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POLITICAL SYSTEM, BUDGET PERFORMANCE AND ECONOMIC GROWTH IN NIGERIA, 1970-2004
ABSTRACT
The effect of political systems, national budgets and how the resulting budget performance affects economic growth in Nigeria between 1970 and 2004 were assessed. The role of a budget in an economy is enormous. This is because the budget is an important instrument of national resource mobilization, allocation and economic management. It is also an economic instrument for facilitating and realizing the vision of government in a given fiscal year. Expenditures that may or may not contribute to economic growth were classified either as inimical to growth so that they are eliminated or they are reduced to the barest minimum, and those that productive and lead to economic growth. Descriptive and econometric methods were used to establish evidence of the performance of national budgets and its impact on economic growth in Nigeria.
The findings of the study show that the economy performed better under democratic dispensation. The economy performed least during the military period (1984-1998). The results of the parsimonious error correction model show that economic growth is invariant with political systems in the country. This finding however, shows that democracy in Nigeria is yet to transform into growth in the Nigerian economy. This may be due to the crowding out effect of the military regime on economy. The result is a reflection of the fact that the Nigerian economy is yet to fully harness its potentials due to continued low budgetary allocation to the real sectors coupled with high level of corruption and rampant poverty in Nigeria. It could therefore be concluded that the advent of democratic governance has not translated to sustained economic growth in Nigeria.
Keywords: Political System; Budgets; Economic Growth; Nigeria