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Author(s): Dr. Anderson Emmanuel Oriakpono, Suleman Ahmed Hyanam, Titus Gandu Obadiah.

Volume/Issue: Volume 6 , Issue 3 (2023)

Abstract:

This study examines the effect of performance-based budgeting on the financial management of selected Ministries, Departments, and Agencies (MDAs) in Nigeria. The study focuses on three key components of performance-based budgeting: performance metrics, outcome-based budgeting, and performance-based contracting. Financial management is assessed based on budgetary control, internal controls, and cash and debt management. The study utilised a survey research design and focused on MDAs with offices in Rivers State for accessibility reasons. A purposive sampling method was employed, resulting in a sample size of 400. The primary data was collected through structured questionnaires, and a structural equation model (SEM) was used for data analysis. The measurement model consisted of six constructs: Performance Metrics, Outcome-based Budgeting, Performance-based Contracting, Budgetary Control, and Internal Controls. Each construct comprised five items that were measured using a 5-point Likert scale. The study also included a demographic analysis to provide an overview of the sample characteristics. The study results showed that performance metrics, outcome-based budgeting, and performance-based contracting positively influenced financial management practices within the selected MDAs. Specifically, performance metrics were found to guide resource allocation, measure program effectiveness, and improve decision-making. Outcome-based budgeting was associated with efficient resource utilisation and aligning budgeting with desired outcomes. Performance-based contracting was found to enhance contractor performance and ensure accountability.

Keywords:

Performance-based Budgeting, Financial Management, MDAs, Nigeria.

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