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A budget is a list of all planned expenses and revenues. A budget according to

macroeconomic analysis and objectives of country is a core of public finance in
revenue generation and public expenditure. In Nigeria, the Federal government,
States and Local governments prepare budget every fiscal year to define basic
expenditure profile and revenue estimation, channels and evaluation. That is,
the budget of a government at any level in Nigeria is a summary or plan of the
intended revenues and expenditures of that government.

Budget implementation is the actual functioning, performance and execution of

a specific revenue and expenditure estimation. Budget implementation has been
very low in most less developed countries including Nigeria. One of the many
problems facing budget implementation in Nigeria are highlighted in the issues
in budget implementation which shall be discussed herein. The scope of this
topic discussion is to know those challenges of budget implementation and the
various possible ways of addressing them. The importance of a realistic budget
cannot far fetch from its implementation such that ; a realistic budget is
implemented with few significant derivations from plan; Low level of
corruption in public expenditure ; high transparency in public finance ; public
funds spent for authorized public purposes ; reported expenditure corresponding
to actual expenditure; reliable external and/or internal controls and where
spending units have reasonable certainty as to the funds that will be available .
‡Release of funds
‡Control and monitoring of expenditure ± by the Ministry of Finance

‡Control and monitoring of revenues ± by the Ministry of Finance
‡Cash and debt management
‡Internal controls, including over payroll and procurement
‡In year modifications of the budget
‡ In-year financial reporting
‡Reporting externally on budget i mplementation
‡External audit of budget implementation
Problems in budget implementation systems may reflect lack of incentives for
good budget implementation, rather than lack of capacity. What are the
incentives for compliance or non -compliance ± institutional issues are
important, not just ³technical´ fixes? 

To what extent are donors and their requirements part of the problem - project
µring fencing´ requirements and non use of country systems , -lack of
predictability of donor funding, both project funding and budget support .for
example IMF, World Bank and others.

Greater complexity with unified budgets covering al l level levels of government

i.e Federal, State and local governments etc. This can be manifested in the Lack
of adequate information provided by the Finance ministry on fiscal activities of
subordinate governments in Nigeria.

Budget implementation problems arises especially when the implemented

budget varies from the adopted one such that; The variance between the adopted
and implemented budget depends on the country¶s fiscal conditions, stability
and certainty in the country¶s finances, the role of the finance ministry, and the
type of budget system. For instance, a highly itemized budget may experience
more variance than one which gives ministries spending discretion. The trend in
contemporary public management is to give spending units more flexibility in
implementing their budgets.

Budget Implementation problems as a result of poor budget preparation. These
arise such that; Problems in budget implementation may reflect a poorly
formulated budget ± for example lack of credibility/realism. And lack of a
comprehensive budget may complicate implementation ± for example separate
timetable and rules for capital budget, extra-budgetary funds. And, also, where
spending ministries have not been fully involved in their budget formulation so
that they understand and own their budge 7t.

Also implementation problems can be reflected in lack of correct prediction of

economic, social and political scenario or circumstances and the outbreak of
situations like war, famine, natural disaster etc can hamper budget
implementation. In Nigeria, the emergence of the civil war in May, 1976 really
hinders the effective implementation of that fiscal y ear¶s budget.

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‘ The approved budget is unrealistic, so actual spending must be less than


‘ Extreme uncertainty concerning available resources, with quarterly or

monthly allotments. E,g in Nigeria drop in crude oil prices due to world
economic depression.

‘ Extra-budgetary funds outside the budget process, hoarded by spending


‘ Significant arrears which are not included in financial statements that

requires attention in the current budget execution. (diversion)

‘ Significant discrepancy between actual and reported expenditure for

certain activities.

‘ Funds diverted to unauthorized purposes or private accounts (corruption)

‘ Lack of civil society involvement in budget preparation and
implementation process in Nigeria

‘ ›elayed publication of financial statements (lack of transparency and


‘ Lack of expert inclusion in the budget preparation to effectively forecast

economic variables.

The importance of implementation underscore the basic functions of budgeting
and implementation in Nigeria since, much time is spent by the Nigerian
government (often with World Bank, IMF assistance or encouragement)
preparing elaborate po verty reduction focused budgets. A budget guides the
government on a developmental plan that most times needs to be consolidated
to achieve a meaningful aim. Budget implementation is importance because it
assesses government performance over time, that is, it measures government
score card and effective comparison can be made. An effectively implemented
budget improves and strengthens the various macro-economic various suck as
poverty, unemployment, inflation, and the financial systems. In total, an
efficient and implemented budget encourages

‘ '

Ê; Assurance that budget aggregates are
sustainable over the medium-term and promote economic stability

‘ '' 
Ê7 Assurance that public money is spent in
accord with national priorities and on programs that are effective in
achieving public objectives and effective distribution of wealth

‘ ''

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7 Assurance that public services are
delivered in an efficient, fair and courteous manner, and are accessible to


I have been able to establish that budget implementation problems can arise
from socio-economic factors as well as inadequate budget preparation , donor¶s
unredeemed pledges as well as inadequate data from the finance Ministry and
spending ministries. I can therefore affirm that for an effective budget
implementation to be achieved, there must no leak in the preparation process
and involvement, transparency/accountability to curb public officer¶s excesses,
execution monitoring and correct estimation of macro -economic variables. Also
that,‘ ‘  ‘ ‘ 
  ‘  ‘ ‘  ‘ ‘  ‘  ‘


‘ ‘  ‘ ‘   ‘ And again, ensuring
that the basic requirements are met; timely realise of funds, cash planning and
effective control o expenditures.

' Ê 
$&&8( +-$+785-..+ (2003). Y    
Pearson Prentice Hall Pub.

ML Jhingan: (2008 ) Macro Economics Analysis Vrinda Publication : New


-(+/ 5$0+(8" 99)5 m m        
Y . J.M. Buchanan review.

:. (2005). Element of Public Administration„Lagos: MC grace

Academic Resources Publishers.

$+;-(/< (1956). Government Budgeting, New York: John Wiley Inc.