CHAPTER ONE

INTRODUCTION

1.1. BACKGROUND OF THE STUDY

A well performing government agency is considered to be a prerequisite for the economic and democratic performance of countries. Recent government agency reforms have been attempted in individual countries to achieve a better performing public sector.

As such, the organization of the public sector in OECD countries has been subject to some major trends and shifts during the last 20 years (Pollitt and Bouckaert, 2012,  Hesse and Toonen, 2015,  Halligan, 2017). New Public Management (NPM) is the best known example of these reforms and led to several changes of the public sector in many countries.

New Public Management was a reaction to correct the irretrievable failures and moral bankruptcy of the ‘old’ public management (Hood, 2011; Keating, 2009). More in particular, New Public Management formed an answer to the lack of result and customer orientedness of public organizations that delivered services to the public or implemented policy (Verhoest et al., 2013).

According to New Public Management doctrines public sector performance can be improved by importing concepts, tools and values from the private sector. Public sector organizations should be offered more managerial autonomy while being controlled by the government on the basis of results.

By doing so public sector organizations are believed to be more likely to apply private-sector styles of management techniques, to be more customer-oriented and will be more likely accountable for results, leading to a higher efficiency and a better performing public sector organization.

Therefore, one of the central arguments of government agencies is that more managerial autonomy may enhance the use of private-sector style management techniques by public sector organizations only under the condition of result control.

This argument is based on principal-agent theory and asserts that because of goal incongruence (or conflict) and information asymmetry between the agency and its political principals, there is a considerable risk of opportunistic behavior by the agency (Pratt and Zeckhauser, 2011).

Opportunism can take the form of adverse selection, moral hazard, and, in policy settings, can lead to a subversive or deviant policy implementation by the agent (Waterman and Meier, 2014). Following this line of reasoning, public managers of autonomous public sector organizations will have no incentives to use management techniques within their own organizations.

On the contrary, management techniques may enhance the information for the political principal about potential shirking or deviant behavior of the agency. The concept of management techniques is however very heterogeneous, and captures a large variety of techniques.

Sets of management techniques are frequently referred to as management systems or management capacity. Based upon literature (Pollitt, 2009; Ingraham et al., 2011; Flynn, 2017; Verhoest et al., 2010) four management subsystems can be distinguished: financial management, performance management, human resource management, and quality management.

For each of these subsystems a number of techniques are proclaimed as good practice by government agency literature (Naschold, 2009; Pollitt, 2009). In this study, we focus on financial management.

Whereby, following Verhoest et al. (2010), internal result-based allocation of resources to organizational units and the development of a cost-calculation system are considered to be representative for the use of financial management techniques within public sector organizations.

Public financial management is the most important component in managing the internal components’ function of the new public management (Adamolekum, 1999; Hughes, 2003; Greener, 2013).

Any government activity needs money in order to operate, and the ability to raise money and to spend it (financing and expenditure management) is what distinguishes the institutions of government with other parts of the society.

After the financial administrations under many governments have been reorganized, public financial management, under new public management, have followed three main themes; promoting result-oriented management, introducing an accrual-based management accounting system, and the use of market-oriented mechanisms (Christensen and Laegreid, 2013).

Therefore, the study examines an assessment of the application of financial management techniques in government agencies (a case study of Kebbi State water board).

1.2. STATEMENT OF PROBLEM

A major macroeconomic objective of every nation is to achieve efficient allocation of resources as well as stabilization of the business cycles. In the last two decades, Nigeria has initiated and implemented series of economic policies to assist in the better management of her economy.

Parts of these reforms were aimed at improving the quality of the nation’s Public Financial Management (PFM) systems. PFM is a critical instrument in the implementation of economic policy, and it works by influencing the allocation and use of public resources through the budget and overall fiscal policy (Prakash and Cabezon, 2012).

A well-functioning PFM system would provide the assurance that the funds released through revenue generation and appropriation processes as well as from debt forgiveness (cancelation) mechanism would be productively used in a transparent and effective manner.

A well-functioning PFM system would also improve the use of aid as well as overall budget performance, and thus contribute to macroeconomic stability and growth. But there has not been proper application of financial management techniques in government agencies.

Understanding the institutional constraints associated with the nation’s public financial management systems would provide the basis for informed economic policy. Hence the study examines an assessment of the application of financial management techniques in government agencies (a case study of Kebbi State water board).

1.3. AIMS OF THE STUDY

The major aim of the study is to examine an assessment of the application of financial management techniques in government agencies (a case study of Kebbi State water board). Other specific objectives of the study include;

1. 1. To examine the financial management in government agencies in Nigeria.

1. 1. To examine the stages and objectives of financial management in government agencies in Nigeria.

1. 1. To examine the impact of application of financial management techniques on government agencies in Nigeria.

1. 1. To examine financial management reforms in Nigeria.

1. 1. To examine the relationship between application of financial management techniques and government agencies in Nigeria

1. 1. To examine the application of financial management techniques in government agencies.

1.4. RESEARCH QUESTIONS

1. 1. What is the financial management in government agencies in Nigeria?

1. 1. What are the stages and objectives of financial management in government agencies in Nigeria?

1. 1. What is the impact of application of financial management techniques on government agencies in Nigeria?

1. 1. What are financial management reforms in Nigeria?

1. 1. What is the relationship between application of financial management techniques and government agencies in Nigeria?

1. 1. What is the application of financial management techniques in government agencies?

1.5 RESEARCH HYPOTHESES

Hypothesis 1

H0: There are is no significant impact of application of financial management techniques on government agencies in Nigeria.

H1: There is a significant impact of application of financial management techniques on government agencies in Nigeria.

Hypothesis 2

H0: There is no significant relationship between application of financial management techniques and government agencies in Nigeria.

H1: There is a significant relationship between application of financial management techniques and government agencies in Nigeria.

1.6. SIGNIFICANCE OF THE STUDY

The study will be of profound benefits because the financial function has become imperative to any organisation for assessment therefore this research work will be of importance to Kebbi State water board to identify and proffer solution to their problem financially. This study would also be of immense benefit to students and scholars who are interested in developing further studies on the subject matter.

1.7 SCOPE AND LIMITATION OF THE STUDY

The study is restricted to an assessment of the application of financial management techniques in government agencies (a case study of Kebbi State water board).

LIMITATION OF THE STUDY

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview)

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8 OPERATIONAL DEFINITION OF TERMS

Government:  is the system or group of people governing an organized community, often a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary.

Financial Management: means planning, organizing, directing and controlling the financial resources of the firm.

GOVERNMENT POLICIES AS A TOOL FOR CREATING A BUSINESS ENVIRONMENT

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND OF THE STUDY

In a country with mixed economy like Nigeria, the government and the individual are managing the economy together. This means that people, groups and the three levels of government are free to start businesses. The three lowest levels of government include the local government, the state and the federal government, respectively. In the modern world, mixed economy appears as the most widespread economic system, but what makes the difference is the degree of mixing.

As a result, the government has important roles to play in this type of economy. Given the importance of government commercial regulation in the country, its regulatory power over commercial activities was defined in Article 16 (1) and (s) of the

Federal Constitution of 1979. 1984 also, the first was modified by the government Federal military of the time. This amendment was also included in sections 16 (1) and (3) of the 1999 Constitution of the Federal Republic of Nigeria. And both constitutions have specified the following with respect to our national economic activities.

Section 16 (1) states that the state must, within the framework of the ideal and the objectives of this Constitution, control the national economy to ensure maximum welfare, freedom and freedom. Energy citizen on the basis of social justice and fairness of status and opportunity.

Without prejudice to their right to operate or participate in areas of the economy that are not the main sectors of the economy.

Subsection 4 of Section 16 defines the main section as activities directly related to the production, distribution and exchange of wealth or goods and services. These main sectors of the economy will be declared periodically by a resolution of each Chamber of the National Assembly administered and administered exclusively by the Government of the Federation.

Without prejudices to its right to operate or participate in areas of the economy, to manage and operate the major section of the economy.

Moreover, according to section 16 (3); a body shall be set up by an act of the National Assembly which shall have power to review from time to time the ownership and control of business enterprise operating in Nigeria and make recommendation it some and to administer any law for the regulation of the ownership and control of such enterprise.

Therefore, it is clear that the role of government is to protect and represent the interest of the society and the citizenry in which business operates.  It can be further said that government through policies protects consumers from abuse, they ensure efficiency in the use of resources and promote equitable distribution of income.

Government policies are the most dynamic of all government influence on business in Nigeria.  This is due to instability in Government of Nigeria and has contributed to massive change in policies affecting the operation of business.

These policies may include monetary or fiscal policies.  Fiscal policies which is a macro-economic tool that involves the use of government spending and taxes (T) in guiding the nation’s economy to achieve pre-determined economic good.  Monetary policy on the other hand is the regulation of money and the terms and availability of credit.  Government can regulation of business activities.

Conclusively, government can use other means such as import duties and tariffs to regulates business in Nigeria, in order to protect domestic industries and producers against foreign competition. This study is therefore carried out to examine government policies as a tool for creating a business environment.

1.2 STATEMENT OF PROBLEMS

The influence of government on business can take so many forms.  The study aims to look at the regulation or government regulation towards Small and medium businesses and also suggest how to increase the organization’s efficiency through the regulation.  Government has realized that political independence without economic independence is meaningless.

The research on government regulation with particular reference to Small and medium businesses has raised some questions among experts and professionals, which this study has attempted to address.  These include;

a.           Can government regulation in organization be minimized and for untimely eliminated?

b.            Can organization exist without regulation?

c.           Is regulation beneficial or detrimental to organizational goal?

d.           How can organization efficiency be increased by regulation?

1.3 OBJECTIVES OF THE STUDY

The main objective of this study is to asses government policies as a tool for creating business environment. The following are the specific objectives of the study:

1.           To find out whether policy exist in small and medium enterprises

2.           To examine and assess various policy traceable in the organization.

3.           To identify whether a specific method of policy actually exist in small and medium enterprises.

4.           To identify problems if any encountered in regulating the organization.

5.           To find out the consequences of policies in small and medium enterprises (activities).

1.4       RESEARCH QUESTION

1.           Does policy exist in small and medium enterprises?

2.           What are the various policy traceable in the organization?

3.           Does a specific method of policy actually exist in small and medium enterprises?

4.           What are the problems encountered in regulating the organization.

5.           What are the consequences of policy in small and medium enterprises (activities).

1.5 SIGNIFICANCE OF THE STUDY

Business had been criticized seriously due to discriminatory rates and policies. The economic power had been in the hands of all kind of processing and manufacturing industries through trusts and corporate merger. Meanwhile, due to this government in order to rescue the economy has come up with so many regulatory measures which are beneficial to the following people;

a.           Employers

b.           Employees

c.           Consumers etc.

In fact it is because of these, it becomes necessary to study the effect of government policy on management of different businesses in Nigeria.

1.6 SCOPE OF THE STUDY

The study of this topic Government Policies as a tool for creating a business environment is supposed to include many kinds of business sector both private and public sector.  In order to manage the topic and carryout the study effectively and effectively the researcher deemed it fit to restrict the topic to the effects of government policy on business and it affects organizations.

Although, reference will be made on a general basis because of the diverse native of business.

1.7       DEFINITION OF TERMS

The following terms or words used in this study will be defined:

Business:  This simply means an economic activity undertaken to produce goods and or services.

Mixed Economy: It is a system of economy in which both private individuals and government jointly run the economic activities of the country.

Fiscal Policy: It is a tool or measure which the government used in regulating the economy through taxes and government spending.

Monetary Politic:        This is another measure used by the government in order to control the supply of money and the terms and availability of credit in the nation.

Government: It is an agency designed to administer the affairs of a state or nation.

Policy: This is the system which government in controlling the economic activities of the nation.

GOVERNMENT POLICIES AS A TOOL FOR CREATING A BUSINESS ENVIRONMENT Poli…

ABSTRACT

The effects of public expenditure on Nigeria’s agriculture industry are the subject of this research. In agriculture, natural food webs are simplified and energy is redirected for human planting and animal consumption. To what degree has government spending contributed to the growth of Nigeria’s agriculture industry was the overarching goal of this research. From 1986 to 2017, the statistics were taken from the CBN statistical bulletin. The study was directed by two research questions. Multiple linear regression was used to analyse the gathered data. Government spending in Nigeria boosted the agriculture industry, which in turn boosted the country’s economy, according to the results.The results led to the recommendation that the government of Nigeria enhance the value of its agricultural sector transactions and establish solid regulatory guidelines to assist farmers improve their production capacity, both of which would contribute to the growth of the economy.

Agriculture, governance, economics, expansion.

CHAPTER ONE
INTRODUCTION

1.1 Background of the study

Because it provided sustenance and income for a large portion of the population before the oil boom of the 1970s, agriculture played a pivotal role in Nigeria’s economic growth. Since agriculture was the mainstay of economic development in the first decade after independence, Nigeria’s economy may be characterised as agricultural [Ogen, 2003]. Up until the 1980s, when oil deposits were first exploited, agriculture constituted the backbone of Nigeria’s economy. The practice of cultivating crops and livestock for human use is known as agriculture, according to Akinboyo [2008]. What we’re seeing here is the redirection of energy from natural food webs to our own agriculture and animal consumption. To say that agricultural advancement is crucial to a nation’s progress and prosperity would be an understatement. The agricultural sector has been crucial to Nigeria’s economic success.

Considering the agriculture sector’s job possibilities and financial repercussions, its contribution to any economy is immeasurable. Nigeria is able to cultivate a diverse array of food and income crops due to its very variable environment. Since many Nigerians relied on agriculture for both subsistence and income, the sector played a crucial role in the country’s economic growth.

According to Muftau and Gafar (2003) and Aina (2015), over 80% of Nigeria’s rural population was involved in agriculture in the 1960s. From 1963 to 1964, the agricultural sector contributed up to 65% of the nation’s GDP. Despite the fact that most small-holder farmers in Nigeria do not have access to inputs that would boost their production, Nigeria was the world’s leading exporter of kernel and palm oil during this time, and the second-largest producer of cocoa overall [Ogen, 2003]. Credit facilities and fertilisers are inaccessible to farmers in rural areas.

Massive importation of basic foodstuffs has replaced agriculture’s dormant role in the economy over the last two or three decades, which is a direct result of the agricultural sector’s inability to fulfil its responsibility of food production [Egbuna, 2003]. The government’s spending, the backbone of agricultural funding, has been steadily falling. In 2008, researchers from the International Food Policy and Research Institute (IFPRI) and the World Bank worked together to find out that public spending on agriculture in Nigeria amounts to less than 2% of the overall federal budget. The government has recognised this and has implemented a number of programs and policies to help the sector thrive so that it can keep fulfilling its functions.

Starting in 1975, the government made the decision to actively engage in the commercial cultivation of food crops in an effort to rectify this anomaly. To help direct oil revenues into the country’s agricultural sector, the government of Nigeria set up the Nigerian Agricultural and Corporative Bank (NACB) in 1973 [Olagunju, 2000]. In an attempt to revive agricultural performance, a number of development programs were also implemented. Despite these and large financial investments, agricultural production remains dismally low [Ojo, 1991].

Productivity has remained stagnant despite the implementation of many agricultural programs, such as the Agricultural Credit Support Scheme of 2006 and the FADAMA Development Programmes (Oriola, 2009). For example, Nigeria continues to spend a substantial amount on rice imports, even though FADAMA Rice initiatives have received a substantial amount of funding.

Agricultural output averaged 32% of GDP from 1996–2000 and 42% from 2001–2009, despite low investment levels (CBN, 2010). Although it received only one percent of all commercial bank loans in 2011, the country’s GDP was forty percent attributable to agriculture, according to the CBN governor (People’s Daily, 2011). Agricultural production is vital in Nigeria, even if the country’s oil industry has an envied position.

1.2 Problem Statement

Despite Nigeria’s abundant natural resources, the agriculture sector’s impact on the economy has been shrinking for some time. This abrupt shift occurred in the early 1970s, when crude oil revenues skyrocketed. Agricultural production in Nigeria is still sluggish and undeveloped compared to the country’s rapidly expanding population, and this is mostly attributable to a lack of investment from both the public and private sectors. As a result, the sector’s productivity has taken a hit, and it has been unable to fulfil its historic function of producing food, among other things.

Increasing agricultural production is hindered by insufficient investment for the industry. According to FAO (2008), between 1970 and 1980, an average of 4.74 percent of Nigeria’s capital was allocated to agriculture. While it did improve to 7% from 1980–2000 and 10% from 2001–2007, it is still not enough to meet the guideline of the Food and Agricultural Organisation (FAO), which is that 25% of the government capital budget should be allocated to agricultural development.

The purpose of this research is to ascertain the extent to which public funds in Nigeria have boosted agricultural output.

1.3 Research Questions

The following research questions will form the basis of this study:

• How does the Nigerian government’s spending affect the country’s agriculture sector?
• How will the expansion of Nigeria’s agriculture industry affect the country’s GDP?

1.4. Research Objectives

The overarching goal of this research is to examine the relationship between Nigerian government spending and agricultural production. The following particular goals will be considered in order to accomplish this overarching purpose.

• To find out how the Nigerian government’s spending has affected the country’s agriculture industry.
• To analyse the effects on the Nigerian economy of the expansion of the agricultural sector.

1.5 Postulates for Future Study

Agricultural production is unaffected by government spending (H0).

Hypothesis 1: Government spending greatly affects the agriculture sector

The expansion of Nigeria’s agricultural industry does not significantly affect the country’s

financial system

Hypothesis 1: The expansion of Nigeria’s agricultural sector greatly affects

financial system

1.6 Significance of the study

Because it will aid in the formulation of economic policy in Nigeria, this research is going to be crucial for both private investors and the government. One of the goals of this investigation is to have a bird’s-eye picture of how the agriculture industry functions. It will add to the current body of knowledge by conducting an empirical investigation on the impact of the agriculture sector on national development. Beneficiaries of this research include;

Researchers and Scholars: This study will be useful for researchers and scholars in the academic community as it will provide a foundation for future studies and serve as a reference for existing literature.

The government should use these insights to formulate and execute policies that would guarantee growth.

Investors: Additionally, investors will find this research important since it will help them make informed judgements about their private investments.

1.7 Scope/Limitations of the study

The purpose of this study is to analyse how the Nigerian government’s spending habits have affected the country’s agriculture industry. The years 1986–2017 were included in the research.

 1.8: Study Structure

The research is organised into five sections. First, there is the introduction, which includes things like the study’s rationale, a problem statement, research questions, hypotheses, study goals, study significance, study constraints, scope, and methodology. The literature review, which includes conceptual, theoretical, empirical, theoretical framework, and gaps in literature, is discussed in Chapter 2. Data analysis methodologies, data kinds and sources, estimating methods, and model specifications are all covered in Chapter 3 of the study approach.Presentation and analysis of outcomes comprises the fourth chapter and includes presenting the results, interpreting the data, and summarising the main findings. The summary, conclusion, and suggestions are presented in Chapter 5.

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