NATIONAL OPEN UNIVERSITY OF NIGERIA

FACULTY OF SOCIAL SCIENCES

INTRODUCTION TO DEVELOPMENT STUDIES II

(DES112)

COURSE GUIDE

Course Developers:
Dr. Musa Samuel Olayinka
University of Lagos, Economics Department, DLI Programme

and

Dr. Osobase Anthony

Department of Economics
Anchor University, Lagos

Course Editor:

Professor Risikat O. S. Dauda

Department Economics
University of Lagos
Lagos State.

1
© 2019 by NOUN Press
National Open University of Nigeria,
Headquarters,
University Village,
Plot 91, Cadastral Zone,
Nnamdi Azikiwe Expressway,
Jabi, Abuja.

Lagos Office
14/16 Ahmadu Bello Way,
Victoria Island, Lagos.

e-mail: centralinfo@nou.edu.ng
URL: www.nou.edu.ng

All rights reserved. No part of this book may be reproduced, in any form or by any
means, without permission in writing from the publisher. Printed: 2018 ISBN: 978-
058-023-X.

Printed:

ISBN:

2
CONTENT
Introduction
Course Content
Course Aims
Course Objectives
Working through This Course
Course Materials
Study Units
Textbooks and References
Assignment File
Presentation Schedule
Assessment
Tutor-Marked Assignments (TMAs)
Final Examination and Grading
Course Marking Scheme
Course Overview
How to Get the Most from This Course
Tutors and Tutorials
Summary

3
INTRODUCTION

Welcome to DES 112: Introduction to Development Studies II

DES 112: Introduction to Development Studies II is a two-credit units and one-

semester undergraduate course for economics student. The course is made up of three
modules, each module is subdivided into four study units and each unit spread across
twelve lectures weeks. This course guide will give you a wider insight into the
concept of development planning. It introduces to you planning, as it is a continuation
of DES 111, Introduction to Development Studies I. It tells you about the course materials
and how you can work your way through these materials. It suggests some general
guidelines for time required of you on each unit in order to achieve the course aims
and objectives successfully. Answers to your tutor marked assignments (TMAs) are
therein already.

Course Content

This course is basically on Introduction to Development Studies II. As you are

aspiring to become an economist, you must be able to apply your knowledge in
planning to economic problems. Nigeria is a developing country and needs season
planners, this study prepares you to be a good planner. Some of the topics covered
include; Introduction to planning; Types of Development Planning; Rationale for
Development Planning; Overview of Development Planning in Nigeria; Brief history of
Development Policy and Practice; Brief introduction to Multilateral, Bilateral and Non-
Governmental Organizations (NGOs) that are engaged in developmental matters.

Course Aims and Objectives

The course attempts to explain the concept of ‗development‘ and ‗planning‘, and
define the meaning of development planning and rationale for planning, that is why
nations needs to plan. The course is prepared in a way that the users would easily
enhance their previous knowledge from Introduction to Development Studies I (DES
111). The course aims are to help users develop critical thinking skills, learn how to
evaluate economic arguments on development planning issues, and understand the
diverse development planning efforts in Nigeria. Concisely, the overall aims are to:

4
  Familiarize you with fundamental concept and meaning of development
planning.
 To familiarize students with brief historical aspect of planning in Nigeria.
 To explain the distinction between short, medium and long term planning.
 To stimulate students‘ knowledge on types of development planning.
 Pointing out some of the reasons for planning failure.
 To make the students to understand international organizations and NGOs
involved in development planning.

Course Objectives

To achieve the aims of this course, there are overall objectives, which the course is set
out to achieve. Similarly, there are set objectives to be accomplished for each unit.
The unit objectives are included at the beginning of a unit; you should read them
before you start working through the unit. You may want to refer to them during your
study of the unit to check on your progress. You should always look at the unit
objectives after completing a unit. This is to assist the students in accomplishing the
tasks entailed in this course. In this way, you can be sure you have done what was
required of you by the unit. The objectives serve as study guides; such that student
could know if he is able to grab the knowledge of each unit through the sets of
objectives in each one. At the end of the course period, the students are expected to be
able to:

 Explain the basic meaning of development planning.

 Define development planning convincingly.
 Describe planning efforts that have been made in Nigeria since independence.
 Explain the ranges of planning in Nigeria.
 Discuss major reasons for planning failure in Nigeria.
 Describe other reputable organizations involved in planning other than
government.

5
Working Through the Course
To successfully complete this course, you are required to read the study units,
referenced books and other materials on the course.

Each unit contains self-assessment exercises called Student Assessment Exercises

(SAE). At some points in the course, you will be required to submit assignments for
assessment purposes. At the end of the course there is a final examination. This course
should take about 12 weeks to complete and some components of the course are
outline under the course material subsection.

Course Material

The major component of the course, what you have to do and how you should allocate
your time to each unit in order to complete the course successfully on time are listed
follows:

1. Course guide
2. Study unit
3. Textbook
4. Assignment file
5. Presentation schedule

Study Unit

There are 12 units in this course which should be studied carefully and diligently.

MODULE ONE: MEANING OF DEVELOPMENT PLANNING

UNIT 1 Definition of Development Planning

UNIT 2 Rationale for Planning
UNIT 3 Characteristics and Types of Planning
UNIT 4 Ranges of planning

6
MODULE TWO: DEVELOPMENT PLANNING IN NIGERIA

UNIT 1 Historical Description of Development Planning in Nigeria: Pre

independence to SAP era (Till 1998)
UNIT 2 Highlight of Planning Experience since 1999 until Date
UNIT 3: Reason for Planning Failure in Nigeria and Prerequisite for
Successful Planning
UNIT 4: Planning experience of selected developed countries (USA, France,
Britain, China, Singapore and India)

MODULE THREE INSTITUTIONS INVOLVED IN PLANNING

UNIT 1 The Non-Governmental Organizations (NGOs)

UNIT 2 Regional Organizations
UNIT 3 United Nations Institutions (i.e. UNESCO, UNCTAD, WTO
etc.)
UNIT 4 The Bretton Woods Institutions (IMF, WDI, IFC etc.)

Each study unit will take at least two hours, and it includes the introduction, objective,
main content, self-assessment exercise, conclusion, summary and reference. Other
areas border on the Tutor-Marked Assessment (TMA) questions. Some of the self-
assessment exercise will necessitate discussion, brainstorming and argument with
some of your colleges. You are advised to do so in order to understand and get
acquainted with historical economic events as well as notable periods.

There are also textbooks under the reference and other (on-line and off-line) resources
for further reading. They are meant to give you additional information if only you can
lay your hands on any of them. You are required to study the materials; practice the
self-assessment exercise and tutor-marked assignment (TMA) questions for greater
and in-depth understanding of the course. By doing so, the stated learning objectives
of the course would have been achieved.

7
Textbook and References

Adekunle, S. B. & Alokpa, F. M. (2018). An Appraisal of the Nigeria Economic

Recovery and Growth Plan, 2017-2020. International Multi-Disciplinary
Journal,
12(3), 25-37. ISSN 1994-9057 (Print) ISSN 2070-0083 (Online)
Ademola Adebayo, A. (2017). Macroeconomics, A Simplified Approach. 2nd Edition.

Ajibola Kumuyi, V. Adeyeye & Babatunde Adeoye (2008): ―Understanding Medium

–
Term Planning for Economic Growth & Development in Nigeria‖ NISER,
Ibadan.
Akindele, S. T., Afolabi, Y. A., Pitan, O. O. & Gidado, T. O. (2016). The
Management
of Interruptions in National Development: A Critical Analysis of Nigeria‘s
Experience. American Journal of Economics, 6(6), 306-333.
Aluko, S. (2006). Abacha‘s vision 2010 Blueprint reviewed. Nairaland Forum.
Tuesday
May 09, 2006.
Ayo, E. J. (1988). Development Planning in Nigeria. Ibadan: University Press.
Bent, H.B. (1969). Jan Tinbergen: An Appraisal of His Contributions to Economics,
The Swedish Journal of Economics, 71(4) (Dec., 1969), pp. 325-336. Pub:
Wiley for the Scandinavian Journal of Economics

Bhende, V.P. (1964). Development Planning in Underdeveloped Countries.

Management Science, 10(4). 796-809. Pub. INFORMS.

Cevat, C. and Dallen, J.T. (2001). Shortcomings in Planning Approaches to Tourism

Development in Developing countries: The Case of Turkey. International
Journal
of Contemporary Hospitality Management, 13 (7). MCB University Press.

Egbunike, N. (2010). What Happened to Abacha‘s Vision 2010? Samsung S4 on

Konga.com, Nigeria Village Square. Jan. 3. www.nigeriavillagesquare.com.
Ejumudo, K. B. O. (2013). The Problematic of Development Planning in Nigeria: A
Critical Discourse. Developing Country Studies, 3(4), 67-80. www.iiste.org
ISSN
2224-607X (Paper) ISSN 2225-0565 (Online).

Dantzig, G. (1963). Linear programming and its extensions. Princeton University

Press and Rand Corporation.

8
Dode, R. O. (2010). Yar‘adua 7-Point Agenda, the MDGs and Sustainable
Development in Nigeria. Global Journal of Human Social Science (GJHSS),
2(10), 1-7.
Egonmwan, J.S. & Ibodje, S. (2001). Development Administration: Theory and
Practice. Benin City: Thesyin (Nig) Company.
Ejumudo, K. B. O. (2013). The Problematic of Development Planning in Nigeria: A
Critical Discourse. Developing Country Studies, 3(4), 67-80. www.iiste.org
ISSN 2224-607X (Paper) ISSN 2225-0565 (Online).
Ekpo, C. (2012). The Transformation Agenda: Issues and Challenges. Conference
Paper· Retrieved from https://www.researchgate.net/publication/328857743.
Fashola M.A. (2012). A Hand Book of Development Planning in Nigeria. Lecture
Notes
on Development Planning, Department of Economics, University of Lagos
Gyong, J.E. (2016). A social analysis of the transformation agenda of President
Goodluck
Ebele Jonathan. European Scientific Journal, 8(16), 95-113. ISSN: 1857 –
7881
(Print) e ISSN 1857- 7431.
http://documents.worldbank.org/curated/en/234301468290438608/Nigeria-National-
Economic-Empowerment-and-Development-Strategy-and-joint-IDA-IMF-staff-
advisory-note
Hayek, F. A. (1939). Freedom and the Economic System. , Public Policy Pamphlet
No.
29; reprinted in Socialism and War, ed. Caldwell, 198. 24.

Ibietan, J. & Ekhosuehi, O. (2013). Trends in development planning in Nigeria: 1962

to 2012. Journal of Sustainable Development in Africa, 15(4), 297-311. ISSN:
1520
5509.
Iheanacho, E. N. (2014). National Development Planning in Nigeria: An Endless
Search for Appropriate Development Strategy, International Journal of
Economic
Development Research and Investment, 5(2), 49-60. ISSN: 2141-6729
Ikeanyibe, O. M. (2009). Development Planning in Nigeria: Reflections on the
National Economic Empowerment and Development Strategy (NEEDS) 2003-
2007. Journal of Social Science, 20(3), 197-210.
Jhingan, M.L. (2016). Economics of Development Planning, 41st Edition. Page 533-
539.Vrinda Pub. Ltd.

Lewis, W. Arthur. (1954). ―Economic Development with Unlimited Supplies of

Labour.‖ Manchester School, Vol 22. No. 2, pp. 139-191.
9
Lewis, W. Arthur. 1949. The Principles of Planning: A Study Prepared for the Fabian
Society. London: Dennis Dobson / Allen & Unwin.

Lim, D. (1983). Malaysian Development Planning. Pacific Affairs, Vol. 55,(4). 613-
639. Pub.,Pacific Affairs, University of British Columbia

Lippmann W. (1925). The Phantom Public (New York: Macmillan, 1925). 9.

Lippmann, W. (1934). The Method of Freedom (New York: Macmillan, 1934), 38–
45,
quote at 41.
Ministry of Budget and National Planning (2017). Nigeria economic recovery and
growth plan (2017-2020. Abuja: SOU Also accessed on
www.nationalplanning.org.ng
Nnanna, O. J., Alade, S.O., & Odoko, F. O. (2003). Contemporary economic policy
issues in Nigeria. Central Bank of Nigeria. CBN publication, 131-184.
Obadan, M. (2003): National Development Planning and Budgeting in Nigeria: Some
pertinent issues. Broad Way Press Limited, Lagos.
Obi, E. A. (2006). Development Administration. Onitsha: Bookpoint Ltd.
Ogefere S. (2007). Government Lists Challenges to NEEDS-2 Goals Achievement.
The
Guardian, Tuesday, May 8.
Oke, L. & Oluwasuji, C. O. (2011). Millennium Development Goals {MDGs} and the
Yar'adua's Seven Point Agenda in Nigeria: Prospects and Challenges. An
International Multi-Disciplinary Journal, 5(1), 57-72. ISSN 1994-9057 (Print)
ISSN 2070-0083 (Online)
Olayiwola, L. M. & Adeleye, O. A. (2005). Rural Infrastructural Development in
Nigeria: Between 1960 and 1990. Problems and Challenges. Ile-Ife, Nigeria:
Journal of Social Sciences, 11(2): 91-96.
Onah, F.O. (2006). Managing Public Programmes and Projects. Nsukka: Great AP
Express Publishers.
Onah, F. O. (2010). Managing Public Programmes and Projects (2nd Edition).
Nsukka: Great AP Express Publishers.
Preston, C. (2017). A Cursory Look at Nigeria's Economic Recovery and Growth Plan
Friday, 10 March 2017. Accessed on 20th March from
https://www.proshareng.com/news/ Nigeria%20Economy/A-Cursory-Look at-
Nigeria-sEconomic-Recovery-and-Growth-plan.
Tinbergen, J. (1955). On the Theory of Economic Policy, North-Holland, Amsterdam,
(2nd edn.).

10
Todaro, M.P. and Smith, S.C (2015): Economic Development 12th ed. Addison-
Wesley, Pearson Education Limited, England.
Ugwu, C.E. (2009) ―The Imperatives of National Development Programmes
Harmonization in Nigeria: Vision 2020, Millennium Development Goals and
Seven Point Agenda‖, in Nigerian Journal of Public Administration and
Local
Government (UNN), 14(2), 200 – 216.

Assignment File

Assignment files and marking scheme will be made available to you. This file presents
you with details of the work you must submit to your tutor for marking. The marks
you obtain from these assignments shall form part of your final mark for this course.
Additional information on assignments will be found in the assignment file and later
in this Course Guide in the section on assessment.

There are four assignments in this course. The four course assignments will cover:

Assignment 1 - All TMAs‘ questions in Units 1 – 4 (Module 1)

Assignment 2 - All TMAs' questions in Units 1 – 4 (Module 2)

Assignment 3 - All TMAs' questions in Units 1 – 4 (Module 3)

[

Presentation Schedule

The presentation schedule included in your course materials gives you the important
dates for this year for the completion of tutor-marking assignments and attending
tutorials. Remember, you are required to submit all your assignments by due date.
You should guide against falling behind in your work.

Assessment

There are two types of the assessment of the course. First are the tutor-marked
assignments; second, there is a written examination.

In attempting the assignments, you are expected to apply information, knowledge and
techniques gathered during the course. The assignments must be submitted to your
tutor for formal assessment in accordance with the deadlines stated in the Presentation

11
Schedule and the Assignments File. The work you submit to your tutor for assessment
will count for 30 % of your total course mark.

At the end of the course, you will need to sit for a final written examination of three
hours' duration. This examination will also count for 70% of your total course mark.

Tutor-Marked Assignments (TMAs)

There are four tutor-marked assignments in this course. You will submit all the
assignments. You are encouraged to work on all the questions thoroughly. The TMAs
constitute 30% of the total score.

Assignment questions for the units in this course are contained in the Assignment File.
You will be able to complete your assignments from the information and materials
contained in your set books, reading and study units. However, it is desirable that you
demonstrate that you have read and researched more widely than the required
minimum. You should use other references to have a broad viewpoint of the subject
and also to give you a deeper understanding of the subject.

When you have completed each assignment, send it, together with a TMA form, to
your tutor. Make sure that each assignment reaches your tutor on or before the
deadline given in the Presentation File. If for any reason, you cannot complete your
work on time, contact your tutor before the assignment is due to discuss the possibility
of an extension. Extensions will not be granted after the due date unless there are
exceptional circumstances.

Final Examination and Grading

The final examination will be of three hours' duration and have a value of 70% of the
total course grade. The examination will consist of questions which reflect the types of
self-assessment practice exercises and tutor-marked problems you have previously
encountered. All areas of the course will be assessed

12
Revise the entire course material using the time between finishing the last unit in the
module and that of sitting for the final examination. You might find it useful to review
your self-assessment exercises, tutor-marked assignments and comments on them
before the examination. The final examination covers information from all parts of the
course.

Course Marking Scheme

The Table presented below indicates the total marks (100%) allocation.

Assignment Marks

Assignments (Best three assignments out of four that is 30%

marked)

Final Examination 70%

Total 100%

Course Overview

The Table presented below indicates the units, number of weeks and assignments to
be taken by you to successfully complete the course, Introduction to Development
Studies II (DES 112).

Units Title of Work Week’s Assessment

Activities
(end of unit)

Course Guide

Module 1 MEANING OF DEVELOPMENT PLANNING

1 Definition of Development Week 1& Assignment 1

Planning
2 Rationale for Planning Week 2 -3 Assignment 1

3 Types of Planning Week 3 Assignment 1

4 Ranges of Planning Week 4

13
Module 2: DEVELOPMENT PLANNING IN NIGERIA

1 Historical Description of Week 5 Assignment 1

Development Planning in
Nigeria: Pre-independence
to SAP era (Till 1998).

2 Highlight of Planning Week 6 Assignment 2

Experience since 1999 until
Date.
3 Reason for Planning Failure Week 7 Assignment 2
in Nigeria and Prerequisite
for Successful
Planning.
4 Planning experience of Week 8 Assignment 2
selected developed countries
(USA, France,
Britain, China, Singapore
and India)

Module 3: INSTITUTIONS INVOLVED IN PLANNING

1 The NGOs Week 9 Assignment 2

2 The Regional Organizations Week 10 Assignment 2

3 United Nations Institutions Week 11 Assignment 2

(i.e. UNESCO, UNCTAD,
WTO etc.)

4 The Bretton Woods Week 12 Assignment 2

Institutions (IMF, World
Bank)

How to Get the Most from this Course

In distance learning the study units replace the university lecturer. This is one of the
great advantages of distance learning; you can read and work through specially
designed study materials at your own pace and at a time and place that suit you best.

14
Think of it as reading the lecture instead of listening to a lecturer. In the same way that
a lecturer might set you some reading to do, the study units tell you when to read your
books or other material, and when to embark on discussion with your colleagues. Just
as a lecturer might give you an in-class exercise, your study units provides exercises
for you to do at appropriate points.

Each of the study units follows a common format. The first item is an introduction to
the subject matter of the unit and how a particular unit is integrated with the other
units and the course as a whole. Next is a set of learning objectives. These objectives
let you know what you should be able to do by the time you have completed the unit.

You should use these objectives to guide your study. When you have finished the unit
you must go back and check whether you have achieved the objectives. If you make a
habit of doing this, you will significantly improve your chances of passing the course
and getting the best grade.

The main body of the unit guides you through the required reading from other sources.
This will usually be either from your set books or from a readings section. Some units
require you to undertake practical overview of historical events. You will be directed
when you need to embark on discussion and guided through the tasks you must do.

The purpose of the practical overview of some certain historical economic issues are
in two folds. First, it will enhance your understanding of the material in the unit.
Second, it will give you practical experience and skills to evaluate economic
arguments, and understand the roles of history in guiding current economic policies
and debates outside your studies. In any event, most of the critical thinking skills you
will develop during study are applicable in normal working practice, so it is important
that you encounter them during your studies.

Self-assessments are interspersed throughout the units and answers are given at the
ends of the units. Working through these tests will help you to achieve the objectives
of the unit and prepare you for the assignments and the examination. You should do
each self-assessment exercises as you come to it in the study unit. Also, ensure to

15
master some major historical dates and events during the course of studying the
material.

The following is a practical strategy for working through the course. If you run into
any trouble, consult your tutor. Remember that your tutor's job is to help you. When
you need help, don't hesitate to call and ask your tutor to provide it.

1. Read this Course Guide thoroughly.

2. Organize a study schedule. Refer to the `Course overview' for more details.
Note the time you are expected to spend on each unit and how the assignments
relate to the units. Important information, e.g. details of your tutorials, and the
date of the first day of the semester is available from the study centre. You
need to gather together all this information in one place, such as your dairy or a
wall calendar. Whatever method you choose to use, you should decide on and
write in your own dates for working breach unit.
3. Once you have created your own study schedule, do everything you can to stick
to it. The major reason that students fail is that they get behind with their
course work. If you get into difficulties with your schedule, please let your
tutor know before it is too late for help.
4. Turn to Unit 1 and read the introduction and the objectives for the unit.
5. Assemble the study materials. Information about what you need for a unit is
given in the `Overview' at the beginning of each unit. You will also need both
the study unit you are working on and one of your set books on your desk at the
same time.
6. Work through the unit. The content of the unit itself has been arranged to
provide a sequence for you to follow. As you work through the unit you will be
instructed to read sections from your set books or other articles. Use the unit to
guide your reading.
7. Up-to-date course information will be continuously delivered to you at the
study centre.
8. Work before the relevant due date (about 4 weeks before due dates), get the
Assignment File for the next required assignment. Keep in mind that you will

16
 learn a lot by doing the assignments carefully. They have been designed to help
you meet the objectives of the course and, therefore, will help you pass the
exam. Submit all assignments no later than the due date.
9. Review the objectives for each study unit to confirm that you have achieved
them. If you feel unsure about any of the objectives, review the study material
or consult your tutor.
10. When you are confident that you have achieved a unit's objectives, you can
then start on the next unit. Proceed unit by unit through the course and try to
pace your study so that you keep yourself on schedule.
11. When you have submitted an assignment to your tutor for marking do not wait
for its return `before starting on the next units. Keep to your schedule. When
the assignment is returned, pay particular attention to your tutor's comments,
both on the tutor-marked assignment form and also written on the assignment.
Consult your tutor as soon as possible if you have any questions or problems.
12. After completing the last unit, review the course and prepare yourself for the
final examination. Check that you have achieved the unit objectives (listed at
the beginning of each unit) and the course objectives (listed in this Course
Guide).

Tutors and Tutorials

There are some hours of tutorials (2-hours sessions) provided in support of this course.
You will be notified of the dates, times and location of these tutorials. Together with
the name and phone number of your tutor, as soon as you are allocated a tutorial
group.

Your tutor will mark and comment on your assignments, keep a close watch on your
progress and on any difficulties you might encounter, and provide assistance to you
during the course. You must mail your tutor-marked assignments to your tutor well
before the due date (at least two working days are required). They will be marked by
your tutor and returned to you as soon as possible.

17
Do not hesitate to contact your tutor by telephone, e-mail, or discussion board if you
need help. The following might be circumstances in which you would find help
necessary. Contact your tutor if.

• You do not understand any part of the study units or the assigned readings

• You have difficulty with the self-assessment exercises

• You have a question or problem with an assignment, with your tutor's comments on
an assignment or with the grading of an assignment.

You should try your best to attend the tutorials. This is the only chance to have face to
face contact with your tutor and to ask questions which are answered instantly. You
can raise any problem encountered in the course of your study. To gain the maximum
benefit from course tutorials, prepare a question list before attending them. You will
learn a lot from participating in discussions actively.

Summary

The course, Introduction to Development Studies II (DES 112), exposes you to

development planning and the reasons why planning is essential for economic growth
and development. Development planning might be more important to underdeveloped
or developing countries because of the need to step-up growth. The modules also
teach you various non-governmental institutions/organizations involved in planning
process, both directly and indirectly. Although, there is no country without a
development plan, however, planning varied across countries and it is mainly
influenced by cultural, political and economic systems. Apart from planning
commission and government agencies, planning process also involves Non-
Governmental Organizations (NGOs) assisting in one way or another to complement
government efforts. These NGOs together with regional and international
organizations have assisted in adding more values to development planning in many
developing countries. Nigeria is one of the developing countries which have benefited
from assistance offered by the international organizations. Nevertheless, the
conditions for obtaining assistance remain unfavourable to the underdeveloped or
developing countries. This means that for the feasibility of success of development

18
planning, planners in developing countries may have to look inwards and annex
domestic resources to realize development planning objectives.

19
MODULE ONE: MEANING OF DEVELOPMENT PLANNING

UNIT 1 Definition of Development Planning

UNIT 2 Rationale for Planning
UNIT 3 Types of Planning
UNIT 4 Ranges of Planning

UNIT 1 DEFINITION AND MEANING OF DEVELOPMENT

PLANNING

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Reasons for variety in planning
3.2 Planning Evidence in Selected Countries
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings

1.0 INTRODUCTION

Just as every human being plans for the future, every country also has plan. Planning
is the proper and organized intelligence and attempt to select the best alternative to
achieve given specific objectives and goals. On the basis of this, Development
Planning can be defined as systematic economic planning made by the central
government of a country as a means of accelerating the rate of growth of the economy
and improving the standard of living and general social welfare of the people. In other
words, national development plans seek to increase the common good of society
which should be the ultimate aim of every person and every sector of an economy
(Cevat and Dallen, 2001). ―Planning is a technique, a means to an end being the
realization of certain pre-determined and well-defined aims and objectives laid down
by a central planning authority‖ (Jhingan, 2016)

20
2.0 OBJECTIVES

At the end of this unit, you should be able to:

 Explain the meaning of development planning
 Evaluate reasons for planning differentials among countries of the world
 Discuss planning evidence in selected countries

3.0 MAIN CONTENT

3.1 Reasons for Variety in Planning Definition

Although planning may look similar in some ways, nevertheless, different countries
have some institutional, social, political and economic underpinning with respect to
planning. For instance, there are three major ways we can classify an economic
system in the world: capitalist, socialist and mixed economy. In a capitalist economy
like the United States of America, the means of production and resources distribution
is mainly under the private sector while in a socialist economy like the North Korea
government has the ownership of resources and means of production. However, in a
mixed economy like Nigeria and United Kingdom, ownership and means of
production are owned by both the private and public sector.

Whichever economic system in place, planning to develop a country requires

concerted efforts from the highest cadre of authorities to the lowest. Although, the
decision made by any level of government or public administration should be in
accordance to plans, but development planning may not be strictly or rigidly adhere
to. This is because sometimes certain unforeseen activities or disturbances, like fall in
government revenue and natural disaster, may occur during the planning period which
may prevent planning outcomes from being totally achieved.

The level of development of a country is another reason why there could be diversity
in planning definition. Some countries are under-developed while some are
developing. Also, there are several countries which are already developed. For
instance, most countries in the Northern hemisphere are developed, while those in the
Sub-Saharan Africa (SSA) are underdeveloped. Therefore, planning models in each of
21
these countries are bound to be different. For the less-developed countries, focus may
be developing natural resources and food production, while in the developed
countries, emphasis may be on investment, internal security and international trade.

3.2 Planning Evidence in Selected Countries

Planning may differ from countries to countries based on their desires and aspirations.
In France, planning is done to disseminate information, identify the problem and
bottleneck within the economy and formulate target for the whole economy in order to
provide guide line for the private economy to make plausible decision. In England and
Wales, development plan may originate from local counties, park authorities, firms
etc. In this case, the higher authority would need to work hand-in-hand with the locals
to formulate national development plan.

Development planning process in India is a provincial and state subject. There are
various town planning authorities under each province/state that assess the growth of
areas. They identify suitable areas for housing, industry, public infrastructure and
allocate finances for these projects. Each of the metropolitan cities has an agency
which is responsible for development planning exercise of the cities. For instance,
there is a Mumbai Metropolitan Region Development Authority commonly
(MMRDA) in Mumbai; Delhi Development Authority (DDA) for Delhi; and
Bengaluru Development Authority (BDA) Bengaluru.

The Middle East countries are not left out in development planning, most of them
have started national development plans centred mostly on diversification of their
economies. There are a number of determined plans in these countries such as visions
on how to enhance socio-economic development in a particular time in future; for
instance, we have the Saudi Vision 2030, Qatar National Vision 2030, UAE vision
2021 and Kuwait Vision 2035.

Nigeria has always been in the train of development planning since independence. Not
only that, there has always been planning before independence in 1960. However,
whether before or after independence, development plan in Nigeria has always been

22
implicitly influenced by the colonial master‘s hegemony and explicitly with ultimate
goal of the zeal to be the greatest African nation, ―the giant of Africa‖. Some of the
noticeable development plan in Nigeria include the national development plans -
1962-1986, perspective plans, rolling plans, vision 2010, vision 2020, 7-Point Agenda
and so on. These would be discussed in Module Two.

Self-Assessment Exercise

List three economic systems which may influence pattern of development planning

4.0 CONCLUSION

This unit has given the meaning and definition of development planning. It is a
deliberate economic planning made by the central government of a country to step-up
the pace of economic growth and development. When the goals and objectives of the
planning are achieved, they are expected to have improved the living standard of the
people. Nigeria is one of the developing countries in SSA just as other developing
countries all over the world. Nigeria has always been planning and will continue to
plan to develop and improve the welfare of the citizen.

5.0 SUMMARY

In this unit, we have discussed extensively development planning. We have explained

topics such as the definition of development planning, reasons for diversity in
planning definitions and evidence of planning initiatives in selected countries. Various
countries make development plan according to economic system, culture, social and
religious background. Moreover, development plan is made in conjunction with
various tiers or levels of government and stake holders in the country. The economic
system in operation also matters in national planning.

6.0 TUTOR-MARKED ASSIGNMENT

Define development planning.

State four reasons why development plan may have variety.
3. List three development plans in Nigeria.

23
4. List two development authorities in India and two development plan efforts in
the Middle East.

7.0 REFERENCES/FURTHER READINGS

Ademola Adebayo, A. (2017). Macroeconomics, A simplified Approach. 2nd Edition.

Cevat, C. and Dallen, J.T. (2001). Shortcomings in Planning Approaches to Tourism

Development in Developing countries: the case of Turkey. International
Journal of Contemporary Hospitality Management, 13 (7). MCB University
Press.

Jhingan, M.L. (2016). Economics of Development Planning, 41st Edition. Page 533-
539.Vrinda Pub. Ltd.

Todaro, M.P. and Smith, S.C (2015): Economic Development 12th ed. Addison-
Wesley, Pearson Education Limited, England

UNIT 2 RATIONALE FOR PLANNING

CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 The need for planning in developing and underdeveloped countries.
3.2 Prerequisite for a successful development planning.
3.3 Problems of Development Planning.
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings

1.0 INTRODUCTION

In this unit, we shall be discussing rationale for development planning. Every country
aspires to attain a level whereby the citizens‘ aspirations in life are fully achieved.
Without a plan, either at local or national level, attaining these aspirations may be
difficult. Therefore, this calls for development planning. It is essential to plan over a
period of time in order to attain desirable level of development.

24
2.0 OBJECTIVES

At the end of this unit, you should be able to:

 State rationale for development planning.
 Discuss why market failure is a key factor necessitating development planning.
 explain prerequisite for a successful development planning.
 Itemize common problems of development planning.

3.0 MAIN CONTENT

This main content contains the reason why government plan and the prerequisite for
planning.

3.1 Rationale or Reasons for Development Planning

The following points are various reasons for formulating development planning in a
country.
1. Market failure: This is a fundamental problem in economics. The market
system assumes perfect adjustment mechanism of the market where by supply
can always create its own demand. The assumption in the classical views also
include perfect distribution of resources, perfect information, equitable
distribution of income, full level of employment and market equilibrium at all
time. However, in real life situation, these assumptions do not always hold,
therefore the market fails and needs to be corrected. The institution often ready
to correct the failure is the government which in turn must plan appropriately to
achieve results. Some of the government efforts to correct market failure in
planning are explained below:
 Government may deregulate the economy to allow the market to work
more efficiently, but if the market still remains inefficient, then
government fully intervenes through direct control. However,
neoclassical market fundamentalists believe government would again
distort the economy especially by borrowing from the private sector
(crowding out effect), creating public goods and strict or direct control.

25
  Poverty alleviation programme (PAP) is also part of planning whereby
government strategize to channel resources to the less privileged to
improve their living standard. Market assumes ―no free lunch‖
 Externalities like environmental pollution, and particularly, public goods
meant failure to the market system. Public goods might be government
created goods such as roads and street light. Market price is not usually
charged on public goods. They have special characteristics of non-
depletability and non-excludability. However, shadow price becomes an
issue that should be addressed over public goods because in the long run
this may cause the market to fail. Privatization or commercialization of
public enterprises is another way of correcting market failure. In
addition, environmental pollution, which might reduce people‘s welfare,
can be corrected or reduced through taxation or strictly regulate
production activities.

2. Resource mobilization: Development plan puts pressure on the public sector

the need for resource mobilization both internally and externally to finance the
plan. Savings, public enterprises profits, borrowings, taxation deficit financing
and reserves are the principle internal sources of finance for the public sector.
Foreign aids, long term developmental fund from foreign countries, in addition,
form the external source of financing the plan. Often, to receive foreign
assistance there must be planning policy paper, where the terms, objectives and
duration of the plan are clearly documented.
This gives the creditors assurance of proper and efficient use of the fund and
assurance to repay loan received.
3. Economic growth and Development: Economic growth is increase in national
output over a period of time. Development is growth plus increase in welfare of
an average citizen. Growth is prerequisite to development. Development also
means substantial reduction in poverty, unemployment and inequality.
Therefore, it is necessary to have a well-documented development plan to
attain economic development and improved welfare of the citizen. .

26
 4. Attitudinal and psychological factor: A country can project to be great in
future. With a development plan, this will be itemized in a comprehensive
development plan induces mobilization by government and stakeholders to
embark on social campaign and sensitization towards realization of the set
goals. This then calls for change in mind set, perception, sensitivity, vision, life
style and consequent elimination of social factors that does not cooperate with
set planning goals.
5. Foreign aids: Foreign aids such as official development assistance (ODL),
grants and debt cancellation can assist a nation to finance her developmental
objectives. A well-documented development plan enhances these foreign aids.
6. Unforeseen disturbances: There are certain occurrences that are very
unpredictable. For instance, there may be disease outbreak or drought, planning
cautions the negative effects these might generate in future. With respect to
these, good development plan can include in its policy thrusts setting aside
certain funds as contingencies and creating public awareness on disaster
outbreak. The fund could also include creating adequate social security such as
health and auto-insurance, silos or food security etc.

3.2 Prerequisite for a Successful Development Planning

For development planning to be successful there are essential points that must be
noted. The vital prerequisite for planning are highlighted below:

 Planning commission: In any development plan, planning commission is

important. It should be organized in a way consistent with development
objectives. It should have many functional components each pursuing common
goals. Several divisions and sub-divisions must be made as well as different
departments headed by competent leaders. These departments must be made up
of trained personnel and technocrats such as scientists, engineers, economists,
accountants and sociologists who are working in unity for a common end. It is
important to emphasize that a result oriented plan requires a ―round peg in a
round hole‖. This means that only those who have values to offer must be
involved or employed by the commission. It might be an inevitable plan to

27
 failure if planning commission members are employed based on religion,
culture or clan.

 Statistical Data: it must be reliable and available for use. This requires adequate
funding of the bureau of statistics to provide reliable data as at when due.
 Efficient and corrupt-free administration: Planning induces large use of scarce
resources which have alternative uses. Efficiency inculcates the best use of
scarce resources to finance developmental programmes. It is therefore
necessary to employ the most efficient group of personnel into the planning
commission. In addition, efficiency can easily erase corrupt administration.
However, corruption can destroy efficiency. Inefficiency and corrupt
administration are twin evil that must not be allowed to abort development
planning.
 Balanced development strategy: According to Jhingan (2016), a plan should
aim at achieving balanced development of the economy to prevent shortages or
unnecessary surpluses as plan progresses. For instance, there should be balance
between investment and savings, import and export, revenue and expenditure,
supply and demand of goods, supply of primary or intermediate inputs and
aggregate demand.
 Clear Objectives and Policy Thrusts: The objectives and policy thrusts must be
realistic, mutually compatible, and flexible in keeping the means requirement
of the economy. The objective should not be conflicting. For instance, we
should not have a poverty alleviation programme and simultaneously fuel price
increase; Reduction in unemployment and retrenchment; increase in salary and
wages and increase in tax.

In spite of all these, it is important to note that planning is not an end in itself. When
we plan, it does not automatically lead to economic development. Planning is not
necessarily a guarantee for a better economic performance, this is because
comprehensive development planning has been made in many underdeveloped
countries but produced no development. According to Arthur Lewis (1949, 1954)
making development planning is the popular activities of developing countries and it
28
is also their biggest failure. Most development plans are set aside soon after they are
made. This is common with plans that are not meant for action but for pure political
propaganda and pure fantasy. Most plans are swept under the carpet by a new regime
or those who made them.

3.3 Problems of Development Planning

Development planning is usually associated with variety of problems, some of these

are explained below:
1. Dearth in reliable statistical data: In most underdeveloped countries,
unavailability of reliable data is prevalent Statistical data is a key foundation
for any development planning. Without data that are reliable, planning
commission would be handicapped in discharging their duties and be unable to
put appropriate planning mechanism in place.
2. Distorted macroeconomic policy framework: Sound macroeconomic policy
framework is required for a good plan. Macroeconomic indicators such as
inflation rate, exchange rate, and interest rate must be stable for the goals of
development plan to be attained.
3. Price Volatility: Let us consider the issue of the exogenous price factor.
Development is based on a constant external price like oil price which is
exogenous. Crude oil price is determined at the international level. If an
accurate prediction of this price is not made, it may serve as a doom for
planners. For instance, the Nigerian Third National Development Plan (1975-
1980) was based on constant high oil price in the 1970s. The gradual decline in
oil price from 1975-1980 resulted in failure of full implementation of the plan.
4. Future uncertainties: Development planning is designed with future optimism.
Planning commission expected that the vision of a plan would be reached.
However, future uncertainty such as natural disaster, war, bad weather, diseases
and price volatilities may halt the dream of a plan.

5. Assumption of fixed relation between factor input and output: Factors inputs
such as labour and capital are resources a company uses to generate output of

29
 goods and services. Often, planners assume these are in fixed proportion, but
sometimes, distorted planning implementation and unexpected economic or
social factors may prevent planners or planning commission from attaining the
desired relations. Increase return to scale is the most desirable outcome of
planning.
6. Lack of harmony between private and public sector plans: In most
underdeveloped or developing countries, there is always disjointed
communication between the private and public sector as well as difficulty to
agree on a particular pattern of planning. This slows down planning process
and prevents smooth implementation.
7. Non synchronization of development plan and annual budget: Although,
development plan and annual budget are, to some extent, two different mode of
planning, but one can complement another. If there is a separation between
them, each might be affected negatively thereby leading to planning failure.
8. Lack of proper project monitoring and evaluation: Projects are key instruments
to attain planning goals. If the projects are not properly monitored and
evaluated, they might prevent planning objectives from being realized.

Self-Assessment Exercise

1. Explain how market failure can make planning important?

2. What are the common problems associated with planning?

4.0 CONCLUSION

Though planning is not an end in itself, but it is vital in national development. Most
importantly, planning is a key factor in underdeveloped countries, first to attain
growth and second, to attain sustainable and desirable development. In a developing
country like Nigeria, Ghana and Rwanda, sound development planning commission
with the right people employed are required to create the much needed economic
growth and sustainable economic development. Planning is necessary, most
theoretical and empirical studies have proved that the market is bound to fail in its

30
allocative efficiency. Government is needed via its planning and policy actions to
correct the market failure.

5.0 SUMMARY

In this unit, we have discussed extensively rationale for development planning and
prerequisite for planning. We explained that one of the main reasons for development
planning is the market failure. Market fails for several reasons such as, inefficient self-
adjustment mechanism of the market ―invisible hand‖, presence of externalities/public
goods and imperfect information. It is important to establish development planning
commission, obtain reliable data and maintain balanced development strategy.
Planning objectives should not be conflicting. These objectives must be self-propelled,
sustainable, feasible, mutually compatible, and flexible in keeping the means of
sustainability frequent requirement of the economy.

6.0 TUTOR-MARKED ASSIGNMENT

1. State four reasons why planning is necessary.

2. List five prerequisites for development planning
3. Explain three reasons why a planning commission is important in a developing
country like Nigeria.

7.0 REFERENCES/FURTHER READINGS

Jhingan, M.L. (2016). Economics of Development Planning, 41st Edition. Page 533-
539.Vrinda Pub. Ltd.

Lewis, W. Arthur. 1954. ―Economic Development with Unlimited Supplies of

Labour.‖ Manchester School, Vol 22. No. 2, pp. 139-191.

Lewis, W. Arthur. 1949. The Principles of Planning: A Study Prepared for the Fabian
Society. London: Dennis Dobson / Allen & Unwin.

Todaro, M.P. and Smith, S.C (2015): Economic Development 12th ed. Addison-
Wesley, Pearson Education Limited, England.

31
UNIT 3 TYPES OF PLANNING

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Types of planning
3.2 Levels or Stages of planning
3.3 Ranges of planning
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings

1.0 INTRODUCTION

In this unit, discussion will be based on various types of planning, which include
national development plan, budget, and perspective planning. The main content will
also include levels or stages of planning and ranges of planning. Analyzing planning
this way broadens our knowledge and understanding about development planning and
help to determine the general rate of economic development the country seeks to
attain.

2.0 OBJECTIVES

At the end of this unit, you should be able to:

 State the types of planning.
 State the levels or stages of planning
 Explain the ranges of planning.

3.0 MAIN CONTENT

3.1 Types of planning

There is no world-accredited formality for planning types because planning may vary
proportionally to the economic development and economic system. Planning still has

32
some characteristics though. The strategy to use in this unit is to explain
comparatively, types of planning that are common.

1. Budget and Development Plan: A budget is a plan on how to spend expected

income over a certain period of time. Household or firms makes budget periodically
based on their expected income. In public finance or development economics budget
is rather complex.

A budget, is a financial plan on income and expenditure of a government of a country

expressed in monetary terms. Although budget could be done periodically, but
usually, it is made to last for one year and this is why it is called annual or yearly
budget. The Nigerian government made annual budget usually read by the president.
Government explains the expected revenue or income for the year and expenditures to
make. In a military regime, the budget may be made by the president and the supreme
military council alone. It is not the same thing in a democratic government where the
national assembly must examine and approve the budget.

Development planning are usually tagged national development plan. It is a long term
plan policy, independent of annual budget, for economic growth and development,
though necessary funding of the development plans and programmes must be
budgeted for in the annual budget. Development planning may cover a period of 5 to
20 years.

Development planning is usually adopted by the government to direct the country

towards resource mobilization and resource distribution in order to step-up economic
growth. It can also mean an agenda or policy of a new government towards fast
economic growth and development. Nigeria as well as other developing countries in
Africa had various national development plans. Some of the key objectives of a
typical development plan are:
 Increase the pace of economic growth and development
 Resources mobilization and redistribution
 Identification of priority sectors and setting targets to attain developmental
strategy for such sectors.

33
 Direction of people‘s orientation towards national goals
 Formulating policy thrust to attain set developmental goals

2. Perspective planning and annual planning: Perspective plan refers to long

term planning whereby long range targets are set to achieve a goal. It is a scheme of
development to be undertaken over a long time. For instance, government may set a
target to eliminate infant mortality within a period of 15 years and within this period
government may set short term plan or target like 3-4 year‘s goals to achieve a certain
number of infants that must be saved. There may be some unpredictable future events
which might limit the effects of long term plan, this induced division of perspective
plan into short term like 3 to 5 years plan. These short periods plan enable necessary
adjustment to policies in the plan. Government may also set poverty eradication goals
such as ―poverty eradication by year 2030‖; ―Attaining global heights in human
capital development by year 2025‖. In the past, Nigeria had ‗vision 2010‘ under the
General Abacha government, and ‗Vision 20:2020‘ after the expiration of ‗Vision
2010‘. The vision ‗20:2020‘ aims at Nigeria becoming one of 20 most developed
countries in the world by year 2020. The main purpose of a perspective plan is to
provide a background to short term plans so that problems that have to be solved over
a long period can be taken into account in planning over a short term.

On the other hand, annual planning may refer to the national budget or planning to
complement development goals in the perspective plan. It could also be a short term
planning for quick resource mobilization. It is necessary for planning to have these
because if a country does not have absorptive capacity of foreign capital inflow, it
may fall into debt crises and planning failure. In summary, annual planning and
medium term planning are usually sandwiched between a perspective plan to attain the
objectives.
3. Indicative and imperative planning: Indicative planning is a kind of flexible
planning adopted by a nation in an effort to solve the problem of imperfect
information in the capitalist and mixed economies in order to increase economic
performance. The government made plan to fix price and determine the appropriate
price of factors, and type of quantity of products to be produced. This type of planning

34
is common in mixed economy like France and in capitalist economy like the United
States. Indicative planning is in contrast to directive or imperative or mandatory
planning where a state sets compulsory output or price requirements. Indicative
planning is not Compulsory; it is just part of government efforts to regulate the
economy so that the private sector can cooperate in the success of planning targets.

Imperative planning requires heavy presence of the state in resource allocation, price
and output settings. The resources are used intensively in order to attain the goals of a
plan. There is no consumers‘ sovereignty, but they obtain commodities in fixed price
and quantity. What to produce and how to produce are set by the state and the
planning commission disseminates the information to the firms which must be strictly
followed. This type of planning is common in socialist or communist countries like
China and North Korea. Nevertheless, efficiency and competitiveness of firms remain
a debatable issue under this type of plan.

4. Authoritative planning and democratic planning: In authoritative planning,

there is central control of all planning apparatus. It is a totalitarian planning where
planning is grounded on the supreme leader‘s hegemony. There is central control and
direction of all economic activities in accordance with a single plan. The people must
obey the planning scheme and are not allowed to act contrary to it. The North Korea
might be a good example of authoritarian planning model in the 21st Century. Some
theorists like Francis (2015), Hayek (1938) and Lippman (1934) & 1925 have argued in
favour of totalitarian planning. They claim that planning is incompatible with
democracy, that ―what was promised as the road to freedom was actually a high road
to serfdom‖. Lippmann (1934) was in support of social liberalism whereby the state
dictates means of production. The strict adherent to planning model in this type is to
increase the pace of attaining the targets set within stipulated period and according to
schedule. Still, authoritarian planning is not strictly recommended for most
underdeveloped or developing countries because of the heavy price to pay and the
inherent welfare lost that the people may face. On the other hand, democratic
planning, where there can be inclusiveness and maximization of society welfare may
be better. A well designed democratic planning is more like to be Pareto optimal.

35
Democratic Planning; In democratic planning, nearly every member of the economy
is carried along. Democratic planning means planning within democracy that is,
planning with the people or with their representatives. The philosophy of the people‘s
representative is accepted as the ideological principle. This means that every step
taken towards achieving plan objectives is with the consent of the people. Perhaps,
what makes democratic planning interesting are that:
 the people are carried along in planning process.
 adequate compensations are agreed to be paid to those who might lose their
properties.
 it respects the institutions of private property.
 it accommodates private initiatives.
 in a federal constituency, both the state and local governments are involved in
planning, as well as the urban and rural areas.

Criticism against democratic planning is that critics are of the opinion that democracy
is not to be anywhere, meaning that democratic planning should not be in existence.
There are quite variety of controls in democracy in form of tariff, interest rate and
exchange rate pegging, import restrictions etc which alienate economic freedom.
Again, since democracy requires all to be informed in planning procedure, this may
bring delay in realization of planning objectives. It may be easier to attain goals set
when few are involved than when multitude are involved.

3.2 Levels or Stages of Planning

The various levels or stages of planning are listed below:

i. Macroeconomic or aggregate planning

ii. Multi-sectoral and sectoral planning
iii. Regional planning
iv. Project stage

These are discussed accordingly.

36
Macroeconomic planning or aggregate planning states the overall objectives or goals
in terms of national income, import, export, savings investment, capital formation etc,
and determination of overall resources or means to achieve these objectives. It is the
crucial step in planning and will affect the entire planning process if not well
designed. Expected rate of inflation rate is set; money growth, exchange rate and
output growth rate are projected in order to insulate the economy against possible
policy reversals.

Multi-sectoral planning: A broad economic sector in Nigeria comprises agriculture,

industry, wholesale & retail, building & construction and services (NBS and CBN,
2017). Each of the sector is divided into various sub-sectors. For instance, agriculture
is sub-divided into crop production, livestock, forestry and fishing. Industry is sub-
divided into crude petroleum & natural gas, solid minerals and manufacturing. Each of
these sectors and sub-sectors requires peculiar planning. It may be difficult to develop
all the sectors simultaneously, therefore, it is pertinent to develop the most important
ones such as the real sectors: agriculture and manufacturing. The two have linkage
effect in that they can generate income that can be re-invested in other sectors such as
the tertiary sector. They can also complement the macroeconomic or aggregate
planning bearing in mind the interdependency of planning variables. Note that
national goals place priority in planning subject to natural resource constraint,
contingencies and welfare.

 It is important to emphasize that some sectors must receive priority attention in

spite of the objectives. Priority must be given to sectors according to their
importance in planning process.
 Planning commission must take into account planed sectoral investment and
availability of resources.

Regional planning or social planning: There are various regions in an economy. The
objective then will be to achieve balance among them. This requires that a balance
should be among the various region in terms of establishing projects. For instance,
nomadic education should be established in the Northern states of Nigeria while

37
curbing excessive erosion and eradication of oil spillage and gas flaring should be in
the Eastern Nigeria and the Niger Delta respectively. The problem of unfettered
migration (rural-urban migration) should be addressed. Migration into large cities like
Aba, the Federal Capital Territory (FCT) Abuja, Ibadan, Kaduna, Kano, Lagos, Port-
Harcourt, and Onitsha are particularly common destinations of interstates migrants in
Nigeria. If we fail to achieve regional balance, long term development objectives may
be far from being achieved.

Project stage: This is concerned with project analysis. A target is set in planning and
consider the various institutions to be put together to achieve the objectives of the set
target. The important factor here is to carry out cost-benefit analysis that is weighing
the expected gains against the cost and considers alternative viable projects.

3.3 Ranges of planning

Ranges of planning means breaking down planning process into different time period.
This starts from:

 Annual planning: This include annual budget of a government indicating its

plan annual revenue and expenditure in monetary term.
 Medium term planning: this plan ranges from 2-5 years. Such plans are made to
correct deficiencies or shortcomings that may arise in a perspective planning.
 Long term or perspective planning: perspective planning are usually stipulated
for a long period of 10-15 years. Within this we have the medium term plan (2-
5 years) and the annual budget (1 year) to amend anomalies or unexpected
outcomes that may occur in the long run.

Self-Assessment Exercise

Distinguish between democratic and authoritative planning.

4.0 CONCLUSION

38
This unit has given us the types of planning, levels or stages of planning and ranges of
planning. Planning could be authoritative or democratic. We can also have multi-
sectoral or regional planning. Although, some authors of the Austrian School tilt
towards opposition to democracy and capitalism and implicitly oppose to planning in
a democratic ideology, but the most important fact about planning is that development
planning is essential for underdeveloped countries to increase economic growth and
improve the lots of the society at large. Moreover, part of the efforts that serve as
complementary factor to development planning are projects which require monitoring
and evaluation.

5.0 SUMMARY

In this unit, we have discussed extensively levels of planning, planning in stages and
ranges of planning. We explained that macroeconomic planning or aggregate
planning is planning the economic aggregates such as national income , saving,
and investment among others. Multi-sectoral planning is also essential in planning.
Since sectors cannot grow at the same pace, it is necessary to identify key sectors and
sub-sectors. In Nigeria key sectors include agriculture sector and manufacturing sub-
sector. Regional planning also plays an important role in the process. Democratic
planning is inclusive and is recommended for a democratic civilian regime like
Nigeria.

6.0 TUTOR-MARKED ASSIGNMENT

1. State 4 types of planning.

2. Why is planning in stages necessary?
3. List four stages of planning
4. Briefly explain the ranges of planning

7.0 REFERENCES/FURTHER READINGS

Ajibola Kumuyi, V. Adeyeye & Babatunde Adeoye (2008): ―Understanding Medium

– Term Planning for Economic Growth & Development in Nigeria‖ NISER,
Ibadan.

39
Hayek, F. A. (1939. Freedom and the Economic System. , Public Policy Pamphlet No.
29; reprinted in Socialism and War, ed. Caldwell, 198. 24
Hayek, F. A. (1938). Freedom and the Economic System. Contemporary Review
153(1938): 434–42
Jhingan, M.L. (2013) The Economics of Development and Planning: 40th Edition,
Virinda publications, New Delhi, India.
Lippmann W. (1925). The Phantom Public (New York: Macmillan, 1925). 9.
Lippmann, W. (1934). The Method of Freedom (New York: Macmillan, 1934), 38–
45,
quote at 41.
Obadan, M. (2003): National Development Planning and Budgeting in Nigeria: Some
pertinent issues. Broad Way Press Limited, Lagos.

40
UNIT 4 Multi-Sectoral Development Planning and Some Relevant
Theoretical Facts
CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Multi-sectoral planning
3.2 The Harrod-Domar theory
3.3 Tinbergen theoretical view
3.4 The Input/Output analysis
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings

1.0 Introduction

This unit is the last aspect of the study on development planning. Attempt is made to
give further explanation on multi-sectoral planning and to highlight some theoretical
underpinning. Here, we discuss the simple Harrod-Domar theoretical view, the
Tinbergen theory on policy variables and the input output analysis.

2.0 Objectives
At the end of this unit, you should be able to:
 Identify the need for multi-sectoral planning.
 List the importance of savings and investment in development planning.
 Explain the Harrod-Domar theory.
 Discuss Tinbergen theoretical view.
 Discuss the input/output analysis.

41
3.0 MAIN CONTENT

3.1 Multi-sectoral planning strategy

There are various approaches to multi-sectoral planning. Sectors are split into sub-
sectors and appropriate methods of maximizing output are devised. It can be the linear
programming technique or the input/output analysis where the national income is to be
maximized subject to the restrictions of available resources. It can also be
mobilization of savings and investment and make a tentative goal for national income,
and translate it into targets for each category of final commodity, and to minimize
capital required (savings) to achieve these targets. The targets can be lowered or
raised, depending upon the available supplies of investment funds. A particular
amount of investment must be tentatively chosen as a function for maximization of
development planning outcomes because neither the supplies of domestic savings nor
the foreign exchange is fixed in amount. Both depend upon government policy and the
results which will be achieved. The best way then would be to find the capital
requirements for several different sets of sector‘s targets as a guide for the political
decisions before a program is adopted.

3.2 The Harrod-Domar Model

The Harrod-Domar model has implication for less-developed economies. It was

developed to address issues in business cycle and later used to explain development
economics. Harrod and Domar opine that economic growth depends on capital and
labour. Although there is surplus labour in underdeveloped economy, but there is
inadequate capital. Capital accumulation (capital stock) is essential to economic
growth and more investment which create more capital is essential as well. He
therefore advocated more savings and investment to create the much needed capital
accumulation.

The implication of this model for planning is that no nation can develop or achieve
developmental planning without capital accumulation. Capital comes through savings
and investment. According to Lim (1983), in the Harrod-Domar type of a more

42
econometric nature, if capital is assumed to be the crucial constraint to growth, macro-
economic aggregates such as consumption, savings, investment, exports and imports
can be used to estimate the savings required to achieve a certain target growth-rate for
a given marginal productivity of capital. This means that macro econometric models
consist of a number of equations with the same number of unknown variables, with
the equations representing the basic underlying structural relationships of the
economy.

We might begin to understand Harrod-Domar model from a one sector model

analyzed below:

( ) (1)

Given that Y = Level of output in the current year.

= Level of capital stock. is a stock and it is a given value of all plant and
equipment in the country regardless of the year they were produced.

Equation (1) states that output is a function of capital stock,

(2)

While equation (2) states that the rate of change in capital with respect to output is
constant ―c‖, that is it is assumed the marginal product of capital is constant, hence,
constant returns to scale in production function. This implies that capital's marginal
and average products are equal; but, f (0) = 0, that is we obtain nothing if we invest or
save nothing, meaning that capital is necessary for output, therefore,

SY =S=I (3)

In equation (3), investment is required for capital, investment is a function of savings

and savings comes from portion of output, and output is a function of capital as stated
in equation (1). This mean that the product of the savings rate and output equals saving,
which equals investment.

43
The product of the savings rate and output equals savings, which equals investment.

Δ = I – ( ). (4)

Equation (4) shows that the change in capital stock equals investment minus depreciation of
the capital stock.

Summary of Harrod-Domar model is shown in equation (1-4). It explains the

interdependence of capital-output ratio in development and planning. A good planner
should understand the importance of savings and capital accumulation as prerequisite
for a successful planning.

3.3. Theoretical View of Jan Tinbergen

Professor Jan Tinbergen was a Dutch economists and a Nobel Prize winner. His
theory on economic planning is being widely applied in many economic decisions
today. In his work on macroeconomic modelling and economic policy, he identified
some economic quantities as targets and some as instruments. Targets are the
variables the policy makers intend to influence, on the other hands, instruments are
those variables the policy makers can control directly. He emphasized that if policy
makers must achieve a desirable values of a number of targets, they must be able to
control similar number of instruments. This means that the number of instruments
policymakers (or economic planners) are able to control, the number of developmental
targets they will likely achieve. The process can be explained briefly as follow:

 In development planning, we give the whole economy a direction.

 It should be noted that the direction is not static but dynamic, that is subject to
change.
 Planners or planning commission will then set target to achieve national
objectives which may include

i. Education for all by year 2030.

ii. Poverty alleviation programme (PAP) or reducing poverty rate to 5% by
year 2025.

44
 iii. House for all adults by year 2025
iv. Provision of 5 million jobs on yearly basis
v. Reducing inflation to single digit

 The instruments to achieve these targets will then be set. Let us use education
for all by year 2030 and PAP as examples. Important instruments may
comprise:
For education:
 Employment of various number of teachers annually or biannually.
 Building a number of well-equipped classrooms at local and state
governments.
 Embark on campaign: ―all citizens must attain primary and secondary
school education‖.
 Declaring free education in relatively poor rural areas.
For PAP:
 Creation of cottage industries in both rural and urban centres.
 Development of foundries or steel producing centers for production of
capital goods that aid the production of intermediate and consumer goods.
 Creation of mega infrastructural projects like mega-dam, for hydro-
electricity generation, and mega-railway lines that cover longer distances and
cut across the geopolitical zones; adequate and reliable energy like gas,
petroleum and natural gas; annex the country‘s coal resources which can be
used to generate electricity.
 Construction of long-lasting, multi-lanes and wider roads network.

It is important to note that targeting poverty alleviation in this manner brings long
lasting solution to the problem of unemployment and better than the temporary
instruments like giving out traditional hand tool like cutlass, hoe, wheelbarrow, or
motor cycle, to unemployed youth. For instance, when there is adequate and constant
electricity supply, the citizens are encouraged to start a productive project that can
yield good value outcomes. This also increases employment via entrepreneurship.

45
Tinbergen said further that there are controlled variables like taxation and money
growth which are instruments that are subject to government manipulation in
achieving a target or objective. In short, government use policy instruments to control
targets. Sir Arthur Lewis added more value to Tinbergen model, he observed that
government is interested in the policy instruments in order to manipulate them. This
becomes an important argument in welfare function. In other words, it must be
emphasized that Tinbergen holds the view that the more policy instrument
government has, the more the degree of freedom to achieve its targets.

3.4 The Input/Output Analysis

The Input-Output model is credited to the French economists Wassily Leontief (1906-
1999) who also received Nobel Prize in Economics for the development of the model.
Leontief (1955) explained the interdependence between different sectors of a national
and regional economies. The beauty of the model is that it is used to analyze the inter-
industrial relationship which will help in understanding the interdependency and
capacity of the economy and thus, the condition for maintaining equilibrium between
demand and supply.

The input-output model furnishes us with a way of representing the structure of the
economy by setting out the flows of goods and services in value terms from one sector
of production to another. These representations are known as trans-sector matrix or
inter-industrial account system.

In addition, the general linear programming developed by George B. Dantzig in 1963

to address the problem of supplies to the United States armed forces, is an
input/output tool that can be employed to attain development planning objectives. It is
a mathematical optimization technique for optimal decision making. It can be used to
achieve benefits or welfare maximization or cost minimization objectives. Some linear
programming assumptions are:

i. There are different sectors (multi-sector) each with unique maximization

objective.

46
 ii. There are interdependence among the sectors.
iii. Decision making body in each sector is faced with certain constraint.
iv. Limited number of alternative production processes.
v. It assumes linear relations among the different variables.
vi. The input/output prices and coefficients are given or constant.
vii. Institutional factors are assumed to be constant.
viii. There is the continuity of indivisibility in the product and factors.

The definite objective of a development planning might be maximization of

employment level or national income, achieving this may entail minimization of factor
cost or optimizing input efficiency. There are many sectors in the economy and certain
national objectives. Each sector has objective to achieve as an integral part of national
objectives. For instance, each sector may be pursuing specific output or each may
need to contribute to foreign exchange earnings or employment. The objective also
could be maximization of social welfare in which all the sectors are expected to
contribute in terms of poverty reduction, housing and job creation. It is also necessary
to identify key sectors. In the history of Nigerian development planning, the key
sectors have always been agriculture and manufacturing.

Self-Assessment Question

Why is multi-sectoral planning crucial to development planning objectives?

4.0 Conclusion

In this unit, more light has been shed on sectoral planning and the need to develop the
important sectors that can contribute more to planning outcomes. This has become
crucial because in any underdeveloped countries, the main objective of development
planning is to bring about a sizable increase in national income in order to increase the
standard of living. Some theoretical facts are also discussed, they explain fundamental
knowledge of the need for resource mobilization and important variables in
developmental index.

47
5.0 SUMMARY

In this unit, issues in multi-sectoral planning have been discussed extensively. The
unit has been able to equip you with theoretical facts on Harrod-Domar model,
Tinbergen ideology and the importance of input/output model in development
planning. We analyze that for a good planning, various sectors must be acknowledged
and important sectors earmarked. Resources can be channeled to each sector based on
their importance to the economy. There should be targets and adequate instruments
available to achieve them. It was pointed out that investment is an essential factor in
capital formation and that savings out of national income can generate the much
needed investment. However, there are certain exogenous factors that might be
functions of development objectives such as international loans, diversification,
production efficiency, innovation and human capital development.

6.0 Tutor-Marked Assignment

1. State four typical development planning targets or development objectives.

2. Why is saving an essential factor in Development planning?
3. State important instruments that might be use to achieve education for all by
year 2025.
4. What do you understand by multi-sectoral planning?

7.0 REFERENCES/FURTHER READINGS

Bent, H.B. (1969). Jan Tinbergen: An Appraisal of His Contributions to Economics,

The Swedish Journal of Economics, 71(4) (Dec., 1969), pp. 325-336. Pub:
Wiley for the Scandinavian Journal of Economics

Bhende, V.P. (1964). Development Planning in Underdeveloped Countries.

Management Science, 10(4). 796-809. Pub. INFORMS.

Dantzig, G. (1963). Linear programming and its extensions. Princeton University

Press and Rand Corporation.

Fashola, M.A. (2012). A hand book of Development Planning in Nigeria. Department

of Economics, University of Economics.

48
Lim, D. (1983). Malaysian Development Planning. Pacific Affairs, Vol. 55,(4). 613-
639. Pub.,Pacific Affairs, University of British Columbia

Nnanna, O. J., Alade, S.O., & Odoko, F. O. (2003). Contemporary economic policy
issues in Nigeria. Central Bank of Nigeria. CBN publication, 131-184.

Tinbergen, J. (1955). On the Theory of Economic Policy, North-Holland, Amsterdam,

(2nd edn.).

49
MODULE TWO: DEVELOPMENT PLANNING IN NIGERIA

UNIT 1: Historical Description of Development Planning in Nigeria: Pre-

independence to SAP era (Till 1998)

UNIT 2: Highlight of Planning Experience since 1999 until Date

UNIT 3: Reason for Plan Failure in Nigeria and Prerequisite for Successful
Planning

UNIT 4: Planning Experience of selected Developed Countries (USA,

France, Britain, China, Singapore and India)

UNIT 1: HISTORICAL DESCRIPTION OF DEVELOPMENT

PLANNING IN NIGERIA: PRE-INDEPENDENCE TILL DATE
CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Elements of a good development plan
3.2 Development Plan during the Colonial Era, Pre-National Development
Era (1946 – 1956)
3.3 Post-Independence Nigerian Development Plans.
3.4 Pre-independence to SAP era (Till 1998)
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings

1.0 INTRODUCTION

This unit is based on Nigeria development planning since independence.

Nigeria has had series of development plans since independence. To some extent,
there were development plans in the pre-independence era which was primarily to
meet the needs of the colonial masters. Development then was centered on extraction
and production of raw materials as inputs for the factories of the colonial masters
abroad. Plans did not include political and economic empowerment of Nigerians.

50
Nevertheless, this unit examines the history and trend in development planning in
Nigeria from 1946-1998. More emphasis is on the 1946 ten-year plan of Development
and Welfare, First National Development Plan (1962-68); Second National Plan
(1970-74); Third National Development Plan (1975-80); Fourth National
Development Plan (1981-85) and The Rolling Plan Era (1990-1998). Efforts were also
made to establish the circumstances that led to the failure of each of the plans.

2.0 OBJECTIVES

At the end of this unit, you should be able to:

 Explain the objectives of a good development plan
 highlight the objectives of each of the development plans carried out in
Nigeria
before independence till-1998.
 Discuss the colonial and Pre-colonial Era Nigerian Development Plans,
 Discuss Post-Independence Nigerian Development Planning.

3.0 MAIN CONTENT

3.1 Elements of a Good Development Plan

Some elements of a good development plan can be explained concisely as follow:

i. The plan must be based upon the existing potential resources of the country.
This involved making a careful investigation of present and future available
manpower and domestic resources
ii. The plan must set up feasible targets or goals that are achievable within the
planned period.
iii. The plan must set up feasible policy to enhance the achievement of proposed
targets.
iv. Economic planning should accelerate development of a country by adopting
measures which examine obstacle to development.

51
 v. Economic policy should devise strategies for efficient utilization of available
resources for a rapid economic development.

3.1.1. Objectives of Nigeria National Development Plan.

The objectives of a typical Nigerian National development plan (Ikeanyibe, 2009 &
Fashola, 2012) are listed below:

 To increase the real income of the citizen and consequently their welfare
 Reduction in the level of unemployment
 To be self-reliance in food production
 To achieve even income distribution among individuals and socio-economic
groups.
 Attain manpower development and increase in its supply.
 To achieve sectoral balance and various geographical areas of the country
 To increase citizen participation in the ownership and management of
enterprises.
 To develop better and improved technology
 To reduce rural-urban migration
 To increase individual productivity in employment
 Promotion of national character
 To promote national orientation towards greater discipline, better attitude to
work and concern for a cleaning environment.

3.2 Development Plan during the Colonial Era, Pre-National

Development

Era (1946 – 1956)

The Nigeria‘s development planning experience is dated back to the colonial era
starting from 1945 with a ten-year (1946 – 1956) development plan (Akindele,
Afolabi, Pitan, & Gidado, 2016). The Ten-year plan of Development and Welfare for
Nigeria was introduced by the colonial government (1945-1956) sequel to a circular
from the Secretary of State for Colonies to all British colonies, directing the setting up

52
of a Central Development Board (Iheanacho, 2014). The Ten Year Plan of
Development and Welfare for Nigeria could not be actually termed as plan in real
sense because it contained mainly a list of uncoordinated projects in various regions.
The objective of the plan, though not stated was to meet the perceived needs of the
colonial government rather than any conscious attempt to influence the overall
performance of the Nigerian economy then. The primary interest of the colonial
government was to produce agricultural products such as groundnuts, palm oil, and
cocoa that were required by the British factories. No attempt was made to articulate
and incorporate the needs and interest of Nigerian people into the objectives and
priorities of development plans (Onah 2010). The programme ―suffered from a
number of problems such as non-specialized colonial administrators approach to
development planning, the inadequacy of planning machinery and absence of clearly
defined national objectives.‖ Irrespective of the weaknesses of the plan, it served as a
launch pad to subsequent development plans in Nigeria (Iheanacho, 2014).

3.2.1 The Development Plans of 1955-1960

The development plan of 1945 was supposed to last for ten years (1945-1956), but
paved way for a new five-year (1955-1960) development plan due to certain political
reasons. One of such issues is the adjudication for self-government in the then three
regions because of a new constitution and the demand for transfer of some
responsibilities to representative of the colony. Like the initial plan (1945-1955), the
plan was purely expenditure-related as its aim was ―primarily to guide the allocation
of the development and welfare funds made available by the imperial power, Britain‖.
Major areas of attention were communication, transport and a few cash crops. Little
attention was paid to developing the productive base and defining a comprehensive
development objective for the country. The plan suffered a revision half way through
in 1951 and the introduction of a federal structure in 1954 reduced its efficacy. But it
continued to guide both the central and regional governments until the launching of
the First National Development Plan in 1962 (Ikeanyibe, 2009).

53
Self-Assessment Exercise:

Explain briefly the Nigeria‘s Pre-Independence Development plan as stated by the

colonial administration.

3.2.2 The Second Phase: The Era of Fixed Term planning (1962-1985)

These period-witnessed four successful plans, which are;

a. The First National Development Plan (1962-1968);
b. The Second National Development Plan (1970-1974),
c. The Third National Development Plan (1975-1980) and;
d. The Fourth National Development Plan (1981-1985).

.a. The First National Development Plan (FNDP, 1962-1968).

Immediately after Nigeria attained independence in 1960, the first National

Development Plan (1962-1968) was launched. The objectives of the plan were:

 To bring about equal distributions of national income;

 To speed up the rate of economic growth;
 To generate savings for investments so as to reduce its dependence on external
capital for the development of the nation;
 To get enough capital for the development of manpower;
 To increase the standard of living of the masses particularly in respect of food,
housing, health and clothing and;
 To develop the infrastructure of the nation (Onyenwigwe 2009).

The FNDP has a proposed total investment outlay of about N2,132 million. The public
sector was expected to invest about N1,352.3 million while the remaining investment
expenditure of N780 million was expected to be made by the private sector
(Ikeanyibe, 2009). Though, the plan appeared impressive, but due to political
upheaval in the country which resulted in 30-month civil war, the plan almost became
redundant.

54
The objectives and targets of the 1962-68 plan were too large, therefore out of tune
with financial, technical and managerial capabilities of the country. This made the
plan to lack clarity and precision in the formulation of objectives and targets. In spite
of the flaws of the plan, some key projects were carried out during that period. These
included the Port Harcourt Refinery, the Nigerian Security and Minting Plant, the
Sugar Mill, Niger Dam, the Niger Bridge, Onitsha, Kaingi Dam and the Jebba Paper
Mill (Iheanacho, 2014).

b. The Second National Development Plan (SNDP, 1970-1974).

At the end of 1970 that is after the civil war, the SNDP was enact by the federal
government. Initially, the plan was meant to cover the four-year period, 1970-1974,
but it was later extended to cover the fiscal year of 1974-1975. Special emphasis of
the plan is on post-war reconstruction, restoring productive capacity, overcoming
critical bottlenecks, and achieving self-reliance. The plan put forward five national
objectives: a United, strong and self-reliant nation; a just and egalitarian society; a
land of bright and full opportunities for all citizens; and a free and democratic society
(Onyenwigwe, 2009).

As noted by Ayo (1988), this is the first truly national and fully integrated plan, which
viewed the economy as an organic unit: the twelve states were fully integrated into
national development plan.

Furthermore, unlike the first plan, the second plan was formulated wholly by
Nigerians.‖ The total capital projected expenditure of about 4.9 billion was contained
in the plan. Out of this figure, the proposed public sector investment was 3.3 billion
while the private sector was expected to invest 1.6 billion (Obi, 2006). The highest
order of priorities in public sector projected expenditure were accorded to transport
and communication, manufacturing, housing and education (Onah, 2010).

This plan also laid much emphasis on indigenization policy. Similarly, the plan also
gave priorities to industry, agriculture, and the development of high level and
intermediate level manpower. Like the first plan, the SNDP was beset with quite a

55
number of problems, among which is that ―the high priority given to agriculture and
industry was not matched with action during the implementation of the plan‖.

As stated earlier, one of the basic tenets of the SNDP is indigenization policy, which
was carefully designed to encourage citizens to participate fully in the commercial,
industrial and financial activities of the Nigerian economy.

An interesting feature of the SNDP was the objective of creating ―a free and
democratic society‖ that was being challenged by the military government. This
objective was put in place without considering any discussion on political
development in the plan document and any means of returning to civilian rule.

Despite the inadequacies of the plan, it witnessed achievements in the areas of

industry and agriculture. The industrial sector recorded more improvements. Many
industries in the war-affected areas were rehabilitated, coupled with establishment of
two salt factories in Kaduna. Super phosphates project and two vehicle assembly
plants were also established. Other achievements included the establishment of
colleges of technology and trade centres by state governments and reconstruction of
about 3000 kilometres of roads (Egonmwan & Ibodje, 2001; Iheanacho, 2014).

c. The Third National Development Plan (TNDP, 1975-1980)

The Second National Development Plan was followed by the Third National
Development Plan (TNDP) of 1975 – 1980. The TNDP had a projected huge
investment of N30 billion, which was later, increased to N43.3 billion. This
represented ten times that of the Second Plan and about 15 times that of the First Plan
(Obi, 2006). According to Obi (2006), the goals of TNDP are:

 more even distribution of income;

 increase in per capita income;
 reduction in the level of unemployment;
 increase in the supply of higher level manpower;
 diversification of the economy;

56
  balanced development and indigenization of economic activities.

The approach of the plan was to utilize resources from oil to develop the productive
capacity of the economy and thereby permanently improve the standard of living of
the people. Therefore, the plan was premised on the need for the public sector to
provide facilities for the poorer sections of the population including electrification,
water supplies, health services, urban housing and education (Egonmwan & Ibodje,
2001).

So far, a critical assessment of the plan showed that it focused on giving priority to
projects and programmes that would directly impact positively on the rural dwellers,
but the meagre allocations to agriculture and social development schemes did not
indicate sincere intention of the government to achieve the objective. As stated by
Okigbo (1989) agriculture and social development scheme (education, housing,
health, welfare etc) that have direct bearing on the living conditions of the rural
population received only 5 per cent and 11.5 per cent respectively of the financial
allocations contained in the plan. It is appropriate to state here that the meagre
allocation to agriculture and social development schemes, which were priority areas,
indicated the ―lack of focus of the planners to careful sifting of the criteria for allotting
principles‖ (Onah, 2010).

Like other plans before it, the third plan did not really achieve its set targets.
Irrespective of the inadequacies of this plan, it witnessed achievements in some areas.
In the opinion of Okowa (1991), ―in terms of achievement, the manufacturing sector
recorded the fastest growth rate with an average of 18.1 per cent per annum. Some
other sectors that witnessed growth were building, construction, and government
services (Iheanacho, 2014).

d. The Fourth National Development Plan (FNDP, 1981-1985).

The FNDP was a civilian government plan, which emphasized among other things the
need for balanced development of the different sectors of the economy and of the
various geographical areas of the country. This development plan period was

57
threatened by fall in oil revenues and equally delays in agricultural modernization due
to decline in funds in-flow and an increase in the quest for imported foods. The
decline in exportation weakened the ability to import construction materials and
related capital goods thereby reducing growth in the construction, transportation,
communications, utilities and housing sectors (Olayiwola & Adeleye, 2005). Another
problem of this plan was rise in the cost of living that led to a reduction in the standard
of living of a common man. There was also phenomenal increase in unemployment
among school leavers in the country. The country‘s external reserves kept on
declining.

It was the first plan that contained guidelines making provision for local governments‘
involvement in planning and implementation although such involvement never
worked due to lack of experienced staff.

The plan laid emphases on the need for rural infrastructural development as a means
of increasing the standard of living in the rural sector. Hence, the following
allocations were made:

* About N924 million naira to the eleven River Basin Development Authorities
towards construction of boreholes, dams, feeder roads and jetties.

* Federal and State Government‘s allocation of N645 million and N700.4 million
respectively for electrification purposes.

* For rural water supply schemes, N2,805 million was allocated while the local
governments in some states (e.g. Anambra, Plateau, Cross River, Bendel and Borno
States) allocated a total of N311,824 million for water projects (Olayiwola & Adeleye,
2005).

Many local governments and various states governments stated numerous policy
issues that could enhance the standard of living of the rural dwellers. The overthrow
of Nigeria‘s second civilian administration, the Second Republic headed by President

58
Shehu Shagari, at the end of 1983 and of the military government of General
Muhammadu Buhari in 1985 brought to an end the fourth development plan.

Still on the FNDA, it is stated that ―the plan period 1981-85 proved to be the most
dismal in the economic history of Nigeria at that time‖ (Alapiki, 2009). In spite of its
drawbacks, the plan recorded some achievements in some areas. This include; the
implementation of Agricultural Development Programme (ADP) in most states was
successfully completed, the commissioning of Egbim Power Station, Dry Dock
Project at snake Island, Lagos and the 87 telephone exchanges located all over the
federation which increased the number subscribers to telephone lines from 188,000 in
1981 to 297,000 in 1985 (Egonmwan & Ibodje, 2001). Furthermore, there was a
replacement cost of physical assets damaged and destroyed in the civil war within the
southeast region that was estimated above N600 million (then about US 900 million).

e. The Fifth National Development Plan (1986-1989)

Following the poor implementation of the Fourth National Development Plan, a

machinery was put in place for preparation of the Fifth National Development Plan.
The objectives of the Fifth National Development Plan were:

I. diversification of the nation‘s economy away from the monocultural one to

which it has been pushed by the fortunes of the oil sector;
II. revitalization of the agricultural sector with a view to achieving thorough
integrated rural development programmes;
III. domestic production of raw materials for local industries in order to reduce the
importation of locally manufactured goods and
IV. promotion of employment opportunities in order to arrest the deteriorating
mass unemployment.

The primary focus of the plan was to correct the structural defects in the economy and
create a more self-reliant economy that would largely be regulated by market forces.
The economy was therefore expected to be restructured in favour of the production
sector especially those of agriculture and manufacturing. The Fifth National

59
Development Plan did not materialize. It was later incorporated in the Structural
Adjustment Programme (SAP). The two-year SAP brought to an end the five year
planning model in Nigeria. The Federal government changed the two-year model to
three year rolling plans (Iheanacho, 2014).

Self-Assessment Exercise:

Explain in detail the idea on which the objectives of the third and fourth National
Development Plans as proposed by the government was anchored, putting into
consideration their successes and failures.

3.2.3 The Third Phase: Era of Rolling Plan and Visions (1990-1998)

The Babangida government had abandoned the previous fixed five-year development
plans and replaced it with two types of national plans viz: perspective plan which will
cover a period of 15-20 years that will provide opportunity for a realistic long-term
view of the problem of the country and the rolling plan which will cover three years‘
subject to review every year to ascertain whether economy is progressing or not.

The perspective plan which was to start from 1990 together with rolling plans did not
take off until 1996 when Abacha set-up the Vision 2010 Committee.

The main report of Vision 2010 submitted to Abacha government in September 1997
among other things recommended that the vision should provide the focus of all plans
including long (perspective), medium (rolling) and annual plans (budgets) (Adubi,
2002). Therefore, the Vision became the first perspective plan for the country even
though it failed to proceed beyond Abacha‘s death in 1998.

The three year rolling plan became operational from 1990 with the introduction of the
First National Rolling Plan (1990-1992). The primary objective of the rolling plan was
to afford the country the opportunity of revision in the ―midst of increasing socio-
political and economic uncertainties‖ (Ikeanyibe (2009).

60
But the preparation of medium term plans turned out to be a yearly event and became
almost indistinguishable from annual budgets. Rolling plans are being prepared
annually at all levels of government. At the end of about ten rolling plans from 1990
to 1999, Nigerians are not better off than they were during the years of fixed medium
term planning (Okojie, 2002 cited in (Iheanacho, 2014).

3.2.4 THE VISION 2010 Era

This vision was initiated during the Sani Abacha regime in Nigeria. The vision 2010
Council, had a member of 248 officials headed by Ernest Shonekan, and was
inaugurated on November 27, 1996. The committee‘s mandate, set out in a 14-item
Terms of Reference, required it to develop a blueprint that will transform the country
and place it firmly on the route to becoming a developed nation by the year 2010
(Egbunike, 2010). On September 27, 1996, General Abacha asked the Visioners to;

I. constructively analyze why after more than 36 years of political independence,

our development as a nation in many spheres had been relatively unimpressive,
especially, in relation to our potentials;
II. envision or visualize where we would like to be at the time that Nigeria will be
a fifty years old as an independent nation, in 2010 and;
III. develop the blue print and action plans for translating the envisaged vision into
reality.

The main report of Vision 2010 submitted to the Abacha government in 1997,
recommended that ‗the Vision should focus on;

 programme that will systematically improve the quality of life of Nigerians in

fourteen years;
 large-scale deregulation of the Nigerian economy;
 release of political detainees and rigorous compliance with the transition
programme and;
 proposed immediate, medium term, short term and long term developmental
strategies.

61
In spite of the best ideas and intentions encapsulated in the reform agenda, Aluko,
(2006) noted that the subsequent regime led by Chief Olusegun Obasanjo terminated
the plan because of sheer hatred for Abacha.

SELF Assessment Exercise:

Briefly describe the main features of Vision 2010.

4.0 CONCLUSION

With regards to the discussion on the concept of national development plans in

Nigeria i.e. from 1945-1998, it is noted that all the plans and visions give priority to
projects and programmes that would directly impact positively on agricultural
development, industrial growth and improvement in the wellbeing of rural dwellers.
However, it is worthwhile to note that there is a missing link in the areas of the
objectives and implementation as observed in each planning era.

5.0 SUMMARY

In this study unit, we have attempted to discuss the Nigeria development plan from the
colonial era to the era of Fixed Term planning (1962-89) and the era of Rolling Plan
(1990-1998). So far, it is appalling that despite all the impressive plans, it fails to
achieve the desired objectives as anticipated. It is believed that your understanding of
this unit has given you a basis to understand the next unit. You are advised to prepare
for the next unit as you read along.

6.0 Tutor-Marked Assignment

Discuss your understanding of the objectives of Nigeria‘s fourth development plan.

7.0 REFERENCES/FURTHER READINGS

Akindele, S. T., Afolabi, Y. A., Pitan, O. O. & Gidado, T. O. (2016). The

Management of Interruptions in National Development: A Critical Analysis of
Nigeria‘s Experience. American Journal of Economics, 6(6), 306-333.

62
Aluko, S. (2006). Abacha‘s vision 2010 Blueprint reviewed. Nairaland Forum.
Tuesday May 09, 2006.
Ayo, E. J. (1988). Development Planning in Nigeria. Ibadan: University Press.
Egonmwan, J. S. & Ibodje, S. (2001). Development Administration: Theory and
Practice. Benin City: Thesyin (Nig) Company.
Egbunike, N. (2010). What Happened to Abacha‘s Vision 2010? Samsung S4 on
Konga.com, Nigeria Village Square. Jan. 3. www.nigeriavillagesquare.com.
Ejumudo, K. B. O. (2013). The Problematic of Development Planning in Nigeria: A
Critical Discourse. Developing Country Studies, 3(4), 67-80. www.iiste.org
ISSN 2224-607X (Paper) ISSN 2225-0565 (Online).
Iheanacho, E. N. (2014). National Development Planning in Nigeria: An Endless
Search for Appropriate Development Strategy, International Journal of
Economic Development Research and Investment, 5(2), 49-60. ISSN: 2141-
6729
Ikeanyibe, O. M. (2009). Development Planning in Nigeria: Reflections on the
National Economic Empowerment and Development Strategy (NEEDS)
2003-2007. Journal of Social Science, 20(3), 197-210.
Obi, E. A. (2006). Development Administration. Onitsha: Bookpoint Ltd.
Olayiwola, L. M. & Adeleye, O. A. (2005). Rural Infrastructural Development in
Nigeria: Between 1960 and 1990. Problems and Challenges. Ile-Ife, Nigeria:
Journal of Social Sciences, 11(2): 91-96.
Onah, F.O. (2006). Managing Public Programmes and Projects. Nsukka: Great AP
Express Publishers.
Onah, F. O. (2010). Managing Public Programmes and Projects (2nd Edition).
Nsukka: Great AP Express Publishers.

63
UNIT 2: Analysis of Nigeria’s Planning Experience from the Democratic
Dispensation Era, 1999 - 2018

CONTENTS

1.0 Introduction
2.0 Objective
3.0 Main Content
3.1 NEEDS – Vision, Objectives and Strategies
3.2 Vision 2015 – Millennium Development Goals (MDGs) in Nigeria
3.3 Vision 20:2020
3.4 The Seven-Point Agenda of President Yar‘Adua in 2007
3.5 Transformation Agenda of 2011-2015.
3.6 The Nigeria Economic Recovery and Growth Plan, 2017-2020.
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

Having studied the Nigeria development plans before independence, that is from 1945
to 1998, it is imperative for learners to familiarize themselves with the topic analyze
in this unit. The topics herein includes development plans/programmes in the
democratic dispensation periods, which started in 1999. These plans, programmes and
visions, include; National Economic and Empowerment Development Strategy –
(NEEDS); the Seven-Point Agenda of 2007; Vision 2015, Millennium Development
Goals (in Nigeria) and Vision 20:2020. Therefore, our discussion in this study unit, is
to describe these national economic plans in the current democratic dispensation era.
It is important for you to pay proper attention as we move on.

2.0 OBJECTIVE

At the end of this unit, you should be able to:

• Highlight the ideas behinds each of the development plans, programmes and Visions
presented by the government during the current democratic dispensation era.

64
3.0 MAIN CONTENT

3.1. NEEDS - VISION, OBJECTIVES AND STRATEGIES

Democratic governance returned to Nigeria in May 1999 with the swearing in of

President Olusegun Obasanjo on the platform of Peoples Democratic Party. This was
after long military rule that ran from 1966 to 1999 with a brief interlude from 1979 to
1983, and a few months Interim National Government headed by a civilian in 1993.
The new administration started development planning in 1999 on a clean slate with
the initiation of a four-year medium term plan document, the National Economic
Direction (1999-2003). The plan had the primary objective of pursuing a strong, virile
and broad- based economy with adequate capacity to absorb externally generated
shocks. While being a new plan document, the objectives and policy direction was not
significantly different from that to which the country has followed since the
introduction of SAP (Ikeanyibe, 2009).

However, the plan did not achieve much of the articulated programmes of alleviating
of poverty, deregulating the economy, creating of jobs, reducing bureaucratic red-
tapism in governance, providing welfare programmes for citizens and infrastructure
development such as electricity, water, improved health care and roads. Despite the
huge resources garnered from improved oil pricing, sale of privatized government
enterprises, and recovered loots from the Abacha family and its cronies, Nigeria went
further down the rungs of impoverished nations.

Furthermore, when the government observed that the plan could not achieved its
objectives, it saw the need to have a rethink on the issue of development planning. It
realized the need for a comprehensive socio-political and economic reform of the
country since no plan can succeed in Nigeria if it continued to be business as usual.
This intent to bring radical changes in the way things are done gave birth to the
National Economic Empowerment and Development Strategy (NEEDS) and other
development plans.

65
As described in Vision 2010, ―Nigeria is a multiethnic society, with a value system
that derives from the diversity of its people, religion and cultures. The elements of this
value system include respect for elders, honesty and accountability, cooperation,
industry, discipline, self-confidence and moral courage, which is the cores values of
NEEDS. Thus, National Economic Empowerment and Development Strategy
(NEEDS) is the response to the development challenges of Nigeria. NEEDS is
described as Nigeria‘s plan for prosperity. It is a four-year medium term plan for the
period 2003 to 2007.

NEEDS is a federal government plan, which also expected the states and local
governments to have their counterpart plans- the State Economic Empowerment and
Development Strategy (SEEDS) and the Local Government Economic Empowerment
and Development Strategy (LEEDS) respectively.

It is the Federal Government comprehensive plan that seeks to include not only all
levels of government towards moving in the same direction, but also seeks all and
sundry namely, the private sector, the Non-Governmental Organizations (NGOs) and
the general public in cooperative activity in pursuit of developmental goals. NEEDS
as a plan contains all the envisaged policies, programmes of the government for the
period 2003-2007 and far beyond, and serves as the foundation of the Obasanjo‘s
reforms programme. NEEDS is not just a macro-economic plan document, but also a
comprehensive vision, goals and principles of a new Nigeria that would be made
possible through re-enacting core Nigerian values like respect for the elders, honesty
and accountability, cooperation, industry, discipline, self-confidence and moral
courage. These aforementioned points are the fundamental values upon which NEEDS
rests.

Following the 1999 Constitution, which clearly stipulates that public policy must be
directed to balance the objectives of efficiency, effectiveness, and equity in order to
ensure a broad-based, poverty-reducing growth and development strategy, the
dividends of which will be distributed fairly across all classes. The NEEDS document
was strategically geared to achieve developmental planning objectives. Which focus

66
on creation of wealth, the generation of employment, the reduction of poverty, the
elimination of corruption, and the general reorientation of values.

In like manner, three other principles underpin NEEDS, which commit the
government to:

 Create an incentive structure that rewards and celebrates private enterprise,

entrepreneurial spirit, and excellence.
 Establish new forms of partnership with all stakeholders in the economy—all
branches of government, the public and private sectors, civil society and the
international community—to promote prosperity.
 Create a public sector that delivers prompt and good-quality service.

In the same way, the NEEDS reform plan is to support the following policy thrusts:

 Sustain a rapid, broad-based GDP growth rate outside the oil sector that is
consistent with poverty reduction, employment generation, and a sustainable
environment.
 Diversify the production structure away from oil and mineral resources.
 Make the productive sector internationally competitive.
 Systematically reduce the role of government in the direct production of goods,
and strengthen its facilitating and regulatory functions.

Key Strategies of NEEDS

The committee that wrote the NEEDS documents proposes achieving its goals in the
following ways:

 Privatize, deregulate, and liberalize key sectors of the economy.

 Coordinate national sectoral development strategies for agriculture, industry
(especially small and medium-size enterprises), and services (especially
tourism).
 Develop infrastructure, especially electricity, transport, and water.

67
  Address the problems of financing the real sector, and mobilize long-term
savings and investment.
 Create effective regulatory regimes that include environmental standards.
 Target programmes to promote private sector growth and development.

In sum, a major target of the current reform effort is the reduction of poverty and
creating of more job opportunities. In line with this goal, the NEEDS programme
promised creating about seven (7) million jobs by 2007. But the truth is that most
policies pursued by the government within the period were anti-employment rather
than employment generating. In the bid to reform government institutions thousands
of employees have lost their jobs. For instance, the Central Bank of Nigeria alone
severed 804 employees through mandatory retirement in 2005 alone (CBN, 2005). In
addition, the bank consolidation exercise that saw the convergence of 75 out of the 89
existing banks in 2004 to only twenty-five and 14 failed ones by end of 2005
witnessed the throwing into the unemployment market thousands of retrenched bank
workers resulting from mergers and acquisitions. The same process is being witnessed
in the microfinance and insurance sub-sectors where stringent capitalization
requirements may by the end of this year push out many existing community banks
and insurance companies out of business. Yet the private sector especially the
manufacturing sub sector is not any ready to start absorbing these excesses as the cost
of production has continued to be high due to gross infrastructural inadequacy,
making the employment situation even worse.

In the area of infrastructure development as projected by NEEDS, the programme

failed to achieve much impact. Electricity, which coincidentally, was a major policy
choice area of the government, rather than show improvement, seemed to decline
tremendously. Using the 2005 situation, CBN (2005) informs that ―the quantum of
electricity generated declined in 2005. At 2.687.1 megawatt hour (MWH), aggregate
electricity generation fell by 2.8 per cent‖. By 2007 the decline of electricity in the
country has reached a crisis dimension.

68
Overall, the government has admitted the failure of NEEDS to achieve significant
results in the medium term. As reported by Ogefere (2007) the Minister/Deputy
Chairman of National Planning Commission, the coordinating institution for NEEDS
programmes, Senator Abdullah Wali, admitted that NEEDS has a lot of challenges.
According to Ogefere (2007), the major challenges were not only in the areas of
infrastructural crisis but also high poverty level and high dependence of nation‘s
economy on oil exports. Others include low contribution of secondary activities to
yearly gross domestic product (GDP), low aggregate demand, high cost of production,
high rates as well as high import dependence of the economy, especially on capital
and intermediate goods import (Ikeanyibe, 2009). In conclusion, the truth is that
NEEDS as a development planning did not achieve the expected results like previous
development plans in Nigeria. The four main objectives Viz: employment generation,
poverty reduction, wealth creation and value re-orientation remains only on paper.

Self-Assessment Exercise

Briefly discuss the policy thrusts and key Strategies of NEEDS in Nigeria.

3.2. VISION 2015 - MILLENNIUM DEVELOPMENT GOALS (MDGs) (IN

NIGERIA)

This is a vision created by the United Nations. The United Nations foundation is
committed to helping the UN achieve the eight Millennium Development Goals by
2015. The MDGs are commitment by the UN to establish peace and a healthy global
economy by focusing on major issues like poverty, children‘s health, empowerment of
women and girls, sustainable environment, disease, and development. Nigeria entirely
embraced this vision and tried to work towards all its objectives.

The eight MDGs call for a Global Partnership for Development. It reflects the fact that
the fates of all people and the nations are linked.

These eight MDGs and their individual targets i.e. the Millennium Development
Goals are:

69
Goals 1: Eradicate extreme poverty and hunger: Reduce by half the proportion of
people living in less than dollar a day. Reduce by half the proportion of people who
suffer from hunger.

Goals 2: Achieve Universal Primary Education - Ensuring that all boys and girls
complete a full course of primary schooling.

Goals 3: Promote Gender Equality and Empower Women - Eliminate gender

disparity in primary and secondary education preferably by 2005, and at all levels by
2015.

Goals 4: Reduce Child Mortality - Reduce by two-thirds the mortality rate among
children under five.

Goals 5: Improve Maternal Health - Reduce by three quarters the maternal

mortality ratio.

Goals 6: Compact HIV/AIDS, Malaria and other diseases - Halt and begin to
reverse the spread of HIV/AIDS. Halt and begin to reverse the incidence of malaria
and other major diseases.

Goals 7: Ensure environmental sustainability- Integrate the principles of

sustainable development into country policies and programs; reverse loss of
environmental resources and reduce biodiversity loss, achieving, by 2010, a
significant reduction in the rate of loss.

Goals 8: Develop a global partnership for development - Develop further an open,

rule-based, predictable, non-discriminatory trading and financial system.

In evaluating the MDGs in Nigeria, Ibietan and Ekhosuehi (2013) noted that the
MDGs are more like ―goals from outside‖, even though some of them are achievable,
the MDGs do not deserve any rigorous discourse under Nigeria‘s development
planning initiative.

70
Self-Assessment Exercise

Give a brief outline of the millennium development goals.

3.3. VISION 20:2020

The Nigerian vision 2020 is a perspective plan - an economic business plan intended
to make Nigeria a fully developed economy by the year 2020; that is, the intent of
Nigeria in vision 2020 programme is to position Nigeria to become one of the top 20
economies in the world by the year 2020.

To ensure achievement of this objective, an institutional framework responsible for

the development and implementation of the vision 2020 was created – a framework
consisting of the National Council on Vision 2020 (NCV 2020), the National Steering
Committee (NSC); and Stakeholder Development Committee (SDCs).

National Planning Commission and the vision 2020 secretariat was then mandated by
the Federal Executive Council (FEC) to produce the vision 2020 plan for launching by
the president in October 1st 2009.

The vision commenced by January 2010 (Ahmed, 2009) and the Chairman of the
Business Support Group of the Vision is by name - Alhaji Umuru Muttalab,
Commander of the Order of Niger (CON). The constitution and inauguration of the
Business Support Group (BSG) intended to engender private sector support for the
vision 2020 process by the National Steering committee.

The vision 20:2020 sought to accelerate the pace of the country‘s growth and
development and make it among the world‘s twentieth economies by the year 2020. It
was of the opinion that for the vision to succeed, the civil service must be carried
along. Thus, the government and the institutional organs took steps towards the
development of the vision 2020 via;

- Provision for the development efforts in the 2009 budget;

71
  Development of sectoral strategies for the vision by some Ministries,
Departments, and Agencies (MDAs);
 Central Bank of Nigeria (CBN) financial sector strategy 2020;
 Federal Inland Revenue (FIRS) 2020 strategy;
 Medium Term Sector Strategy (MTSS).

The objectives of the vision 2020 programme are to:

 Stimulate Nigeria‘s economic growth and launch the country onto a path of
sustained and rapid social economic development.
 Place Nigeria in the bracket of top 20 largest economies of the world by the
year 2020, with a growth target of not less than $900 billion in GDP and a per
capita of not less than $4,000 per annum.
 Engendering peaceful, harmonious and a stable democracy by the year 2020.
 Provision of infrastructure services; a modern and vibrant education system;
health sector that supports and sustains a life expectancy of not less than 70
years.
 Provision of modern technologically enabled agricultural sector; vibrant and
globally competitive manufacturing sector with contribution to GDP of not less
than 40%.

The Vision 2020 also follow the path of other plans by presenting areas/issues to be
covered in an omnibus manner without breaking it down into phases (Ibietan, &
Ekhosuehi, 2013). In the words of Ugwu (2009), Vision 2020 lacks properly outlined
objectives, except for policy statements coming from some federal government
officials.

3.4 The Seven-Point Agenda of President Yar’Adua in 2007.

As a development planning initiative, Vision 2020 was also carried over by the
Yar‘adua administration from the Obasanjo civilian administration, but later translated
to 7-point agendas. The main objectives of the administration, otherwise referred to as
the 7-point agendas are:

72
i. Critical Infrastructure: This would involve paying attention to adequate power
supply to facilitate industrialization. Development of Rail, Road, Air and Water
transportation to facilitate movement of persons, goods and services.

ii. Niger Delta: This would involve complete overhaul of the region to ensure
provision of physical infrastructure and empowerment of the people.

iii. Food Security: Through this vision, the administration has declared interest in
enhancing agricultural and water resources to ensure adequate food supply for local
consumption and export.

iv. Human Capital Development: This would involve reform of education sector to
improve skills and enhance standards.

v. Land Tenure and Home Ownership: Review of the Land use laws to facilitate
proper use of the Nation‘s land assets for socio-economic development; and citizens‘
access to mortgage facilities.

vi. National Security and Intelligence: Through this strategy, the administration
intends to give adequate attention to the provision of security to lives and property.

vii. Wealth Creation: This aspect would be used to initiate the process of
diversification of the nation‘s revenue base and increased production to provide jobs (
Dode, 2010).

Despite the affirmed commitment of the government to the above plan in term of
human resources, money and materials, the policies do not really achieve the stated
goals. To this extent, certain challenges are identified which include: the death of
president Yara‘dua, failure of past policies, the level of executive corruption in high
places; the global economic recession, government contradictory policies and
government insincerity among others.

73
Self-Assessment Exercise:

Briefly outline the similarity between VISION 20:2020 and the Seven-Point Agenda
of President Yar‘Adua.

3.5 Transformation Agenda of 2011-2015.

The Transformation Agenda of President Goodluck Ebele Jonathan is yet another

policy somersault in relation to the 7-Point Agenda of his immediate predecessor (late
President Umaru Musa Yar'adua). It is a 5-year development plan ranging from 2011-
2015. It arises from the need to re-position the country's drive to development in the
critical spheres of the economy hinged on the rule of law, where equality, peace and
justice shall reign. In order to accomplish the daunting task, the President, upon
assumption of office, assembled a vibrant team of renowned technocrats called the
Economic Management Team (EMT) to midwife and drive the process through to a
successful end (Gyong, 2016).

The Economic Management Team is made up of a 28-member management team

headed by the President as Chairman, the Vice President as Vice Chairman and the
Minister of Finance, Dr Ngozi Okonjo Iweala, as Coordinator. The appointment of the
Minister of Finance, a reputable Economist, clearly indicates the centrality of the
economy as the driving force in the success of the Transformation Agenda.

The Transformation Agenda of Goodluck Jonathan, from all intent and purposes, is
largely in pursuance of collective national goals and aspirations towards driving
Nigerian into the comity of the 20 largest economies by 2020 (Gyong, 2016).

Particularly, the Transformation Agenda is focused on three key areas. These

includes:

i. Strong, inclusive, non-inflationary growth. This includes efforts on the part of

government to encourage large-scale industries, Small, and Medium
Enterprises (SMES), revitalize ailing industries, promote agriculture and agro

74
 businesses, encourage local content strategy and develop Information
Technology and Communication (ICT) to be the major driver of the agenda.
ii. Employment generation and poverty alleviation. This includes effort to expand
tourism and entertainment industry, exploit private sector potentials for
employment creation, focus investment in construction industry and public
works, using labor intensive techniques and provide safety nets for vulnerable
groups.
iii. Value re-orientation to re-organize the National Orientation Agency (NOA) to
develop campaigns aimed at fighting corruptions, punish acts of corruption and
reward exemplary behavior, support groups and Non-Government
Organizations (NGOs) that are involved in the fight against corruption.

The outline of the three key areas of President Jonathan‘s transformation policies and
strategies as stated earlier are categorized into:

I. A macroeconomic framework for economic direction to be achieved through

the National Economic Management Team (NEMT) review of the national
revenue allocation formula, passage of a Planning and Project Continuity Bill.
II. Job creation, to be achieved through the National Action Plan on Employment
Creation (NAPEC), implementing a youth empowerment safety net support
programme; development of industrial clusters; reviewing of university
curricular to align with job requirements in industry.
III. Better power supply by increased investment in the sector to be achieved
through the strategy of creating a deregulated more competitive power sector
that will attract foreign and local investment ensuring a more viable
commercial framework for the sector and a tariff regime that promotes
transparency, guarantees security of investment, adequate return on investment,
transmission capacity and more.
IV. Justice and judiciary sector that eliminates all forms of corruption in the
administration of justice in Nigeria through achieving greater independence
and enhancing the capacity of the justice ministry to superintend prosecution
and improving professionalism in legal practice for better service delivery.

75
 V. Governance challenges addressed through policies that focus on public service,
security, law and order, legislature and anticorruption measures.
VI. Human Capital Development through rehabilitating of the educational sector
by implementing the recommendations of the Presidential Task Team on
Education which includes; strengthening the 9-3-4 educational system and
implementing the teachers' salary scale, provision of infrastructure such as
classrooms across all levels to ease overcrowding; enhancing the efficiency,
resourcefulness and competence of teachers and other educational personnel
through training, capacity building and motivation. And better health care
delivery, through the implementation of the National Strategic Health
Development Plan (NSHDP), Provision of information and Communication
Technology, through Public-Private Partnership (PPP).
VII. Transportation, through evolving a multi modal, integrated sustainable
transportation system with more emphasis on rail and inland water ways
transportation.
VIII. Other sectors such as Niger delta, labour and productivity, legislature, justice
and judiciary, foreign policy and economic diplomacy, public expenditure
management have applicable strategies geared towards achieving set objectives
in the various sectors.

In addition, efforts will be made to include moral instruction and civic education in
school curricular, institute incentives that reward hardworking and sanction poor
performance. Similarly, efforts are directed towards engendering a culture of
leadership by example and ensure compliance by all citizens with the law, rules and
regulations guiding their conduct. In order to realize the aforementioned goals, the
Transformation Agenda stated that effort would be made to fast track constitutional
and electoral reforms to provide the necessary legal framework for the policy
packages; overcome security challenges, create the enabling environment for private
sector participation; encourage coordination and collaboration of policies, and not
competition, among sectors.

76
Like other development plans/programme, the Transformation Agenda was bedeviled
by quite a number of problems. These include limited financing from the Federal and
State government, scandals of corruption, near absence of a purposeful, trusted,
respect and focus leadership, weak participation of the citizens and finally the rise of
insecurity of lives and properties across the country.

Self-Assessment Exercise:

Describe any five issues raised by the Transformation Agenda of the President Good
Luck Jonathan government.

3.6 The Nigeria Economic Recovery and Growth Plan, 2017-2020

In keeping up with the above tradition of rolling out economic plans, the Buhari
administration came into power in 2015 and launched yet another plan. This time a
comprehensive economic intervention plan tagged the Economic Recovery and
Growth Plan (ERGP). The ERGP, which comes on the heels of Nigeria‘s slump into
recession for the first time in 25 years and the sharp fall in oil prices from highs of
about $112 a barrel in 2014 to below $50 in 2016, is targeted at propelling Nigeria
back to sustainable, accelerated development and restoring economic growth in the
medium term from 2017-2020 (Adekunle & Alokpa, 2018). Hence, in a bid to change
the trajectory, the ERGP was launched to build on the Strategic Implementation Plan
(SIP) for the 2016 Budget of Change, which was developed as a short-term
intervention measure to rescue the ailing economy (Ministry of Budget & National
Planning, 2017).

The ERGP was established based on three strategic objectives, these are:

a. Restoring growth - Monetary and fiscal stability, external balance, economic

growth and diversification;
b. Investing in the Nigerian people - Health, education, social inclusion schemes,
job creation and youth employment schemes;

77
 c. Building a globally competitive economy – Improving the ease of doing
business, investing in infrastructure and promoting digital led growth.

Following the above objectives, the ERGP made the following projections:

i. The inflation rate is projected to trend downwards from the current level of
almost 19 per cent to single digits by 2020.
ii. Real GDP is projected to grow by 4.6 percent on average over the Plan period,
from an estimated contraction of 1.54 percent recorded in 2016. Real GDP
growth is projected to improve significantly to 2.19 per cent in 2017, reaching
7 per cent at the end of the Plan period in 2020.
iii. Crude oil output forecast is to rise from about 1.8 mbpd in 2016 to 2.2 MBPD
in 2017 and 2.5 MBPD by 2020. Relentless focus on electricity and gas will
also drive growth and expansion in all other sectors.
iv. Privatizing select public enterprises/assets, and refurbishing local refineries to
reduce petroleum product imports by 60 per cent by 2018.
v. Nigeria is expected to become not only a net exporter of refined petroleum
products by 2020 but also a net exporter of key agricultural products such as
rice, cashew nuts, groundnuts, cassava and vegetable oil that take up a lot of
foreign exchange.
vi. Unemployment will reduce from 13.9 per cent as of Q3 2016 to 11.23 per cent
by 2020 which translates to the creation of over 15 million jobs during the
plan horizon or an average of 3.7 million jobs per annum (Adekunle & Alokpa,
2018).
In order to achieve these objectives, it is noted that the drivers of these projections
include: doubling tax compliance for non-oil sector; eliminating leakages at customs;
and reviewing rules for remitting surplus funds to FGN from independent revenue
sources (Preston, 2017).

In sum, one positive outcome of ERGP since its enactment in 2017 is the growth of
the non-oil sector, increases in revenues from custom and excise duties, VAT and
growth in the growth rate of GDP (Nigerian Bureau of Statistics, 2018). Despite the

78
positive outcome of ERGP, it must be noted that the journey is still far going by the
yearly timelines it has earmarked for itself and due to some obvious lacuna in the plan
and implementations. For instance, a comprehensive plan of this nature has no legal
framework backing its establishment and execution. Also, another major challenges
that may constitute a stumbling block to the success of the ERGP is adequate funding,
political risks, high levels of unemployment, and social vices such as kidnapping,
militancy etc., (Adekunle & Alokpa, 2018).

Self-Assessment Exercise:

Briefly discuss the relevance of ERGP to the Nigeria economy.

4.0 CONCLUSION

Based on our discussion on development planning from 1999 till date, it can be
deduced that almost all the plans, programmes and visions suffered from similar
problems as the initial pre 1999 plans. Such issues include policy changes by
successive government, corruption by government officials, inadequate funding, weak
participation of the citizens in policies making just to mention a few. In spite of all
the plans/programme and visions, it must be said that the Nigeria citizenry are plagued
with the issues of hunger and starvation, erratic power supply, tumble-down road
network, insecurity of lives and property, underdeveloped rail system, high
unemployment rate etc. These aforementioned issues raised, in one way or the other
have been included in all the programs/plans and visions in Nigeria over the years but
they persist until date (2019).

5.0 SUMMARY

In this study unit, we have attempted to discuss the Nigeria‘s development plans from
the democratic dispensation era, 1999 till date. Some of the development plans and
vision discussed includes: National Economic Empowerment and Development
Strategy (NEEDS); VISION 2015 - Millennium Development Goals; VISION
20:2020, the Seven-Point Agenda, Transformation Agenda of 2011-2015 and the

79
Economic Recovery and Growth Plan (ERGP). Following the reviews of the
aforementioned plans, it is observed that greater percentage of the objectives as
spelled out by various government has not been achieved. This should be a serious
concern for the Nigerian government and citizens. So far, it believed that learner
understanding of this study unit will give you an edge to understand the next unit. You
are advised to prepare for the next unit as you read along.

6.0 TUTOR-MARKED ASSIGNMENT

Highlight any three similar objectives of VISION 20:2020, Transformation Agenda

and the Economic Recovery and Growth Plan (ERGP) that you know in Nigeria.

7.0 REFERENCES/FURTHER READINGS

Adekunle, S. B. & Alokpa, F. M. (2018). An Appraisal of the Nigeria Economic

Recovery and Growth Plan, 2017-2020. International Multi-Disciplinary
Journal, 12(3), 25-37. ISSN 1994-9057 (Print) ISSN 2070-0083 (Online
Akindele, S. T., Afolabi, Y. A., Pitan, O. O. & Gidado, T. O. (2016). The
Management of Interruptions in National Development: A Critical Analysis of
Nigeria‘s Experience. American Journal of Economics, 6(6), 306-333.

Ayo, E. J. (1988). Development Planning in Nigeria. Ibadan: University Press.

Dode, R. O. (2010). Yar‘adua 7-Point Agenda, the MDGs and Sustainable
Development in Nigeria. Global Journal of Human Social Science (GJHSS),
2(10), 1-7.
Egonmwan, J.S. & Ibodje, S. (2001). Development Administration: Theory and
Practice. Benin City: Thesyin (Nig) Company.
Ejumudo, K. B. O. (2013). The Problematic of Development Planning in Nigeria: A
Critical Discourse. Developing Country Studies, 3(4), 67-80. www.iiste.org
ISSN 2224-607X (Paper) ISSN 2225-0565 (Online).
Ekpo, C. (2012). The Transformation Agenda: Issues and Challenges.Conference
Paper· Retrieved from https://www.researchgate.net/publication/328857743.
Gyong, J. E. (2016). A social analysis of the transformation agenda of President
Goodluck Ebele Jonathan. European Scientific Journal, 8(16), 95-113. ISSN:
1857 – 7881(Print) e ISSN 1857- 7431.
http://documents.worldbank.org/curated/en/234301468290438608/Nigeria-
National-Economic-Empowerment-and-Development-Strategy-and-joint-IDA-
IMF-staff-advisory-note.

80
Ibietan, J. & Ekhosuehi, O. (2013). Trends in development planning in Nigeria: 1962
to 2012. Journal of Sustainable Development in Africa, 15(4), 297-311. ISSN:
15205509.
Iheanacho, E. N. (2014). National Development Planning in Nigeria: An Endless
Search for Appropriate Development Strategy, International Journal of
Economic Development Research and Investment, 5(2), 49-60. ISSN: 2141-
6729
Ikeanyibe, O. M. (2009). Development Planning in Nigeria: Reflections on the
National Economic Empowerment and Development Strategy (NEEDS) 2003-
2007. Journal of Social Science, 20(3), 197-210.
Ministry of Budget and National Planning (2017). Nigeria economic recovery and
growth plan (2017-2020. Abuja: SOU Also accessed on
www.nationalplanning.org.ng
Obi, E. A. (2006). Development Administration. Onitsha: Bookpoint Ltd.
Ogefere S 2007. Government Lists Challenges to NEEDS-2 Goals Achievement. The
Guardian, Tuesday, May 8.
Oke, L. & Oluwasuji, C. O. (2011). Millennium Development Goals {MDGs} and the
Yar'adua's Seven Point Agenda in Nigeria: Prospects and Challenges. An
International Multi-Disciplinary Journal, 5(1), 57-72. ISSN 1994-9057 (Print)
ISSN 2070-0083 (Online)

Olayiwola, L. M. & Adeleye, O. A. (2005). Rural Infrastructural Development in

Nigeria: Between 1960 and 1990- Problems and Challenges. Ile-Ife, Nigeria:
Journal of Social Sciences, 11(2): 91-96.
Onah, F. O. (2006). Managing Public Programmes and Projects. Nsukka: Great AP
Express Publishers.
Onah, F. O. (2010). Managing Public Programmes and Projects (2nd Edition).
Nsukka: Great AP Express Publishers.
Preston, C. (2017). A Cursory Look at Nigeria's Economic Recovery and Growth Plan
Friday, 10 March 2017. Accessed on 20th March from
https://www.proshareng.com/news/ Nigeria%20Economy/A-Cursory-Look at
Nigeria-sEconomic-Recovery-and-Growth-plan
Ugwu, C.E. (2009) ―The Imperatives of National Development Programmes
Harmonization in Nigeria: Vision 2020, Millennium Development Goals and
Seven Point Agenda‖, in Nigerian Journal of Public Administration and Local
Government (UNN), 14(2), 200 – 216.

81
UNIT 3 Reasons for Plan Failure in Nigeria and Prerequisite for
Successful Planning
CONTENTS

1.0 Introduction
2.0 Objective
3.0 Main Content
3.1 Reasons for Planning Failure in Nigeria
3.2 Prerequisite for successful Planning in Nigeria.
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The last two study units examines development planning in Nigeria from pre-
Independence era to the current democratic dispensation. This unit will describe the
weakness of development plans in Nigeria from 1946-2019. It is noticed that in spite
of the number of development plans, programme and visions introduced by successive
Nigerian governments since independence, the country has failed to produce much
needed sustainable development. Most of the development plans in Nigeria have
failed to achieve their desired objectives due to several challenges that bedeviled the
plans. These problems are discussed herein for proper policy implementation both
now and the future.

2.0 OBJECTIVE

At the end of this study unit, you should be able to:

 State the flaws of development plans, programmes and Vision of successive
government in Nigeria.
 List and discuss the Conditions needed for successful Planning in Nigeria.

82
3.0 MAIN CONTENT

3.1 Reasons for Plan/Visions Failure in Nigeria

Some of the challenges that have impeded the successful implementation of

development plans, programmes and visions in Nigeria are discussed below:

i. Lack of Clear Cut Development Plans: It is needful that Nigeria prioritises

her programmes, specifically by looking at cost and benefits of real action that
would stimulate an enduring economic development. Nigerian economy suffers
because Nigerian leaders lack the ability to transform planned policies to real
actions. Generally, good plans would be laid down but self-interests in policy
and decision making most times hinder the good policies implementation.
Likewise, series of ideas on how to transform the economy might be provided
but they may not be genuine hence the national development plans continued to
fail (Ugwuanyi, 2014).

ii. Corruption: Corruption in Nigerian political system has hampered

development plans and programmes. Corruption has been a pervasive social
phenomenon. The disheartening thing about the whole scenario is that the
purported development plans are to a large extent corruption avenue to some
greedy Nigeria leaders. Illicit misappropriation of privileges and opportunities
in public and private sectors for personal aggrandizement particularly those in
positions of authority are sine-qua-non to Nigeria. The involvement of our
political leaders in massive corruption both in military and civilian
governments has been an obstacle to national development plans. Onah (2006)
observes that all development visions and programmes fail in Nigeria because
of poor handling by corrupt and poor/hungry politicians and bureaucrats
(Iheanacho, 2014).

iii. Mono-Product Economy: Nigeria has depended on the oil sector as a major
source of revenue for the financing of development plans in the country and
this had been the main source of frustration in plan implementation since

83
 independence. So far, various governments in Nigeria have continued to pay lip
service to the issue of diversifying the economy. Since the demand for and
price of crude oil is subject to international politics, a fluctuation in
international Oil market, as is being experienced now, will spell doom for the
success of the Nigeria's Vision 20:2020.

iv. Misplacement of Priorities: Like the colonial ones, the policies of the post-
independent plans also exhibited a basic lack of urgency. A typical example is
the iron and steel industry that was in the first and second plans and was
initiated for projected completion during the fourth plan. This represented a lag
of twenty years; yet this project was repeatedly acclaimed the cornerstone of
Nigeria‘s industrialization. Similar examples include petrochemicals,
fertilizers, the petroleum refinery, liquefied petroleum gas and other heavy
industries. While this leisurely pace persisted, the country completed such
counter-productive projects like the National Stadium and Trade Fair Complex
in Lagos, the Festac Durbar Hotel at Kaduna and staged the multi-million Naira
FESTAC itself in 1977 (Ejumudo, 2013).

v. Lack of Commitment: Development plans are often prepared without

consulting the people, hence public apathy towards its implementation. Since
the plan is meant for the people, but they are not even aware of its existence or
objectives, they do not feel duty bound to contribute to its success. This has
made many development plans fail in Nigeria. It was an attempt to address this
problem that made the defunt Vision 2010 Committee to embark on series of
publicity programmes, like seminars, conferences and public enlightenment
campaigns (Iheanacho, 2014).

vi. Inadequate infrastructural Facilities: Our infrastructural facilities and other

social services are terribly poor – power, roads, healthcare, education, railway,
etc, and thus cannot sustain the plans/visions implementation. These has been a
major constraint to past developmental efforts in the country, especially the
power sector; and since they are politically masterminded, would have adverse
effects on the Nigeria's developmental effort.

84
vii. Absence of Relevant Data: Development planning depends basically on
availability of data, unfortunately, there is dearth in relevant data. This may be
due to poor funding of the Federal Office of Statistics, the unwillingness of
Nigerians to reveal information and outright manipulation of data for pecuniary
or other gains. A striking example of the problem in Nigeria is that until today,
nobody is sure about the exact population of Nigeria. A country that does not
know its population would definitely not be in position to determine the other
vital statistics necessary for planning life, birth rate, death rate, number of those
of school age and demographic changes in the population which are essential
for planning. (Ejumudo, 2013). The absence of reliable background data has
made the use of social indicators difficult and inadequate for plan preparation,
implementation and monitoring of national development (Iheanacho, 2014).

viii. Technology Transfer Syndrome: Until the fourth development plan in

Nigeria, the nation did not recognize the key role of indigenous technological
capability in national development. Worse still is the fact that the stress on
technological transfer through multinationals, which has proved to be a mirage
up until date, is still adopted.

ix. Deficiency in Continuity of Government Programmes: Lack of continuity of

government programmes has retarded development plans in Nigeria. Most of
the development programmes are usually abandoned once the government that
introduced them are out of power. Government officials did not feel committed
to the national plans of their predecessors and subsequently sought to change
by introducing major projects not incorporated in the original plan or
introducing new ones (Oladapo, 2004). This is the reason for uncompleted
projects in different parts of the country today. The situation is worsened
because of political instability to which the country has been subjected since
independence. Arguably, the frequent and unpredictable changes in the
government especially during the military regimes, created room for
uncertainty and for the retardation of development process articulated in
various plans.

85
 x. Inadequate Executive Capacity: Inadequate executive capacity is one of the
greatest problems of development plans in Nigeria in the area of execution. In
fact, it is frustrating to plan the execution of programmes which require the
availability of organization, institutions and skills which the economy does not
possess and cannot normally be expected to generate during the plan period.
Executive capacity also involves the existence of competent contracting firms
and basic socio-economic infrastructure including competent hands to run the
civil service and allied government machinery..

xi. Inattention to Budget Discipline: Budget constitutes an important instrument

for achieving the various developmental plans. Budget constitutes one of the
instruments for achieving the fiscal policy of the government. The current
government plan of Economic Recovery and Growth Plan (2017-2020), if it is
to be achieved will be implemented through the annual government budgets.
One major bane of budgeting in Nigeria is lack of budget discipline. Budgets in
Nigeria are either not implemented as proposed or are haphazardly
implemented. This typically affect development plans and programme. Also,
the Nigeria budget structure shows that recurrent expenditure often takes the
larger proportion of the total sum of the annual budgets. For instance, in 2017
budget, recurrent expenditure was 79.3 percent while capital expenditure was
21.7 percent, and in 2018 recurrent expenditure stood at 77.14 percent while
capital expenditure was 22.86 percent. The implication of the above trend is
that more than 60 percent of the annual budgets were used for administrative
purposes. Nations aiming at economic development will spend a substantial
amount of their annual budgets on capital projects. With the above anomalies
in the budget structure and implementation in Nigeria, realization of any
development plans, programmes or Vision will be very extremely difficult.

In the light of the above, it should be noted that, there are quite a number of
constraints bedeviling the Nigeria developmental plans and visions since
independence, and each plan/vision has its own issues emerging from its objectives or
from the succeeding government after the plans were enacted. Having discussed the
86
constraints confronting development plans in Nigeria, the next section is to examine
the conditions for a successful development plans in the country.

SELF Assessment Exercise:

Explain any five challenges that hinder Nigeria development plan and visions in the
last two decades.

3.2 Prerequisite for Successful Development Plans/Visions in Nigeria.

To achieve the goals and objectives of development plans and visions in Nigeria, there
is a great need to develop practical and workable frameworks that take into
cognizance all the factors that militate against it. Therefore, the necessary conditions
for effective and efficient plans and visions are:

1) The need for Attitudinal changes by Nigerian. The issue of attitudinal

change among Nigerian should start from the leaders. Unless there is a change
of attitude starting from the leadership, nothing will work well in Nigeria.
There is the need for sincere, dedicated, visionary, focused, inspired and
visionary leaders. In addition, followers should be honest, faithful and
trustworthy in carrying out their responsibilities. In like manner, Nigerians
must also change their negative attitude towards development. The idea that
―things cannot work in Nigeria or Nigerian factor‖ should be discouraged. Real
development is achieved through internal activities rather than from external
influences. Development is seen as a process generated within a society by
forces propagated and invigorated by the actual members of that society. The
notion that true development can neither be started nor sustained by outsiders
should not be found in us. Although, no country can develop in isolation, but
heavy emphasis should not be placed on foreign resources for the country‘s
development. The models of development of Japan and China show how these
countries utilize their internal resources both human and material for rapid
economic development. It is reasonable that Nigerians should inculcate a high

87
 sense of patriotism as demonstrated by the Japanese and Chinese (Lawal &
Oluwatoyin, 2011).
2) Policy Makers and Implementers Commitment and Honesty: For the
Nigerian society to have a successful development plans and visions, there is
the need of commitment and honesty on the part of the policy makers and
implementers, which remains the only antidote to developmental achievement.
The need for discipline and trustworthiness on the part of the project
implementers cannot be compromised; such officials should show enough
discipline, interest, willingness, dedication and honesty. Without these
attributes and the will to pursue set economic goals, all other ingredients of
development present would amount to nullity.
3) Efficient, Effective and Update Database: Strengthen the data capacity base
through strengthening the human and institutional capacity of statistical
services especially at the State and Local Government levels, while instituting a
robust monitoring and evaluation system for development plans.
4) Economic Diversification: Unless economic planning and policy are designed
with the aim of achieving economic independence and rapid sustainable
development that emphasize local contents and internally generated resources,
the drive for industrialization may give rise to increased foreign control of
strategic sectors of the national economy like oil and gas.
5) Human Resource Development: Human resources development is also a sine
qua non to Nigeria‘s national development. Development depends very much
on human knowledge and skills. This must be such that a high quality of
education and training is achievable for a large majority of the people at a
reasonable price and the context and quality of such education and training
should be relevant and adequate to the country‘s development needs.
6) Infrastructural Development: Provision of adequate economic and social
infrastructures both of which are essential for economic transformation of
Nigeria. Efficient infrastructure reduces the cost of doing business and makes a
nation more cost advantaged and competitive globally. Fundamental reforms in
the power and energy sector are very important here.

88
 7) Reforms in Public and Private Sectors: There is need for a fundamental
reform in the management and restructuring of the economy in terms of
economic and political governance in the public and private sectors, and
fundamental shifts in national values, institutional performance and the
enthronement of national discipline.
8) Policies Consistency: Stability and continuity of policies tends to encourage
investment and propel development. An example is the Korea scenario, where
Park Chung-hee was assassinated in 1979, but his policies remain and were
built on. Thus, our leadership must learn to build on policies rather than to
abandoning them for new ones for the sake of party politics and personal
aggrandizement.
9) Setting Realistic and Attainable Objectives and Targets. For example,
aspiring to achieve a GDP growth rate of 13 – 15% is over ambitious given the
historical average growth rate of 6 percent and considering the existing
socioeconomic, political and insecurity issues in the country.

10) Development of a Result-Based National Monitoring and Evaluation

Framework. A key requirement for quality planning and its implementation is
the adoption of a coherent national monitoring and evaluation framework
towards assessing plan implementation, defining challenges and using
outcomes to correct plan implementation and initiate new ones. Currently, the
national monitoring and evaluation system was newly introduced at the Federal
level, there is the need to foster such to the states and local governments levels
(Udoudo & Ubi-Abai, 2016).

Self-Assessment Exercise:

Describe any five recommendations that will aids the Nigeria government to achieve
its development plans and visions.

89
4.0 CONCLUSION

Having discussed the challenges that lead to failure of each development plans and
Visions in Nigeria, it is sad to say that a lot of works need to be done for the country
to achieve set goals and objectives. Based on the issues raised, it is necessary that the
country examine those factors/indicators that will help enhance the success of the
developmental plans, as well as implement such with all honesty without political
party sentiment.

5.0 SUMMARY

In this study unit, we have tried to carefully discussed the problems of national
development in Nigeria, and carefully explain the necessary requirements and viable
strategies needed to engender sustainable and viable development plan in Nigeria. It is
the belief that if these suggestions and models are judiciously and faithfully pursued
and imbibed, Nigeria will be well positioned in the global economy by the year
2020/2030. This study unit has given you a clear picture of the challenges and
possible solutions of achieving successful development plans in the Nigeria economy.
Your knowledge of the issues raised in this unit, will aid your preparation for the next
study unit.

6.0 TUTOR-MARKED ASSIGNMENT

1. Lack of clear cut plan is one of the problems affecting Nigerian development plan,
explain.

2. Discuss how a mono product economy can affect Nigeria development planning.

7.0 REFERENCES/FURTHER READINGS

Ejumudo, K. B. O. (2013). The Problematic of Development Planning in Nigeria: A

Critical Discourse. Developing Country Studies, 3(4), 67-80. www.iiste.org
ISSN 2224-607X (Paper) ISSN 2225-0565 (Online).

90
Eric, P. (2016). Nigeria‘s Development Planning (II). Department Of Political Science
and International Relations Consultancy Services Unit, Taraba State
University.
https://www.academia.edu/31760835/NIGERIAS_DEVELOPMENT_PLANNI
NG_II
Iheanacho, E. N. (2014). National Development Planning in Nigeria: An Endless
Search for Appropriate Development Strategy, International Journal of
Economic Development Research and Investment, 5(2), 49-60. ISSN: 2141-
6729.
Kayode, A. & Akume, A. (2012). VISION 20: 2020 Realities and Challenges.
JORIND, 10 (2), 275-281. ISSN 1596 - 8308. www.transcampus.org./journals,
www.ajol.info/journals/jorind
Lawal, T. & Oluwatoyin, A. (2011). National development in Nigeria: Issues,
challenges and prospects. Journal of Public Administration and Policy
Research, 3(9), 237- 241. Available online
http://www.academicjournals.org/jpapr. Onah, F. O. (2006).
Managing Public Programmes and Projects. Nsukka: Great AP Express
Publishers.
Ugwuanyi, G. O. (2014). The Economic Implications of National Development Plans:
The Nigerian Experience (1946-2013). Developing Country Studies, 4(9), 171-
179. www.iiste.org. ISSN 2224-607X (Paper) ISSN 2225-0565 (Online).

Udoudo, M. P. & Ubi-Abai, I. P. (2016). (VISION 20:2020 and economic

development in Nigeria: Gleaning from past National Development Plans.
International Journal of Development Strategies in Humanities, Management
and Social Sciences, 6(2), 201- 214. Hard Print: 2360-9036. Online: 2360-
9044.

91
UNIT 4 Planning Experiences of Selected Countries (USA, France,
China India and South Africa) Globally

CONTENTS

1.0 Introduction
2.0 Objective
3.0 Main Content
3.1 Planning Experiences of Selected Countries (USA, France, China and
India).
3.2 Planning experience of South Africa
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

In this study unit, we shall be looking at specific planning experiences of selected

nations in the world and the lessons to be learnt from their experiences. Therefore, the
scope of the study is narrowed down to countries such as USA, France, China and
India. Thus, our task is to examine the various types of economic reforms and
programmes adopted by these nations that brought about sustained growth in their
economies. Therefore, let us adhere to the explanations that will be given in this unit
and subsequent units.

2.0 OBJECTIVES

At the end of this unit, you should be able to:

 Describe the planning experiences of USA and France

 Identify planning experiences of China and India.

3.0 MAIN CONTENTS

3.1 Planning experience of USA and France.

In this study section, we shall consider the economic reforms and planning
experiences of USA and France.

92
  Brief History of United State of America Planning Experience.

In the early years of American history, most political leaders were reluctant to involve
the federal government too heavily in the private sector, except in the area of
transportation. In general, they accepted the concept of laissez-faire, a doctrine
opposing government interference in the economy except to maintain law and order.
This attitude started to change during the latter part of the 19th century, when small
business, farm, and labor movements began asking the government to intercede on
their behalf.

Thus, Congress enacted a law regulating railroads in 1887 (the Interstate Commerce
Act), and one preventing large firms from controlling a single industry in 1890 (the
Sherman Antitrust Act). These laws were not rigorously enforced, however, until the
years between 1900 and 1920, when Republican President Theodore Roosevelt (1901-
1909), Democratic President Woodrow Wilson (1913-1921), and others sympathetic
to the views of the Progressives came to power. Many of today's U.S. regulatory
agencies were created during these years, including the Interstate Commerce
Commission, the Food and Drug Administration, and the Federal Trade Commission.

Government involvement in the economy increased most significantly during the

New Deal (development plan) of the 1930s. The 1929 stock market crash had initiated
the most serious economic dislocation in the nation's history, the Great Depression
(1929-1940). President Franklin D. Roosevelt (1933-1945) launched the New Deal to
alleviate the emergency.

Many of the most important laws and institutions that define American's modern
economy can be traced to the First New Deal (1933-35) and Second New Deal (1935-
38) Era. New Deal legislation extended federal authority in banking, agriculture, and
public welfare. It established minimum standards for wages and hours on the job, and
it served as a catalyst for the expansion of labor unions in such industries as steel,
automobiles, and rubber. Programs and agencies that today seem indispensable to the
operation of the country's modern economy were created: the Securities and Exchange
Commission, which regulates the stock market; the Federal Deposit Insurance

93
Corporation, which guarantees bank deposits; and, perhaps most notably, the Social
Security system, which provides pensions to the elderly based on contributions they
made when they were part of the work force.

New Deal leaders flirted with the idea of building closer ties between business and
government, but some of these efforts did not survive past World War II. The National
Industrial Recovery Act, a short-lived New Deal program, sought to encourage
business leaders and workers, with government supervision, to resolve conflicts and
thereby increase productivity and efficiency. While America never took the turn to
fascism that similar business-labor-government arrangements did in Germany and
Italy, the New Deal initiatives did point to a new sharing of power among these three
key economic players. This confluence of power grew even more during the war, as
the U.S. government intervened extensively in the economy. The War Production
Board coordinated the nation's productive capabilities so that military priorities would
be met. Converted consumer-products plants filled many military orders. Automakers
built tanks and aircraft, for example, making the United States the "arsenal of
democracy." In an effort to prevent rising national income and scarce consumer
products to cause inflation, the newly created Office of Price Administration
controlled rents on some dwellings, rationed consumer items ranging from sugar to
gasoline, and otherwise tried to restrain price increases.

The government intervention into the economy help to supplement the price system
with centralized resource allocation and created a number of new agencies to direct
important economic sectors; notably the Food Administration, Fuel Administration,
Railroad Administration and War Industries Board. During the Second World War,
the economy experienced staggering growth under a similar system of planning. In the
postwar period, US governments utilized such measures as the Economic Stabilization
Program to directly intervene in the economy to control prices, wages, etc. in different
economic sectors.

From the start of the Cold War and up till the present day, the United States Federal
Government directs a significant amount of investment and funding into research and
development (R&D), often initially through the Department of Defense. The
94
government performs 50% of all R&D in the United States, with a dynamic state-
directed public- sector developing most of the technology that later becomes the basis
of the private sector economy. Furthermore, the development plan of American was
anchor on economic indicators of growth and development indices of food security,
affordable health care system, water supply, adequate housing, efficient education,
employment opportunities and provision of infrastructures through which sustainable
economic development can be achieve. The US economy has been the cynosure of all
eyes thereby attracting migrants from all parts of the world. However, according to the
Economist Intelligence Unit, (2015), the global food security index of USA is 89.0%,
which placed the country as one of the most secured in terms of food security.

Self-Assessment Exercise:

Describe the achievements of the First New Deal (1933-35) and Second New Deal
(1935-38) development plan of American government.

 Brief History of France Development Plan Experience.

France utilized indicative planning and established a number of state-owned

enterprises in strategic sectors of the economy. The concept behind indicative
planning is the early identification of oversupply, bottlenecks and shortages so that
state investment behavior can be modified in a timely fashion to reduce the incidence
of market disequilibrium, with the goal of sustaining stable economic development
and growth. Under this system France experienced its "Trente Glorieuses" period of
economic prosperity.

France also anchored its economic blue print by successive government on economic
indicators of growth and development, indices of food security, water supply,
adequate housing, efficient education, affordable health care system, employment
opportunities and provision of infrastructures through which sustainable economic
development can be achieved. However, according to the Economist Intelligence Unit,
(2015), the global food security index of France is 83.8%, which placed the country as
one of the most secured in terms of food security. France is also among the most

95
developed nations in the world that other less developed countries are now
patronizing.

Self-Assessment Exercise:

How relevant is French economic reforms to the national economy?

 Economic Reforms of China Government

Prior to 1979, China, under the leadership of Chairman Mao Zedong, maintained a
centrally planned, or command, economy. A large share of the country‘s economic
output was directed and controlled by the state, which set production goals, controlled
prices, and allocated resources throughout most of the economy. During the 1950s, all
of China‘s individual household farms were collectivized into large communes. To
support rapid industrialization, the central government undertook large-scale
investments in physical and human capital during the 1960s and 1970s. As a result, by
1978 nearly three-fourths of industrial production was produced by centrally
controlled, state-owned enterprises (SOEs), according to centrally planned output
targets. Private enterprises and foreign-invested firms were generally barred. A central
goal of the Chinese government was to make China‘s economy relatively self-
sufficient. Foreign trade was generally limited to obtaining those goods that could not
be made or obtained in China. Such policies created distortions in the economy. Since
most aspects of the economy were managed and run by the central government, there
were no market mechanisms to efficiently allocate resources, and thus there were few
incentives for firms, workers, and farmers to become more productive or be concerned
with the quality of what they produced (since they were mainly focused on production
goals set by the government). Based on these reforms, China‘s economy suffered
significant economic downturns during the leadership of Chairman Mao Zedong,
including during the Great Leap Forward from 1958 to 1962 (which led to a massive
famine and reportedly the deaths of up to 45 million people) and the Cultural
Revolution from 1966 to 1976 (which caused widespread political chaos and greatly
disrupted the economy). From 1950 to 1978, the growth in Chinese living standards

96
paled in comparison to those in the West, such as Japan drop drastically (World Bank,
2017).

In 1978, (shortly after the death of Chairman Mao in 1976), the Chinese government
decided to break with its Soviet-style economic policies by gradually reforming the
economy according to free market principles and opening up trade and investment
with the West, in the hope that this would significantly increase economic growth and
raise living standards. As Chinese leader Deng Xiaoping, the architect of China‘s
economic reforms, put it: ―Black cat, white cat, what does it matter what color the cat
is as long as it catches mice? (Congressional Research Service, 2019).

Beginning in 1979, China launched several economic reforms. The central

government initiated price and ownership incentives for farmers, which enabled them
to sell a portion of their crops on the free market. In addition, the government
established four special economic zones along the coast for the purpose of attracting
foreign investment, boosting exports, and importing high technology products into
China. Additional reforms, which followed in stages, sought to decentralize economic
policymaking in several sectors, especially trade. Economic control of various
enterprises was given to provincial and local governments, which were generally
allowed to operate and compete on free market principles, rather than under the
direction and guidance of state planning. In addition, citizens were encouraged to start
their own businesses. Additional coastal regions and cities were designated as open
cities and development zones, which allowed them to experiment with free-market
reforms and to offer tax and trade incentives to attract foreign investment. In addition,
state price controls on a wide range of products were gradually eliminated. Trade
liberalization was also a major key to China‘s economic success. Removing trade
barriers encouraged greater competition and attracted FDI inflows. China‘s gradual
implementation of economic reforms sought to identify which policies produced
favorable economic outcomes (and which did not) so that they could be implemented
in other parts of the country.

Since the introduction of economic reforms, China‘s economy has grown substantially
faster than during the pre-reform period, and, for the most part, has avoided major
97
economic disruptions. From 1979 to 2018, China‘s annual real GDP averaged 9.5%.
This has meant that on average China has been able to double the size of its economy
in real terms every eight years. The economic reforms, which included the
decentralization of economic production, has led to substantial growth in Chinese
household savings as well as corporate savings. As a result, China‘s gross savings as a
percentage of GDP is the highest among major economies. The large level of domestic
savings has enabled China to support a high level of investment. In fact, China‘s gross
domestic savings levels far exceed its domestic investment levels, which have made
China a large net global lender (Congressional Research Service, 2019).

Following the reform, China has emerged as the world‘s largest manufacturer
according to the World Bank. According to World Bank report (2017), in 2016, the
value of China‘s manufacturing on a gross value added basis was 49.2% higher than
the U.S. level. Manufacturing plays a considerably more important role in the Chinese
economy than it does for the United States. In 2016, China‘s gross valued added
manufacturing was equal to 28.7% of its GDP, compared to 11.6% for the United
States (World Bank report, 2017). China‘s trade and investment reforms and
incentives led to a surge in FDI beginning in the early 1990s. Such flows have been a
major source of China‘s productivity gains and rapid economic and trade growth.
There were reportedly 445,244 foreign-invested enterprises (FIEs) registered in China
in 2010, employing 55.2 million workers or 15.9% of the urban workforce. FIEs
account for a significant share of China‘s industrial output. That level rose from 2.3%
in 1990 to a high of 35.9% in 2003, but fell to 25.9% in 2011. In addition, FIEs are
responsible for a significant level of China‘s foreign trade. At their peak, FIEs
accounted for 58.3% of Chinese exports in 2005 and 59.7% of imports, but these
levels have subsequently fallen, reaching 41.7% and 43.7%, respectively, in 2018
(Congressional Research Service, 2019).

Furthermore, China‘s abundance of low-cost labor has made it internationally

competitive in many low-cost, labor-intensive manufactures. As a result,
manufactured products constitute a significant share of China‘s trade. China‘s biggest
exports were electrical machinery and equipment; nuclear reactors, boilers, and

98
machinery; furniture; plastics; and vehicles (UNCTAD, 2019). China‘s FDI inflows in
2018 were $139 billion, making it the world‘s second largest recipient of FDI after the
United States.30 China‘s FDI outflows have grew rapidly after 2005 and exceeded
FDI inflows for the first time in 2015. China‘s FDI outflows reached a historic peak of
$196.1 billion in 2016 (UNCTAD, 2019).

In view of the above, it is stated that the sharp increase in China‘s global FDI outflows
in recent years appears to be largely driven by a number of factors, including Chinese
government policies and initiatives to encourage firms to ―go global.‖ The
government wants to use FDI to gain access to intellectual property right (IPR),
technology, know-how, famous brands, etc., in order to move Chinese firms up the
value-added chain in manufacturing and services, boost domestic innovation and
development of Chinese brands, and help Chinese firms (especially SOEs) to become
major global competitors.

SELF Assessment Exercise:

What are the benefits of the market-based driven policy of the Chinese government of
1979 to the economy?

 Description of India Development Plan Experience.

The foundation of credible national security is based on the level of economic

prosperity and well-being of the population of any country. This is especially so for
developing countries like India. The attainment of sustained high economic growth is
a necessary condition for improving the national security and the quality of life of the
people throughout the country. In 1991, India embarked on launching its major
market-oriented economic reforms to liberalize its country after three decades of
socialism and a fourth of creeping liberalization. The decision to embark on the
reforms, follows the crisis of 1991 which was primarily motivated by the beliefs of the
former finance minister Manmohan Singh (prime minister since 2005) that the roots of
the nation‘s financial crisis were structural in nature and lay in the import-substituting
industrialization strategy followed by India's governments since 1947. The main
elements of this strategy were inward-looking trade and foreign investment policies,

99
along with extensive bureaucratic controls over production, investment, and trade, and
a substantial public sector presence in the economy, going beyond the conventional
confines of public utilities and infrastructure (Agrawal, Gokarn, Mishra, Parikh, &
Sen, 1995).

The 1991 economic reform program specifically targeted the highly restrictive trade
and industrial policies. Quotas on the imports of most machinery and equipment and
manufactured intermediate goods were removed. A large part of the import licensing
system was replaced by tradable import entitlements linked to export earnings.
Furthermore, the "actual user" criterion for the imports of capital and intermediate
goods was removed. There was also a significant cut in tariff rates, with the peak tariff
rate reduced from 300 percent to 150 percent and the peak duty on capital goods cut to
80 percent. The industrial licensing system was abolished altogether, except for a
select list of environmentally sensitive industries. Sections of the Monopolistic and
Restrictive Trade Practice (MRTP) Act, 1969 that restricted growth or merger of large
business houses were eliminated. The list of industries reserved for the public sector
was reduced from seventeen to six, and private investment was actively solicited in
the infrastructural sector. Foreign ownership restrictions were liberalized, and foreign
direct investment was actively encouraged, particularly in the infrastructural sector
(Joshi & Little, 1996).

Since the 1990s until date, the Indian economy has grown at a rate of 5–6 percent per
annum, far exceeding the "Hindu rate of economic growth" observed for much of the
previous decades since independence. Much of the increase in economic growth can
be attributed to the strong performance of the manufacturing sector, in contrast to the
1970s, when the manufacturing sector's performance was dismal. India has gone from
being a poor, slow-growing country to the fastest-growing major economy in the
world in 2016. The World Economic Outlook for 2016 says that the United States and
India are the two pillars of strength today that are helping hold up a sagging world
economy. Once an object of pity, India has become an object of envy among
developing countries; it is often called a potential superpower and is backed by the
United States for a seat on the UN Security Council (World Bank, 2016).

100
The Green Revolution made India first self-sufficient and then a surplus producer of
food. India suffered two consecutive droughts in 2014 and 2015, yet agricultural
production actually rose slightly; India became the world's largest rice exporter in
2015, exporting 10.23 million tons. India has also become a substantial exporter of
wheat and maize in recent years. That is a measure of its agricultural transformation.
Paddock and Paddock never imaged that India, which swallowed almost the entire
food aid of the world in the mid-1960s, would become a donor of food aid to North
Korea in 2010 (Swaminathan, 2016). Similarly, India's poverty ratio did not improve
at all between independence in 1947 and 1983; it remained a bit under 60 percent.
Meanwhile, the population virtually doubled, meaning the absolute number of poor
people doubled. That was a cruel reflection of the failure of the socialist slogan Garibi
Hatao (Abolish Poverty). Poverty started declining gradually after 1983, but the big
decline came after economic liberalization. In the seven years between 2004-5 and
2011-12, no fewer than 138 million Indians rose above the poverty line
(Swaminathan, 2016).

In 1991, India's main exports were textiles and cut-and-polished gems. Today, its
main exports are computer software, other business services, pharmaceuticals,
automobiles, and auto components. Most developing countries grew fast by
harnessing cheap labor. India never did so, because its rigid labor laws inhibited labor
flexibility, and they still do so today. Software and business services are estimated at
$108 billion in 2015-16, up from virtually nothing in 1991. Following reforms, India
commercial finances have attracted inflows of foreign exchange other than foreign
aid. Total foreign investment (equity plus portfolio inflows) came to $51.2 billion in
2014-15. Foreign commercial borrowing in the same year came to $68.2 billion gross
and $10.4 billion net, whereas remittances from Indians overseas exceeded $70 billion
(WDI, 2017).

Before 1991, Indian companies used obsolete technologies based on ancient licensing
agreements and did very little research and development. Today, India has emerged as
a global research and development (R&D) hub. General Electric has located one of its
five global R&D centers in Bengaluru. Suzuki and Hyundai have made India a hub for

101
small-car research and production. Microsoft and IBM are among the global
companies using India as an R&D base. Prior to the reform, India produced fewer than
50,000 engineers per year, mostly from government colleges. India's economic
success after 1991 has spurred the creation of thousands of private engineering
colleges, with estimated admissions of 1.5 million students per year. One oft-quoted
rule of thumb is that a quarter are usable, and a quarter are world-class. That outlook
suggests that producing up to a quarter million world-class engineers per year is a very
solid base for future progress (Mahendra, 2016).

Another positive development in the 1990s was the large increase in foreign exchange
reserves over the decade. In 2001 foreign exchange reserves stood at
U.S.$54,106,000,000, a fiftyfold increase to its level at the height of the 1991
economic crisis. The buildup of foreign exchange reserves reflects the sharp decline in
the current account deficit as well as the large net capital inflows during the 1990s.
The improvement in the balance of payments can be mainly attributed to the large
inward remittances through legal channels, as nonresident Indians took advantage of a
market-determined exchange rate that was steadily depreciating. The wide-ranging
trade and industrial policy reforms have clearly had a positive effect on India's
engagement with the world economy. The openness of the economy—defined as
exports plus imports as a ratio of gross domestic product (GDP)—had nearly doubled
in less than a decade, and the openness ratio stood at 23 percent in 2000, a significant
achievement for an economy that had remained closed to international trade for much
of its post-independence period (Sen, 2019).

In sum, the 1991 reforms freed Indian entrepreneurs from the shackles of bureaucratic
controls and from a policy regime that encouraged unproductive rent-seeking
activities at the cost of activities aimed at increasing productivity and output. The
Indian business class responded to the new opportunities provided by the reforms by
significantly increasing their investments in productive capital (Sen, 2019). Thus,
India 28 years of economic reform brings out three major trends that are visible. First,
the vast majority of successes have been private-sector successes; second, the local
markets have become competitive and globalized, the outcomes have been excellent

102
and thirdly, the quality of Indian institutions have grown far greater than its form
before 1991.

Self-Assessment Exercise:

Briefly describe five achievements of the India 1991 Economic Reform strategy.

3.2 Planning experience of South Africa

The National Development Plan of South Africa (SA) aims to eliminate poverty and
reduce inequality by 2030. According to the SA National Planning Commission these
goals can be attained by drawing on the energies of its people, growing an inclusive
economy, building capabilities, enhancing the capacity of the state, and promoting
leadership and partnerships throughout society.

The Commission‘s Diagnostic Report, released in June 2011, set out South Africa‘s
achievements and shortcomings since 1994. It identified a failure to implement
policies and an absence of broad partnerships as the main reasons for slow progress,
and set out nine primary challenges:

1. Too few people work

2. The quality of school education for black people is poor
3. Infrastructure is poorly located, inadequate and under-maintained
4. Spatial divides hobble inclusive development
5. The economy is unsustainably resource intensive
6. The public health system cannot meet demand or sustain quality
7. Public services are uneven and often of poor quality
8. Corruption levels are high
9. South Africa remains a divided society

Nevertheless, the National Planning Commission believes that ―to build a better South
Africa, we must start today‖. While the achievement of the objectives of the National
Development Plan requires progress on a broad front, three priorities stand out:

 Raising employment through faster economic growth

103
  Improving the quality of education, skills development and innovation
 Building the capability of the state to play a developmental, transformative
role.
(South African Planning Commission, Vision for 2030).

The planning commission believes that with these planning priorities, planning
objectives are bound to be achieved.

4.0 CONCLUSION

From our discussion so far on development plans experiences in selected countries of

the world; we can infer that; economic reforms/development plans were anchored on
socioeconomic indicators of growth and development. These include; indices of food
security, adequate housing, portable water supply, affordable health care system,
adequate security of life and properties, efficient education, employment opportunities
and provision of infrastructures facilities. The aforementioned indicators when fully
implemented are yardstick for sustainable economic growth and development to be
achieved.

5.0 SUMMARY

In this unit, we have attempted to review the major development plans of USA,
France, China and India. From the point of view of our discussion, you will observe
that one keys phenomenon among these countries economic reforms is continuity and
commitment, which have referred point in the global setting till date. Therefore, this
call for serious commitment on the part of the Nigeria government that good
development plans should be sustained, irrespective of the party affiliation. So far, it is
believed that your understanding of this unit has given you a basis to understand the
next unit. It is expected of you to be eager to read the next unit.

6.0 TUTOR-MARKED ASSIGNMENT

Discuss the various socioeconomic indicators that the USA, France, China and India
built their economic reforms around.

104
7.0 REFERENCES/FURTHER READINGS

Agrawal, P., Gokarn, S. V., Mishra, V., Parikh, K. S. & Sen, K. (1995). Economic
Restructuring in East Asia and India: Perspectives on Policy Reform. London:
Macmillan, 1995.
Bhagwati, J. (1993). India in Transition: Freeing the Economy. Oxford: Oxford
University Press, 1993.
Bhagwati, J. N., & Srinivasan, T. N. (1975). Foreign Trade Regimes and Economic
Development. New York: National Bureau of Economic Research, 1975.
Charan, D. W. India Trying To Liberalise: Economic Reforms Since 1991.
Congressional Research Service (2019). China‘s Economic Rise: History,
Trends, Challenges and Implications for the United States.
Joshi, V., & Little, I. M. D. (1996). India's Economic Reforms, 1991–2001. Oxford:
Clarendon Press, 1996.
Mahendra, S. D. (2016). "Economic Reforms, Poverty and Inequality in India,"
Symbiosis School of Economics, Pune, India. ―Our Future Makes it Work‖
National Development Plan 2030 Executive Summary. National Planning
Commission, the Presidency, Republic of South Africa.
Sen, K. (2019). Economic Reforms of 1991. Retrieved from
YcfhDYptPbG7UiXX7shttps://www.encyclopedia.com/international/encyclope
diaS aminathan S. A. A. (2016). Twenty‐Five Years of Indian Economic
Reform. Retrieved from https://www.cato.org/publications/policy-
analysis/twenty-five-years-indian economic- reform.
UNCTAD (2019). World Investment Report.
Available at https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf.
World Bank (2016). World Development Indicators database.
http://databank.worldbsnk.org/data/download/GDP_PPP.pdf
World Bank (2017). China Overview. Available at http://www.worldbank.org/en/
country/china/overview.
World Development Indicators, (WDI, 2017).

105
MODULE THREE: OTHER INSTITUTIONS INVOLVED IN
DEVELOPMENT PLANNING

UNIT 1 The Non-Governmental Organizations (NGOs)

UNIT 2 The Regional Organizations
UNIT 3 United Nations Institutions (i.e. UNESCO, UNCTAD, WTO
etc.)
UNIT 4 The Bretton Woods Institutions (IMF, World Bank and IFC.)

UNIT 1 The Non-Governmental Organizations (NGOs)

CONTENTS
1.0 Introduction
2.0 Objective
3.0 Main Content
3.1 Description of the roles of Non-Governmental Organizations (NGOs) in
nation‘s development planning and global economic reforms.
3.2 Characteristics of NGOs
3.3 Types of NGOs: By Orientation and Level of Operation
3.4 Functions/Roles of NGOs
3.5 Funding of NGOs
3.6 The Concept of International Non-Governmental Organizations
(INGOs)
3.7 The History of NGOs Activities in Nigeria
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

This unit will examine the concept of Non-Governmental Organizations (NGOs), the
history, characteristics, types and functions of NGOs. In addition, selected NGOs that
have collaborated with various government in planning issues both locally and
internationally will be discussed herein.

106
2.0 OBJECTIVE

At the end of this unit, you should be able to:

1. Define the term NGOs;

2. Describes the different types of NGOs;
3. Explain the sources of funding to NGOs;
4. Highlight the functions of NGOs;
5. Name any five NGOs operating outside Nigeria and their roles;
6. List five NGOs collaborating with the Nigeria government in developmental
issues.

3.0 MAIN CONTENT

3.1 Description of the roles of Non-Governmental Organizations (NGOs) in

Nation’s Development Planning and Global Economic Reforms.

The term ‗NGO‘ stands for "Non-Governmental Organization" and its function can
vary widely from service organizations to human-rights advocacy and relief groups.
Defined as "an international organization that is not founded by an international
treaty" by the United Nations, NGOs work to benefit communities from the local to
international levels. NGOs not only serve as checks-and-balances for government and
governmental watchdogs but also are crucial mechanisms in wider governmental
initiatives such as relief response to a natural disaster. Without NGOs' long history of
rallying communities and creating initiatives around the world, famine, poverty, and
disease would be a much bigger issue for the world than it already is (Bridget, 2019).

There are several definitions of NGOs worldwide. For instance, NGO as defined by
the World Bank is a private organizations that pursue activities to relieve suffering,
promote the interests of the poor, protect the environment, provide basic social
services, or undertake community development‖. Folger (2019) conceived the term as
a non-profit, citizen-based group that functions independently of government. NGOs,
sometimes called civil societies, are organized on community, national and

107
international levels to serve specific social or political purposes, and are cooperative,
rather than commercial, in nature. Also, the term refers to a not-for-profit organization
that is independent from states and international governmental organizations. They are
usually funded by donations but some avoid formal funding altogether and are run
primarily by volunteers. NGOs are highly diverse groups of organizations engaged in
a wide range of activities, and take different forms in different parts of the world.
Some may have charitable status, while others may be registered for tax exemption
based on recognition of social purposes. Others may be fronts for political, religious,
or other interests.

3.1 Brief History of NGOs

In 1945, the United Nations was first created to act as an intergovernmental agency-
that is an agency that mediates between multiple governments. To allow certain
international interests groups and non-state agencies to attend the meetings of these
powers and ensure an appropriate checks-and-balances system was in place, the U.N.
established the term to define them as characteristically non-government. However,
the first international non-government organizations, by this definition, dated back
well into the 18th century. By 1904, there were over 1000 established NGOs in the
world fighting internationally for everything from the liberation of women and slaves
to disarmament.

Rapid globalization led to the quick expansion of the need for these non-government
organizations as shared interests between nationalities often overlooked human and
environmental rights in favor of profits and power. Recently, even oversight with U.N.
initiatives has given rise to an increased need for founding NGOs that are more
humanitarian in order to compensate for missed opportunities.

3.2 Characteristics of NGOs

i. An NGO is a non-profit making, voluntary, service-oriented/ development

oriented organization, either for the benefit of members (a grassroots
organization) or of other members of the population (an agency).

108
 ii. An organization or group of people working independent of any external
control with specific objectives and aims to fulfill tasks that are oriented to
bring about desirable change in a given community or areas or situation.
iii. It is a social development organization assisting in empowerment of people.
iv. It is an organization of private individuals who believe in certain basic social
principles and who structure their activities to bring about development to
communities they are servicing.
v. An independent, democratic, non-sectarian people‘s organization working for
the empowerment of economic and/or socially marginalized groups.
vi. An organization not affiliated to political parties, generally engaged in working
for aid, development and welfare of the community.
vii. An organization committed to the root causes of the problems trying to better
the quality of life especially for the poor, the oppressed, the marginalized in
urban and rural areas.
viii Organizations established by end for the community with or without little
intervention from the government; they are not only a charity organization, but
work on socio-economic-cultural activities.

3.3 Types of NGOs: By Orientation and Level of Operation

NGOs can be group into the following types: By their orientation and level of
operation.

a. NGOs Types by Orientation:

a. Charitable Orientation often involves a top-down paternalistic effort with

little participation by the "beneficiaries". It includes NGOs with activities
directed toward meeting the needs of the poor -distribution of food, clothing or
medicine; provision of housing, transport, schools etc. Such NGOs may also
undertake relief activities during a natural or man-made disaster.
b. Service Orientation includes NGOs with activities such as the provision of
health, family planning or education services in which the programme is

109
 designed by the NGO and people are expected to participate in its
implementation and in receiving the service.
c. Participatory Orientation is characterized by self-help projects where local
people are involved particularly in the implementation of a project by
contributing cash, tools, land, materials, labour etc. In the classical community
development project, participation begins with the need definition and
continues into the planning and implementation stages. Cooperatives often
have a participatory orientation.
d. Empowering Orientation is where the aim is to help poor people develop a
clearer understanding of the social, political and economic factors affecting
their lives, and to strengthen their awareness of their own potential power to
control their lives. Sometimes, these groups develop spontaneously around a
problem or an issue, at other times outside workers from NGOs play a
facilitating role in their development. In any case, there is maximum
involvement of the people with NGOs acting as facilitators.

b. NGO Types by Level of Operation:

i. Community-based Organizations (CBOs) arise out of people's own

initiatives. These can include sports clubs, women's organizations, neighbourhood
organizations, religious or educational organizations. There are a large variety of
these, some supported by NGOs, national or international NGOs, or bilateral or
international agencies, and others independent of outside help. Some are devoted to
rising the consciousness of the urban poor or helping them to understand their rights in
gaining access to needed services while others are involved in providing such
services.

ii. Citywide Organizations include organizations such as the Rotary or Lion's

Club, chambers of commerce and industry, coalitions of business, ethnic or
educational groups and associations of community organizations. Some exist for other
purposes, and become involved in helping the poor as one of many activities, while
others are created for the specific purpose of helping the poor.

110
iii. National NGOs include organizations such as the Red Cross, Young Men's
Christian Association (YMCA)/ Young Women Christian Association (YWCA),
professional organizations etc. Some of these have state and city branches and assist
local NGOs.

iv. International NGOs range from secular agencies such as Save the Children
organizations, Women's Economic Empowerment and Care (WE-Care), Ford and
Rockefeller Foundations to religiously motivated groups. Their activities vary from
mainly funding local NGOs, institutions and projects, to implementing the projects
themselves.

3.4 Functions/Roles of NGOs

NGOs worldwide perform a wide range of services aimed towards human wellbeing
and social welfare. These organizations relentlessly work towards development and
bringing a positive change in the society. NGOs may have different structures,
activities and policies, but all NGOs are committed towards their cause and perform
their roles to achieve their respective goals. Among the wide variety of roles that
NGOs play, the following six can be identified as important, at the risk of
generalization:

i. Development and Operation of Infrastructure:

Community-based organizations and cooperatives can acquire, subdivide and
develop land, construct housing, provide infrastructure and operate and
maintain infrastructure such as wells or public toilets and solid waste collection
services. They can also develop building material supply centres and other
community-based economic enterprises. In many cases, they will need
technical assistance or advice from governmental agencies or higher-level
NGOs.
ii. Supporting Innovation, Demonstration and Pilot Projects:
NGOs have the advantage of selecting particular places for innovative projects
and specify in advance the length of time which they will be supporting the
project overcoming some of the shortcomings that governments face in this

111
 respect. NGOs can also be pilots for larger government projects by virtue of
their ability to act more quickly than the government bureaucracy.
iii. Facilitating Communication:
NGOs use interpersonal methods of communication, and study the right entry
points whereby they gain the trust of the community they seek to benefit. They
would also have a good idea of the feasibility of the projects they take up. The
significance of this role to the government is that NGOs can communicate to
the policy-making levels of government, information about the lives,
capabilities, attitudes and cultural characteristics of people at the local level.
NGOs can facilitate communication upward from people to the government
and downward from the government to the people. Communication upward
involves informing government about what local people are thinking, doing
and feeling while communication downward involves informing local people
about what the government is planning and doing. NGOs are also in a unique
position to share information horizontally, networking between other
organizations doing similar work.
iv. Technical Assistance and Training:
Training institutions and NGOs can develop a technical assistance and training
capacity and use this to assist both CBOs and governments.

v. Research, Monitoring and Evaluation:

Innovative activities need to be carefully documented and shared - effective
participatory monitoring would permit the sharing of results with the people
themselves as well as with the project staff.

vi. Advocacy for and with the Poor:

In some cases, NGOs become spokespersons or ombudsmen for the poor and
attempt to influence government policies and programmes on their behalf. This
may be done through a variety of means ranging from demonstration and pilot
projects to participation in public forums and the formulation of government
policy and plans, to publicizing research results and case studies of the poor.

112
 Thus NGOs play roles from advocates for the poor to implementers of
government programmes; from agitators and critics to partners and advisors;
from sponsors of pilot projects to mediators.

3.5 Funding of NGOs

There are many different local and international sources for NGO funding. On the
local level the most common ones are:

 Governments: Sometimes, NGOs may source funding from the government to

finance their projects even though NGOs are independent of government.
 Local businesses: Local businesses might also be interested in having their
names associated with development and community projects.
 Community foundations: There may also be local foundations already
established that share some of the goals of the NGO and are interested in
collaborating by sharing funding as well as other kinds of resources.

On the international level, most common funding sources for NGOs are:

 Official development assistance agencies of countries: These agencies are

common in the governments of economically developed countries and serve to
provide financial aid for developing economies. Sometimes these agencies give
their money directly to a country‘s government, to ensure ‗that the money goes
to the right place‘, a share of the funding can also be dedicated to NGOs and
grassroots projects. The European Union can be seen as one of those agencies
as well.
 UN agencies: There are various agencies of the United Nations system that
offer funding for NGOs pursuing certain goals.
 Multilateral development banks: These banks, such as World Bank or the
European Investment Bank, get funding from different governments aimed at
developing particular regions and/or causes. The primary business of these
banks is to provide loans to countries, but they can also provide grants to
NGOs.

113
  International foundations: These types of foundations are established for
instance through endowments, either on the part of a wealthy individual or a
large organization willing to donate a big amount of money to a NGO. These
foundations only offer funding for a specified aspect of development or a
particular region they are interested in.
 Multinational corporations: Multinational corporations can be interested in
supporting certain communities and/or international development projects. An
example of this form of donor is oil companies.
 Larger international NGOs: These INGOs sometimes provide support for
smaller NGOs that act on a more local level but with a related focus.
 Governmental funding: Sometimes an NGO gets money from other
governments, as well as different countries. This can be challenging because
some governmental NGO funding may be viewed as controversial because of
their norms and values and because the funding may support certain goals
rather than a nation‘s development goal.

These are just some of the most common types of funding. Thus, funding can take
many forms of which a basic understanding is useful if an individual or establishment
want to work for an NGO.

3.6 The Concept of International Non-Governmental Organizations (INGOs)

International nongovernmental organizations (INGOs) are growing in both numbers

and influence around the world. INGOs range wildly in scope, size, membership, and
home location. Examples of INGOs include Amnesty International, the International
Federation of Red Cross and Red Crescent Societies, Oxfam International, CARE,
Save the Children, the World Wildlife Fund, Greenpeace, the Sierra Club, ActionAid,
Aga Khan, and Médecins Sans Frontières (MSF; also known as Doctors Without
Borders, see table 1). INGOs have increasingly been involved in the policymaking and
the policy process. Domestically, INGOs have access to policymakers and work to
influence policy through lobbying efforts and information campaigns. Internationally,
INGOs often work with intergovernmental organizations and donor agencies and can

114
 have tremendous sway in certain policy domains. Recent works have linked INGO
efforts to changes in trade and investment patterns and decisions about humanitarian
interventions, economic sanctions, and aid allocation.

INGOs are defined and situated in the international system. The United Nations
Economic and Social Council (ECOSOC) defines an INGO as "any organization
which is not established by inter-governmental agreement" (Resolution 288 (X) 27
February 1950), "including organizations which accept members designated by
government authorities, provided that such membership does not interfere with the
free expression of views of the organizations" (Resolution 1296 (XLV) of 25 June
1968). It can also be to non-profit institutions (including religious organizations)
which may develop, finance or implement activities in the domain of ICT in education
as either their primary or secondary mission.

Table 1: Some of the Largest INGOs Globally

ORGANIZATION/ PRIMARY
DATE OF OBJECTIVE INCOME STAFF GEOGRAPHIC
ESTABLISHMENT 2011 NUMBERS REACH
To achieve
social justice,
ActionAid gender equality
(Johannesburg, and poverty - 45 countries - 25
1. South Africa). 2003. eradication. $314 million 2,328 million people
Aga Khan Address issues
Development on health,
Network education, rural Development
(Geneva, development, activities
Switzerland). 1967. environment and budget
the strengthening $450 million
2. of civil society. (2008) 60,000 - 25 Countries
Fight against
worldwide -87 Countries
CARE International poverty and to - 60 million
(Chatelaine, protect and people
Switzerland). 1946. enhance human 12,000 - 12 national
3. dignity $780 million members
Catholic Relief Promoting
Services (CRS) human - 100 Countries -
(Baltimore, USA). development by 130 million
4. 1943. responding to $823 million 5,211 people
115
 major
emergencies,
fighting disease
and poverty and
nurturing
peaceful and just
societies.
Provide
humanitarian
relief, long-term
development,
support for poor
communities
worldwide,
tackling injustice
Christian Aid and championing
5. (London, UK). 1945. people‘s rights. $148 million 758 - 45 Countries
Provide medical
assistance to
people affected
by conflict,
Médecins Sans epidemics,
Frontières. disasters, or
(Geneva, exclusion from
6. Switzerland). 1971. healthcare. $1.24 billion 22,000 - 60 Countries
Resolving
humanitarian
and development
challenges
currently faced
Mercy Corps by societies in
(Portland, USA). countries facing
7. 1981. instability. $301 million 3,700 - 40 Countries
To reduce - 98 Countries -
Oxfam International poverty and 14 member
8. (Oxford, UK). 1942. injustice. $1.25 billion 6,000 organizations
Focuses on child
protection,
education, child
participation,
economic
security,
emergencies,
Plan International health, sexual
(Working, UK). and reproductive
9. 1937. health and rights, $827 million 8,131 - 48 Countries

116
 water and
sanitation.
To improve the
lives of children
through better - 120 Countries
education, - 29 national
Save the Children economic help, organizations
(London, UK). 1919. emergency aid, 14,000 - 80 million
10. and health care
$1.4 billion children
World Vision Focus on well-
International being of all
(Monrovia, people, - 120 countries -
California, USA). especially 100 million
11. 1950. children. $2.79 billion 40,000 people
Sources:
https://www.undp.org/content/dam/china/docs/Publications/UNDPCH11%20An%20
Overview%20of%20International%20NGOs%20in%20Development%20Cooperation
.pd

One of the most important objectives of almost any INGO is to coordinate the
activities of its members whether they are individuals or organizations in one form or
another. Most international secretariats have little formal regulatory power, so the
coordination usually takes the form of suggestions, exchange of views and
information, and bargaining during organizational meetings. Exchange of information
is also an important function in itself. An organization frequently serves as a clearing-
house between its members‘ for the sector in which the INGO has competence. Some
of them publish reference works, others compile bibliographical and documentation
material. Scientific INGOs frequently administer the exchange of scientific data. A
large proportion of all INGOs have their own periodicals, which keep their members,
and other persons concerned informed about the state of affairs between their general
conferences. On an average, such general meetings are held every second year while
the executive boards meet more frequently, usually once or twice a year. A few
INGOs not only try to coordinate and encourage research among their members, but
are also actively engaged in research projects themselves. Direct INGO involvement
in projects has certain advantages when the research includes cross-national
comparisons. A related pair of functions is education and training. A large number of
INGOs organize exchange of scholars and students. An important part of the

117
programme of the World Crafts Council, for instance, is to exchange apprentices and
artists. INGOs also frequently provide opportunities for "on the job training" in
connection with development aid programmes. Some of these programmes include
education and training of the local population.

3.7 The History of NGOs Activities in Nigeria

Whilst tracing NGOs back to industrialized western countries in the mid-nineteenth

century, Willets (2002) affirmed that the term ―NGO‖ was made popular in the 1945
Charter of United Nations Organization (UNO) which differentiated between
participation rights for intergovernmental specialized agencies and international
private organizations.

Historically, most NGOs emerged from relatively small-scale origins and

metamorphosed into larger organizations. Small scale refers to the micro level where
an individual takes action or a group of people of like minds congregates to tackle a
perennial socioeconomic and political problem. By inference, NGOs in Nigeria
predated 1945 having existed in various forms of age groups, social clubs and
descendant associations, which were established by various passionate or influential
persons, private organizations, missionary institutions, etc. Since 1930, the
documented NGOs in Nigeria were mainly community-based and they drew
membership from defined demographics, ethnic affinities and proximate geographical
axis (Odiboh, Omojola, Ekanem & Oresanya, 2017).

With regards to the history of Nigeria Network of NGOs (NNNGO), particlaurly in

1992, representatives from 60 Nigerian NGOs met with the Federal Ministry of
Health, USAID, Society for Family Health, World Health Organizations, the British
High Commission, Ford Foundation, UNICEF, World Bank, British Council,
Department For International Development (DFID), UNESCO, UNIC, the Friedrich
Ebert Foundation and Goethe Institute to discuss the daily realities that hundreds of
disparate civil society organizations have to organise better, with a view to
collaborating with Government and Multilateral Agencies on issues of development.

118
In reaction to this serious challenge, the Nigeria Network of NGOs was established by
these organizations.

The idea of a formalized collaboration between the Federal Government of Nigeria

and NGOs was first muted at a meeting organized by the Federal Ministry of Health
(FMOH) for NGOs active in the Health Sector in 1987. Between 1990 and 1991, the
FMOH held consultative meetings to mobilize NGOs to support the Federal
Government in the Expanded Program on Immunization (EPI), Drug Abuse, and
subsequently in the HIV/AIDS campaign, thus widening the spectrum of CSOs
collaborating with the Federal Government.

The Nigeria Network of NGOs (NNNGOs) initially commenced its operations from
an Office in the Federal Ministry of Health with the aim of identifying, registering,
collaborating, building capacity and mobilizing NGOs. It also wanted to find a way of
bringing the worlds of development and human rights to work together. By 1997
NNNGOs was strong enough to continue its work as an independent organization
working from its 15 Military Street Onikan Office in Lagos.

The Network is charged with the objective of identifying, registering, coordinating,

building capacity and mobilizing civil society organizations to promote
interconnectivity and bring equity, justice, peace, and development to grassroots
communities throughout Nigeria, including the implementation of the Sustainable
Development Goals (SDGs).

The Nigeria Network of NGOs (NNNGOs) is the first generic membership body for
civil society organizations in Nigeria that facilitates effective advocacy on issues of
poverty and other developmental issues. Established in 1992, NNNGOs represents
over 2,400 organizations ranging from small groups working at the local level, to
larger networks working at the national level.

The membership includes over 20 national organizations and over 250 membership
organizations focusing on different thematic areas of development, all of whom work
to support a diverse range of membership communities across the nation. In total, the

119
 outreach to the third sector in Nigeria is estimated to be in the excess of 5000, which
includes both members and affiliates at national and global levels.

In the same vein, there are a good number of notable NGOs that have contributed
immensely to the growth of the Nigeria economy, but few will be examined herein.
Such includes Albino Foundation, All Youth Against Cancer (AYAC), MTN
Foundation, Tony Elumelu Foundation, TY Danjuma Foundation, Rochas Foundation,
Oando Foundation, Action Aid International Nigeria, PZ Foundation, Ford
Foundation, Cleen Foundation, Ovie Brume Foundation, Bill and Melinda Gates
Foundation, African Network for Environmental and Economic Justice (ANEEJ),
Leadership Effectiveness, Accountability Professionalism Africa (LEAP Africa),
Dangote Foundation, Kanu Heart Foundation, Shuga Limp Foundation, and Irede
Foundation. Some other NGOs and their scope of duties are depicted in table 1.2.

SECTOR/AREAS OF State of
S/N NAMES FOCUS DATE Intervention
1 Rahi Medical Outreach Health 3/11/09 Delta/P/Harcourt
Women Environmental Empowerment of
2 Programme (WEP) women & Youths 29/6/07 Abuja
The HAVIDS Centre for
environment and Education & Community
3 Development Development 1/7/2009 Port Harcourt
Poverty Alleviation
Initiative for Community &Women Warri, P/Harcourt,
4 Development Financing Empowerment 7/3/08 Lagos, Abuja
Voluntary Work camps 13/8/08
5 Association of Nigeria Rural Empowerment Lagos
Global Women Abuja & Across
Empowerment Women the
6 Association (GLOWEM) Empowerment 23/9/08 Federation
Africa Initiative for
Education
and Economic 28/11/07
7 Development Education Abuja
Centre for Community
Empowerment for Social Economic 16/7/09
8 underprivileged Development Abuja
Center for Care of
Vulnerable
9 and Development Social Empowerment 3/11/09 Ilorin

120
 Initiatives
Center for Organizational
and
Professional Ethics Oyo, Abuja &
10 COPEAFRICA) Ethical Practices 3/11/09 Ilaro
Kanem Bornu Human
Devt. Association
11 (KABHUDA) Health 9/11/09 Maiduguri
Poverty Alleviation for the
Poor
12 Initiative Community Development 18/11/09 Ughelli, Delta.
Health & Social Service
13 Initiative Health 30/6/10 Abia State
Foundation for Promotion Abuja, Enugu,
of Health Warri &
14 Good Health 21/4/08 Kaduna
Agency for African
Families in Peace Building/Security
15 Distress (AAFID) Watch 2/2/10 Abuja, Bauchi
Society for Community Community Abuja, Auchi,
16 Development Development 8/2/10 Kubwa
Faith Based Aids
Awareness
Initiative
17 Health Education 19/6/08 Jos
Society for Maternal and
Child
18 Support Initiative in Africa Health 30/6/08 Kaduna
Education as a vaccine
Against Education Abuja, Benue,
19 Aids NA Nawarawa
Women Centre for Self
Empowerment & Women
20 Development Empowerment NA Anambra & Enugu
Progressive Initiative for
21 Educational Development Education 18/5/10 Lafia
Neighborhood Care-Well Health CRS, N/Delta
22 Foundation NA A/ibom,Rivers
Community Health
Enlightenment & Community Health
23 Development Enlightenment 8/10/08 Guasau
Jos, Kaduna,
Excellence Foundation Akure, Ilorin,
24 International Inc Health 7/3/08 Abuja Bauchi
Gantys Aid for Widows, Empowerment of
25 Orphans & Needy Widows 14/2/07 Kafanchan, Jos
121
 Global Network Against
Trafficking in Women and
26 Children Child Tracficking 13/07/10 Abuja
People Against HIV/AIDs
27 in Barack HIV/AIDs care and support 21/07/10 Lagos
Liftup Care for the Needy Support Physically
28 Foundation Challenged 30/11/10 Lokoja
Sheikh Ahmad Al-
Hamaweey
29 Islamic Foundation Islamic Affairs 17/03/11 Ilorin
A/Ibom, Abuja,
Women of Vision Poverty Alleviation & aiduguri,
30 Association Women Empowerment 7/7/09 Nasarawa
Source: nairametrics.com › wp-content › uploads › 2013/01 › ngos-list-in-Nigeria

From table 1.2, it can be inferred that NGOs in Nigeria can focus on different areas
that are accountable, independent and truly representative of giving a voice to the
common man. Despite, their historical and vast contributions to human and
socioeconomic development in Nigeria, NGOs are still beset by several challenges,
the most disturbing of which is the media exposure. Other challenges are access to
funding, inadequate resources, weak governance, lack of good regulatory framework,
insecurity, lack of staff career development and public trust. However, in some ways
the state can resolve these issues by providing basic infrastructure and allowing NGOs
access, guarantee security of lives of staff/members of the establishment, public trust
on NGOs activities, substantial financial resources from the governments and
intergovernmental bodies.

4.0 CONCLUSION

This unit has examined the concept of NGOs. Thus, it is stated that NGOs play an
increasingly important role in the development cooperation. They can bridge the gap
between government and the community. They facilitate the supply of inputs into the
management process, mediating between people and the wider political party,
networking, information dissemination and policy reform. By creating an enabling
framework of laws, economic and political conditions, the State can play a
fundamental role in helping NGOs to play their roles more effectively and as a result
increase the access to infrastructure services for the urban poor. Therefore, it is stated

122
that partnerships between all groups should be achieved without ignoring each other
strengths but make use of each other‘s comparative advantage.

Self-Assessment Exercises:

Briefly discuss the main objectives of NGO.

1. What are the features of NGOs.

2. Highlight the sources of funding to NGOs.
3. Outline the roles of NGOs in nation building.

5.0 SUMMARY

In this unit, we have comprehensively discuss the concept of NGOS. In the course of
the study, the history, features, types and functions of NGOs were emphatically
described. In the same vein, the sources of finance to NGOs was discussed and the
study went further to explain the concept of international NGOs. Example of the
largest INGOs were listed. Lastly, the history of NGOs in Nigeria was stated and
selected NGOs and their scope of duties were stated.

6.0 TUTOR-MARKED ASSIGNMENT

1. Discuss the major difference between NGOs and INGOs.

2. Explain the various types of NGOs.

7.0 REFERENCES/FURTHER READINGS

Bill, M. (2015). An overview of C7 International NGOs in Development Cooperation.

Retrieved from
https://www.undp.org/content/dam/china/docs/Publications/UNDP-
CH11%20An%20
Overview%20of%20International%20NGOs%20in%20Development%20
Cooperation.pdf

Bridget, J. (2019). The Basics of Non-Governmental Organizations. Retrieved from

https://www.thoughtco.com/ngo-definition-3555283

123
Cousins, W. (1991). "Non-Governmental Initiatives" in ADB, The Urban Poor and
Basic Infrastructure Services in Asia and the Pacific". Asian Development
Bank, Manila. https://www.gdrc.org/ngo/ngo-types.html

David, L. (2010). Nongovernmental Organizations, Definition and History. Retrieved

from https://www.researchgate.net/publication/302391474.DOI:10.1007/978-
0-387-93996-4_3

Folger, J. (2019). What is an NGO (Non-Governmental Organization)?

https://www.investopedia.com/ask/answers/13/what-is-non-government
organization.asp

Odiboh, O., Omojola, O., Ekanem, T. & Oresanya, T. (2017). Non-Governmental

Organizations in the Eyes of Newspapers in Nigeria: 2013 – 2016 in Focus.
Covenant Journal of Communication (CJOC), 4(1), 66-92.

https://socialworkeducationbd.blogspot.com/2017/08/concept-of-ngos-types-and-
activities-of.html

https://uia.org/faq/yb4

https://oxfordre.com/politics/view/10.1093/acrefore/9780190228637.001.0001/acrefor
e-9780190228637-e-441

https://www.thoughtco.com/ngo-definition-3555283

https://www.thoughtco.com/ngo-definition-3555283

https://oxfamnovibacademy.wordpress.com/2017/12/06/fundraising-for-ngos-101-
types-of-funding-for-an-ngo/

http://uis.unesco.org/en/glossary-term/ingos-or-ngos

https://socialworkeducationbd.blogspot.com/2017/08/concept-of-ngos-types-and-
activities-of.html

124
125
UNIT 2 THE REGIONAL ORGANIZATIONS

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 The Regional Institutions
3.2 The ECOWAS
3.3 The African Union (AU)
3.4 AGOA, ACFTA and NEPAD
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings

1.0 INTRODUCTION

In this unit, we shall be examining regional organization and their importance in

development planning. By definition, regional organizations are international
organizations with the aim of achieving economic cooperation and development of
their regions. Although, they incorporate international membership and encompass
geopolitical entities that operationally transcend a single nation state, however, their
membership is characterized by boundaries and demarcations characteristic to a
defined and unique geography, such as continents, or geopolitics, such as economic
blocs.

2.0 OBJECTIVES

At the end of this unit, you should be able to:

 Explain the concept of regional organizations.
 State the functional characteristics of a particular regional organization.
 highlight the role of regional organizations in development planning.

126
3.0 MAIN CONTENT

This main content focuses on the functional characteristics of regional organization.

These will enable the students to understand the role and importance of the
organization in development planning.

3.1 The Regional Institutions

Regional organizations are established to foster economic, political, trade and

dialogue cooperation among states or entities within a definite geographical frontier.
The states or entities belonging to a particular regional organization might share
common pattern of development, long cultural and historical facts. The association
may have started shortly after the World War II or after independence. Also, the need
for cooperation arises as a result of globalization and global supply chain. It can come
as with the objective to ease capital movement. All these can increase opportunities
among members in terms of production and distribution of goods and services and
they form major reasons why regional cooperation institutional characteristics
deviates from loose cooperation to formal regional integration. Most regional
organizations are subset of the United Nations (UN), that is, they still follow the UN
principle rules for the global world. Although in many cases a regional organization
might be called an international organization, but in definite terms, it is clearer to use
the term region to denote the limitation of a particular membership or region. With
reference to development planning, some of the regional organizations observed in
this study include Economic Community of West African States (ECOWAS), African
Union (AU), West African Economic and Monetary Union (WAEMU), West African
Monetary Zone (WAMZ), African Continental Free Trade Agreement (ACFTA),
Southern African Development Community (SADC), Association of Southeast Asian
Nations (ASEAN), and European Union (EU). There are also regional organization
established by international organization to address economic issues at different level.
These include United Nations Economic Commission for Africa and African
Development Bank (UNECA and AfDB). The African Growth and Opportunity Art
(AGOA) was created by the United States (US) to promote African export trade.

127
The overall development planning objectives of these institutions include:

1. Economic cooperation
2. Dispute settlement
3. Economic openness via tariff reduction or elimination
4. Financial support or grant
5. Reduce rivalry among member nation
6. Export promotion
7. Financial integration

3.2 The ECOWAS

ECOWAS is the Economic Community of West African States established on 28th

May, 1975 is a regional political and economic union of fifteen countries located in
West Africa. Collectively. The broad mission is to promote economic integration
among member states. The vision was later revised and it is ―to achieve collective
self-sufficiency" for its member states by creating a single large trade bloc by building
a full economic and trading union‖.

Its mission in short is to promote economic integration in "all fields of economic

activity, particularly industry, transport, telecommunications, energy, agriculture,
natural resources, commerce, monetary and finance, social and cultural life. As part of
development effort and among the achievement of ECOWAS is peace keeping
mission among its members warring nations. There have been several dispute
settlements. The states also have the inter-governmental action group against money
laundering and terrorism financing.

According to an ECOWAS Court Information Manual Issued in Abuja, in 2001, the

union among ECOWAS countries leads to the acceptance of the fundamental
principles of:

 Equality and inter-dependence of Member States;

 Solidarity and collective self-reliance

128
  Inter-state co-operation, harmonization of policies and integration of programs;
 Non-aggression between Member States
 Maintenance of regional peace, stability and security through the promotion
and strengthening of good neighborliness;
 Peaceful settlement of disputes among Member States, active co-operation
between neighboring Countries and promotion of peaceful environment as a
prerequisite for economic development
 Recognition, promotion and protection of human and people‘s rights in
accordance with the provisions of the African Charter on Human and People‘s
Rights;
 Accountability, economic and social justice and popular participation in
development;
 Recognition and observance of the rules and principles of the Community;
 Promotion and consolidation of a democratic system of governance in each
Member State as envisaged by the
 Declaration of Political Principles adopted in Abuja on 6th July 1991; and
 Equitable and just distribution of the costs and benefits of Economic Co-
operation and Integration (ECOWAS, 2001).

There are two sub-regional blocks in ECOWAS, these include:

 The West African Economic and Monetary Union (WAEMU or UEMOA in

French acronym) and,
 The West African Monetary Zone (WAMZ).

While WAEMU is association of eight French speaking ECOWAS nations, WAMZ is

association of six English speaking ECOWAS nations.

Although each ECOWAS member might place priority on domestic affairs,

nevertheless, ECOWAS, as a body of regional organization has quite a good number
of functional and developmental objectives, some of them are highlighted below:

 Promotion of Cooperation and development.

129
  Harmonization of Agricultural, Economic, Monetary and Industrial Policies.
 Abolition of trade restrictions and Customs Duties.
 Establishment of Common Fund.
 Implementation of Infrastructural Schemes
 Greater economic competitiveness, through open markets, in addition to the
rationalization and harmonization of the legal environment
 The convergence of macro-economic policies and indicators
 The creation of a common market
 The co-ordination of sectoral policies
 The harmonization of fiscal policies

3.3 The African Union (AU)

The African Union (AU) is an inter-governmental organization with 55 member

countries. It is a continental organization aimed at bringing African countries under
the same umbrella. The drive to form the AU started in a conference in Ghana in
1958. The conference aimed at forming the Africa Day, to mark the liberation
movement each year concerning the willingness of the African people to free
themselves from freedom from servitude. They aim freedom from the dictatorship of
the colonial masters and attain independence for all African countries. The subsequent
attempts to unite Africa leads to the formation of the Organization of African Unity
(OAU) in 1963, and the African Economic Community in 1981. Since then, various
conferences to consolidate the organization have been held in different point in time.
The organization adopted the new name, AU in Durban on the 9th July, 2002. Among
others, some developmental objectives of the AU include:

i. Establishing the New Partnership for African Development (NEPAD)

ii. Canvassing for democratic government in Africa.
iii. Calling for joint African space agency
iv. Cooperation with the United Nations on the eradication of HIV Aids
v. Lessening poverty rate
vi. Women empowerment and development

130
 vii. Agriculture and food production (Coleman, 2002 & Bronwen, 2004).

Other Objectives of the AU clearly stated in the AU Agreement, include:

1. To achieving greater unity, interconnection and harmony between the African

countries and African nations.
2. To accelerate the political and social-economic integration of the continent.
3. To promote and defend African common positions on issues of interest to the
continent and its peoples.
4. To defend the sovereignty, territorial integrity and independence of its Member
States.
5. To encourage international cooperation, taking due account of the Charter of
the United Nations and the Universal Declaration of Human Rights.
6. To promote peace, security, and stability on the continent.
7. To promote democratic principles and institutions, popular participation and
good governance.
8. To promote and protect human and peoples' rights in accordance with the
African Charter on Human and Peoples' Rights and other relevant human rights
instruments.
9. To establish the necessary conditions which enable the continent to play its
rightful role in the global economy and in international negotiations.
10. To promote sustainable development at the economic, social and cultural levels
as well as the integration of African economies. Many have criticized the AU
for lacking the might to stop dictatorship in Africa. Many African leaders have
held on to power for too long without good governance. In additions, the
continent has been affected by diseases and pestilences over the years. Most
countries in the AU has remained underdeveloped, human trafficking, child
labour, kidnapping and many social evils have rocked the many countries. As a
result, low productivity, poverty and unemployment have been on the increase.
Unfortunately, there might be no sign of end to these as the population is on the
increase and productivity appears to be falling. In spite of all the shortcomings,

131
 over the years, the AU has recorded quite some level of achievements. Some of
the achievements with respect to development are highlighted below:

 Establishment of human right courts

 Establishment of various developmental bank
 Participating in several peace keeping operations within and outside the
continent.
 Maintaining cordial relations with the UN, EU and several international
organizations and also UN veto-powers like USA, CHINA, UK and France.
In fact in recent time, there had been a Forum on China–Africa Cooperation
summit in Beijing, China.
 Ensure all the countries in African continent are member states unlike EU
where some countries refuse to be members or some have left or planning to
leave (Frugé, 2016).

Some of the future goals, as far as development planning for the continent is
concerned, are:

 Formulating a customs union.

 To achieve a common or single market.
 Establish a central bank.
 To have a common currency or African Monetary Union.
 Granting visa-free travel zone.

3.4 African Growth and Opportunity Act (AGOA) and African Continental Free
Trade Agreement (ACFTA)

3.4.1 African Growth and Opportunity Act (AGOA)

AGOA is a US Trade Act, enacted on 18 May 2000 as Public Law 106 of the 200th
Congress. AGOA has been functional since then but has time duration. However, it
has been renewed to 2025. The act significantly allows market access to the US of
goods from Sub-Saharan African (SSA) countries. Benefits of AGOA include:

132
  Increases foreign exchanges earnings advantage to beneficiary countries.
 Induces productivity and export.
 Accords duty-free access for eligible products to the largest single market in
the world.
 Provides beneficiary countries with a significant competitive advantage over
non-AGOA countries that must pay normal tariff rates to enter the United
States.
 It eliminates trade bias
(Donaldson, 2017).
(http://www.brookings.edu/events/2012/06/13-africa-growth-opportunity)
https://en.wikipedia.org/wiki/African_Growth_and_Opportunity_Act.

One of the benefits open to Nigeria is the Textile Visa Stamp. According to the
Nigerian Export Promotion Council (NEPC), this would enable garment
manufacturers in Nigeria to have tariff concession on textile and garments
manufactured in the country for export to the United States under the African Growth
and Opportunity Act.

3.4.1 African Continental Free Trade Agreement (ACFTA)

The ACFTA is a new trade agreement between the African countries with the main
objective to cooperate via free trade. ACFTA was established in March 2018. That is
member countries signing the agreement accept free movement of capital, trade
openness and abolition of trade tariff. At first other specific objectives. At the
beginning Nigeria was not a member but later signed in mid-2019. Other specific
objectives of ACFTA are:

 Encourage production and export among African countries.

 Given special consideration, like tariff reduction or elimination, to African
countries with respect to tradeable goods.
 Enhancing African power in trade negotiation at the World Trade
Organization.

133
  Creating employment opportunities via increase trade activities.

However, ACFTA has quite some challenges, the major challenge is the inability of
securing full cooperation of members. For instance, Nigeria did not sign the
agreement for over a year for some economic reasons. Most of the countries,
especially, the Sub-Saharan Africa, have relatively low volume of trade to contribute.
As a result, in the long run, they may be at the receiving. In addition, economic
openness may lead to unrestrained immigration of labour to resource rich or fast
economic developing areas within the region, this may lead to over-population or
population explosion in the long run.

3.4.2 New Partnership for Africa’s Development (NEPAD)

The New Partnership for Africa‘s Development (NEPAD) is a regional organization

helping countries agree on priority corridors and investment allocations. It is an
economic development programme of African Union. NEPAD aims at formulation
economic policy framework for accelerating economic co-operation and integration
among African countries. In order to foster her developmental objectives, NEPAD has
formulated partnership with the United Nations Economic Commission for Africa
(UNECA), African Development Bank (ADB), Development Bank of Southern Africa
(DBSA), African Capacity Building Foundation and Office of the UN secretary
general and special adviser on Africa.

NEPAD specific objectives are:

 To promote sustainable growth and development.

 To eradicate poverty.
 To place African countries, individually and collectively, on a path of
sustainable growth and development.
 To end marginalization of Africa in the globalization process.
 To enhance its full and beneficial integration into the global economy.
 To accelerate the empowerment of women.

134
What can be regarded as instruments to achieve the long run objectives of NEPAD
are:

 Engage in social and political activities that is based on underlying principles

of a commitment to good governance, democracy, human rights and conflict
resolution,
 Recognition that maintenance of these standards is fundamental to the creation
of an environment conducive to investment and long-term economic growth.
 Seeks to attract increased investment, capital flows and funding,
 Providing an African-owned framework for development as the foundation for
partnership at regional and international levels.

NEPAD has been criticized on the basis of failing to include wide participation of
more African countries, civil societies, and NGOs. Insufficient funding and poor
management of fund; slow decision making process and poor project
implementing framework are also some of the shortcomings of NEPAD.

Self-Assessment Exercise
In view of the AU agenda, quickly highlight four future aspirations of the AU.
Explain are the shortcomings of NEPAD in a sentence?

4.0 CONCLUSION

Regional organizations are integral part of development objctives because they serve
as complemenatry to development policies of member nation. For instance in peace
keeping, they maintain security of life and property. They create a save environment
for career developmnet and enable the people to pursue their aspirations in life. In
provision of financial aid, implicitely, they support developmnetal projects. By
promoting unity among member nations, they recognize the need to be in peace and
harmony. The future aspiration of common monetary union and free entry-visa zone
and developmental goals and objectives of other partners organizations are expected
to add more strength to the goal of cooperation, development and development
planning process of Africa and other poor countries.
135
5.0 SUMMARY

This unit has examined the regional organizations and their important objectives
relative to development planning. Regional organization include countries forming
peaceful coexistence of member nations. Most of the objectives of regional
organization will boost development projects if implemented efficiently. We
explained that while the African Union (AU) encompasses the whole African
continent, the Economic Community of West African States (ECOWAS) cover the
West African region. Although ECOWAS was made of two blocs, the British and the
French African countries, their objectives are similar, aiming at promoting
cooperation mostly through trade and monetary union. Other regional organization
like AGOA and ACFTA are created to increase trade opportunities. AGOA is an Act
of Parliament of the United States to reduce tariffs on products of beneficiary nations.
African is being given priority in the Act. The ACFTA is a proposed trade agreement
focusing on elimination of trade barriers within member African nations. NEPAD is
another partnership that can catalyzed Africa development plan if aims and targets are
efficiently pursued. It is noted that if both African regional and also international
organizations focus on achieving their set targets, it will enhance full implementation
and successful outcome of development planning in the region and others in the
world.

6.0 TUTOR-MARKED ASSIGNMENT

1. States the benefits attached to membership of AGOA and NEPAD

2. List five developmental objectives of the AU.
3. In your own expression, explain four reasons why a regional organization
might be advantageous to development planning.
4. What are the criticisms levied against the AU?

7.0 REFERENCES/FURTHER READINGS

"Economic Policy and Conflict in Africa" in Journal of Peace building and

Development, Vol.2, No.1, 2004; pp. 6–20

136
Bronwen Manby (2004). "The African Union, NEPAD, and Human Rights: The
Missing Agenda. Human Rights Quarterly - Volume 26, Number 4, November
2004, pp. 983–1027

Coleman, S. (2002). Pan-Africa: The NEPAD formula, World Press Review July
2002 v49 ( 17) 29-31. original on 1 October 2016. Retrieved 29 September
2016.

ECOWAS Information manual, 2001.

Frugé, Anne (2016). The Opposite of Brexit: African Union Launches an All-Africa
Passport". The Washington Post.

https://en.wikipedia.org/wiki/African_Union

https://www.govinfo.gov/content/pkg/PLAW-106publ200/pdf/PLAW-106publ200.pdf

NEPAD: A New Path?" edited by Peter Anyang' Nyong'o, Aseghedech Ghirmazion

and Davinder Lamba, Heinrich Boell Foundation, 2002

Rodrigo Tavares (2009), Regional Security: The Capacity of International

Organizations. London and New York: Routledge.

Smith, David (6 September 2012). "Sudanese president calls for African space
agency". The Guardian Study on an African Union Government: Towards a
United States of Africa, 2006. See also, Decision on the Union Government,
Doc. Assembly/AU/2(VII).

Spandler, Kilian (2018). Regional Organizations in International Society: ASEAN, the

EU and the Politics of Normative Arguing. Palgrave Macmillan. ISBN 978-3-
319-96895-7.

Strengthening Popular Participation in the African Union: A Guide to AU Structures

and Processes, AfriMAP and Oxfam GB, 2010.

Tanja A. Börzel and Thomas Risse (2016), The Oxford Handbook of Comparative
Regionalism. Oxford: Oxford University Press

The New African Initiative and the African Union: A Preliminary Assessment and
Documentation by Henning Melber, Publisher: Nordiska Afrikainstitutet,
Sweden; ISBN 91-7106-486-9; (October 2002).

United Nations. "Cooperation with regional organizations", in Annual Report of the

Secretary-General on the work of the Organization 1995, ch. 4.

137
UNIT 3 UNITED NATIONS INSTITUTIONS (I.E. UNESCO,
UNCTAD, WTO, FAO ETC.)

CONTENTS

1.0 Introduction
2.0 Objective
3.0 Main Content
A
3.1 A Brief examination of United Nations Institutions (UNESCO, UNCTAD,
WHO, FAO, UNIDO, FAD, and ILO) involved in Planning.
3.2 United Nations Educational, Scientific and Cultural Organization
(UNESCO)
3.3 United Nations Conference on Trade and Development (UNCTAD)
3.4 World Health Organization (WHO).
3.5 Food and Agriculture Organization (FAO).
3.6 International Fund for Agricultural Development (IFAD).
3.7 International Labour Organization (ILO).
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The previous unit examines regional organizations involved in economic reforms in

Nigeria and other sub-Africa regions. This study unit takes a step further to look at
United Nation Institutions that indirectly involve in social and economic planning
globally. The institutions to be examined and discussed are UNESCO, UNCTAD,
WHO, FAO, UNIDO, FAD and ILO. In the course of explaining what the institutions
stand for, more emphasis will be on the duties of each establishment.

2.0 OBJECTIVE

At the end of this unit, you should be able to highlight the mission and functions of the
following arms of United Nations:

 UN Educational, Scientific and Cultural Organization (UNESCO);

 International Labor Organization (ILO);

138
  Food and Agriculture Organization of the UN (FAO);
 World Health Organization (WHO);
 International Fund for Agricultural Development (IFAD);
 UN Industrial Development Organization (UNIDO), and;
 World Trade Organization (WTO).

3.0 MAIN CONTENT

3.1 A Brief examination of United Nations Institutions (UNESCO, UNCTAD,

WHO, FAO, UNIDO, FAD, and ILO) involved in Planning.

Development plans and economic reforms also involve collaboration between regions,
countries, states and several international institutions. These institutions provide help
by formulating policies, provide technical assistance, and other forms of practical help
in virtually all areas of economic and social endeavor to different countries and
regions. A good number of such agents are under the umbrella of the United Nations.
Such agencies include: The International Labor Organization (ILO), the Food and
Agriculture Organization of the UN (FAO), UN Educational, Scientific and Cultural
Organization (UNESCO), World Health Organization (WHO), World Bank,
International Monetary Fund (IMF), International Civil Aviation Organization
(ICAO), Universal Postal Union (UPU), International Telecommunication Union
(ITU), World Meteorological Organization (WMO), International Maritime
Organization (IMO), World Intellectual Property Organization (WIPO), International
Fund for Agricultural Development (IFAD), UN Industrial Development Organization
(UNIDO), International Atomic Energy Agency (IAEA) and the World Trade
Organization (WTO). However, with regards to the subject matter of the study only
seven of these agents (UNESCO, UNCTAD, WHO, FAO, UNIDO, FAD and ILO)
will be examined.

139
3.2 United Nations Educational, Scientific and Cultural Organization
(UNESCO)

UNESCO, acronym for United Nations Educational, Scientific and Cultural

Organization, is a specialized agency of the United Nations (UN) that was outline in a
constitution signed November 16, 1945. The constitution, which entered into force in
1946, called for the promotion of international collaboration in education, science, and
culture. The agency permanent headquarters are in Paris, France.

Each member state has one vote in UNESCO General Conference which meets every
two years to set the agency budget, its program of activities, and the scale of
contributions made by member states to the agency. The 58-member Executive Board,
which is elected by the General Conference, generally meets twice each year to give
advice and direction to the agency‘s work. The Secretariat is the agency backbone and
is headed by a director general appointed by the General Conference for a six-year
term. About 200 national commissions, composed of local experts, serve as
governmental advisory bodies in their respective states. Most work occurs in special
commissions and committees convened with expert participation. Prominent examples
include the Intergovernmental Oceanographic Commission (1961), the World
Commission on Culture and Development (1992-99), and the World Commission on
the Ethics of Scientific Knowledge and Technology (1998). The findings of these
commissions are regularly published by UNESCO.

The main objective of UNESCO is to contribute to peace and security in the world by
promoting collaboration among nations through education, science, culture and
communication in order to further universal respect for justice, for the rule of law, and
for the human rights and fundamental freedoms which are affirmed for the peoples of
the world, without distinction of race, sex, language or religion, by the Charter of the
United Nations.

In support of these objectives, UNESCO's principal functions are:

140
 a. To promote intellectual co-operation and mutual understanding of peoples
through all means of mass communication;
b. To give fresh impulse to popular education and to the spread of culture;
c. To maintain, increase and diffuse knowledge;
d. To encourage scientific research and training;
e. To apply sciences to ensure human development and the rational management
of natural resources. (https://en.unesco.org/)

As noted earlier, UNESCO is also involved in efforts to protect the natural

environment and humanity‘s common cultural heritage. For example, in the 1960s
UNESCO helped sponsor efforts to save ancient Egyptian monuments from the waters
of the Aswan High Dam, and in 1972, it sponsored an international agreement to
establish a World Heritage List of cultural sites and natural areas that would enjoy
government protection. In the Nigeria scenario, the Youth Mobile Initiative is an
innovation by UNESCO launched in 2014 at the global level, which aims at engaging
a critical mass of young people to acquire basic technical skills and confidence to
develop, promote, and sell locally relevant mobile applications (APPs) that address
local issues for sustainable development. Within the framework of this initiative,
UNESCO Abuja Office collaborated with the Federal Capital Territory
Administration (FCTA) to implement a project tagged UNESCO-FCTA Youth-
Mobile Project. This project began its first phase in June 2017, graduated over 400
beneficiaries in March 2018.

In conclusion, the UNESCO agency has not only promoted education globally, but has
also help to create environmental awareness campaign, ethical awareness, things like
values, attitude change, skills acquisitions, and good behaviour.

Self-Assessment Exercise:

Describe any four objectives of UNESCO.

141
3.3 United Nations Conference on Trade and Development (UNCTAD)

The United Nations Conference on Trade and Development (UNCTAD) is a

permanent organ of the United Nations (UN) General Assembly, established in 1964
to promote trade, investment, and development in developing countries. The
headquartered is in Geneva, Switzerland, UNCTAD has approximately 190 members
which Nigeria is inclusive.

UNCTAD working at the national, regional, and global level, help countries to:

 Comprehend options to address macro-level development challenges

 Achieve beneficial integration into the international trading system
 Diversify economies to make them less dependent on commodities
 Limit their exposure to financial volatility and debt
 Attract investment and make it more development friendly
 Increase access to digital technologies
 Promote entrepreneurship and innovation
 Help local firms move up value chains
 Speed up the flow of goods across borders
 Protect consumers from abuse

Particularly, negotiations at UNCTAD‘s meetings resulted in the formation

Generalized System of Preferences (GSP) (1968), an agreement that reduced tariffs

and removed or reduced nontariff trade barriers among participating developing
countries; the Common Fund for Commodities (1989), an intergovernmental financial
institution that provides assistance to developing countries that are heavily dependent
on commodity exports; and various agreements for debt relief. In the 1990s
UNCTAD‘s efforts were directed toward the challenges globalization poses to
developing countries, and special attention was focused on measures to help the
poorest and least developed countries become integrated into the world economy.

142
The highest policy-making body of UNCTAD is the Conference, which meets once
every four years to set policy guidelines and to formulate a program of work. The
UNCTAD Secretariat, whose members form part of the UN Secretariat, performs
policy analysis, monitors and implements the decisions of UNCTAD‘s
intergovernmental bodies, and provides for technical cooperation and exchanges of
information. It comprises four divisions on globalization and development strategies;
international trade; investment, technology, and enterprise development; and services
infrastructure as well as the Office of the Special Coordinator for Least Developed,
Land-locked, and Island Developing Countries (OSC-LDC). The Trade and
Development Board, UNCTAD‘s executive body, is responsible for the operations of
the organization when the Conference is not in session.

Self-Assessment Exercise:

The UNCTAD agency is working with several national and regional government to
achieve certain objectives, discuss.

3.4 World Health Organization (WHO)

The World Health Organization is an organization within the United Nations that is
responsible for helping governments to improve their health services. World Health
Organization (WHO) was created in 1948 by member states of the United Nations
(UN) as a specialized agency with a broad mandate for health. The WHO is the
world's leading health organization. Its policies and programs have a far-reaching
impact on the status of international public health.

Defined by its constitution as "the directing and coordinating authority on

international health work," WHO aims at "the attainment by all peoples of the highest
possible standard of health." Its mission is to improve people's lives, to reduce the
burdens of disease and poverty, and to provide access to responsive health care for all
people.

WHO's responsibilities and functions include;

143
  Assisting governments in strengthening health services;
 Establishing and maintaining administrative and technical services, such as
epidemiological and statistical services;
 Stimulating the eradication of diseases;
 Improving nutrition, housing, sanitation, working conditions and other aspects
of environmental hygiene;
 Promoting cooperation among scientific and professional groups;
 Proposing international conventions and agreements on health matters;
 Conducting research;
 Developing international standards for food, and biological and pharmaceutical
products and;
 Developing an informed public opinion among all peoples on matters of health
(https://en.wikipedia.org/wiki/World_Health_Organization)

WHO‘s operations are carried out by three distinct components: The World Health
Assembly, the executive board, and the secretariat. The World Health Assembly is the
supreme decision-making body, and it meets annually, with participation of ministers
of health from its 191 member nations. In a real sense, the WHO is an international
health cooperative that monitors the state of the world's health and takes steps to
improve the health status of individual countries and of the world community.

The executive board, composed of thirty-two individuals chosen on the basis of their
scientific and professional qualifications, meets between the assembly sessions. It
implements the decisions and policies of the assembly.

The secretariat is headed by the director general, who is elected by the assembly upon
the nomination of the board. The headquarters of the WHO is in Geneva. The director
general, however, shares responsibilities with six regional directors, who are in turn
chosen by member states of their respective regions. The regional offices are located
in Copenhagen for Europe, Cairo for the eastern Mediterranean, New Delhi for
Southeast Asia, Manila for the western Pacific, Harare for Africa, and Washington
D.C. for the Americas. Their regional directors, in turn, choose the WHO

144
representatives at the country level for their respective regions. There are 141 WHO
country offices, and the total number of WHO staff, as of 2001, stands at 3,800. WHO
is the only agency of the UN system with such a decentralized structure. The Pan
American Health Organization (PAHO) existed before the birth of WHO and serves as
WHO's regional office for the Americas.

3.5 Food and Agriculture Organization (FAO)

The Food and Agriculture Organization (FAO) is a specialized agency of the United
Nations that leads international efforts to defeat hunger. It was founded in 1945 and it
Headquarters is located in the city centre of Rome. FAO has 194 Member Nations,
two associate members and one member organization, the European Union. It played
the leading role in the global food and agriculture issue areas, overseeing the
establishment of important agreements and institutions, including the World Food
Programme (WFP). The functions of FAO include efforts to improve agriculture,
forestry and fisheries practices, ensuring good nutrition and food security. The
objective is to achieve food security for all and make sure that people have regular
access to enough high-quality food to lead active, healthy lives.

FAO has five strategic objectives:

 Help eliminate hunger and malnutrition (including food security concerns)

 Make agriculture (and forestry and fisheries) more sustainable (and productive)
 Reduce rural poverty
 Enable inclusive food systems
 Increase resilience of food related livelihoods (e.g., farmers) to threats and
crises (http://www.fao.org/home/en/)

FAO is also a source of knowledge and information, and helps developing countries
and countries in transition modernize and improve agriculture, forestry and fisheries
practices, ensuring good nutrition and food security for all. Other functions of FAO
are to furnish such technical assistance as governments may request; to organize, in
cooperation with the governments concerned, such missions as may be needed to

145
assist them in fulfilling obligations arising from their acceptance of the
recommendations of the UN Conference on Food and Agriculture and of its
constitution; and, generally, to take all necessary and appropriate action to implement
the purposes of the organization as set forth in the preamble.

Self-Assessment Exercise:

What are the strategic roles of FAO?

3.1.5 United Nations Industrial Development Organization (UNIDO).

On 17 November, 1966, the United Nations General Assembly passes resolution 2152
(XXI) establishing the United Nations Industrial Development Organization (UNIDO)
as an autonomous body within the United Nations. Its mission is to promote and
accelerate the industrialization of developing countries. It also provides a platform
wherein developing countries can fight, mitigate and counter marginalization in the
globalizing world.

In order to contribute substantially in the achievement of Millennium Development

Goals (MDGs), UNIDO has identified three core functions:

 Poverty Reduction through Productive Activities;

 Trade Capacity Building and
 Energy and Environment (https://www.unido.org/).

In each of these areas, UNIDO activities include technical cooperation, analytical

activities and advocacy through fora and publications. The policy-making organs of
UNIDO are the General Conference (GC), which meets biannually, the Industrial
Development Board (IDB) which meets twice in non-GC years and once in GC years,
and the Programme and Budget Committee (PBC) which meets once every year.
UNIDO has offices in 44 countries to manage its programmes in a decentralized
manner. Twelve of these are regional offices each covering a number of countries. As
at April 2019, 170 States are Members of UNIDO. They regularly discuss and decide
UNIDO‘s guiding principles and policies in the sessions of the Policymaking Organs.
146
It must be noted that the adoption of the New Partnership for Africa's Development
(NEPAD) by the summit of heads of state held in Lusaka, Zambia, situated South
Africa's co-operate with UNIDO on a much focused and strategic path.

In carrying out the core requirements of its mission, UNIDO has considerably
increased its technical services over the past ten years. At the same time, it has also
substantially increased its mobilization of financial resources, testifying to the
growing international recognition of the Organization as an effective provider of
catalytic industrial development services.

Self-Assessment Exercise:

Highlight the missions of UNIDO.

3.6 International Fund for Agricultural Development (IFAD).

The International Fund for Agricultural Development (IFAD) is a specialized agency

of the United Nations mandated to enable poor rural women and men to improve their
food security and nutrition, raise their incomes and strengthen their resilience. Its
mandate therefore aligns with the priorities of Switzerland's development policy.

It was established in 1977 in response to the food crisis of the 1970s. IFAD is today
the only multilateral organization with a mandate specialized on smallholder
agriculture. Its work focuses on poor rural people, including poor smallholder farmers,
fishermen and pastoralists, as well as landless and indigenous people. Its programmes
aim at improving poor rural people's access to financial services, markets, technology,
land and natural resources. As an international financial institution, IFAD provides
grants and loans on favourable terms to countries affected by widespread rural
poverty. IFAD also provides expertise in the agricultural sector and supports
innovation.

The overall direction of IFAD is summarized by the Strategic Objectives of its

Strategic Framework 2016- 2025;

147
  Increasing poor rural people‘s productive capacities in a sustainable and
resilient manner;
 Increasing and improving their engagement in markets, while enabling them to
better manage related risks;
 Strengthening the environmental sustainability and climate resilience of their
economic activities (https://www.ifad.org/en/).

IFAD is thus today the only multilateral organization with a mandate specialized on
smallholder agriculture. It finances the development of sustainable agricultural value
chains. Its work is complementary to the two other Rome-based agencies, the Food
and Agricultural Organization (FAO) with its focus on policy and knowledge, and the
World Food Programme (WFP) focusing on humanitarian interventions. IFAD
continues to partner with the Nigerian Government in building rural institutions,
establishing community-driven development initiatives, developing profitable
smallholder agri-businesses, and pursuing financial inclusion for rural poor
households.

Self-Assessment Exercise:

What are the key objectives of IFAD?

3.7 International Labour Organization (ILO).

The International Labour Organization (ILO) is a specialized agency of the United

Nations (UN) dedicated to improving labour conditions and living standards
throughout the world. Established in 1919 by the Treaty of Versailles as an affiliated
agency of the League of Nations, the ILO became the first affiliated specialized
agency of the United Nations in 1946.

The main functions of the ILO are as follow:

 The development and promotion of standards for national legislation to protect

and improve working conditions and standards of living;

148
  Provides technical assistance in social policy and administration and in
workforce training;
 Fosters cooperative organizations and rural industries;
 Compiles labour statistics and conducts research on the social problems of
international competition, unemployment and underemployment, labour and
industrial relations, and technological change (including automation);
 Helps to protect the rights of international migrants and organized labour.
(https://www.ilo.org/global/lang--en/index.htm).

In its first decade, the ILO was primarily concerned with legislative and research
efforts, with defining and promoting proper minimum standards of labour legislation
for adoption by member states, and with arranging for collaboration among workers,
employers, government delegates, and ILO professional staff. During the worldwide
economic depression of the 1930s, the ILO sought ways to combat widespread
unemployment. With the postwar breakup of the European colonial empires and the
expansion of ILO membership to include poorer and less developed countries, the ILO
addressed itself to new issues, including the social problems created by the
liberalization of international trade, the problem of child labour, and the relationship
between working conditions and the environment. Among intergovernmental
organizations, the ILO is unique in that its approximately 175 member states are
represented not only by delegates of their governments but also by delegates of those
states‘ employers and workers, especially trade unions. National representatives meet
annually at the International Labour Conference. The ILO‘s executive authority is
vested in a 56-member Governing Body, which is elected by the Conference. The
International Labour Office in Geneva, Switzerland, composed of the permanent
Secretariat and professional staff, handles day-to-day operations under the supervision
of an appointed director general. The ILO has international civil servants and
technical-assistance experts working in countries throughout the world.

Self-Assessment Exercise:

Briefly discuss the main objectives of ILO.

149
4.0 CONCLUSION

This unit has examined the historical background of selected institutions under the
umbrella of the United Nation. From the discussion, it is observed that each
institution/agents has its own specular mission, goals and responsibilities as regarding
economic reforms in both developed and developing countries alike. Nigeria is one of
the developing countries that has benefited from these agencies in one way or the
others. For instance, World Health Organization (WHO) has been supporting the
government‘s efforts to improve the health status of all Nigerians over the years. Also,
in support of the Nigerian government‘s efforts in addressing the lingering security
challenges in the country, the United Nations, under the framework of the Counter-
Terrorism Implementation Task Force (CTITF) initiative on ―Integrated Assistance
for Countering Terrorism‖ (I-ACT) initiated, through UNESCO Abuja office, a
project titled, ‗Conflict Prevention and De-radicalization of Youth in Nigeria through
Cultural Dialogue and Education.‘ The project supported conflict prevention, promote
peace education and contribute to de-radicalization of youth and adults in Nigeria. In
each of UNESCO‘s fields of competence, namely education, culture, sciences and
communication and Information, gender equality is mainstreamed into planning and
implementation of programmes. Finally, we can conclude that all agencies in the
United Nations perform unique functions to positively touch lives in Nigeria and the
rest of the world.

5.0 SUMMARY

In this unit, we have briefly discussed seven agencies that were establish within the
pinnacle of the United Nation. These agencies include International Labor
Organization (ILO), Food and Agriculture Organization of the UN (FAO), UN
Educational, Scientific and Cultural Organization (UNESCO), World Health
Organization (WHO), International Fund for Agricultural Development (IFAD), UN
Industrial Development Organization (UNIDO), and the World Trade Organization
(WTO). Moreover, we have examined the aim, structures, functions and location of
each of these agencies. From your understanding of this unit, you should be able to

150
explain the mission of each of these agencies of the United Nation. Also, it is expected
that knowing the functions of these agencies will prepare you for the next study unit.

6.0 TUTOR-MARKED ASSIGNMENT

i. Highlight any four functions of the following agencies: UNESCO, UNCTAD,

WHO, FAO, UNIDO, and IFAD.

ii. Are there duplication of duties among these agencies, discuss?

7.0 REFERENCES/FURTHER READINGS

https://en.unesco.org/

https://infoguidenigeria.com/8-functions-unesco-nigeria/

https://caast-net-plus.org › page › attach › Attachment_2_Nigeria_UNESCO

http://www.fao.org/home/en/

https://www.ifad.org/en/

https://en.wikipedia.org/wiki/World_Health_Organization

https://en.unesco.org/news/youthmobile-initiative-nigeria

https://www.britannica.com/topic/UNESCO

https://www.nationsencyclopedia.com/United-Nations-Related-Agencies/The-Food-
and-Agriculture-Organization-of-the-United-Nations-FAO-PURPOSES.html

https://www.nationsencyclopedia.com/United-Nations-Related-Agencies/The-Food-
and-Agriculture-Organization-of-the-United-Nations-FAO-
PURPOSES.html#ixzz628CCaWFS

151
(https://www.unido.org/)

https://www.suedafrika-botschaft.at/en/international-relations/multilateral-
relations/united-nations-industrial-development-organization-unido.html

https://www.eda.admin.ch/deza/en/home/partnerships-mandates/partnerships-
multilateral-organisations/un-agencies/ifad.html

152
UNIT 4 THE BRETTON WOODS INSTITUTIONS (IMF, THE
WORLD BANK, ETC.)

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 The International Monetary Fund (IMF)
3.2 The World Bank
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings

1.0 INTRODUCTION

In this unit, we shall continue the discussion on international organization which has
relevance to achievement of development planning. This unit centres on one of the
Bretton Woods Institutions, the IMF. Apart from the IMF, the institution also includes
the World Bank. The immediate aims of the two institutions were to help rebuild the
shattered post World War II economies and promoting international economic
cooperation. They also help to stop the competitive currency devaluations that
contributed to the ―Great Depression‖ of the 1930s. Member countries also primarily
unite to prevent another event that may plunge the world into another world war.

2.0 OBJECTIVES

At the end of this unit, you should be able to:

 Know the functions of IMF.
 Itemize IMF‘s assistance to developing countries.
 Know the objectives of the World Bank.
 Evaluate World Bank‘s support to underdeveloped countries.

3.0 MAIN CONTENT

153
3.1 Bretton Woods Institution l, the IMF

The Bretton Woods institution is a system of monetary management that established

the rules for commercial and financial relations among the United States, Canada,
Western European countries, Australia, and Japan after the 1944 Bretton Woods
Agreement. The agreement reached in Bretton Woods was not supported by the USSR
or Russia. The International Monetary Fund (IMF) as a body of the Bretton Woods, is
an international organization consisting of 189 countries. The IMF working to address
balance of payments problems among member countries. The institution promotes
global monetary cooperation, secure financial stability, facilitate international trade,
promote high employment and sustainable economic growth and reduce poverty
around the world. It also relies on the World Bank assistance. However, it has
encountered the need to address the lack of cooperation among other countries and to
prevent competitive devaluation of the currencies. The IMF has been a dominant
leader in financial management of many underdeveloped economies of the world
(Kindleberger, 2000). Nigeria, Ghana, Sierra Leone have benefited from IMF loans
since its inception. Also, many countries from South America and Asia have benefited
as well. As part of its responsibility, the IMF implicitly provides political protection
for its members by its virtue of universality. This is because the institution represents
nearly every country in the international system, and therefore, can pursue
international financial rescues without implicating specific creditor governments. It
often uses conditionality to prevent moral hazard associated with loans to correct
adverse balance payments (Stone, 2008). Apart from poverty alleviation policy paper,
the IMF also demands and evaluates country‘s reserves before giving financial
assistance.

3.1.1. Functional Objectives of the IMF

According to the IMF itself, it works to foster global growth and economic stability by
providing policy advice and financing the members by working with developing
nations helps them achieve macroeconomic stability and reduce poverty. Other
objectives are as follow:

154
  Ensure the stability of the international monetary system.
 Oversee the fixed exchange rate arrangements between countries
 Keeping global watch of economic systems to prevent global economic crises.
 Maintain the stability of exchange rates and international payments system.
 Maintaining stability of all macroeconomic and financial sector issues that bear
on global stability.
 It facilitates international trade, promotes employment and sustainable
economic growth, and reducing global poverty.
 Collection of sensible data such as available reserves and macroeconomic
trends.
 Give advisory counselling to member nations on balance of payments.
 Carry out research on types of government policy that would ensure economic
recovery (https://www.imf.org/external/index.htm)

Although the IMF might have achieved a great deal of economic recovery for its
members, nevertheless, the institution has come under strong criticism. Critics regard
IMF as agent of the ―West‖ to exploit less-developed or underdeveloped countries. It
has been observed that the huge interest charged on loan, as well as loan servicing
demanded on loan obtained, are burden on the poor countries often worsening their
balance of payments problem. Some of the challenges encountered by the IMF
include:

 Insufficient data to capture the real activities of member nations

 Lack of effective cooperation by members.
 Inadequate fund availability to poor countries.
 Credit facilities not accessible by extremely poor countries
 Induce structural adjustment of poor nations
 Strict loan conditionality often disadvantageous to poor countries

Although, when the IMF was established as an institution for monetary cooperation in
1944, there was no reference to conditionality. Indeed, the concept of conditionality
did not appear in the original Articles of Agreement. This concept was later

155
introduced in an executive board decision in 1952 and much later incorporated in the
Articles, as part of the First Amendment. Although, strict conditions give the IMF
institution leverage advantage, but with respect to development planning,
conditionalities is disadvantageous. This is because conditions, in the long run, impose
debt burden which may impact negatively on planning set targets. The need to pay
high interest rate on loan and servicing debt (out of reserves or dwindling government
revenue) will definitely reduce the amount that might be earmarked for planning
projects. With regard to development planning, some of the structural conditionalities
given by the Bretton Woods Institutions are:

i. A member‘s use of the resources of the Fund shall be in accordance with

the purposes of the Fund. The Fund shall adopt policies on the use of its
resources that will assist members to solve their balance of payments problems
in a manner consistent with the purposes of the Fund and that will establish
adequate safeguards for the temporary use of its resources.

ii. Under Article V Section 3(c) of the Agreement, the Fund must examine
the member‘s representation to determine that the requested repurchase would
be consistent with the Articles of Agreement and the policies on the use of
Fund resources.

The broader structural conditions also known as, Washington Consensus, are
highlighted below:

 Cutting expenditures, also known as austerity.

 Focusing economic output on direct export and resource extraction.
 Devaluation of currencies.
 Trade liberalization, or lifting import and export restrictions,
 Increasing the stability of investment (by supplementing foreign direct
investment with the opening of domestic stock markets),
 Balance budget and prudential financial management.
 Removing price controls and state subsidies,

156
  Privatization, or divestiture of all or part of state-owned enterprises,
 Enhancing the rights of foreign investors vis-a-vis national laws,
 Improving governance and fighting corruption.
 Draw up Poverty Reduction Strategy Paper (PRSP) (Clemens and Kremer,
2016; https://www.imf.org/external/index.htm).

The IMF conditions, which also include high interest on loan (Hardstaff, 2003) have
been criticized to be counter development. For instance, focusing economic output on
direct export and resource extraction and evaluation of currencies have resulted into
long term underdevelopment of poor countries. The IMF does not encourage
industrialization for underdeveloped countries. Industrialization stands as a critical
employment generation and should be hallmark of development planning.

According to Moore-Sieray, (1997), ―the (IMF) has caused more harm to the
underdeveloped and developing countries than the good. In Africa, in particular, IMF
and the World Bank have destroyed Africa's capacity and prospects for development
through misguided policies and conditions which are based on some universal
standard criteria rather than situation-specific needs of individual countries‖. This
might not be true in all ramifications because often, corruption and mismanagement of
public fund in Africa, especially, in the Sub-Saharan Africa, prevent the efficient
utilization of IMF fund to the extent that fund allocated to African countries usually
finds its way back to foreign countries of the world.

3.2 Bretton Woods Institution II, the World Bank

The World Bank is another international financial institution formed together with the
IMF in 1944. The major role of the World Bank is provision of long term financial
assistance to foster development in poorer countries mainly for the purpose of
pursuing capital projects. The Bank comprises two institutions: the International Bank
for Reconstruction and Development (IBRD), and the International Development
Association (IDA). The World Bank is a component of the World Bank Group. In
recent times, the World Bank most stated goal is the reduction of poverty. From the

157
definition, we can understand how relevant the World Bank is to the development of
underdeveloped or developing countries and how it can assist to achieve development
planning. Unlike the IMF, the World Bank gives loan at a very low interest rate and
thereby promoting long-term economic development and poverty reduction. The
World Bank group also provide technical and financial support to help countries
reform certain sectors or implement certain capital projects such as building dams for
electricity generation or irrigation; establish schools and health centers; providing
pipe-borne or drinkable water, fighting diseases, and environmental protection.

Objectives of the World Bank

For several decades following its establishment, the World Bank main objective is to
promote economic development of the poorer countries as well as assist in
accomplishing their developmental planning objectives. Apart from this, the World
Bank has several objectives which are pertinent to planning goals and targets, these
include:

 Providing long term capital to members for economic development and

reconstruction.
 Helps in inducing long term capital for improving the balance of payments.
Balancing international trade by providing institutional framework that
promotes export promotion. In the long run, these also improve balance of
payments.
 Embark on projects in rural areas of poor countries thereby reducing rural-
urban migration and lessening pressure on urban infrastructures.
 Provision of low interest loans or grants to fight diseases or prevent the
spread of diseases.
 Contribute to global entity by providing relatively reliable data on
developmental index.
 Lunching global food security programme.
 Assist in restoring and sustaining benefits of global integration, by
promoting international economic cooperation.

158
  Reduce poverty by offering assistance to middle-income and low-income
countries.
 Provide low-interest loans, interest-free credit, and grants, these enhance
improving education, health, infrastructure and natural resources management.
 Guarantee peace by creating the International Centre for Settlement of Investment
Disputes (ICSID) (https://www.worldbank.org/; https://icsid.worldbank.org/en/)

In addition to these functional objectives, currently, the World Bank has two stated
goals that it aims to achieve by 2030. These include:

 To end extreme poverty by decreasing the number of people living on less than
$1.90 a day to below 3% of the world population, and,
 To increase overall prosperity by increasing income growth in the bottom 40%
of the world‘s population.

The group aims to work with the private sector and its specialized agencies:
International Bank for Reconstruction and Development (IBRD), International
Development Association (IDA), International Financial Corporation (IFC), and
Multilateral Investment Guarantee Agency (MIGA) to achieve these two objectives.
Also, Development Impact Evaluation (DIME) is to be introduced for impact
assessment of programmes or projects.

Critique of the institutions

The IMF and the World Bank are not necessarily different from each other. Both
appear to be pursuing objectives not favourable to poor countries particularly the Sub-
Saharan African countries. In fact, the IMF and World Bank policies have generated
serious economic problem in South American countries in the 1960s to 1980s. In other
words, criticisms against the World Bank are not really different from that of IMF,
except that some of them usually focus on inappropriate policy advice which might be
inimical to development plan objectives in developing countries. Some of these
criticisms are highlighted below:

159
 - Just as the IMF, the World bank Loans are conditional loans
- Countries must strictly adhere to structural adjustment.
- Often time funding inappropriate agricultural method like growing
wheat in the tropical zones, (Williams, 1987).
- Offering policies that would implicitly aggravate balance of payments
crisis or lead to policy reversals.
- According to Klein (2010) the conditions are to the advantage of the
Washington Consensus but to the detriment of recipient nations.

Self-Assessment Exercise

State four reasons why Nigeria may not gain much from the IMF loan.

4.0 CONCLUSION

There is no doubt that the IMF and World Bank play significant role in the global
world particularly in development of the poor countries. The two institutions are
significant in promoting cooeperation and economic development. If the poorer
countries can avail themselves of the adavantages open to them as member of the
institutions, they would attain their planning objectives. However, there ought to be a
consensus on reduction of the conditions of the Bretton Woods institutions. For
instance, the high interest rate on loan should be reduced and less emphacy should be
laid on export of primary products. Reliable data and more developmental projects are
needed to supplement individual poor country‘s development plan.

5.0 SUMMARY

This unit has examined the International Monetary Fund (IMF) and the World Bank
(WB), they are also called the Bretton Woods Institutions. The primary objectives of
the institution are promotion of economic cooperation and development. The two
major institutions also assume advisory role on economic management and
development planning projects. While the IMF basically gives short term loans
usually to correct adverse balance of payments, the World Bank provides long term

160
loans for provision of capital projects. The International Bank for Reconstruction and
Development (IBRD) and International Development Association (IDA) are two
branches of the World Bank assisting in achieving its objectives. Although, the IMF
and the WB have achieved handful of development in the poor countries, yet, the two
have been criticized for their financial exploitation like high interest rate on loans to
poor countries; strong averse to import substitution; enforcing recipient nations to use
IMF or World Bank expatriates and ideologies; and insufficient development projects
in the underdeveloped countries. These insensitivities have been claimed to be one of
the major factors increasing poverty in poorer countries.

6.0 TUTOR-MARKED ASSIGNMENT

1. List five structural conditions of the IMF.

2. What are the challenges encountered by the IMF.
3. Explain the World Bank‘s development objectives that are relevant to
development planning in the poor countries. .
4. Discuss which of the Bretton Woods institutions would be more beneficiary to
Nigeria.

7.0 REFERENCES/FURTHER READINGS

Ariel Buira, A. (2002). An Analysis of IMF Conditionality. Department of Economics

Discussion Paper Series Number 104, University of Oxford.
Clemens, Michael A.; Kremer, Michael (2016). "The New Role for the World Bank".
Journal of Economic Perspectives. 30 (1): 53–76.
Hardstaff, P. (2003). "Treacherous conditions: How IMF and World Bank policies
tied to debt relief are undermining development.
Kindleberger, C.P (2000). Manias, Panics and Crashes: A History of Financial Crises.
New York: John Wiley & Sons.
Klein, Naomi (2010). The Shock Doctrine: The Rise of Disaster Capitalism. Henry Holt. pp.
566, 549.
Moore-Sieray, D. (1997). The Bretton Woods Institutions and the Self-deceiving State
In Africa: How International Finance Capital and Blunted Vision have
underdeveloped Africa. Journal of African Research & Development 27(28).
183-196. Pub, Gideon Were Publications.

161
Stone, R. (2008). The Scope of IMF Conditionality in Terminal Organization, 62(4).
586-620.
Williams, G. (1987). The World Bank in Rural Nigeria, Revisited: A Review of the
World Bank's Nigeria: Agricultural Sector Review 1987. Review of African
Political Economy. Routledge, Taylor & Francis Group.

162