It has been suggested by scholars that this type of budgeting technique is best suited for discretionary costs and support services or activities. Due to the level of discretion exercises by various ministries and departments of government (MDGs) in Nigeria, one is tempted to agree with the current government of the need to make our budgeting experience more productive. It is therefore not surprising that this type of budgeting has mostly been applied in local and government establishments where the predominant costs are of a discretionary in nature.

In 1969, the city of Texas was the first to adopt ZBB. It was a fashionable management tools of the 1970s. Phyrr (1976) observed that there were 100 users in the USA in the early 1970, including the State of Georgia whose governor was ex-president, Jimmy Carter, In fact, when he became the President of United State, he directed that all federal agencies should adopt ZBB.

 ZBB involves majorly the following three decision packages:

  • A description of each organisational or departmental activities
  • Evaluation and ranking in order of importance
  • Allocation of resources based on the order of priority up to the spending cut-off level.

 Some benefits have been attributed to ZBB over the traditional budgeting used to by the previous administrations, such as:

  1. Traditional budgeting tends to extrapolate the past by adding a percentage increase to the current year while ZBB avoids the deficiencies of incremental budgeting and can be seen as a shift towards the allocation of resources by need or benefit. Consequently, ZBB does not take funding for granted like the traditional budgeting.
  2. It creates a questioning attitude rather than one that assumes that current practice represents value for money.
  3. ZBB focuses attention on outputs in relation to value for money. It enhances the concept of the 3Es (economy, efficiency and effectiveness).

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