Financial Governance and Sustainable Development in Nigeria: A Critical Review
Subtitle: Nigerian Financial Development
Publisher: International Journal of Learning & Development
Published: Accepted: August 14, 2012 Published: September 05, 2012
Place of publication: www.macrothink.org
Language: eng
Format: Sustainable Development
Number of pages: 9
Table of contents: title: Abstract; title: The work is a review of the Federal Government application of fiscal and monetary policies to create the necessary healthy environment for sustainable growth and development of the Nigerian state. The review indicates that although the government of Nigeria has designed in theory good fiscal and monetary policies to facilitate sustainable growth and development of all the sectors of the economy, the practical implementation of such policies to attain the desired results has remained an illusion. The problem responsible for the great expectations not matching with the realities on ground is because of lack of budget discipline. The Nigerian government in practical terms most often than not hardly follows the implementation of her annual budget as approved by the National Assembly. Consequently, a lot of extra budgetary activities which amount to both financial and budget indiscipline are experienced in the management of the annual budgets over the years. It is therefore recommended that the Federal Government of Nigeria should maintain strict budget discipline to guarantee good financial governance which is a necessary condition for sustainable development. Keywords: Financial Governance, Sustainable Development, Money Market, Policy Introduction; title: When Crowther, in Swammy (1985) was talking of money, as the bedrock of discovery in economics and financial management, in the whole public and commercial sectors and for the social existence of man, he was in fact, demonstrating the universal importance of finance. Peter Abraham in Mine Boy was describing the power of money and informs us that with money one can achieve anything (Abraham, 1979). In the early days of development, financeInternational Journal of Learning & Development; title: ISSN 2164-4063; title: 2012, Vol. 2, No. 5; title: 87 www.macrothink.org/ijld; title: was only seen as a means of exchange for mere living and sustainability. Finance was with gradual development and in the 15th century, it was used for the monarch and the kings (for the palace maintenance) with a view to maintaining law and order and for good governance. Little was seen of finance as the main expansionary phenomenon for diverse and decisive development, which modern development has proved for expansionary and real development. It shows that finance does not have to concentrate on the oligarchic maintenance of the palace only but there is the need for general development. The service to the people demands public services delivery. This service centre on policies aimed at general development (i.e. both urban and rural development). This is so because there is the need for broad financial resources to tackle the numerous societal needs and development including social, economic, political and rural development. In addition to the public finance and fiscal policy, the need for the real value of the purchasing power should be considered, so also to show a realistic development. In other words, the monetary policy should be addressed. This is so due to the fact that the monetary policy aims at determining the real worth of money in circulation and the cost of capital and the interest rate involved. In substantiating the effect of finance on sustainable development, we should look at the policies involved in enhancing development, especially such policies that are sustainable and laudable. Development is the improvement of human’s material needs, social and economic condition as well as man’s social cultural, political, economic, institutional and technological life as cultural advancement (Nzenwa, 2000). It is a positive change. Oduran sees development as form of change from a prior condition to a better one (Oduran in Omoruvi, 2001). Development therefore is a gradual growth or advancement through progressive change in all variables of man’s existence. It could be the discovery of such variable as economic advancement, social improvement, exhibition of political ingenuity and cultural growth. Sustainable development is the managed and controlled development in such a way that recognizes the dynamic nature of social, political, cultural and technological factors in the society. The process of development involves such identifiable features of growth that address the social, economic, political and environmental conditions of the society. The process of development and the ability to retain and control such change, is sustainable development. For an enduring development in a society, there should be effective financial policies in such society. In other words sustainable development is synonymous with public finance and its management. The management of public finance involves the fiscal and monetary management. Public finance is the study of public authorities (government) in generating revenue, allocating revenue (i.e. spending) and debt management towards ensuring efficiency of the state and the well being of the people (Salawu, 2005). According to Ato in Salawu (2005), public finance is the study of fund raised by government to meet the cost of government. Public finance is also the study of incomes and expenditure of the central, state and local governments for the collective satisfaction of wants on the principles which govern income and expenditure. However, public finance, being about money and its importance, especially in government, should reflect on the source of fund and its cost. In other words the worth of fund is very necessary in determining the state of an economy. And for effective, stable economy, the enactment and implementation of policies that would regulate the cost of fund is very necessary. In other words, the income and expenditure policy of government should include the cost of fund of such income hence the need for monetary policy which determines the money in circulation and the interest rate (i.e. cost of capital) and of course the management of both (i.e. public debt).