In every given environment, whether large or small, it is easy to observe different economic functions taking place on continuous basis. To maintain a healthy and acceptable interaction among several economic units, a nation has its laid down rules and expected roles to be played by the citizens and other investors.
No nation would ever survive without a sound financial system, which is the law and environment with an interchange of wealth, asset and liabilities on regular basis for economic growth. In fact, in the words of Herggott Beckhart, financial system is defined as “the family of rules and regulations and the congeries of financial arrangements, institutions, agents and the mechanism whereby they relate to each other within the financial sector and with the rest of the world.”
As related activities are grouped, so also is the grouping of all financial entities and agents, under the financial sector. This sector is briefly defined as the grouping of all financial agents whose transactions determine qualitatively, the financial flow in the economy. (Okigbo P23) .
Apart from political reasons, a country is said to join the international financial system for social intercourse with other nations, so as to obtain some assistance for new development efforts. Some of these financial institutions include the International Bank for Reconstruction and Development (World Bank), International Monetary Fund (IMF), International Finance Corporation (IFC), International Development Association, African Export Import Bank and African Development Bank. Specifically, the foreign exchange department is responsible for the formulation of exchange control policies and procedures of the Central Bank.
Public finance as a discipline, is concerned with the allocation of resources, distribution of income and wealth and stabilisation of the economy (A.O. Akerele, 1998, P.21). All nations’ economies depend on the public and private sectors’ full participation in addressing social and political issues through efficient allocation of resources. Therefore, there is the need for free competition, enabling environment for investments, availability and utilisation of resources and adequate information for public awareness for greater participation of all at achieving macro-economic stability. It is in view of this, that the Ministry of Finance has intensified efforts at announcing and publicising some incentives like deregulation, commercialisation and privatisation, tax relief and indeginisation, for achieving more participation.
Therefore, public finance institutions as state organs are to maintain the financial integrity of the government and create the necessary machinery for monitoring the activities of profit makers and preventing unwholesome financial disruption. But where the private sector is unable to establish and provide economic facilities which are commercially unprofitable but otherwise essential for the efficient working of the economy, the public institution as government policy maker, will recommend and implement appropriate measures at providing such social overheads.
The action of the Government in stepping in, may not necessarily indicate that the public sector is more efficient than the private sector. The public sector cannot be ignored when it comes to providing essential economic social overheads, which include providing an enabling environment for investment such as accessible road network, hospitals, security and flexible fiscal policy, among others.
In view of this, in the word of Bhatia HL (Public Finance, Vikes Publishing House 1976, P.21), it is considered best that the public sector should only help and supplement the private sector and should never supplant it. According to him, the problems of capital formation and economic growth are supposed to be tackled adequately by the private sector itself. The market forces of demand and supply, which basically means obeying the law of consumers’ sovereignty, would guide the private investors and savers.
The federal government through its appropriate ministries, makes vital budget breakdown annually, which comprises fiscal and monetary policies aimed at achieving certain macro-economic targets like reducing inflation, increasing employment and maintaining a stable exchange rate regime. The budget breakdown serves as guidelines to investors, financial institutions, businessmen and other tiers of government to explore with the overall aim of maximising interests.
The government, as the major determinant of the direction of public spending through monetary and fiscal policies, has the task of addressing issues that have direct impact on the entire citizenry, including all operators within the system. Some of these issues are government taxes and expenditure; resources allocation in the economy; economic incentives and capabilities to perform the basic economic functions of working, saving, risk taking and spending for consumption; total government expenditure; the levels of production, national income and employment; total consumption expenditure and the distribution of wealth; the standard of living of the people, economic growth and stability; public debts; and foreign debts. (Peter Arize, 1998, P5)
The government, in view of the above, therefore, has the largest public, viz its three tiers of government, public and private sectors and the ordinary citizens who must either enjoy or suffer the effects of the policies’ direction.
The State, as the major instrument that addresses social welfare and provides infrastructure and enabling environment for economic growth, needs to keep the public fully informed about the facts and those policies as they have direct bearing on individual lives and the economy as a whole.
It is in view of keeping the public well informed about the fiscal and monetary efforts of the government at addressing the major economic problems, that the Information and Public Relations Units are charged with the responsibility of giving out the facts and promoting the economic programmes of the government.
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