INTRODUCTION

The budget is detailed finance statement that consists

of anticipated revenues and proposed expenditures. The

budgets process brings about the ministry of finance,

the budget office, fiscal responsibility commission the

organized private sector civil society organization and

legislators and the executives together to articulate

the challenges of development as face by critical

elements of the society. There is a great deal of

consultation and checks and becomes especially between

then executive and the legislative. The Nigerian

experience shows that their is wide spread cases of

budget indispline during implementation to the extended

that instead of the budget to serve as an instruments

of allocation, accountability, produce and control, it

has turned out to be more or less an annual ceremonial

ritual, that is annually celebrated.

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Adhering stretchy to what the budget stipulate is the

surest guarantee for a more developed, better and

greater Nigeria.

On Thursday 19th Dec 2014, the minister of finance

on behalf of the president of federal republic of

Nigeria presented the 2015 budget proposal to the

national assembly under the theme “budget for job

creation and inclusive growth posed. This budget has

the total estimate of N4.6 trillion.

Definition

The word budget has been defined by many books,

scholar’s e.t.c. for example, oxford advance learners

dictionary, 4th edition, defined budget as a n

official statement by the government revenue and how is

should be spend. Robert Lee and Ronald y. or governor

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including information in revenue, expenditure and

purpose of government.

The concept of “budget” was derived from a French

word called “bougette” which means “ a market” or “a

purse”.

Types of budget

Every nation’s budget is prepared in anticipation

of revenue and expenditures. The revenue and

expenditure structure can be said to determine the

types of budget which are as follows:

1.Surplus budget

2.Balance budget

3.Deficit budget

Surplus budget:- this in where by the estimated

revenue is more than the proposed expenditure. In

this types budget all the expected revenues are not3

spend on proposed expenditure of revenue after all

the expenditure has been carried out.

Balance budget:- this is where by the estimated

revenue equals to the proposed expenditure. There

will be no reserved revenue of deficit in the budget

and all the estimate revenue are allocated to a

proposed expenditure.

Deficit budget:- this types of budget government

proposed by various countries are over the glove. The

deficit of the revenue in the proposed budget are

usually financed by borrowing from international

monetary fund {IMF}, selling of government bonds

foreign aids etc. example of countries that operates

this types of budget Nigeria, Chad, Niger.

Aims of budgets

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1.It helps to foster economic growth and document in

all the sector of the economy.

2.It serves as a means of evaluation of government

performance in the economy

3.It serves a plan to check and crub inflation rate.

4.Allocation of resources tom the different sector of

the economy.

5.It serves as a means of communications and

government and its citizens.

Budget short comities

1.In appropriate static in drafting of the business

2.Lack of proper implementation of the budget

3.Structure of the budgets

4.Misplaced priority

NIGERIA FISCAL AND MONETARY CHALLENGES.

Nigeria’s potential for growth and poverty reduction isyet to be realized. A constraint has been the recentconduct of macro economies, particularly fiscal and

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momentary policies. This has led to rising inflationand decline in real incomes. The public deliveryservices are poor and deteriorating. Moreover, therehave been little transparency and accountability in themanagement of public resources. An objective indicatorof the traumatic experience of Nigerian economy whichat the inception of the present administration was thepersistent weak of GDP growth and decliningproductivity. This was a manifestation of a demoralizedworkforce coupled with corruption that characterizedgovernment business, lack of transparency andaccountability in the executions of public sectoractivities was very pronounced in all tiers ofgovernment. Equally glaring is the poor social-economiccondition of the people. Poverty rate remained veryhigh, with about 70% of the population estimated to beliving below the $1 per day consumption bar.

National economic management became a herculeantask, as economy has to contend with volatility ofrevenue and expenditure. The widespread lack the fiscaldiscipline was further exacerbated by poor coordinatingof fiscal policy among the three tiers of government.Also there is a weak revenue base arising from highmarginal tax rate with the very narrow tax base,resulting in low compliance. These has been curbed withthe introduction of a new integrated tax system.

Other gray areas of the national economy includepoor infrastructure, weak public service delivery and

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generally weak environment for private sectordevelopment. All of these called for the recentexercise embarked upon by government for theprivatization of different sectors of the economy.

The lunching of transnational corporation of Nigeria{Transpcorp} plc. By president Olusegun Obasonjo whichis chaired by the NSE director general Dr. {Mrs} NdidiOkereke Onyuike; the director of the governor of thecentral bank of Nigeria prof. Charles Soludo on thebanking sector consolidation drive are other example ofgovernment influence in public policy formulation attouching the wide spectrum of the Nigeria public, Thusthe issue is not only of improving economic managementbut also one of improving overall governance.

The Nigerian people aspire to and desire to moveout of poverty within the framework of stable andrapidly growing economy. This is certainly feasible ofadequate policies are put in place and sustained.Particularly and poorly implemented reform will notserves to reserve current trend. Thus the government isat crossroads.

It faces a choice between improving the welfare ofpopulace and allowing the situation to deterioratefurther in view of the above, the federal governmenton Nigeria through the central bank of Nigeria hasformulated various monetary and fiscal policies aimedat attaining macro – economic management for instanceaccording to the central bank of Nigeria {CBN} annual

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report and statements of account 1984 part II statedthe government monetary and fiscal policies objectivesas: “the objectives of monetary policy in 1984 were tobe the backlog of accumulated trade debt and achievesubstantial improvement in balance of payment position,stimulate domestic production, especially food andraw materials, reduce the rate of inflation in theeconomy and mobilize increased domestic revenue as wellas external financial resources”.

In the area of fiscal policy, measure were taken toensure effective protection of local raw materials,encourages the greater use of local raw material togenerate increase in government revenue curtailexpenditure and minimize budgetary deficit financing.In theory, the principal – agent: principle governs therelationships between the government and the governed.Consequently budgeting process under, Democracy shouldsatisfy the conditions of broad-based realparticipation and consultation, transparency andaccountability if the government must truly act as anagent of the people (Ariyo. 2000). Budget in governmentis the statement of expenditure preferences ofgovernment expressed in momentary terms and subject tothe constraints imposed by the environment indicatinghow the available resource may be utilize to achievewhatever the dominant individuals the politicalleadership agree to be the government priorities.

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(Omolehinwa, 2001). Against the backdrop of severalpolitical and socio-economic problems facing theeconomy: Government decided to fashion out theobjective of monetization in a manner that couldresolve some of the retching problems of the nation.

As a macro-economic tool, monetary and fiscalpolicies formulated by the government also have a greatinfluence on the budget and developmental plan. Goingback monetary land, the first independence budget of1960 spelt out the objective as:

“The achievement and maintenance of the highest rate ofincrease in the standard of living and the creasing ofnecessary conditions to the end,” the objective hasbeen expanded and elaborate in the next andsubsequent development plan. In the second and thirdplan. For instance they where stated as: “To establishNigeria firmly as a united a great and dynamic economy,a just and egalitarian society, a level of brightdemocratize society, in view of the above moredetermined efforts have continued to be made by theNigerian government to eradicate the problems includingthe unacceptable high rate of inflation andunemployment low productivity, balance of paymentdeficit, low value added and a disturbingly doubtful &30 birchen external dept.

CHALLENGE AND PROSPECT

THE MONETARY POLICY:

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The momentary policy is an economic policy which refersto the combination of measures designed to control insupply of money and credit condition in an economy forthe purposes of achieving macro-economic goals of fullemployment, economic growth, efficient resourcesallocation, favourable balance of payment and increasein industrialization to mention but a few.

To attain the aforementioned objectives, theNigerian government have used some important and potenttools such as open market operation (OMO), cash reserverequirement, interest rate policy, discount windowoperations, credit ceilings, stabilization securities,special deposit, sector credit allocation etc.

The open market operation (OMO) is the buying andselling of government securities with the view toinfluencing the cash flow of the banking system.Purchases increase while sales contracts the cash base.As a strategy for controlling the excess liquidity inthe banking system, the central bank of Nigeriareactivated the repurchase agreement (KEPO) withdiscount houses, which was suspended in 1995.

The government through the use of cash reserverequirement, has influenced the level of the liquidityin the economy banks are required to maintain from timeto time a certain percentage of this capital base with.the CBN this is the effect of the mega banking in orderto provide fund mobilization for both local andinternational market to aid investment in the economy.

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The CBN through the discount window especially through

minimum rediscount rate (MRR) has influenced the

interest rate policy in order to attain macro-economic

objective. For instance, the minimum rediscount rate

was raised from 13.5% in December 1998 to 20.0% in

April 1999 and letter lowered. From 15.5% to16.5%which

is a step in the drive to tightens liquidity positions

but unfortunately it is presently 3.5%

Beside, the use of credit ceiling cannot beoveremphasized. The central bank of Nigeria has tiedthe commercial banks and merchant banks to the apronstring domestic economy.

THE FISCAL POLICY

The fiscal policy, as an economic measure refers to thedeliberate use of government spending and taxes toachieve macro-economic growth. Put differently, itdescribes the combinations to measures in governmentrevenue and expenditure to achieve overall economicobjective of a nation.

The fiscal policy used include taxations, publicexpenditure relief: concession and fiscal incentivepolicies to mention just a few.

The government fiscal policy measures can becategorized into two which include.

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1. Automatic stabilizers fiscal policy measure

2. Discretionary fiscal policy measures

1. Automatic stabilizers are government spending ortaxation actions that take place without any deliberategovernment control and which tend to dampen thebusiness cycle. Where as,

2. Discretionary fiscal policy are government spendingand taxation action that have been deliberately takento achieve specified macro-economic goals.

One of the major problems experienced by the Nigeriagovernment is the persistent increase in price of goodsand services without corresponding increase inproductivity base. To correct this. The federalgovernment curtails the growth of government spending,raises taxes, especially to middle and upper incomeearners.

The nation’s worst socio-economic problem isunemployment which is characterized by low standard ofliving and poverty. In an attempt to solve the problemof unemployment, the federal government has toestablished non-profit making organization like thenational Directorate of employment ( NDE). Which isaimed at assisting the unemployed in search of gainfulemployment poverty alleviation program, sure-p whichintroduced by the present government. The global systemmobile telecommunication GSM, has no doubt created

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unprecedented employment opportunity for thousands ofNigerians, and the market is opening up by the day.

The Nigerian economy, in the present is witnessingeconomic retardation. Due to insecurities, politicalinstability, low level of productivity, externaldependence, high rate of population growth rate, risingof employment and bad governance and many more. Inview of this the federal government has adopted variousfiscal policies. In essence government has to focusmore on home production and provides employmentopportunities to the entire citizen.

In view of the problems of the Nigeria fiscal andmonetary policies, the government sector developmentprogram should guide our national economic agenda.

In conclusion, to revive the growth of the Nigeriaeconomy, deeper reforms of budgetary planning.Expenditure control and transparency would be need toaddress the structural weaknesses in the governmentresources management expenditure priorities formulatedshould not only be appear on paper.

Components of Government Budget

The main component or parts of government budget areexplained below

1. Revenue budget

This financial statement includes the revenue receiptsof the government i.e revenue collected by the way of

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taxes and other receipts. It also contains the items ofexpenditure met from such revenue.

(a) Revenue receipts

These are the income which are received by thegovernment from all sources in it is ordinary course ofgovernance. These receipts do not create a liability orlead to a reduction in assets

i. Tax revenue

Tax revenue consists of the income received fromdifferent taxes and other duties levied by thegovernment. It is a major source of government revenue.Every citizen, by law is bound to pay them and non-payment is punishable.

These taxes are of two types:

Direct taxes and indirect taxes.

- Direct taxes are those taxes which have to be paidby the person on whom they are levied. It is burdencannot be shifted to someone else. eg income tax,property tax, corporation tax estate duty, etc. aredirect taxes. These is no direct benefit to the taxpayer.

- Indirect taxes are those taxes which are levied oncommodities and services and affect the income of aperson through their consumption expenditure. Here, theburden can be shifted to some other person e.g custom

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duties, sales tax, services tax, excise duties e.t.care indirect taxes.

ii. non- tax revenue

a part from taxes, government also receivesrevenue from other non-tax sources.

The non-tax source of public revenue are asfollows:

- Fees: the government provides variety of servicesfor which fees have to be paid. e.g, fees paid forregistration of property birth certificate deathcertificate etc,

- Fines and penalties: fines and penalties areimposed by the government for not following (violating)the rules and regulations.

- Profit from public sector enterprises: manyenterprises are owned and manage by the government. Theprofit receives from them is an important source ofnon-tax revenue. For example in Nigerian, the NigerianRailways, oil and natural gas Commission. NigeriaAirline e.t.c are owned by the government of Nigeria.The profit generated from them is a source of revenueto the government.

- Gifts and grants: Gifts and grants are received bythe government when there are natural calamities like

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earth quake, floods, famines, etc citizen of thecountry foreign governments and internationalorganizations like the UNICEF, UNESCO, ETC donateduring TIMES of natural calamities.

iii.Revenue receipts:

b. Revenue expenditure

Revenue expenditure is the expenditure incurred forroutine, usual and normal day to day running ofgovernment department and provision of various servicesto the citizens. It includes; rout development it is anon-development expenditure of the government. Usuallythe expenditure that do not result in the creations ofassets are considered as a revenue expenditure.

2. Capital budget:

This part of the budget includes receipts & expenditureon capital projected for the next financial year.Capital budget consists of capital receipts and capitalexpenditure.

a. Capital receipts

Receipts which created a liability or result in areduction in asset are called capital receipts. Theyare obtained by the government by raising funds throughborrowings, recovery of loans, And disposing of assets.

The main items of capital receipts {income} are:-

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Loan raised by the government from the publicthrough sale of bonds and securities. They are calledmarket loans.

Borrowings by government from any financialinstitutions through the sale of treasury bills.

loans and aids received from foreign countries andother international organization like internationalmonetary fund {IMF}, World Bank, etc.

Receipts from small savings schemes like thenational scheme.

Recoveries of loans granted to state and union.

b. Capital expenditure

Any projected expenditure which is incurred forcreating assets with a long life is capitalexpenditure. Thus, expenditure on land machinesequipment, irrigation project, oil exploration andexpenditure by way of investment in long-term physicalor financial assets are capital expenditure.

Definition of budget

The term budget is derived from French word“Budgette” which means a “leather bag” or a “wallet”.It is a statement of the financial plan of thegovernment it shows the income & financial year, whichruns generally from 1st April to 31st March.

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Budget is most important information document ofgovernment one part of the government budget is similarto company’s annual report. This parts presents theoverall picture of the financial performance of thegovernment. The second part of the budget presentsgovernments financial plans for the period up to it isnext budget.

So, every citizens of a nation from the common manto the politicians is egger to know about the budget asthey would like to get an idea of the:

- Financial performance of the government over thepast one year.

- To know about the financial program and policies ofthe government for the next one year.P

To know how their standard of living will beaffected by the financial policies of the government inthe next one year.

An additional definition of budget are:

According to Tayler, “budget is a financial plan ofgovernment for a definite period”.

According to Rene Stourm, “A budget is a documentcontaining a preliminary approved plan of publicrevenue and expenditure.

A budget is also a statement of future intention ofan organization be it government or private in

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qualitative and monetary terms usually prepared to lastfor one year.

Government Budget

A government budget is a political andadministrative instrument by which the executive andlegislative bodies endeavor to allocate scarceresources among the various organs of governmentseither at state or federal levels. It is basically atool for selecting a particular mix of public andprivate goods and services in the public sector budgetperforms the same allocative functions that the pricemechanism performs in the private sector.

Budget is also a tool for management direction andcontrol of work which an agency or department plans todo. In effect it is a work program translated intomonetary unit.

Government budget is a government documentpresenting the government proposed revenues andspending for a financial year that is often passed bythe legislative, approved by the chief executive orpresident and presented by the finance minister to thenation. And it is also known as annual financialstatement of the country. This document estimates theanticipated government revenues and governmentexpenditures for the ensuing {current} financial year,for example, only certain types of revenue may beimposed and collected property tax is frequently the

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basis for municipal and country revenues, while salestax and or income tax are the basic for state revenuesand income tax and corporate tax are the basis fornational revenues.

Types of Government Budget

1. Balanced budget:- when government revenue andexpenditure are equal.

2. Surplus budget:- when anticipated revenues exceedexpenditures

3. Deficit budget:- when anticipated expenditures isgreater than revenues.

Element of Government Budget

The two basis element of any budget are:

The revenue and expenditures. In the case of thegovernment revenue are derived primarily from taxes.Government expenses included spending on current goodsand services which economists call governmentconsumption; government investment expenditures such asinfrastructure investment or research expenditure andtransfer payment like unemployment or retirementbenefits

Classification of Budget

1. Budget can be classified based on function offunctional basis.

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2. Budget can be classified on organizational basese.g. ministry of health education N.U.C etc.

3. There is also an economic classification of budgete.g social sector, economic sector and administrationetc.

Some important features of successful budget

1- Accurate income projections

2- Enough categories to give a meaningful picture ofwhere funds goes and where it might be able to cutcosts

3- Categories that fit your personal situation andyour spending habits, not somebody elses.

4- Regular review of categories to determine what youneed

5- Cash expenditure tracking and recording cashspending is the highest

6- Inclusion of expenses

7- Internal motivation and a positive attitude

8- A line items for savings

9- Realistic written goals

10- Identification of spending patterns

Function of a budget

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1- Economic policy: budget is a instrument foreconomic policy e.g fiscal policy, taxation etc.

2- Accountability and control

3- Planning: budget is instrument for planning –shortterm planning

4- Management: management is a getting things donetherefore budget is a getting things done.

Important or use ofbudget

National budget is used to achieve the followingobjective

1- the government use it as medium to communicategovernment economic objectives and policy to thecitizens.

2. it is used as a tool cure inflation and deflation.

3. to allocate resources from one sector of the economyto another.

4. it is use by the citizens and the internationalcommunity to appraise the performance of thegovernment.

5. it is used to foster economic growth and development

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6. it is use To established the financial position oflocal government state, government and the federalgovernment.

7. to provide mechanism for ensuring that adequatecontrols are maintained over the expenditure andrevenue

8. to provide a financial plan of action .

Some basic feature/ qualities of budget are.

1- It is an interrelated set of decision

2- It is a financial plan

3- It is a document

4- It is a process by which public policy is made andpublic action programme put into effect.

Significance of budget

1- It is an allocation medium- some people said budgetis a political document

2- It is an operational expression of public policyissue

3- It is an instrument of resources allocation,management and control

4- It is an administrative policy medium

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5- The budget process is an instrument for resolvingpolitical conflicts, it is a medium of sharing thenational cake.

Problems of Nigerian budget

Nigeria budget faces a lots of challenges that deniedit to be a successful budget, which include the:

1- Misplacement of priority

Misplacement is among of the problems of budget inNigeria that lead to misplacement of priority in itsallocation to some sector are most at times inadequatecompared to the allocation to some important sectors;for instance in the 2014 budget, the federal ministryof finance ( including services wide votes) will getthe lion share of N1.6 trillion representing 35.69% ofthe total budget at the expenses of key sectors likeeducation with allocation of 493.4billion which –represented 10.69% of the total budget and the defencequota combined allocation of 340.33bilion representing7.39% of the total; despite the security challenge inthe country.

2- In appropriate statistic in drafting the budget.

There is always inadequate data and statistic on thepart of the developing countries leading inappropriation in drafting the budget which ends up incorrupting the budget and making it a complete failure,it can also lead to misassumption and at the End of the

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day making a wrong analysis of the population. Forinstance, lack of appropriate rate of naira to Dollarin the Nigeria budget will en d up making it notworkable because the expected revenue are calculated indollars.

3. Poor implementation

Budget are facing poor implementation in developingcounties and Nigeria in particular. For example in2012, there is poor implementation of the budget whichbrought the tension of the national Assemblythreatening the impeachment of the president .

CONSTITUTIONAL PROVISION ON THE BUDGET OF THE FEDERALREPUBLIC OF NIGERIA

The 1999 constitution like in theprevious constitutions made provisions with regard tobudgeting.

The 1999 constitutions made the followingprovision.

Section 81(1) provide that the president shall causeto be prepared and laid before each house of thenational assembly at any time in each financial yearsestimates of the revenue and expenditure of thefederation for the next financial year.

Section 81(2) the heads of expenditure contained in theestimates shall be included in a bill to be known as anappropriation bill providing for the issues from the

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consolidated revenue fund of the sums necessary to meetthat expenditure and the and the appropriation ofthose sums of the purposes specified therein.

Section 81(4) if in respect of any financial year it isfund that:

(a) The amount appropriated by the appropriation Act.For any purpose is insufficient or

(b) A need has arisen for expenditure for the purposefor which no amount has been appropriated by the Act, asupplementary estimate showing the sums required shallbe laid before each house of the national assembly andthe heads of any such expenditure shall be included ina supplementary appropriated bill.

Section 81(3) provides that any amount standing to thecredit of the Judiciary in the CRF of the Federation,shall be paid directly to the National Judicial councilfor disbursement to the heads of the courts establishedfor the Federation and the States.

Section 82 if the Appropriation Bill in respect of anyfinancial year has not been passed into law by thebeginning of the financial year, the President mayauthorize the withdrawal of moneys from the CRF of theFederation for the purpose of meeting expenditurenecessary to carry on the services of the Government ofthe Federation for a period not exceeding six months oruntil the coming into operation of the AppropriationAct, which is even the earlier.

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Provided that the withdrawal in respect of any suchperiod shall not exceed the amount to authorized to bewithdrawal from the CFR of the federation under theprovisions of the appropriate act passed by thenational assembly for the corresponding period in theimmediately preceding financial year. Being an amountproportionate to the total amount so authorized for theimmediately preceding financial year.

Section 83(1), The National Assembly may be law makeprovisions for the establishment of a ContingenciesFund for the Federation and for authorizing thepresident if satisfied that there has arisen an urgentand unforeseen need for expenditure for which no otherprovision exists, to make advances from the fund tomeet the needs.

Section 83(2) where any advance is made in accordancewith the provisions of this section a SupplementaryEstimate shall be presented and a SupplementaryAppropriation bill shall be introduced as soon aspossible for the purpose of replacing the amount soadvanced.

BUDGETARY PROCEDURES AT DIFFERENT LEVELS OFGOVERNMENT

A budget is a statement of future intentions of anorganization be it private public in quantitative andmonetary terms. It is usually prepared for one-financial. Individuals, organization, big and small

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usually prepare budgets to enable them achieve theirobjectives. A better way to prepare government budgetis to consider the expenditure first al then find howit is going to generate funds to meet thoseexpenditures:

BUDGETFORMULATION

Budget formulation involves the following steps.

Establishment of Budget Committee by the Ministry ofFinance or Budget and Planning (Office of theAccountant General).

Budget committee will then send a ell circular to thevarious ministries and Ex; Ministerial’ Departmentscalling on all accounting officers to start preparationfor the next financial year’s budget. -

Ministries and Extra ministerial Departments will thenresponds by sending

advance copies of their proposals known as AdvanceProposals.

Advance Proposal: - These are proposed budget ofministries and departments sent to budget committee.Reasons why advance proposals are required are:

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i. To ensure that existing government regulation andinstructions with regard to staff and other servicesmatters have been followed in preparing the proposals.

ii. To ensure that non-essential items are not givenpreference over essential items.

iii. To have a preliminary idea of the proposed budget.

iv. No new staff employment and if any to be approvedby the establishment department.

v. No new capital projects proposed and if any to becleared by state planning on capital projects.

The advance proposals are screened by a budgetcommittee with the affecting ministries in attendance.After screening the advance proposals, they are sentback to their respective ministries to prepare cleancopies out of the proposals. The clean copies arecalled draft estimates. They will again go to budgetoffice to make sure that there are no departures fromthe items approved in the advance proposals and areprocessed according to the form required for printingthem.

The total expenditure and revenue of government for thecoming financing year is us ascertained when all theestimates from various ministries and parastatals havebeen collected together. It is bounded and submitted tothe governor who inturn send it to the slate house ofassembly for approval.

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LEGISLATIVEAUTHORIZATION

The Draft estimates containing the total expenditureand revenue of government for the coming financial yearin a bounded form called appropriation bill is thensubmitted to the State/National House of Assembly bythe Governor Or

President as the case may be.

The House considering the Bill on draft estimates wouldbreak into various committees to consider the draftbudget in its totality. The House could summonedthe Accounting officers to brief the Committees onincome aspects of the draft estimates.

THE PARAMETERS OF PROPOSED BUDGET 2015

• Oil production remains at 2.2782 million barrels perday;

• Benchmark oil price of $65/barrel;

• GDP growth rate projected at 5.5%;

• An exchange rate of N165 to the US Dollar;

• Non-oil revenue (including non-Federation account) ofN1,684.63 billion;

• Fiscal Deficit of N755 billion (or 0.79 percent ofGDP); and

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• Domestic Borrowing of N570 billion down from N571.9billion in 2014

Now, the $65pb represents a $13 drop per barrel fromthe $78pb (i.e., about N142 billion of FGN budgetrevenue) originally proposed to the National Assembly.To partly make up for this, we have taken steps in thisBudget to introduce some short-to-medium term revenueand expenditure measures. Most of these measures aredesigned to kick-in towards the beginning of secondquarter 2015 and will considerably boost the ratio ofnon-Oil revenues to Oil revenues.

SPECIFIC MEASURES TO INCREASE NON-OIL REVENUES AND HOWMUCH THEY WILL BRING INTO THE TREASURY

Revenue (Non-Oil) Measures

Independently Generated Revenues: Over the last threeyears, Government has been working to increase itsindependently generated revenues (IGR) and has in fact,sustained an upward trajectory in IGR receipts. Actualreceipts have continued to grow from about N182 billionin 2011 to N274 billion in 2013 and then, N328 billionas of October 2014. While this is encouraging, thereare still leakages and incidences of non-remittance ofrequisite funds to Treasury by some agencies. Mr.President recently summoned a meeting with revenuegenerating agencies to address this issue, andsubsequently issued an unequivocal directive to allrevenue agencies to ensure remittance of their

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obligations to Treasury. With this strong support, weare working with the Banks to ensure strict compliance,and so we have projected IGR receipts of N450 billionfor 2015.

Tax Revenues: In the short term, we are determined toimprove tax revenues not by increasing tax rates asmany have advised, but rather as a pro-peopleAdministration, by strengthening our taxadministration. We aim to plug leakages, increase thetax base and improve tax collection efficiency. In thisrespect, Messrs. McKinsey & Co. was engaged to workwith the Federal Inland Revenue Service (FIRS) about ayear ago, before the oil price drop, to enable FIRSimprove on tax collection. I am pleased to inform youthat so far this effort has already yielded additionalnon-Oil revenue of about N143 billion for Government in2014. In 2015, we are ramping up the FIRS/McKinseyinitiative to contribute an extra N160 billion in taxreceipts and an aggregate of about N460 billion overand above the 2014 levels in the 2015-2017 period.

Tax Waivers and exemptions: Analysis shows that about30 percent of those that received tax waivers fromgovernment especially under the pioneer status schemenow abuse the system. As a short-term measure,Government has commenced a review of the implementationof pioneer status exemptions to some oil companieswhich could unlock up to N36 billion of additional taxrevenues in 2015.

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Luxury Surcharges:

• A 10% import surcharge would be imposed on newPrivate Jets which is estimated to yield about N3.7billion in 2015; 39% import surcharge on luxury Yachtswhich is estimated to potentially raise N1.6 billion in2015; and 5% import surcharge on luxury cars which isestimated to yield about N2.6 billion of additionalrevenues.

• A surcharge on Business and First Class Tickets onAirlines.

• Others are: the imposition of 3% luxury surcharge onchampagnes, wines and spirits to generate about N2.3billion in 2015; and a 1% FCT Mansion Tax onresidential properties with value of N300 million andabove which should yield additional N360 million. Thesesurcharges would yield a total of about N10.56 billionin 2015.

TAXPOLICY

In the medium term, it will be important to focus onTax Policy to see where opportunities lie to streamlineand rationalize certain taxes and levies whist lookingto boost others. For example, Nigeria has one of thelowest VAT rates in the world and medium term effortsmust involve the Legislature to see what opportunitiesexist with VAT which largely benefits States. WhilstState Governments get 85 percent of VAT, the Federal

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Government gets just 15 percent. A 5 percent increasein VAT rate for instance would yield N614 billion, mostof which would go to the States and Local governments.

I believe that the discipline these new measures imposewill go a long way to support the economy and provideNigeria a responsible pathway to overcoming thelimitations of falling oil revenues withoutdisproportionately affecting the poor-to-middle class.

Based on these parameters, the 2015 Budget envisages anet federally collectible revenue of N6.9 trillion. Ofthis, a total of N3.6 trillion is envisaged to fund theFGN 2015 Budget, representing about 3.4% drop from N3.7trillion for 2014 Budget. This is with more emphasis onnon-oil revenue sources to partly compensate for theshortfall in actual oil revenue.

SPECIFIC MEASURES TO REDUCE EXPENDITURE AND HOW MUCHTHEY WILL CONTRIBUTE

Expenditures Measures

Government is also contemplating short and medium-termmeasures in expenditure. These focus on cutting non-essential and non-developmental expenditures from theBudget. Some of these measures include:

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Deploying IT Systems: In the short term, our strategyto curb recurrent expenditure will increasingly rely onimplementing the right technologies such as biometricsand digitizing government payments. It is pleasing tonote that we have advanced the deployment of threeelectronic platforms – namely, the Treasury SingleAccount (TSA), the Government Integrated FinancialManagement Information System (GIFMIS) and theIntegrated Payroll and Personnel Information System(IPPIS) – which are all geared towards improvingefficiency and transparency in our public finances.

Just through the implementation of IPPIS alone, we havesaved thus far about N185.4 billion and weeded out60,450 ghost workers from 359 MDAs and we intend tosave even more. We intend to ramp up the work on theseplatforms in 2015 to improve on our transparency,efficiency and efficiency objectives while saving themuch needed resources for reinvestment to benefit allNigerians.

In the short-term, we are instituting measures aimed atimproving spending. This exercise which will save atotal of N82.5 billion will include the following:

• Overhead expenditures: We propose cuts toInternational Travels and Training by 50% for all MDAssaving about N14 billion, while other provisions forOverhead expenditure have been dropped completely –saving about N4 billion.

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• Administrative Expenditures for Buildings, Equipment,Supplies, etc: MDAs’ provisions for the procurement ofadministrative supplies and equipment will be cut,saving about N5 billion; procurement and upgrade ofbuildings were similarly curtailed saving about N44billion, while another N76 billion is proposed forreallocation to more impactful programmes of Governmentin the security, health, and education sectors.

• We have also commenced partial implementation of theGovernment’s Whitepaper on the rationalization ofAgencies based on the Oronsaye Report. We have built-insavings of about N6.5 billion in the 2015 Budget fromthe rationalization of some agencies, committees, andcommissions. Nevertheless, medium term measures requiregreater efforts to cut the cost of governance acrossall tiers and branches of government. This requiressupport from the legislature to amend laws underpinningcertain agencies. A list of such laws will be submittedto the National Assembly for consideration by thesecond quarter of 2015.

A fundamental restructuring of budgets is required atFederal and State levels if fiscal sustainability is tobe achieved in the nation’s economy going forward. Thehigh ratio of recurrent to capital spending must bereversed going forward.

The Aggregate Budget

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Based on the foregoing, the FGN 2015 Budget has anAggregate Budget Revenue of N3.602 trillion made up of:oil revenue of N1.918 trillion and non-oil revenues ofN1.684 trillion (implying a ratio of 53% oil revenuesto 47% non-oil) to fund an Aggregate Budget Expenditureof N4.358 trillion proposed for 2015 Budget, which isabout 8% less than in 2014 Appropriation. Thisexpenditure figure is made up of N412 billion forStatutory Transfers, N943 billion for Debt Service,N2,616 billion for Recurrent (Non-Debt) and N634billion for Capital Expenditure (inclusive of SURE-P).

SUPPORT FOR JOB CREATIONYIELDING RESULTS

You Win: this successful program has nurtured over2,400 young entrepreneurs with 22,000 jobs created inthe first two rounds. You Win 3 is starting to disburseto its 1,500 beneficiaries who are expected to createon average 9 jobs each, and we will continue in 2015with the implementation of You Win 4, which will again,identify another 1,500 young entrepreneurs to support.The government also launched a $50 million SME VentureCapital Fund that will help take You Win beneficiariesand other viable SMEs to the next level, and createeven more jobs. The government’s focus on this programdespite a tight budget is part of the pro-peopleefforts of this budget to support our youth.

G-WIN: The Growing Girls and Women Initiative inNigeria which was launched in 2013 to integrate our

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women and girls into key sectors of the economy throughbudgetary initiatives has yielded positive results andgenerated interest across the board. Specify someresults achieved include the training of 2285 youngwomen in ICT; treating 2362 VVF patients and so on. In2015, we would continue to expand this program. Inaddition to the original five ministries, the Ministryof Environment has also has now signed an MOU to joinGWIN effective in 2015 and discussions are ongoing withother Ministries and the private sector forpartnership.

DFI TAKES OFF INJANUARY 2015

Finally, Ladies and Gentlemen, the government plans tolaunch in January 2015 the Development Bank of Nigeria(DBN) – a wholesale financial institution that willsupport our private sector especially SMEs to accessmore affordable financing with longer tenure. SeveralNigerian entrepreneurs still lack access to affordablefinancing, with medium- to long-term tenors. At least,over twenty thousand entrepreneurs in critical sectorsof the economy are targeted to be financed through theDFI in its first full year of operation. We are workingwith partners such as the World Bank, the AfricaDevelopment Bank, the BNDES Bank in Brazil, and KfW inGermany, and have set aside the sum of N4 billion inaddition to the N16 Billion provision in the 2014Budget to realize this project. Our existing Bank of

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Agriculture and Bank of Industry will be re-structuredas specialized institutions to retail financing fromthis new wholesale development bank.

GDPESTIMATE FOR 2015

Due to all these efforts, GDP is expected to still growby a decent 5.5 percent, driven by non-Oil sectorgrowth. This growth is important as it will enable uskeep poverty in check. People often criticize ouremphasis on GDP growth, saying “na GDP we go chop?” butthe truth is that if GDP does not grow, poverty willworsen. GDP growth is therefore necessary but notsufficient for development and we need to bolster ournon-oil growth rate.

SOCIALSAFETY NET

That said, to properly tackle poverty, we have beenworking for the past 4 months to develop a SocialSafety Net with the support of our development partnersespecially with the World Bank supporting with US$500million. The Ministry of Planning has already put inplace a Social Protection Policy upon which the SafetyNet will be based. This program, which will kick off inthe latter part of 2015, will aim to reach up to 3million households (or about 13 million people) withina 10 year period. For the first time in Nigeria, wewill have a robust national system for effectively

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targeting the poorest for social assistance. Thisprogram will not only alleviate poverty but will alsocontribute to socio-economic inclusive through linkageswith sectors.

Regarding Social Safety Nets and Inclusion, thechallenging security situation in the North East withemergency rule in three States, namely: Yobe, Borno andAdamawa makes the region one of the prime areas fortargeting under the new Social Safety Net program underconstruction. In addition, government has developedthree strategic programs to alleviate the suffering ofthe affected population in the North East.

The full implementation of the Safe Schools Initiative(SSI) will be revved up in 2015 with the transfer of2400 schoolchildren from high risk areas in theNortheast to other parts of the country, amongst otherinterventions. The Presidential Initiative for theNorth East (PINE), aimed at rehabilitatinginfrastructure as well as helping to restore theirlivelihoods, has received a boost in its budget from N2billion to N5 billion, to deliver on its mandate. Also,the Presidential Victims Support Fund will administerpalliatives to the victims of recent terroristactivities in the region.

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BREAK DOWN OF THE SECTORS AND THE PROPOSAL OF2015 PROJECT

Agriculture

• Expected to drive job creation and inclusive growth

About 750,000 entrepreneurs have been targeted within 5years under the Youth Employment in AgricultureProgram.

Establishment of a N50 billion Farm Mechanization Fund.

$100 million Government and Donor Fund forAgricultural Financing in Nigeria (FAFIN) to

• Provide long-term tailored financing foragricultural businesses.

• 10 million farmers benefiting from subsidy forfertilizers, seed longest. Through E-wallet.

Power

• Establishment of the Nigerian ElectricityRegulatory

• Commission (NERC) in 2005.

• On-going reform and full deregulation.

• In 2014, 10 National Integrated Power Projects(NIPPs) were embarked upon with a combined capacity toproduce 5,455MW.

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• Current power generation capacity stands at about7,000MW of which 6,000MW is thermal. About 50% of thethermal capacity is underutilized due to gas supplyconstraints.

• Measures have been introduced to increase gassupply by 900 million standard cubic feet. This includeraising the price of domestic gas from $1.50 to $2.50per million British Thermal Units (BTU) with anadditional allowance of up to $0.80 for gastransportation.

Transportation

• Increase in aviation transportation passengers.

• Plan to improve road and rail transportation.

• Reuters and Business Insider UK reported a$12billion deal with China for the building of a highspeed technology railway in 2014.

In the 2011-2015 Transformation Agenda, the governmentplanned to allocate N1.61 trillion towards15 Railwayprojects

• Completion/progress on major road projectsincluding Lagos-Ibadan express way, and these condNiger Bridge.

Housing

In 2014, the Nigerian Mortgage Refinance Company (NMRC)was launched as are- financing institution

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• 66,000 applications are currently being processedunder the Affordable Housing

• Mortgage Finance scheme, for implementation in2015.

Insurance

• Over the next 3 years, government aims to:

Grow total insurance premiums from N300 billiontoN1trillion.

Increase the number of insurance policy holders fromthe current 3 millionto10 million.

.Increase jobs generated by the sector from 30,000 to100,000.

Manufacturing

Implementation of the National Industrial RevolutionPlan (NIRP) aimed at industrializing and diversifyingthe economy.

• Continuous support for the private sector,particularly the SMEs.

• Review and restructuring of the Export Expansiongrant scheme (EEG) for sustainability.

Oil and Gas

• Passage of the Petroleum Industry Bill to beapriority for 2015.

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• Refinery rehabilitation in order to improveproducts yield and capacity utilization.

• Commence the Delta Gas & Petrochemical Parking 2015for gas infrastructure development.

• Attract investments of over $16 billion within thenext four years.

Solid Minerals

• Assessment of the mining landscape in order toimprove the processed so artisanal and small scalefarmers.

• In the medium term, solid minerals are expected tomake substantial contributions to the

• Federation Account (aboutN14 billion in 2015).

• A fiscal regime has now been completed for thesector.

Creative Industries

Currently Hollywood accounts for about 1.4% ofNigeria’s GDP.

• The Government initiated the “Project AdvancingCreativity and Technology (PACT)”, a N3 billion grantprogrammed for Hollywood.

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• The PACT initiative has led to the co-financing ofover 90 films and has contributed to building capacityof over 200 film practitioners.

The sum of N102.5 billion has been allocated as thesure-p budget for 2015 which is a decline of 61.8%compared to the 2014 budget. This sum consists of thefederal government’s share of N53 billion from thesavings from the partial removal of subsidy on petroland the estimated unspent balance of about N49.5billion in 2014.

Tax changes

Nigeria’s tax to GDP ratio is reported as 6% (excludingoil) in the Budget presentation .Government isdetermined to improve tax revenues and reduce focus onoil revenue. Below are the highlights on taxation inthe Budget:

Closing the tax gap

• Pioneer status –Review of existing tax waivers andexemptions especially pioneer status.

• The focus seems to be on upstream oil companies andwhether they are entitled to pioneer status mayalso affect to the sector and companies in terms ofwhether the specified conditions were met for theincentives.

• McKinsey & Co- About N160 billions expected in 2015and an aggregate of about N460

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• Billion over and above the2014 levels in the 2015-2017 period through work being carried out byMcKinsey.

• Tax raids- The Debt Enforcement and SpecialProsecution Unit (“DESPU”) of the FIRS, hasrecently gone on the offensive, resorting to taxraids and prosecution of non-compliant taxpayers.We expect this trend to continue in 2015.

• of an increase in the VAT rate. In our view, thegovernment may explore a VAT rate of 10% to 15% notonly to raise revenue but also to Possibility alignwith the VAT rates of other West African countries(and make it easier to implement the CommonExternal Tariffs).

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Digitization programmed

The 2015 budget seeks to deploy it systems to promotetransparency, improve efficiency and reduce recurrentexpenditure. Some notable it systems deployed by thecurrent administration include:

Job Creation

The focus of the proposed 2015 budget remains jobcreation and reduced unemployment. The agriculture,manufacturing, construction, and housing sectors areexpected to be the main drivers of job creation.

Priority sectors

Besides the agricultural sector, the Minister offinance has indicated that all infrastructural sectorsare top priority for the government and the budget willgo towards supporting those sectors. One of the sectorsof prime importance to the government is housing. Basedon the medium term expenditure and fiscal strategyframework, there is expected to be an increase in

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access to mortgage finance through the establishment ofa mortgage refinance company.

Reasons Why the Recurrent Expenditure Is Higher ThanCapital Expenditure

The government stated in the 2014 Budget thatAgriculture and infrastructural sectors was thepriority. This continues to be the cases in theproposals for 2015.We highlight some of the key sectorsbelow:

Key highlights of the 2015 Budget. In the appropriationbill for the 2015 fiscal year, Nigeria's federalgovernment is proposing a N4.91trillion spending plan,representing a decline of 1.52% over the N4.99trillionappropriated for the 2014 fiscal year. In our opinion,the year-on-year decline in the 2015 budget isnoteworthy as it compares favorably to the increase inaggregate expenditure recorded between 2010 and 2014which averaged 18.31percent

The 2015 aggregate expenditure figure comprises ofN1.10trillion for capital expenditure, N2.43trillionfor recurrent expenditure, N399.69billion for statutorytransfers and N712.00billion for debt service. We alsohighlight the provision of N268.37billion earmarked forthe Subsidy Reinvestment (SURE-P) programmed whichconsists of the Federal Government’s savings from the

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partial removal of fuel subsidy in January 2012augmented by the 2014 unspent balances.

The budget was underpinned by some assumptions whichincluded an average exchange rate of N160/$, aprojected oil production level of 2.39million barrelsper day, down by 5.53% from the 2.53million barrels perday projected for 2014. The benchmark oil price was setat US$77.5/barrel, a decline from the US $79/barrelapproved in the 2014 Budget while GDP growth wasestimated at 6.75%, up from the 6.50% projected for2014. We are of the view that the exchange rateassumption may be relatively optimistic in view ofexpected increase in spending (in preparation for the2015 elections) in the domestic economy which wouldbring about possible pressures on exchange rate coupledwith activities in the external environment.

However, the percentage of recurrent expenditure tototal spending increased significantly. Recurrentexpenditure has been a larger component of Nigeria'sannual national budgets as it has averaged 69.51% ofaggregate expenditure in the last seven years. Thisbrings to the fore the country's largely inadequatephysical infrastructure fuelled by pressures arisingfrom rapidly increasing population growth and lowerallocation to capital projects which has averaged30.49% over the same period. Whilst we commended thedecline in the ratio of recurrent expenditure to totalspending in the 2012 and 2014 budgets, we note a trend

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reversal as the percentage of recurrent expenditure tototal expenditure is estimated to increase to 76.30%from 67.50% in the 2014 budget. Consequently, capitalexpenditure as a share of aggregate spending isestimated at 3.70% in 2015 from 32.50% in 2014. Whilstwe state that the reduction in aggregate expenditurehighlights the government attempt to sustain fiscalconsolidation the make-up of that spending still posessome concerns. We are of the view that a shift ingovernment spending profile in favor of capitalprojects will further aid sustainable economic growthin the years ahead.

Analysis and overview of 2015budget

Before proffering some suggestions, it is pertinent tomake some observations on budget implementation and itsprospects. The implementation of the capital componentof the budget has for a long time elicited deepconcerns because of poor implementation and out-turns.Poor implementation has constituted a weak link in thebudget process, resulting in a low rate of performanceand inability of the government to achieve spelt-outdevelopment goals and objectives. Year in, year outMDAs have shown limited capacity to utilize budgetedfunds that were released. The year 2015 is not likelyto be different.

Another major weakness of the national budget in thesphere of implementation is its stress on inputs, in

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terms of financial resources released to MDAs and howmuch is utilized, instead of the outputs and outcomesachieved. The capital budget implementation that thegovernment has always celebrated is not the actualexecution of programmed and projects and the resultingoutputs (in physical terms) but rather the drawing downof the budgeted funds domiciled at the Central Bank byMDAs. Thus, the government’s budget implementationfigure of 64.5 percent in 2014 related to how much ofthe monies released to the MDAs that they accessed, andnot how much output of goods and services had beendelivered to the Nigerian people from the fundsreceived. If the funds accessed were to be related tothe total capital budget appropriation, theimplementation rate would be only 40.4 percent in 2014.A consideration of the output of physical goods andservices obtained from spending budgeted funds wouldreveal even a much lower level of budgetimplementation.

Another factor of the perennial poor budgetimplementation in Nigeria is the late presentation ofthe budget to the National Assembly by the executiveand the late enactment of the budget into an Act. The2015 budget was presented to the National Assembly(NASS) by the executive a few days to the beginning ofthe new fiscal year. This practice has been on forquite some time and it has continued to pose asignificant challenge to effective budgetimplementation. Available data on the budget process

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shows that since 2004, the time lag between the mainbudget presentation to NASS and its enactment hasranged from two months to six months.

What is even worse is that some of the budgets werepresented to NASS just a few days to the commencementof the fiscal year, for example, 2006, 2009, 2011, 2012and 2015 Appropriation Bills. The implication of thispractice is that the ministries, departments andagencies of government have very limited time(sometimes, just a few months) for actual budgetexecution, particularly the capital budget.Consequently, budget out-turns become poor. Under thecircumstance, many MDAs have continued to show limitedcapacity to implement capital budgets. Funds arereleased and cash-backed, but the MDAs have shown lackof capacity to absorb the released funds, and theunutilized funds are returned to the Treasury at theend of the year, or budget implementation is extendedto the first or second quarter of the succeeding fiscalyear. This in itself is an aberration.

The inability of MDAs to utilize budgeted capitalexpenditure funds makes the case for a huge size of thecapital budget very weak. Thus, for a start, thefundamental problem to address is the limited capacityof the MDAs apart from the late presentation andenactment of the budget. Under the prevailingcircumstances, the prospects of a higher capital budgetimplementation in fiscal 2015 are not bright.

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In light of the foregoing analysis, the followingrecommendations are suggestive in relation to the 2015budget and generally to improve budget implementationperformance.

• To improve budget implementation, the government mustdevelop the culture of early submission of theappropriation bill to the National Assembly which thelatter must endeavor to enact before 1st January of thefiscal year. International best practice indicates thatthe government budget should be submitted to parliamentnot less than three months prior to the start of thenew fiscal year. And the budget must be approved by theparliament prior to the start of the new fiscal year,in Nigeria’s case before January 1.

• Also, the government needs to avoid the lapses thatgive rise to the need for extension of budgetimplementation period. Very importantly, the NationalAssembly can tackle firmly the issue of late submissionof the budget by the executive by enacting a BudgetAct which, among others, will commit the Executive to aclear time-table to implement the budget process interms of submission of the budget frameworks andAppropriation Bill, and approval of the budget atspecified dates. In this direction, the Bill should besubmitted to the National Assembly not later than the1st of September while it should be signed into law notlater the last week of December so that budget

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implementation can commence on January 1st. The fiscalframeworks would be submitted earlier.

• The size of the budget reported by the government ismisleading as it excludes the SURE-P expenditure. Thefigures need to be adjusted by including the SURE-Pbudget to have total budget size as N4.910 trillioninstead of N4.642 trillion and N1.367 trillion capitalbudget instead of N1.1 trillion.

• Need to tackle the rising cost of governancereflected in growing recurrent expenditure. Governmentneeds to develop the political will to reduce the costof governance. Specific measures include the following:(i) Rationalization of government parastatals toeliminate wasteful and redundant parastatals asrecommended by the Oronsaye Committee report; (ii)Drastic cuts in the emoluments of political officeholders and legislators.

The burgeoning recurrent budget must be reduced to freeresources for enhanced allocations to the capitalprojects and program. Also, the government should dothe needful by sending bills on the parastatalsrestructuring to the National Assembly for urgentaction.

• A thorough scrutiny of the recurrent expenditureitems of MDAs which seem to indicate the presence ofwasteful, repetitive, conspicuous consumption andnebulous expenditures, some of which may facilitate

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fraudulent and corrupt financial transactions, with aview to drastically cutting them, especially in theareas of monitoring and evaluation, research anddevelopment, anniversaries/celebrations, etc.

• Need for a thorough scrutiny of the capital budget,most elements of which are not pro-poor, in order toeliminate the projects that are geared towards meetingthe consumption needs of the political elite. Allocatemore funds to pro-poor projects.

• In view of the very high cost of servicing domesticdebt arising from the high interest rates on governmenttreasury bills and bonds, there is need for thebenchmark price for crude oil to be fixed at a levelthat will eliminate the need for very costly financingof fiscal deficit and still allow some funds to beaccumulated in the.

Excess Crude Account.

• There is need for government to strive to increasethe contribution of non-oil tax revenue to the budgetthrough economic diversification and continuous reformsto modernize and improve tax administration.Importantly, to obtain more revenue, government mustreconsider the issue of import duty waivers because ofthe tendency for their abuse and their implications fornon-oil revenue. There is need to use them sparinglyand transparently.

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Overall, there is not much basis for optimism about theoutcomes of the 2015 budget as the same old style andattitude towards budget implementation is likely tocontinue. But the outcomes of future budgets may bebetter if the government does the right things relatingto budget formulation and implementation, develops thecapacity of MDAs and grows more stable sources ofrevenue outside oil. Also, public spending would needto be efficient and effective by being devoid ofcorruption.

The 2015 budget is a relatively tight budget comparedto 2014. The delay in the presentation of the budgetwas avoidable and we hope that the legislative arm willpromptly pass the budget. As always, the major taskremains the implementation of the budget given that the2014 budget was only 64% implemented as at when the2015 budget was presented. We hope that a betterimplementation of the 2015 budget will be achieved.

Conclusion

Nigeria has a very high ranking on all the lists ofthe most unstable countries in the world. Last months,a UK-based risk analysis firm, maple croft, groupedNigeria with the worst ten in Africa. Heading the teamof most-unstable nations are Somalia and Sudan. Othersare south Sudan, democratic republic of Congo, centralAfrica republic. Libya and Egypt. The ranking looked atconflict, terrorism political pressure.

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In another list compiled by foreign policy groupand fund for peace in 2013, weight was ranked 16th inthe world with a 100.7 points on the failed stateindex. The index indicators are factors lay d

emocratic pressure, human rights. Uneven development,economic decline, deligitimization of the state, publicservice, security operations, fact implied elite andothers.

The good news is that Nigeria is also on thehighest growing economics in the world. Some of therichest equal, the economic factor will balance out theinstability factor and allow Nigeria to soldier onbeyond 2015, in fact, that is how Nigeria has beensoldering on, dying all predictions of doom. WhenNigeria last visited the price, which was during thecivil war. It was able to pull back all survive, thanksto the oil boom that followed.

• The first budget? Walpoles bay of tricks and theorigin of the chancellors greater secret. Retrieved2012 -12 -17.

References

Fiscal and monetary party by Jeleke TaiwoAccounting Lexicon {Official Journal of AccountingDepartment of Lagos State University LASU 2002}.

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“Leaders” budget performance in Nigeria: “Acritical review of 2001 – 2002”. The NigerianAccountant Scemiu Babatunde A. and S.S.S. Arowomole.

“monetization of fringe benefit in public service:issue of poverty implementation monitoring andstrategy” the Nigeria Accountant Francis Olaide.

• Public budgeting and financial management floridinternational university, retrieved November 21,2013.

• History origins and traditions of the budgetretrived 2012-12-17.

• “A history of the budget” retrieved 2012-12-17.

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