Vahdi Boydaş, Mensur Boydaş,Human capital
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    Vahdi Boydaş, Mensur Boydaş,Human capital Vahdi Boydaş, Mensur Boydaş,Human capital Document Transcript

    • GRADUATE SCHOOL Of SOCIAL SCIENCES YILDIRIM BEYAZIT UNIVERSITY GRADUATE SCHOOL of SOCIAL SCIENCES SOP 651 ECONOMIC DEVELOPMENT GREATEST OBSTACLES OF NIGERIA IN TERMS OF GROWTH AND DEVELOPMENT PreparedBy: Mansur Boydaş Submitted To: Prof. Dr. Dilek Demirbaş November 2012
    • GRADUATE SCHOOL Of SOCIAL SCIENCES GREATEST OBSTACLES OF NIGERIA IN TERMS OF GROWTH AND DEVELOPMENT Facts of Nigeria: Political and Administrative Structure Federal Republic of Nigeria has petroleum-based economy and a West African country with a surface area of 923 773 km ². On the other hand, Nigeria, Africa's most populous with a population of 155.2 million, and the second largest economy in sub-Saharan Africa after South Africa. About 55% of the population is Muslim predominantly settled in northern states, and 45% Christian live in predominantly southern states. With more than 250 ethnic groups, Nigeria is a country with one of the world's largest ethnic group. Nigeria is a federal republic consisting of 36 states and one Federal Capital Territory “Abuja”. Nigeria gained independence from Britain on October 1, 1960. Between the years 1966-1999, except for a short interim period of governments, military ruled the country and after the general elections held in 1999, democracy started in the country. Nigeria is governed by a presidential system. Foreign Trade of Nigeria Contrary to many other African countries, Nigeria is one of the few important countries in the African continent with a trade surplus and as the size of both exports and imports. Especially in the last 10 years, the country has had a significant trade surplus. This is mainly related to the oil exports and rising oil prices. According to the CIA World Fact Book, the exports of Nigeria in 2011 are about $103.1 billion dollars and will keep increasing and the imports are $69.45 billion dollars.
    • GRADUATE SCHOOL Of SOCIAL SCIENCES Table1: Foreign Trade Viewed by Year Source: The Economist Intelligence Unit Nigeria Country Report, Mart 2011 T.C. Ministry of Economics: Nijerya Bilgi Notu Petroleum is accounting for over 90% of Nigeria’s export earnings. While the government aims to increase export items, this issue has not been successful. Liquefied natural gas (LNG) is the second largest export item. The export share of liquefied natural gas was 5.5% in 2010. Besides petroleum and natural gas, the animal skins and leather, cocoa and cocoa products, oil seeds, natural rubber and other products which are important in exports of Nigeria. The reasons for lower non-oil exports of products are the intense trafficking and overvalue of Naira, the currency of Nigeria. Nigeria's most important export partner is the United States and other important partners are as follows; India, Brazil, Netherlands, France, Italy and Spain. The share of Turkey in 2010 exports of Nigeria is only 0.5% and Turkey takes 27th place in Nigerian export market (Akova, 2012). Nigeria's important import goods are passenger cars, motor vehicles for the transport of goods, electrical transformers, static converters, public transport vehicles, parts and components for land vehicles, plumber goods, wheat, rubber goods, frozen fish and iron and steel-wire electrical devices for telephones (Akova, 2012). The United States is again the most important partner of Nigeria in imports. The share of USA in 2010 imports is 17.9%. Chine is the second after USA with a share of 16.6%. The share of Turkey in 2010 imports of Nigeria is only 0.6% and Turkey takes 28th place. Growth And Development Obstacles Development is critical and essential for the nourishment and growth of any nation. A state is developed when is able to afford sufficient life for her people. It is tragic that Nigeria in the last fifty years has been struggling with the troubles of development despite her vast human,
    • GRADUATE SCHOOL Of SOCIAL SCIENCES material and natural resources. With an active leadership, economic success would have been achieved already. Igbuzor states that it is ironic that Nigeria is the sixth largest exporter of oil and at the same time host the third largest number of poor people after China and India. While there has been sound economic growth within the context of GDP in the last few years, there are uncertainties whether the advantages are equally circulated particularly to the poor and excluded through development. There is growth with no development alongside. Nigeria is among the twenty states in the world where the gap between the rich and the poor is widest. Although Nigeria has had sequence of development plans started from the colonial times, all attempts to create momentous development proved useless. The greatest obstacles in terms of growth and development of Nigeria shown in the figure; Growth And Development Obstacles Of Nigeria Human Capital Development Lack of Good Governance High Illiteracy Rate Corruption Unskilled Workers Unjust Political, Social, Economical Structures NIGERIA Unemployment Human Security Conflicts Among Ethnic Groups Low Productivity Over Population Survival, Basic Needs, Quality of Life Poverty Infrastructure
    • GRADUATE SCHOOL Of SOCIAL SCIENCES Lack Of Good Governance There exists a strong relationship between development and good governance. In spite of numerous development plans, there has not been a significant increase in growth and development. So, what went wrong? Were the plans bad in their context or wrongly anticipated? Many aspects have united together to bind growth and development of Nigeria. The new economic plan is called 2020 vision and to achieve expected outcomes the economy was expected to grow at 14% annually, but currently economy is growing at 7%. The low GDP growth is mainly due to ineffective distribution and broke administration of the country’s human and natural resources. According to the 1999 constitution of Nigeria, the local governments mainly depend on the state government within the context of freedom and financial strength which entails breakages on economic growth. In the majority of the cases, there was no executive capacity responsible for the formulation and implementation of development plans. Some of the plans failed because of no consultation of the general public. Development plans are supposed to involve even a single human being in the state. Even, the Local Government officials who are close to the people were not consulted. Mimiko asserts in her article that planning is not an edifice where technocrats alone operate (as cited in Oluwatoyin and Lawal, 2011). Development becomes a fantasy where there is lack of good governance. This shows that the leaders have no sense of dedication to development. Another obstacle of development in Nigeria which is related to governance is high level of corruption. Corruption is a key problem which directs resources away from growth and development. Nigeria is depicted to be country where the robbery of state fund is flagrantly institutionalized (Ofeimun, 1993). The state of Nigeria could be very prosperous whereas it has wasted oil and mineral wealth and generated unfair income distribution. The state is corrupt and governed by corrupt leaders who have made the state a mechanism of capital accretion, despite using it to the concern of the people. Transparency International has rated Nigeria as the second most corrupt state in the world in the 2002 report. Lack of good governance in a way corrupt government triggers unjust political, social and economic structures which threatens human security, quality of life and have negative effects on infrastructure. Even the base of conflicts among the ethnic groups is related to economics, therefore the main problem here is that the state fund leakages should be cut and redirected to the policies within the context of citizens’ interest to achieve sound growth and development. As a result of unjust political, social and
    • GRADUATE SCHOOL Of SOCIAL SCIENCES economic structures, human security comes into question. Breakdown process of social groups, economic systems and political structures threatens human security at all levels. Conflicts among groups have made Nigeria unsecured since independence in 1960. The human security is jeopardized by hunger, poverty, inequality, injustice, dependence, ignorance, corruption and crime. As a result of poverty, consumption is low in the general public which directly effects economy. The connotation of poverty on economic development of Nigeria is visible in the lack of sufficient infrastructure. The supply of electricity is irregular and for few hours in a day. This entailed the condition in which the country as a whole lacks access to adequate food supply and access to services like health and education. It is crucial to hub on human security in order to hub on a comprehensive development schedule. Human security and human development are associated. Human development would only be achieved by the existence of human security and without human development human security is not possible reach. So these two are very much interrelated. The security is essential as the action plans of entire development will position on the foundations of security. Economic security of people is the most significant of them. No economic assets, no progress. Economic security is based on stable, regular and satisfactory income, profitable employment for all and the optimum level of the population of the state. Akpobasah states that “Income distribution in the country is also highly skewed such that probably less than 15% of the population actually benefits from the GDP growth. The country has a debt overhang of about US $30 billion with high servicing requirements. Currently about 65- 70% of the population lives below the poverty line, half of which probably lives on less than half a dollar per day. The situation rather than improve has been worsening over time.” The weak point of the Nigerian economy is not unconnected to its reliance on oil. The initiation of petroleum in the Nigerian economy in the late 60s and early 70s brought advantages and disadvantages. The core advantages were increase in government returns, visible rise in industrial investment, balance of payment surplus, growth in construction industries, rapid urbanization and apparent advancement in educational, health and infrastructural development. Third National Development Program was initiated in 1973, by the time it was said that money was no longer a problem in the economic development of Nigeria but how to manage it. Oil makes about 90% of foreign exchange earnings and 75% of government revenues and it contributes about 30% of GDP but employs only about 3% of the labor force (Akpobasah, 2004). The main disadvantage of the oil boom is over dependence of the economy on one commodity which was petroleum. Other disadvantages comprise
    • GRADUATE SCHOOL Of SOCIAL SCIENCES ignorance of agriculture which was the mainstay of Nigerian economy in 60’ss and 70’s and the rural sector at the expense of urban centers and over dependence on external sector for food supply and industrial raw materials. Nigeria is gifted with plentiful environmental resources however, high population growth rate at about 3 percent and increasing demand for these resources threaten environmental sustainability. Human Capital Development Human beings are the most important promising soource of growth in productivity, growth and development. The development and use of human capital is vital for economic growth. Though, the illiteracy rate in Nigeria is high and many workers are unskilled that results in low productivity. The main source of output in any country is increase in productivity. Technology and tools are made by humans and can only be used by people. As the global economy move to more knowledge-based sectors skills and human capital development becomes a fundamental concern. The prime hub of Nigeria has been finding a way to speed up the growth rate of national income and to connect in structural renovation of her continuation and resource based economy to a production and consumption based economy in order to break the cycle of poverty, low productivity and sluggishness. Human capital refers to the abilities and skills of human resources and human capital development refers to the process of acquiring and increasing the number of persons who have the skills, education and experience which are critical for the economic growth of the country ( Harbison, 1962). Thus, what really matters in Nigeria is the empowerment of people and the recruitment of economic surplus into productive investment channels. There is also the need for the Nigerian economy to abolish or reduce those limitations towards human capital development so as to augment fast economic growth. The illiteracy rate is very high. Majority of the workers are unskilled and make use of obsolete capital, equipment and techniques of production. The marginal productivity is very low which leads to low real income, low savings, low investment and accordingly low rate of capital structure (Johnson, 2011). Human capital development is
    • GRADUATE SCHOOL Of SOCIAL SCIENCES valuable and vestiges an indispensable tool of economic growth and development in Nigeria. The primary, secondary and tertiary school enrolments, total government expenditure on health and on education is considerably associated with economic growth in Nigeria. Conclusion This paper has carefully revealed the greatest obstacles of Nigeria in growth and development. It examined the problems of economic development in Nigeria and the paper also suggested some viable strategies needed to stimulate sustainable development in Nigeria. It is the outcome of this paper that if these strategies are realistically and judiciously pursued, Nigeria will be well positioned in the global economy.
    • GRADUATE SCHOOL Of SOCIAL SCIENCES References 1. Ofeimun, O.(1993). To Safe the Nigerian Economy: The Fallacy of Structural Adjustment, the Imperative for a Public Sector-Driven Economy and Confronting the Corruption Industry, The African Guardian, pp. 18-20 2. CIA World Fact Book, Statistics of Nigerian Foreign https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html Trade, 3. Akova, Y., (2012). Nijerya Bilgi Notu, T.C. Ekonomi Bakanlığı İhracat Genel Müdürlüğü. 4. Johnson, O, A., (2011). Human Capital Development and Ecocomic Growth in Nigeria. European Journal of Business and Management, Vol 3, No.9., Nigeria. 5. Akpobasah, M. (2004). The Development Strategy for Nigeria, Presented at Overseas Development/Nigerian Economic Summit Group Meeting on Nigeria, London. 6. Harbison F.H. (1962): Human resources development planning in modernizing economies; international labor review pp453-458. 7. Ofeimun, O.(1993) ''To Safe the Nigerian Economy: The Fallacy of Structural Adjustment, the Imperative for a Public Sector-Driven Economy and Confronting the Corruption Industry '',The African Guardian, pp. 18-20. 8. Oluwatoyin, A., Lawal, T. (2011). National Development in Nigeria: Challenges and Prospects. Journal of Public Administration and Policy Research, Vol. 3(9), pp. 237241. Retrieved from http://www.academicjournals.org/jpapr. Doi: 10.5897/JPAPR11.012