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This research work titled “An evaluation of budget and budgetary control in Nigeria communication industry, with particular reference to mobile Tele-communication Network (MTN) Nigeria ltd.” The researcher examined the extent of budgeting in mobile Tele-communication network (MTN) Nig. Ltd. Examined the budgeting procedures and techniques in mobile Tele-communication network (MTN) Nig. Ltd. Examined the effect of budget and budgetary control on decision making process in mobile Tele-communication network (MTN) Nig. Ltd. Identified the various problems associated with budget and budgetary control in mobile Tele-communication network (MTN) Nig. Ltd and proffer possible solutions to the problems identified . Data for the study was sourced from two main sources which include Primary and Secondary sources of data Collection. Primary data: questionnaires and oral interviews were used to collect information from the respondents. Secondary data: Journals and other relevant materials relating to the area of my investigation will be review. Extensive literature review was carried out on the direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open ended question. Simple tables and percentages were used in treatment of data. The researcher found out that poor budgetary control affect the growth and development at mobile Tele-communication network (MTN) Nig. Ltd. Lack of budget supervision and evaluation affected the success of mobile Tele-communication network (MTN) Nig. Ltd. Late preparation of budget and weak legislature affects the budget policy and decision in mobile Tele-communication network (MTN) Nig. Ltd. Is evenly distributed. Based on the findings the researcher recommends that effort should be made for effective budget plan and evaluation in this state. This should be achieved by providing a standard budget units set out to plan and evaluate the budget and equally make provision for ways and effective implementation. The activities and the progress of this budget unit should be monitored by government acting as a supervision body and giving correction orders where and when needed. The budget planners should plan in interest of the entire country and such plans should guarantee a systematic growth in the economy when implemented. When implementing, the budget unit should make an extensive use of budget document and program budgeting which should enable the planners to know how much spent on the project and the return thereafter.


Title page                                                                                 ii

Approval page                                                                          iii

Dedication                                                                               iv

Acknowledgement                                                                    v

Abstract                                                                                   vi

Table of contents                                                                     vii


1.1 Background of the study                                                    1

1.2      Statement of problem                                                      6

1.3 Objectives of the study                                                       8

1.4      Research questions                                                          9

1.5      Research hypotheses                                                       10

1.6      Significance of Study                                                               11

1.7   Scope of the study                                                           12

1.8 Limitation of the study                                                       12

1.9 Definition of Terms                                                            13


2.1   Concept of meaning of budget and budgetary control      16

2.2   Objectives of budgetary control                                                22

 2.3  Scope and Techniques of standard costing and              

budgetary control.                                                            23

2.4 Requisites for effective budgetary control                           24

2.5   Budgetary Control                                                            35

2.6      The planning and control process                                   37

2.7      Types of Budgets                                                              39

2.8      Performance of Budgeting                                                        47


3.1   Research Design                                                              51

3.2 Area of the study                                                                        52

3.3   Population of the study                                                    52

3.4 Sampling Method                                                              53

3.5   Determination of sample size                                           54

3.6   Research Instrumentation                                               55

3.7   Validity of the instrument                                                57

3.8   Reliability of the instrument                                            57

3.9   Sources of Data                                                              58

3.10 Method of Investigation                                                   60


4.1 Analysis of data                                                                 61

4.2 Testing of Hypotheses                                                        68


5.1   Findings                                                                          75

5.2   Conclusion                                                                      76

5.3   Recommendations                                                           78

Bibliography                                                                    80

Appendix I                                                                       83

Appendix II (Questionnaire)                                             84



1.1      Background of the study

The term budget refers to a plan quantified in monetary terms, prepared and approved by appropriate authorities prior to a defined period of time, usually showing planned income to be generated and or expenditure to be incurred during that period and the capital to be employed to attain a given objective.

Abogun (2012) defined a budget as a plan of dominant individuals in an organization expressed in monetary terms and subject to the constraints imposed by the participants and the environments, indicating how the available resource may be utilized to achieve whatever the dominant individuals agreed to be the organization priorities.

Pandey (2003) in his formal definition defines budget as “a qualitative statement for a defined period of time which may include planned revenue, expenses, asset, liabilities and cash flows”.

Institute of cost and management accountants (ICMA) (as cited by Eze 2001), defined budget as “ a financial and or qualitative statement prepared prior to a defined period of time, of policy to the pursued during that period for the purpose of attaining a given objective”.

Lucey (2003) in his recent definition of budget defines it as a qualitative expression of a plan of action prepared for the business as a whole for departments, for functions such as sales and production or for financial resource item such as cash, capital, expenditure, manpower purchase, e.t.c

Morgan (19970 opines that the budget had grown beyond a financial tool. It is above all managerial tool, in essence, it is the best tool for making sure that key resources, especially performance resources are assigned to priorities and to results. It is a tool that enables the manager to know when to review and revise plans, either because results are different from expectation or due to environment economics conditions, market conditions or technologies charge which no longer correspond to the assumption of the budget.

Welsh (2003) opines that budgeting is the only comprehensive approach to managing so far developed that, if utilized with sophistication and good judgment fully recognizes the dominant role of the manager and provide a framework for implementing side fundamental aspects of  scientific management.

Budgeting at both management level and operation level looks at the future and lays down what has to be achieved, control checks whether the plans are being realized and put into corrective measures, where deviation or shortfall is occurring. According to Egam (1997) emphasized that without effective controls, an enterprise will be at the mercy of internal and external forces that can disrupt its efficiency and be unaware, when a budgeting and control system is in use, budgets are established which set out in financial terms, the responsibility of the managers in relation to the requirement of the overall policy of the company.

Financial, a budget provides a focus for the organization, aids the coordination activities and facilities control where as control is flexible budgets. The general objective of this study therefore is the way forward in which the research posed to evaluate budget and budgetary control in Nigeria communication industry with emphasis on mobile Tele-communication network Nigeria (MTN) Enugu state as a case study.

The company through planning and control represents several million of naira in investment. The company as at may 31, 2004 had a total of 31 mobile switching centres and over 940 radio base station across the country.

Several more are in the process of being installed on January 20, 2002. MTN commissioned the first phase of its digital microware transmission backbone, Yello balm is Africa’s most extensive transmission infrastructure and  has significantly helped to enhance all quality on MTNS network. Yello balm SPS 3400 kilometers and traverse over 120 cities, villages and communities while coverage has been extended do more 90 mager towns and a total of over 5000 villages and communities across Nigeria. The second phase of Yellow balm is currently outgoing and will spend another 4500 kilometers.

MTN subsists on the core brand values of leadership, integrity, innovation, relationships and a “can do attitude” a passionate optimistic focus on the future.

1.2      Statement of problem

Budgetary control problems as a result of poor budget preparation. These arise such that; Problems in budgetary control may reflect a poorly formulated budget  for example lack of credibility/realism. And lack of a comprehensive budget may complicate implementation for example separate timetable and rules for capital budget, extra-budgetary funds. And, also, where spending ministries have not been fully involved in their budget formulation so that they understand and own their budget. Also implementation problems can be reflected in lack of correct prediction of economic, social and political scenario or circumstances and the outbreak of situations like war, famine, natural disaster etc can hamper budget implementation. In Nigeria, the emergence of the civil war in May, 1976 really hinders the effective implementation of that fiscal year budget.

Some of the problems includes:

Lack of civil society involvement in budgetary control process in Nigeria Preparation. Delayed publication of financial statements. Lack of transparency and accountability. Lack of expert inclusion in the budget preparation to effectively forecast economic variables. The importance of implementation underscore the basic functions of budgeting and implementation in Nigeria since, much time is spent by the Nigerian government (often with World Bank, IMF assistance or encouragement) preparing elaborate poverty reduction focused budgets. A budget guides the government on a developmental plan that most times needs to be consolidated to achieve a meaningful aim. Budgetary control is importance because it assesses government performance over time, that is, it measures government score card and effective comparison can be made. An effectively implemented budget improves and strengthens the various macro-economic variable, such as poverty, unemployment, inflation, and the financial systems. In total, an efficient and implemented budget encourages fiscal discipline; Assurance that budget aggregates are sustainable over the medium-term and promote economic stability effective allocation; Assurance that public money is spent in accord with national priorities and on programs that are effective in achieving public objectives and effective distribution of wealth efficient public service; Assurance that public services are delivered in an efficient, fair and courteous manner, and are accessible to citizens.

1.3 Objective of the study

The aim of this research work is to evaluate budget and budgetary control in Nigeria communication industry, with particular reference to mobile Tele-Communication Network (MTN) Nig. Ltd. The general objectives of this research work includes the following;

1.  To examine the extent of budgeting in mobile Tele-Communication Network (MTN) Nig. Ltd.

2.  To examine budgeting procedures and techniques in mobile Tele-Communication Network (MTN) Nig. Ltd.

3.  To examine the effect of budget and budgetary control on decision making process in mobile Tele-Communication Network (MTN) Nig. Ltd.

4.  To identify the various problems associated with budget and budgetary control in mobile Tele-Communication Network (MTN) Nig. Ltd. And also proffer possible solutions to the problems identified.

1.4 Research Questions

Based on the above objectives, the researcher developed the following research questions;

1.  To what extent does mobile Tele-Communication Network (MTN) Nig. Ltd apply budgeting in  their operation?

2.  What are the budgeting procedures and techniques in mobile Tele-Communication Network (MTN) Nig. Ltd?

3.  Does budget and budgetary control have any effect on decision making process in mobile Tele-Communication Network (MTN) Nig. Ltd?

4.  What are the various problems associated with budget and budgetary control in mobile Tele-Communication Network (MTN) Nig. Ltd?

1.5 Research hypotheses

Ho: Mobile Tele-Communication Network (MTN) Nig does not apply budget and budgetary control in their decision making.

H1: Mobile Tele-Communication Network (MTN) Nig applies budget and budgetary control in their decision making.

Ho: There is no problem associated with budget and budgetary control in mobile Tele-Communication Network (MTN) Nig. Ltd.

H1: There are so many problems associated with budget and budgetary control in mobile Tele-Communication Network (MTN) Nig. Ltd.

1.6 Significance Of The Study

It is important to point out that on completion of this work by the researcher, it would be of immense significance to the following:

RESEARCHERS:  Other researchers on the same or similar topic would find this work helpful as it will form a base of review of related literature and also a stepping-shine for future researchers.

ECONOMY: This work will help to improve the economy through budget and budgetary control.  This is because of improvement in the efficiency and effectiveness of the operations as well as the overall success of a country depends on its budgeted plans which will be achieved through adequate implementation.

SHAREHOLDERS: The wealth of the shareholders will be maximized due to adequate budgetary control.

1.7 Scope of the Study

This project work focuses on the evaluation of budget and budgetary control in Nigeria communication industry, with particular reference to mobile Tele-Communication Network (MTN) Nig. Ltd Ziks avenue Enugu.

1.8 Limitations of the Study

The researcher in carrying out this study encountered numerous problems, which includes:

i)      Financial.

ii)     Time and several other constraints.

i)      FINANCIAL – This included lack of enough fund to move around and visit the various areas in the state, and also lack of money to buy enough research material which constitutes an impediment to the researcher, high cost of transportation in the city due to long distance also imposed its own limitation on the researcher.

ii)     TIME – Time is also another constraints to the researcher.  This is because the researcher is combining school activities and at the same time this made her unable to cover a lot of interesting areas but therefore limited her research work only at mobile Tele-Communication Network (MTN) Nig. Ltd Ziks avenue Enugu.

From the above points the researcher tried her best to bring out a detailed study on the evaluation of budget and budgetary control in Nigeria communication industry.

1.9 Definition of Terms

BUDGET: The chartered institute of management accountants (CIMA) defines budget as “a plan qualified in monetary terms prepared and approved prior to a defined period usually one year showing planed income to be generated and expenditure to be incurred during that period and the capital to be employed to attain that objective.

BUDGETART CONTROL: this is the establishment of a budget relating to the responsibilities of executives to the requirements of a policy and the continuous comparison of actual with budgeted results either to secure the individual actions with the objective of that policy or to provide a basis for its revision.

PLANNING: this is the establishment of objectives and the formulation, evaluation and selection of required to achieving these objectives.

CONTROL: this is the process of measuring and correcting actual performance to ensure that the firm’s activities conform to its plans and that its objectives are achieved.

MAXIMIZATION WEALTH: It is a process that increases the current net value of business or shareholders capital gains with the objective of bringing in the highest possible return. It is a strategy generally involved in making sound financial investment decisions which take into consideration any risk factors that would compromise or outweigh the anticipated benefits

VARIANCE: This is the differences between planned (budgeted) and actual results.

FAVOURABLE VARIANCE: this is the excess of the budgeted result over the actual result, in the case of cost. But in the case of revenue, it is the excess of the result over the budgeted or planned.

UNFAVOURABLE VARIANCE: this is the excess of actual result over budgeted in terms of cost and excess of budgeted over actual in terms of revenue.

BUSINESS: This is any establishment which has profit motive or maximization as its major objective.

ORGANIZATION: All establishments whether government or private owned.

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