By Linus Aleke, Abuja
The Community Parliament of the Economic Community of West African States ECOWAS otherwise known as ECOWAS Parliament, has underscored the imperative of budgeting in every institution, national or multilateral.
The Parliament also explained that budgeting is not only important because it involves number-crunching, but it
is crucial because it requires attention to details, and making informed strategic decisions about fund allocation.
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The co-chair, joint committee on administration, finance and budget, public accounts, macroeconomic policy and economic research of the ECOWAS Parliament, Rt Hon Benjamin Kalu, said this at the official opening of the committe’s delocalized meetings, in Abidjan, the beautiful city of the Republic of Côte d’Ivoire.
Kalu who is also the deputy speaker of the Nigeria’s House of Representatives, further gave five reasons why
budgeting is important in organisations, disclosing that it ensures resource availability. He averred that the primary function of budgeting is to ensure an organisation has enough resources to meet its goals, saying, through effective financial planning, one can determine which programs and activities require more resources and which areas to cut back.
He noted that budgeting can help set and report on internal goals. Kalu explained that budgeting for an upcoming period is not just about funds allocation, but also about determining how much revenue is needed to achieve desired goals.
According to him, “Financial goals should be attainable enough that one could count on them to inform the rest of budget allocations. The set goals inform the expenditure needed to reach them and vice versa.
“It helps prioritise programs and activities, a byproduct of the budgeting process is that it requires prioritising programs and activities. When prioritising, a key consideration is the potential of each project, how each aligns with the institution’s strategic goals, and the extent to which they could positively impact community citizens.
“It can lead to financing opportunities, when deciding to provide aid to community institutions, investors highly value its current, past, and predicted financial performance. providing documents for previous periods with clearly outlined – budgeted and actual spending, shows proficiency in the handling of organisation
finances,” he further explained.
The Co-chair also noted that budgeting provides a pivotable plan, stressing that a budget is principally a financial roadmap for the upcoming period; if all
goes according to plan, it shows how much should be earned and spent on specific items.
Noting that the business and social world is anything but predictable, Kalu concluded that “circumstances outside our control can impact our revenue or cause priorities to change at a moment’s notice”.
