (2012), “Challenges of Governance: Need forTransformational

36

Leadership”, Presented at NationalConference of ANAN, Held at Abuja, October 9.

Anyafo, A.M.O. (1994). Public Finance in a DevelopingEconomy: The Nigerian Experience. In Public SectorAccounting. Lagos :UNEC Publication.

Aruwa A Suleiman (2010). “Nigerian budgeting processand magnitude of budget variance” In AcademyJournal of defense studies, NDA Kaduna. July

Chinweoke Akoma (Nov 2011). Economic Transformation:Facts and Processes. Retrieved June 3, 2014 fromwww.vanguard.com/business.

NEEDS (2004). National Economic Empowerment andDevelopment Strategy 1(2004-2008). Abuja: National PlanningCommission.

Osisioma B. C. (2012). Nigeria’s TransformationAgenda: The Management and Leadership Challenges. Paperpresentation on the Occasion of 2012 NIM South-East Zonal Management SummitHeld at King David Hotels, Regina Caeli Road, Awka.

Osisioma B. C. (ed), (2008), Agenda 20:2020: RedesigningNigeria’s Future, Lagos, ANAN.

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Udoma, U.U. (2002), “The Appropriation Process” A Paperpresented at National War College Course 11 by SenateChairman, Senate Committee on Appropriation

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