DEVELOPMENT OF A MODEL FOR EFFECTIVE HOUSING BUDGET PERFORMANCE IN ANAMBRA STATE NIGERIA

1.1Background to the Study

Planning, allocation and utilization of financial resources for projects are crucial decisions for the actualization of corporate objectives in private and public organizations. The budgeting process is employed to integrate these decisions (Shapiro, 2001; Ugwu, 2006; Ekewealor, 2007; Ugoo, 2008, Fort, 2012). In private organizations, the bottom line is profit. However, budgeting in the public sector or government establishments is concerned with enhancing the welfare of citizens; via the provision of infrastructure and services for the people. Meyers (1999) emphasizes that, because time and wealth are scarce resources to all organizations, including the government, effective utilization of these resources requires careful planning and control, which a budget seeks to achieve. Hence, the need for an efficient budgeting process to allocate scarce resources to vital sectors of an economy in an informed manner.

Budgeting in its generic sense is defined as a financial and quantitative statement, prepared and approved prior to a defined period, of the policy to be pursued during that period, for the purpose of attaining a given objective. It represents a detailed plan of action that is prepared in relation to a particular period of time. The budgetary process translates financial resources into human purposes (Ekaete,1989; Chartered Institute of Cost and Management Accountants (CICMA), 2003; Kafareti, 2006). In addition to this, Ugoo (2008) submits that a well prepared budget acts as a mechanism to plan for revenue and expenses related to specific operations within a given time frame.

The government or public budget is more encompassing, than the generic definition of a budget. It not only contains estimate of incomes and expenditure (Federal Government of Nigeria, 1999), but also proposes policy thrusts particularly with regards to the direction which the economy is expected to follow (Altinyele, 1980). To corroborate this, Aderibigbe (2012), established that the role of a budget in an economy cannot be overemphasized, because it is an important tool for economic planning, resource mobilization, allocation and control.

Fort (2012) surmises that a public budget is a very important tool for financial planning, economic policy and development and is regarded as the most crucial instrument for governance. This is because it not only provides leaders access to state resources, it also sets out a platform for allocating these resources for the welfare of the people. Budgets are critical for the performance of the primary function of every government, which is to provide public goods and services (welfare) as enshrined in the constitution. According to Emma (2001) and Ekewealor (2007), it contains the government‘s proposed policy initiatives and targets to be achieved in both physical and financial terms. For the purpose of estimating financial requirements of various sectors of an economy, most governments adopt the system of annual budgeting.

According to Chark (1995), budget also helps to measure efficiency and inefficiency in a system. In view of this, Curristine, Zsuzsanna, & Journard (2007) clearly emphasize that for efficiency in public organizations to be achieved, budget practices and procedures must be changed or improved and result-oriented approaches to budgeting introduced.

A budget constituent of the Nigerian government, at both the federal and state levels in its annual budget exercise, is the provision of housing. Housing (shelter) is undoubtedly a major welfare concern to the inhabitants of any geographical location on earth. It is of supreme importance to man and one of the best indicators of a person‘s standard of living and his place in society (Ugonabo and Emoh, 2013). It is unarguably one of the basic necessities of man and ranks second after food in the hierarchy of man‘s needs. However, according to Ebie (2009), it is the first and most important of all rights.

Ebie (2009), states that housing, in all its ramifications, is more than mere shelter. It embraces all social services and utilities that make a community or neighbourhood a livable environment; which makes it a human right. This position is reinforced by section 16(1)(d) of the 1999 constitution under the Fundamental Objectives of State Policy, which compels the Nigerian State

―to provide suitable and adequate shelter for all citizens‖. It reinforces the call for public sector driven mass housing provision in Nigeria. Over time, the need for adequate shelter has continued to attract global attention especially in developing countries where the urbanization process has been growing at an alarming rate (Jiboye, 2009; Omoniyi and Jiboye, 2011).

 

Nigeria, like other developing countries is saddled with uncontrollable growth of the urban population caused by lack of provision of infrastructural facilities. The proportion of the Nigerian population living in urban centres has increased phenomenally from 7% in the 1930s, 10% in 1950, 20% in 1970, 27% in 1980 to 35% in 1990 (Okupe, 2002). Over 40% of Nigerians now live in urban centres of varying sizes. The incidence of this population in urban centres has created severe housing problems, resulting in overcrowding in inadequate dwellings, and has resulted in a situation where 60% of Nigerians can be regarded as ―houseless persons‖ (Federal Government of Nigeria, 2004).

The foregoing gory picture of housing in Nigeria applies to a high extent to Anambra State, in the south-eastern geo-political zone of the country, which makes the State a peculiar one of focus. The 2006 National Population Census established that Anambra State has a population of 4,182,032 which makes it the 9th most populous State in Nigeria (National Population Commission (NPC), 2006). The State population was also projected to be 5,073,868 by the end of 2013 using the 2.8 % population growth rate of the 2006 census. The State is also experiencing rapid urbanization and because of its relatively small land mass, it is becoming one huge urban area.

According to the National Bureau of Statistics (NBS) (2006), Anambra State is the second most urbanized state in the country having 62% of its total population living in urban areas. Consequently it has one of the highest population densities in Africa and the second most densely populated state (1,500 – 2000 persons per square kilometer) in Nigeria. These situations have resulted to challenges of inadequate and unaffordable housing for the inhabitants, especially the poor and low-income groups, thus leaving the state in dire need of mass provision of housing facilities for the residents. The Demand for better housing units, especially in the urban centers of the State has been on the increase. In plain language, the demand for houses out-stretches the supply (Anambra State Government, 2009). To corroborate this ugly scenario, Okoli (2007) stressed that since its creation, Anambra has been faced with the housing problem. The problem is so pronounced, that over 75percent of the state workers still operate from Enugu State; a journey of at least one hour to Awka and other cities outside the state capital. This has led to low productivity, lateness and truancy.

To compound these challenges, Anambra State still grapples with poor budgeting procedures (Anambra State Government, 2009a). Ineffective and inefficient budgeting procedures by the State government reflect in the housing budgeting process and have impacted negatively on the housing sector. It has contributed to denying the residents the benefits of housing delivery schemes. Specifically, these problems bother on poor budget performance arising from poor preparations, undisciplined implementation and extra budgetary expenditures, weak project monitoring and evaluation procedures, excessive bureaucratic bottlenecks in passing and approval of budget, lopsided or skewed allocation, lack of scientific basis or criteria for dictating budget ceilings and final budget sums, absence of housing cost professionals or experts in making decisions regarding final housing budget allocations, inadequate needs assessment of the citizenry on housing priorities before budgetary allocations, absence of a mechanism for obtaining statistical data on housing needs.

Economists expect any budget that is properly formulated and implemented to be comprehensive, transparent and to be characterized by probity, accountability and measurability. If a budget is effectively and religiously implemented, it opens up several economic windows. It helps a nation to achieve national development objectives within a given time frame. These include measurable economic growth rates that reduce poverty, raise income, makes for equitable wealth distribution and economic stabilization (Fort, 2012).

The problem of housing is obviously a common one. The housing need of every single individual or organization may be impossible to meet, giving limited resources. This research however argues that inefficiency and ineffectiveness of budgeting procedures in Anambra state is one factor that influences both delivery and availability of housing. The housing budgetary process in Anambra State (from preparation and allocation through implementation and monitoring) can be improved, to make housing available. Appropriate, efficient, realistic, adequate, verifiable, ethical and transparent budgetary measures should be adopted and adhered to, in order to improve confidence in the system and alleviate the plight of the citizenry.

It is against this backdrop that this research appraises critically, the performance of Anambra State‘s housing budget and their implications to the delivery of housing infrastructure. This is with a view to establishing weaknesses and inefficiencies in the system and developing a

framework to address or mitigate them. It encapsulates a holistic investigation of the problems bedeviling the budget performance of the housing sector in Anambra State. Details of this and statement of the research problem have been presented and discussed in subsequent sections of this research.