BUDGETARY ALLOCATION AND POVERTY INCIDENCE IN NIGERIA FROM 1980-2010
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Institute of Chartered Accoun tR'its of Nigeria
Abstract
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The paucity of public resources amid competing infinite national needs is the fundamental
rationale for effective budgetary a/location in the public sector. A((ocation is said to be effective
when the resources of the government are channelled to national priority areas such as poverty
reduction. This paper therefore set out to establish the short-term association between
budgetary allocation and poverty incidence in Nigeria. Four sectors of the economy namely:
agriculture, education, health, and transport and communication were selected purposively for
investigation. Data relating to national poverty index and budgetary allocation to these sectors
were obtained from official government publications for 31 years (1980-2010), and analysed
using descriptive statistics, partial correlation and the Ordinary Least Square (OLS) regression
techniques. The result revealed an insignificant negative association between budgetary
allocation and the incidence of poverty in Nigeria in the short term. Although, the magnitude of
the association is inconsequential at 95% confidence interval, the direction of the relationship is
in tandem with the underlying theory. To this end, it was recommended that allocation to
sectors of the economy with direct impact on the poor such as: agriculture, education, health
and transport and communication should be increased. However, actual release of funds
should be done promptly to allow for uninterrupted execution of projects, albeit, under watch in
order to avoid misdirection of funds
Keywords
HF5601 Accounting