The Budget as a Management Tool: Zero Base Budgeting, Panacea to Budget Implementation in Nigeria

Abstract

Nigeria has been experiencing difficulties in Budget implementation. The objective of this article is to present alternative forms of budgeting and after exposition on them, to recommend one that could mitigate budget implementation problem for Nigeria. Two types of budgeting addressed are incremental and zero-base. Under incremental budgeting, A certain percentage is added or subtracted from previous period’s figures to arrive at new period’s budget. Under zero base, every programme is reevaluated for its merits, as if previous budgets never existed. The starting point are the results hoped to achieve, and every debate about budget implementation is done prior to passage. Zero base budgeting is analogous to marketing concept in terms of information requirement and zeroing in on customized needs. To the extent that zero base budgeting plans, executes and controls, it serves as a management tool. Nigeria’s budgeting has been incremental, overly politicized and not carried out by experts, but merely based on benchmark price and quota of daily oil production. Factors militating against proper budgeting in Nigeria are distortions in fiscal transparency. Budget implementation in Nigeria is a critical problem. Many have blamed our poor socio-economic and infrastructural development on low degree of budget implementation, which is a result of incremental budgeting process. The paper therefore recommends zero base budgeting to Nigeria at all levels.