CHAPTER ONE INTRODUCTION

 Background to the Study

The government essentially performs two functions viz protection which entails creation of the rule of law and enforcement of property rights: and provision of public goods and services which include roads, education, health and electricity (Economics Online, 2015). Fundamentally, Usman and Ijaiya (2010) argue that economic growth can be fostered through government expenditure on infrastructures such as roads, communications and power generation since it reduces the cost of production, increases private Sector investment and eventually profitability of firms. Loto (2011) on the other hand postulates that better standards of living to the citizens of a country will be achieved through the development of key Sectors of the economy such as health, housing, education and agriculture, as these Sectors are important in stimulating the economy of a country by addressing the nation‟s foremost needs, hence bringing about sustainable development.

Indeed, meaningful government expenditure to key Sectors of the economy can bring government services closer to the people and can enhance equity and reduce poverty; but the productivity of these allocations depends on the efficiency of resource allocation within these Sectors (Olopade & Olopade, 2010). This thinking is consistent with the agency theory that requires the agent to allocate and utilize resources efficiently and effectively to maximize shareholders wealth. In this case, the agent is the government represented by Ministries, Departments and Agencies (MDAs) while the principal is the citizenry (Leruth & Elisabeth, 2006).

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