Review of Public Administration and Management

Review of Public Administration and Management

Vol.3 No. 5

ISSN 2315-7844

July. 2014

A bi-annual Journal of the Department of Public Administration Nnamdi Azikiwe University, Awka, Nigeria Website: http://journalofpubadmin.blogspot.com http://reviewofpublicadministration.wordpress.com www.arabianJBMR.com E-mail: [email protected]

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Review of Public Administration and Management

© Department of Public Administration Nnamdi Azikiwe University, Awka, Nigeria

Published July, 2014 by Department of Public Administration, Nnamdi Azikiwe University, Awka, Nigeria

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any other information storage and retrieval system, without prior permission of the publishers.

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Editorial Board

Chief Editor:

Prof. M.C. Muo, Ph.D, Nnamdi Azikiwe University, Awka

Executive Managing Editor:

Assoc. Prof. Emma E.O. Chukwuemeka, Ph.D, Nnamdi Azikiwe University, Awka

Secretary

Ngozi C. Ewuim, PhD Nnamdi Azikiwe University Awka

Circulating Editor

Purity Ndubuisi-Okolo, M.Sc Nnamdi Azikiwe University Awka

Members Prof. Steve Ibenta, PhD Prof. J.C. Okoye, Ph.D

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Nnamdi Azikiwe University, Awka Nnamdi Azikiwe University, Awka

Prof. Ezimma Nnabuife, Ph.D Prof. Chikelue Ofuebe, Ph.D

Nnamdi Azikiwe University, Awka University of Nigeria Nsukka

Okey Francis Chikeleze, Ph.D

Enugu State University Technology, Enugu

Ehsan Azhar, M.Sc

Sohar University, Sohar Sultanate of Oman, Saudi Arabia

Florence Agbodike, PhD

Nnamdi Azikiwe University, Awka

of

Science

and

Consulting Editors Prof. Kunle Awotokun, Ph.D

Obafemi Awolowo University, Ife

Prof. Emma Ezeani, Ph.D

University of Nigeria, Nsukka

Prof. Ike Ndolo, Ph.D Enugu

Enugu State University of Science and Tech,

Prof. Charles Okigbo, Ph.D

North Dakota State University, United States of America

Prof. B.C. Nwankwo, Ph.D Chukwumerije Okereke, Ph.D

Kogi State University, Ayingba University of Reading, United Kingdom

D. Stamatakis, Ph.D I.M. Ambe, Ph.D

Athens National and Kapodistrian University University of South Africa

S. Jabulani

University of Swaziland

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Editorial Policy

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he Review of Public Administration and Management is a referred Journal that is published by The Department of Public Administration, Nnamdi Azikiwe University, Awka – Nigeria bi-annually (July and November). The Journal endeavors to provide a forum for researchers, practitioners, students, resource persons and other people in the academia who are interested in the discussion of current and future issues and challenges impacting on the field of Public Administration, Management Sciences, Humanities, Education, Arts and Social Sciences. We adopt double blind peer review policy in which both authors and reviewers are kept anonymous so as to maintain the high technical and quality standards as required by the researchers. The Journal welcomes the submission of manuscripts that meet the general criteria of significance and scientific excellence. Papers submitted will be published approximately two months after acceptance. Interested contributors should type their scientific papers on A4 size with wide margins and double line spacing in 12 fonts. It should not exceed 15 pages including the abstract of not more than 250 words. Not more than five keywords should be provided immediately after abstract. The paper should be empirical or theoretical, well researched, and persuasive. Short communications, original research articles, reviews, commentaries and methods could also be considered. Contributors should include: brief profile of the author including institutional affiliation and status, title of paper, abstract, introduction, statement of problem, review of related literature, method of investigation, discussion of findings and recommendations. Authors should include their phone numbers including addresses and e-mail. Manuscripts must be in conformity with the American Psychological Association (APA) documentation style 6th edition. Journal titles should be abbreviated for multiple citations in the same year, a,b,c, should be used immediately following the year of publication. Manuscripts should be submitted in hard copy and soft copy in CD with password clearly indicated. Correspondence should be addressed to the Executive Managing Editor, Review of Public Administration and Management Department of Public Administration, Nnamdi Azikiwe University, Awka Nigeria, P.M.B. 5025, Awka, Anambra State. Tel: 08060967169, 08033249488, 08033577153 e-mail: [email protected] or [email protected]

The views expressed in the articles do not reflect that of the Editorial Board but of the author(s) concerned iv

In this Issue *Gender Balance, empowerment and national development: from the liberation to empowerment – Kalu Peters, Nwakwaribe Adindu

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*Roles of entrepreneurship in small and medium enterprises development in Nigeria – Dr. Stella Duruwoju

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*Millenniums development goals, mangrove resource utilization and Costal Delta Women economic livelihood – Ibeme Nwamaka

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*Micro credit alternatives for sustainable national development: A focus on Nigeria’s political economy – Okeke Remi Chukwudi

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*Human capital accounting: The dichotomy of value representation – Dr. Kehinde James Sunday

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*Approaches, skills and styles of leadership in organizations – Assoc. Prof. Stanley Aibieyi

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*Poverty development Nexus: The Nigerian paradox – Samson Obamwonyi, Assoc. Prof. Stanley Aibieyi

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*Nigeria and the ECOWAS trade libralisation scheme: The Journey so far –Chibuike Oguanobi, Anthony Akamobi, Chibueze Aniebo, Emilia Mgbemena

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*The Possible impact of Tourism industry on Nigeria economyDr. Ndajiya Abdularahman, Shehu Muhammad, Dr. Yunusa Hashim Muhammad

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*Business Process re-engineering and customer responses in selected food and Beverages companies in Lagos State – Waidi Akingbade

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*The role of top management in business organizations – Dr, Okafor Obiefuna

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*Social studies as an instrument for global peace: Analytical and prescriptive Perspectives – Odia A.A.

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*Imperatives of development centres for rural development in Ebonyi State – Tiben Benz Nwali, Nwoba Martin, Elom Ikechukwu U.

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*The imperatives of an accounting bridge on the impact of law, equity and class struggle in Nigeria – Dr. Ezeagba Charles

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*Effects of monetary policy on the commercial banks lending in Nigeria –Dr. Jegede Charles A.

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*Government expenditure and the development of the education sector in Nigeria: An evaluation – Dr. D.E. Oriakhi, Dr. Grace Ameh

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*Motivation: Panacea for increased employees’ performance in organizations-Dr. Ovaga Okey

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*An overview of democratic rule and democratization process in Nigeria 1999 – 2013 – Mukhtar Abdullahi

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*Implementation of millennium development goals to universal basic education Programme in Nigeria public schools : Issues and challenges – Omeje Ngozi, Ogbu Mark

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*An examination of information and communication technology adoption barriers by small and medium enterprises in Nigeria – Dr. James Abiola, Dr. Sikiru Ashamu, Dr, Kemi Yekini

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*Understanding and overcoming the challenges of youth empowerment in Nigeria – Haruna Ruth, Attah Yusuf, Purity Ndubuisi-Okolo

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*An exploratory study of relational capabilities and balanced score card in the Nigeria manufacturing firms – Lasisi Jubril O, Olajide Alade Raji, Hasan Banjo, Shodiya Olayinka

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The Contributors Dr. Kemi C. Yekini – Dept. of Accounting and Finance De Montfort University, Leicester United Kingdom Kalu Peters, Nwakwuribe Adindu J – Dept of Public Administration, Abia State Polytechnic Aba Dr. Stella Durowoju – Dept of Business Administration and Technology, Lagos State University Ojo Ibeme Nwamaka – National Open University of Nigeria, Lagos Okeke Remi Chukwudi – Dept of Public Administration and Local Govt. University of Nigeria Nsukka Dr. Kehinde James Sunday, Dept of Accounting and Finance, Lagos State University, Ojo Assoc. Prof, Aibieyi, Stanley – Institute of Public Administration and Extension, University of Benin, Benin City. Samson Obamwonyi – Faculty of Law, University of Benin Chibuike Oguanobi, Anthony Akamobi – Anambra State University, Igbariam Chibueze Aniebo, Emilia Mgbemena – Madonna University, Okija Dr. Ndajiya Abdularahman – Dept of Political Science, University of Abuja Shehu Muhammad – Dept. of Economics, University of Abuja Dr. Yunusa Hashim Muhammad, Dept. of Political Science, IBB University, Laipai, Niger State Waidi Adeniyi Akingbade – Dept. of Business Administration and Mgt Tech. Lagos State University, Ojo Dr. Okafor Obiefuna – Dept. of Hospitality and Tourism, Federal Polytechnic Oko Odia, A.A. – Dept. of Education Psychology and Curriculum Studies, University of Benin Tiben Benz Nwali, Nwoba Martin – Dept. of Public Administration, Ebonyi State University Abakaliki vii

Elom Ikechukwu Ubochi – Public Relations Unit, Federal University, NdufuAlike Ikwo Ebonyi State Dr. Ezeagba Charles – Dept. of Accountancy, Nnamdi Azikiwe University, Awka Dr. Jegede Charles Ayodele – Dept. of Banking and Finance, Lagos State University Ojo Dr. D.E. Oriakhi, Grace Ameh – Dept. of Economics and Statistics, University of Benin Dr. Ovaga Okey Hilary – Dept. of Public Administration and Local Government, University of Nigeria, Nsukka Mukhtar Abdullahi – General Studies Directorate, Abubakar Tafawa Balewa University, Bauchi Omeja Ngozi Priscilla, Ogbu Mark O – Dept. of Public Administration, Ebonyi State University Abakaliki Dr. James Abiola, Dr. Sikiru Ashamu – Dept. of Accounting and Finance Lagos State University Ojo Haruna Ruth, Attah Yusuf Emmanuel – Kogi State Polytechnic Lokoja Purity Ndubisi-Okolo – Dept. of Business Administration, Nnamdi Azikiwe University, Awka Lasisi Jubril O, Olajide Alade Raji, Shodiya Olayinka – Dept. of Business and Finance, Crescent University Abeokuta Hasan Banjo – Dept. of Business Administration Olabisi Onabanjo University Ogun State

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Gender Balance, Empowerment and National Development: From Liberation to Empowerment By 1

Kalu, Peters &

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Nwakwuribe, Adindu J.

Abstract This paper which is exploratory in nature examines the role women can play and the limitations facing them in being part of development, it admitted that women have great potentials to be harnessed for development and its neglect will obviously be antithetical to real economic, social and political development. If the goals of development which include improved standard of living, removal or reduction of poverty, access to dignified employment and reduction in social inequality, then women who do not only have the crucial role of ensuring the perpetuation of the human race but also constitute the majority of the poor, the underemployed, economically and socially disadvantaged in many societies, must be consulted and actively involved in the development process both at the stage of planning, execution and/or implementation. The work relied basically on content analysis in which existing body of literature from books and journals were used. Useful recommendations ranging from elimination of gender prejudices and its attendant discriminatory practices which were identified as being predicated on injustice were made. The study concluded that it is necessary to eliminate gender inequalities in primary and secondary education and ensuring free and equal rights for women to own and inherit property. This also means doing everything in our power to eliminate all forms of discrimination and violation against women and girls so that social justice and development is entrenched in Nigeria.

Introduction Issues in gender have generated so much interest generally in the recent past in Africa and Nigeria in particular. Attempts have also been made by different peoples, governments, agencies, including world organizations on the issues of gender especially as it affects women notable among them is the United Nations (UN) decades for women 1975-1985 and 1985-1995. This UN initiative gave raise to such fora on Women In Development as the one in Mexico City (1975), Copenhagen (1980) Nairobi (1985) and Beijing (1995). Therefore, his work therefore is essentially an attempt to evaluate the phenomenon of not only women’s studies but also the impact of same on their emancipation for national development. Contextual and Conceptual Discuss-The Struggle In Retrospect According to Okeke in Anugwom et al (2000:62) ‘the first decade succeeded in raising the consciousness of people, especially Africans to the plight of women, the discriminatory and/or unequal practices against them in social, economic and political sphere.’

Department of Public Administration, Abia State Polytechnic, Aba [email protected] Tel. +234-80-3-7008618 Department of Public Administration, Abia State Polytechnic, Aba [email protected] Tel. +234-80-3-705562

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In retrospect however, women's movement campaigned to obtain political, social, and economic equality for women. Among the equal rights campaigned for are control of personal property, equality of opportunity in education and employment, equal suffrage in other words, the right to vote, and equality of sexual freedom. In the words of Hannam (2005:5) ‘the women's rights movement, also known as feminism and women's liberation, first discernibly arose in Europe in the late 18th century. Although by 1970 most women throughout the world had gained many rights according to law, (but) in fact complete political, economic and social equality with men remains to be achieved.’ Similarly, Gloria Steinem-(who campaigned in the 1960s), a writer, founder of MS Magazine and who helped to found the American Women’s Political Caucus and Women’s Action Alliance- who had championed feminism and women liberation insists that the cause her colleagues and herself pursue was not only that in women but that in humanism. In fact, she posited in her famous ‘Address to the Women of America’ that This is no simple reform, it is really a revolution. Sex and race because they are easy visible differences have been a primary way of organizing human beings into superior and inferior groups and into the cheap labour on which the system still depends. We are talking about a society in which there will be no roles other than those chosen or those earned. We are really talking about humanism.

What this course of action has achieved for the womenfolk is rather enormous, indeed, the Women's Movement by about 1960, had achieved some social and economic conditions which helped to shape and expand the role of women out of the home to the factory and office. This, along with other social changes, convinced women to demand equality with men. Including the right to vote which was won through the effort of Elizabeth Cady Stanton in 1919. According to Hannam (2005:6) ‘Elizabeth persuaded Senator Aaron A. Sargent of California to sponsor a woman suffrage amendment to the US Constitution in 1878. The amendment was reintroduced every year until Congress finally approved it in 1919, meaning that American women had finally won the right to vote.’ With the re-emergence of Western feminism in the 1960s, the emphasis of the movement was very much on the fact of the personal being political, that is, that women's individual experiences of subordination were not isolated incidents rooted in particular personality differences, but were each an expression of a common political oppression. There was also, early on, a concern for the importance of sisterhood, but this notion has been accused of lacking coherence and integrity in the event of persistent racial and class prejudice within the movement. In fact, the differences between women, as well as their areas of common ground, have themselves become topics in women studies and for feminist academic research in recent years. Howbeit, what is important is that this period provided ample opportunity for the liberty of women or better still, women liberation which manifested especially on such issues as suffrage won some time in 1919. Women Emancipation In Nigeria In any case, it was in the second decade (1985-1995) according to Okeke in Anugwom et al (2000:62) ‘that African countries became really concerned to some extent, with the phenomenon of women’s studies’. In other words, a significant number of African women developed an interest in women’s studies only in the 1980s. 2

It is important to mention here that feminism as a concept though may be defined in various ways is seen as an awareness by women of their exploitation and oppression within the family, at work and in the society including conscious action by the women to change the situation. According to Okeke citing Charlotte Bunch (1979) in Anugwom et al (2000:63) feminism is seen as a perspective or world view with two long goals-the achievement of women’s equality, dignity and freedom of choice through women’s power to control their own lives and bodies within and outside the home; (power here refers not to a hope of domination over others, but (seen) as a source of internal strength, the right to determine one’s choices and ability to influence social processes and the direction of social change); it is the removal of all forms of inequality and oppression through the creation of a more just social economic (system). In relation to the study of women are issues in development, which in this context will be considered as national development. The role of women in national development cannot therefore, be over emphasized. Indeed, the growth and development (mental/physical) of any child is usually attributed to its mother. This means that the child which represent the future of any society owes his upbringing to the woman, in other words, for the future of any society to be guaranteed and secured, the woman cannot be taken for granted. It is in a bid to guarantee the future that it becomes imperative not to ignore the women in national development. We shall for the purpose of this study consider national development to mean sustainable development. What is sustainable development one may want to ask? Development that is sustainable according to Onah (1995:29) is ‘development that does not endanger the natural systems that support life on earth.’ Onah further added that the Nigerian Environmental Study Team (NEST, 1991) summarizes sustainable development as that which is a motion, a movement and an approach, which has developed, into a global wave of concerns, study, political mobilization and organization around the twin issues of environmental protection and economic development. In supporting the above assertion on sustainable development, Dalal-Clayton (2005) cited in Kalu (2007:6) posits that an almost universally quoted definition of sustainable development was produced by the World Commission on Environment and Development (WCED) otherwise known as the Brundtland Commission (named after the Prime Minister of Norway). It defined sustainable development as ‘economic and social development that meets the needs of the current generation without undermining the ability of future generations to meet their own needs’. It can therefore be said that it is also ‘a dynamic approach which according to the Brundtland Commission is a process of change in which the exploitation of resources, the direction of investment, the orientation of technological development and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations’. Against the foregoing, issues in human development are those which Gloria Steinem the famous women libration protagonist had in the second half of the last century referred to as issues not in feminism but in humanism. Indeed, meeting human needs is nothing but a commitment to meeting the needs of present and future generations and meeting these needs has various implications such as satisfying socio-cultural and health needsincluding a shelter which is healthy, safe, affordable and secure, within a neighbourhood 3

with provision for piped water, drainage, transport, health care, education, child development and protection from environmental hazards. Services according to Kalu (2009:12) ‘must meet the specific needs of children and of adults responsible for children MOSTLY WOMEN’ (emphasis mine). Achieving this implies a more equitable distribution of income between nations and in most cases within nations especially between and among the genders. In like manner, political needs-including freedom to participate in national and local politics and in decisions regarding the management and development of one’s home and neighbourhood, within a broader framework that ensures respect for civil and political rights and the implementation of environmental legislation. It should be noted that no meaningful development can occur when the development of the home, local and national politics are in fetters. When and where freedom and liberty to participate in the democratic process is seriously hindered and hampered by the gender divide. Consequently, we should join hands in liberating the womenfolk. Africa in the words of Nwachukwu-Agbada (2008:36) cannot be free until her women are free. He went on to add that

‘… in a polity like ours in which honesty and commitment have become rare virtue, we should hand over to the women lest we harbor the solution to the poverty of ideas currently pervading the social and political climate of the nation without knowing it…this is because women seem to understand more intimately what it is to be free and unfettered…and it is only as a liberated people, physically and cerebrally, that we can enjoy real development.’ Development will continue to elude any nation whose population especially the women population is economically backward, suffer unemployment and have problems relating to health care including maternal and childcare. It is only when these issues are adequately addressed that the quest from women libration to equality and then to empowerment will become more relevant and more useful. The issue of women employment cannot be over exaggerated, this is because once women are employed or are engaged in gainful employment, they help to improve the economic base of their families, as they become income earners. That way, improvement and development begin to take effect. As a matter of fact, the International Conference on Population (1984) specifically addressed the situation of women regarding employment. It emphasized according to Onah (1995:31) ‘the need for an articulated policy on women employment with a view of accelerating it.’ However, acceleration of women employment seems to be anything but accelerating. Onah (1995:31) posits that ‘rapid population growth especially in the urban areas affects the supply of labour in the economy. The size of the population in Nigeria’s labour force defined, as 76 per cent (as of 1995) of the population aged 15-64 is about 37.5 million workers. Women constitute 48 per cent of this figure.’ This situation is anything but cheering as it does not suggest development in any way whatsoever. In respect of maternal health and care, maternal mortality is not only a medical problem but also a social albeit, development problem. The fifth (5th) of the eight (8) Millennium Development Goals (MDGs) adopted in September 2000 by the United Nations (UN) focuses on reducing Maternal Mortality Ratio (MMR) by three-quarters 4

(3/4) between 1990 and 2015. The millennium goals include poverty reduction, education, gender equality, reduction of maternal and child mortality. According to Ndikom (2007:17) ‘available data indicate that maternal mortality is still high about 1’000 per 10’000 live births in the late 1990s to 2001.’ Furthermore, Moss, Darmstadt, Marsh, Black, Santosham (2000) cited in Ndikom (2007:17) stated that ‘neonatal mortality now accounts for approximately two-thirds (2/3) of the 8 million deaths in children less than one (1) year of age, and nearly four-tenths (4/10) of all deaths in children less than 5 years of age. Worldwide, 98% of all neonatal deaths occur in developing countries, mostly at home and largely attributable to infections, birth asphyxia and injuries and consequences of prematurity, low birth weight and congenital anomalies.’ Indeed, the achievement of the forth (4) goal of the MDG which is to reduce child mortality can only be achieved if the mother is alive, healthy and knowledgeable. Similarly, the United Nations Fund for Population Activities (UNFPA, 2005) noted that ‘education, together with reproductive health, is one of the most important means of empowering women with the knowledge, skills and self confidence necessary to participate fully in the development process.’ According to Ndikom (2007:17) ‘studies have shown that women with higher educational attainment are more likely to use formal pregnancy related care than less educated’. She went further to add ‘that the status of women in developing countries limit their access to economic resources and basic education and thus their ability to make decisions related to their health, nutrition and that of their children’. It therefore follows that educational empowerment is very important in order to ensure the women and their children remain alive as the foster of the future generation and leaders of tomorrow’s development respectively. This is in line with the United Nations Childrens’ Education Fund (UNICEF) 2001 report which states in part that ‘… services in health care facilities, age of sexual debut or age of marriage are all related to educational level and cultural values.’ Accordingly, there can be no gain saying the fact about the crucial role of women in not only nation building but also in national development. Indeed, this has gained so much currency that it has attracted world-wide attention, so much so that it has stimulated concern for the role of women in development as well as the appropriate way of repositioning them from the shackles and fetters of domination through liberation and ultimately to empowerment. For this repositioning effort will only be meaningful if and when they reach or arrive at the point of both socio-economic and political development. Amujiri (2007:15) had noted ‘that it has become an incontrovertible fact that women constitute more than half of the world population and plays important and strategic roles in societal development’. If this assertion is anything to go by, it is then worrisome that the ‘…low status of women, pathetic and deplorable conditions of women especially in developing countries. Societal and traditionally rooted bias against women, discrimination and unjustified violence against them (are, as it were) the main factors that vitiate women’s role in development.’ (Amujiri, 2007) As a matter of fact, the enormity and pervasive nature of these practices against women particularly in Nigeria have negatively affected the level of social, economic and political 5

empowerment of women including what Amujiri (2007:16) had referred to as their ‘capacity utilization’ as well as their contributions to national development. Globally, these pathetic and deplorable conditions of the womenfolk have generated serious concern that literature on these challenges have proliferated such that great insight in this regard has yielded. Against the foregoing, one such insight is the Nigerian situation where women according to the 1991 census figures constitute 49% of the nation’s population. Rural women, according to Caritas (2008:33) ‘play an essential role in crop and livestock production; they provide the food, water and fuel their family need. They are responsible for the reproduction of the labour force and for producing of 70% of the nation’s food supply.’ Despite the fact that women are predominantly the food producers of the nation, majority of them are still food insecure and being small holders whose farm size fall below the threshold level for adequate food production, it significantly fails and impedes for them access to financial, physical and social assets. While reflecting on the Nigerian situation of women poverty and women empowerment, Caritas (2008:34) notes that ‘the majority of female sector workers are to be found in lower cadre occupations…due to power relationship in the family where men and their families frequently control household income, many women find themselves economically vulnerable even when they have secure employment. This is aggravated by social-cultural norms that diminish women’s status in the family. Different forms of violence including discrimination (seen as men’s property), denial of inheritance, harassment, battering and even rape and human trafficking can be the consequence.’ It should be noted that one basic reason for the vulnerability of women is limited capacity such as illiteracy or low educational attainment (as already pointed out). This singular barrier tends to lock about half or more of the population in the vicious circle of poverty and deprivation. As a consequence, women continue to be underrepresented at most levels of public office. An extra burden is added especially to women through the Human Immune Deficiency Syndrome and Acquired Immune Deficiency Syndrome (HIV/AIDS) crisis which affects women disproportionably. In Nigeria, it is all too clear that women are disproportionately represented among poor households and that poverty is being increasingly feminized. In order to eradicate poverty according to Caritas (2008:35) ‘the gender dimension needs to be addressed in development planning.’ Caritas further observed that ‘interestingly, Nigeria has signed the UN Convention on the Elimination of all forms of Discrimination Against Women (CEDAW), and also the Beijing Declaration. This is meant to remove all obstacles that retard the participation of women in nation development.’ Furthermore, Caritas (2008:36) noted that the UN Convention requires from all signatories to ‘take all appropriate measures to eliminate discrimination against women in all matters relating to marriage and family relations, and in particular to ensure, on a basis of equality of men and women’. The same rights have to be recognized for both spouses in respect of ownership, acquisition, management, administration, enjoyment and disposition of property. As a matter of fact, a study carried out by Mirrill Lynch Investment Managers cited in Kiyosaki (2006) and quoted in Meneke (2010:6), concludes that women know how to

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handle money. Kiyosaki went further to give reasons why women are better investors than men as followsa) They are willing to ask for help b) Women are great shoppers c) Women do their home work d) Women are risk bearers e) Women have much less ego f) Women are nurturers g) Women learn well from other women Indeed, Kiyosaki (2006) in Meneke (2010) concluded by insisting that women are more humble and can stoop low to handle any genuine business in order to take care of their children and members of their family (including their husbands). Therefore, women has to prepared through the instrumentality of entrepreneurial education as one of those appropriates to eliminate discrimination. Infact, Heckler et al (2008) in Meneke (2010:7) explains that entrepreneurial education can offer the desired help for women to shift from traditional sectors to industrial sectors such as high-tech, construction, transportation, public utility, business consultancy services etc. It must have been in this vein that His Holiness, the Supreme Pontiff, Benedict XVI in his first encyclical (2006) while speaking about charity as a responsibility of the Church posited that ‘there can never be room for a poverty that denies anyone what is needed for a dignified life.’ His Holiness is also of the view that there must exit such social and civil order upon which discrimination is eliminated. Benedict XVI therefore opines that ‘building a just social and civil order, wherein each person receives what is his or her due, is an essential task which every generation must take up anew…the church is duty bound to offer, through the purification of reason and through ethical formation, her own specific contribution towards understanding the requirements of justice and achieving them politically. The Church cannot and must not take upon herself the political battle to bring about the most just society possible…yet at the same time she cannot and must not remain on the sideline in the fight for justice.’ It is pertinent to observe that issues of gender prejudices and its attendant discriminatory practices are predicated on injustice at least as has been justified by the Church. As part of her social justice crusade, while addressing the African Union (AU) summit on gender equality, Mtengeti-Migiro (2007) in Kalu (2010:7) insisted that it is necessary ‘to ensure that our women take their rightful place in society…eliminating gender inequalities in primary and secondary education and ensuring free and equal rights for women to own and inherit property…and it means doing everything in our power to eliminate all forms of discrimination and violation against women and girls’. In concluding this piece, we must sound a note of warning, that whereas, the womenfolk are being encouraged to get into the mainstream of economic and national life, the men folk must also effectively secure their place in both economic and national life. This is borne out of the fact that while the womenfolk are gradually but steadily being emancipated, the men folk on the hand are steadily yet gradually losing ground and hold of what and where hitherto were male domain. For instance, while women now achieve 7

and gain admission to study such men dominated areas as aeronautics engineering, natural and physical sciences among many more disciplines as well as rise and increased girl-child school enrollment. It is open secret on the other hand that the boy-child school enrolment has considerably dropped. In the light of the above, there is regrettably, a corresponding rise and increase in the number of primary and high school age male school dropouts who have become either ‘danfo-bus drivers and/or conductors’ or who are shop keeper in various auto-parts markets around Nigeria, incidentally, most of these young men are of South-East extraction. At the rate the womenfolk are being emancipated from liberation through equality to empowerment, chances are, that in the very near future, and in no distant time, too women would have taken over strategic aspects of human endeavour particularly from that part of Nigeria where the dropout rate is high. This trend will most likely result into a precarious situation which if not checked and urgently too, will become stories of men seeking libration, from whom, one may be tempted to ask? Your guess is definitely as good as mine. Recommendations On the strength of the foregoing discussion, the following recommendations have been put forward as followsi. The womenfolk should be given or granted the opportunity to participate in the public policy making. Apart from creating policy framework that can be brought to directly bear on issues that concern and affect them. When that is done, it will certainly offer them the privilege to participate and contribute in national development psychologically, financially, academically, materially, socially and politically. ii. There should also be a deliberate attempt at creating awareness, enlightenment and advocacy concerning the place and importance of women in nation building. iii. The idea of society that women are the weaker sex and should be treated specially is an issue in self pity, it should be completely discouraged particularly in the area of such jobs in politics and governance. Conclusion Howbeit, it must be admitted that women have great potentials to be harnessed for development and its neglect will obviously be antithetical to real economic, social and political development. If the goals of development which include improved standard of living, removal of poverty, access to dignified employment and reduction in social inequality, then women who do not only have the crucial role of ensuring the perpetuation of the human race but also constitute the majority of the poor, the underemployed, economically and socially disadvantaged in many societies, must be consulted and actively involved in the development process both at the stage of planning, execution or implementation. Reference Amujiri, B.A. (2007) ‘Repositioning Women for Socio-Economic and Political Progress in Nigeria’ Nigerian Journal of Public Administration and Local Government. Vol. XIII. #1. Nsukka: University of Nigeria.

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Benedict XVI (2006) ‘Deus Caritas Est’ Encyclical Letter of the Supreme Pontiff. Vatican City: Libreria Editrice Vaticana Caritas Nigeria (2008) Signs of Hope-Poverty Reduction for a Better Nigeria. Lagos: Catholic Secretariat of Nigeria Hannam, June (2009) ‘Women’s Movement’ Microsoft Encarta Encyclopedia. Washington: Microsoft Corporation KALU, Peters (2010) ‘Achieving the Millennium Development Goals (MDGs) Through Women Empowerment in Nigeria’. Paper at the International Conference on Achieving the MDGs through Gender Equity and Good Governance at the Imo State University, Owerri. ----------- (2009) ‘Women and National Development’ The African Ladies Guide. Vol.2, #1. Aba: Abia State Polytechnic ----------- (2008) ‘Energy Crisis In Nigeria & National Development: Renewal Energy As Alternative Source’ The Journal of Energy and Environmental Economics of Nigeria. Vol. 1, #1. Awka: Nnamdi Azikiwe University

Meneke, Obiageli Augustina (2010) ‘Gender and Entrepreneurship Education’. Paper at the International Conference on Achieveing the MDGs through Gender Equity and Good Governance at the Imo State University, Owerri. Mtengeti-Migiro, Asha-Rose (2007) ‘The Rise and Rise of Mtengeti-Migiro’ Annual Meetings Daily (Washington DC) Oct. 21. Lagos: D.E.R Ltd. Ndikom, C.M. (2007) ‘Educational Empowerment of Women: A Major Tool In the Millennium Development Goals To Reduce Maternal & Child Mortality in the Developing Countries (Nigeria)’. The International Journal of Development Studies Vol. IV, #1. Houston: Development Studies Research Institute Nwachukwu-Agbada, J.O.J. (2008) ‘Literature As Libration: A Quantum Factor In Sustainable Development’ 6th Inaugural Lecture. Uturu: Abia State University Press Okeke, V.I. (2000) ‘Women Studies In Nigeria: A Critical Review’ The Social Sciences: Issues & Perspectives Anugwom, E.E. et al (ed). Nsukka: Fulladu Publishing Company. Onah, Fab (1995) ‘Sustainable Development and Women Employment Situation In Nigeria’ Nigerian Journal of Public Administration & Local Government Vol.6 #2. Nsukka: University of Nigeria UN (2000) ‘Millennium Development Goals’ The Millennium Declaration. New York: United Nations 9

ROLES OF ENTREPRENEURSHIP IN SMALL AND MEDIUM ENTERPRISES DEVELOPMENT IN NIGERIA By Stella Toyosi Durowoju (Ph.D) Abstract The paper sees entrepreneurship as the process of creating something new with value by devoting the necessary time and effort, with the accompanying financial and social risks, and receiving in return monetary rewards and personal satisfaction and independence. Using secondary data, the paper seeks to explore the issues involved in entrepreneurship and economic development in Nigeria, the problems of entrepreneurship and how these have threatened the sustenance of small business enterprises in Nigeria. The paper concludes that entrepreneurship is essential for rapid and sustained economic growth but there is urgent need to change the mindset of the average Nigerian especially the youths towards embracing self employment and de-emphasize the search for white collar jobs that are non – existent.

Introduction In today’s world where technological change, liberalization, outsourcing, and restructuring rule the business enterprises, the subject of entrepreneurship has gained greater interest. This is because entrepreneurship is seen as a method for bridging the gap between science and the marketplace, creating new enterprises, and bringing new products and services to the market. Entrepreneurial activities impact on both the overall economy by building economic base and providing jobs. The role of entrepreneurship in economic development is wide as it involves initiating and constituting change in the structure of business and society. This change is accompanied by growth and increased output, which allows more wealth to be divided by the various participants, Hisrich and Peters (2002). Entrepreneurs are driven by the desire to be their own bosses, do what they want to do, and turn passions into profit-making businesses. An Entrepreneur is one who initiates a new business in the face of risks and uncertainty for the purpose of satisfying human needs and making a profit. An Entrepreneur carves out a niche for himself by scanning the environment, identifying opportunities and threats and combining and utilising the necessary resources to capitalize on opportunities identified. There are so many factors as reasons why people go into business for themselves. Pride, Hughes and Kapoor (2000) said one that is often cited is the “entrepreneurial spirit”, the desire to create a new business. Other factors may include independence, the desire to determine one’s own destiny, and the willingness to find and accept a challenge that, certainly play a part even though family background may also exert an influence as well. However, there must be some motivation to start a business such as leaving a paid employment where opportunities were not available to think and earn your own living, lost of jobs, having an idea for a new product or a new way to sell an existing product or the opportunity to invest into business may arise suddenly. In some people, the motivation to start a business whether small or medium develops slowly as they gain the knowledge and ability required for success as a business owner. Small businesses traditionally lead to increase of new jobs in Nigeria economy Department of Business Administration and Management Technology Faculty of Management Sciences, Lagos State University, Ojo Lagos-Nigeria, E-mail: [email protected] , 08038414213

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By hiring a larger proportion of employees who are younger workers, older workers, women or workers who prefer to work part-time thereby contributing to solving unemployment problems. Small firms also provide a variety of goods and services to each other and much larger firms. Large firms generally buy raw materials from small businesses because it is less expensive, this eventually reflected in the price that consumers pay for their products. Nigeria is naturally endowed with entrepreneurship opportunities; however the realization of the full potential of these opportunities has been dampened by the adoption of inappropriate industrialization policies at different times (Ebiringa, 2012). Review of Literature Entrepreneurship involves taking chances, but new businesses do not emerge by accident (Egelhoff, 2005). They are usually founded as a result of motivated entrepreneur gaining access to resources and finding niches in opportunity structures. Hence, entrepreneurship could be seen as the process of identifying and exploiting unique business opportunities that stretch the creative capacities of both private and public organizations. Sue and Dan (2000) argue that entrepreneurship is influenced by genetic power, family background and economic environment. Since economic environment could support or suppress entrepreneurship, governments world over undertake to develop macroeconomic policies that focus mainly on providing access to resources and support services to individuals and organizations that display flair for expanding their business horizons. Entrepreneurship consists of routine management tasks, relationships with venture capitalists and other sources of external finance, product development, marketing, and so on. Garba (2010) asserted that the term entrepreneurship means different things to different people and with varying conceptual perspectives. He stated that in spite of these differences, there are some common aspects such as risk taking, creativity, independence and rewards. However, Ogundele (2007), viewed entrepreneurship as a multidimensional phenomenon. It was found that processes of emergence, behavior and performance of indigenous entrepreneurs were separately and in combinations affected not by a single but multiple factors, in ranging degrees such as socio-cultural, ecological, managerial, educational developmental, experiential, technological, structural, ethical and innovative issues. It was observed that any policy designed to change entrepreneurship scenario in Nigeria will require multiple and simultaneous approaches in the development of necessary changes in the behavior of indigenous entrepreneurs. To Shane (2010), entrepreneurship is the act of being an entrepreneur, which can be defined as "one who undertakes innovations, finances and displays business acumen in an effort to transform innovations into economic goods.” This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The Influence of Entrepreneurship on Economic Development The concept of economic growth is relevant at the levels of firms, regions, industries, and nations. Hence, linking entrepreneurship to economic growth implies linkage between the individual level and the aggregate level. The relationship between entrepreneurship and economic growth is an important one. Entrepreneurial activities have been found to be capable of making positive impacts on the economy of a nation and the quality of life of the people. Studies have established its positive relationship with stimulation of economic growth; employment generation; and empowerment of the disadvantaged segment of the 11

population, which include women and the poor (Thomas and Mueller, 2000; Reynolds, 1987; Shapero, 1981). A sizeable body of literature analyzing the impact of entrepreneurship on economic performance at the level of the firm (or establishment) emerged. These studies typically measure economic performance in terms of firm growth and survival (Audretsch, 1995; Caves, 1998; Davidson et al., 2006). The compelling stylized fact emerging from this literature is that entrepreneurial activity, measured in terms of firm size and age, is positively related to growth. New and (very) small firms grow, on average, systematically larger than large and established incumbents. These findings hold across Western economies and across time periods. The link between entrepreneurship and performance is also extended beyond the firm as unit of observation to focus on geographic regions (Acs & Armington, 2004; Audretsch & Fritsch, 2002). Entrepreneurship is “at the heart of national advantage” (Porter, 1990). Concerning the role of entrepreneurship in stimulating economic growth, many links have been discussed. It is of the utmost importance in carrying out innovations and enhancing rivalry. Entrepreneurship is the basic key for business growth, most business today grew out of the effort of one man with passion, the effort of one man who wants to make profit and who wants to innovate or create a new product. According to Schumpeter, capital and output growth in an economy depends significantly on the entrepreneur. The quality of performance of the entrepreneur determines whether capital would grow rapidly or slowly and whether the growth involves innovation where new products and production techniques are developed. The difference in economic growth rates of countries of the world is largely due to the quality of entrepreneurs in those countries. Production factors of land, labour and capital are said to be dormant or indolent without the entrepreneur who organizes them for productive ventures (Ebiringa, 2012). Entrepreneurial activities have been found to be capable of making positive impacts on the economy of a nation and the quality of life of the people (Adejumo, 2000). Ogbonifoh et al (1999) explains that entrepreneurship is an essential variable in any nation’s economic growth and development. It is therefore true that the growth of a nation (country) depends on whether it has entrepreneurs and encourage entrepreneur and entrepreneurship successes depends largely on whether the human capital is being deliberately harnessed and nurtured to become entrepreneurially successful because entrepreneurs are born as well as made. Economic growth is determined by two elements, (a) by the available quantities of goods that can be used in the productive process and (b) by the adroitness with which these available factors of production are combined. Entrepreneurship is a key driver of any economy; wealth and a high majority of jobs are created by small businesses started by entrepreneurially minded individuals, many of whom go on to create big businesses. There is more creative freedom for people who are exposed to entrepreneurship. There is higher self-esteem, and an overall greater sense of control over the people’s own lives. It is the believe of many experience business people, political leaders, economists and educators that fostering a robust entrepreneurial culture will maximize individual and collective economic and social success on a local, national, and global scale. The importance of entrepreneurship to any economy is like that of entrepreneurship in any community: entrepreneurship activity and the resultant financial gain are always of benefit to a country. If you have entrepreneurial skills then you will recognize a genuine opportunity when you come across one. Small firms tend to employ more labour per unit of capital and require less per capital unit of output than do large one (Kuratko and Hodgetts, 1998). 12

Entrepreneurial activity and new firm formation are unquestionably considered engines of economic growth and innovation. As such, they are among the ultimate determinants of the large regional differences in economic performance (Baumol, 1990). The factor of production that will make this possible is the entrepreneur who is regarded by the economist as a factor of production responsible for the creation of the enterprise that run the risky business for the purpose of profit making while labour receive wages, land receive rent and capital attract rent as the return for their usage however, the entrepreneur receive profit as their return, this the economist view of who an entrepreneur is. Economic growth rates are often attributed to the role of the duo of government and entrepreneurs which is complementary and not mutually exclusive. In Nigeria, like some other economies, the government helps to encourage entrepreneurship development (Ebiringa, 2012). The entrepreneur is therefore an important agent of innovation growth and technical progress. The development and utilization of their technical and commercial skills create growth potential in micro, small and medium business enterprises. The present day global economy is knowledge-driven operating on the pragmatic and innovative thoughts of the entrepreneur. Business set ups have become informal and oriented towards survival and self employment. The role of entrepreneurship in economic development involves more than just increasing per capital output and income; it involves initiating and constituting change in the structure of business and society. This change is accompanied by growth and increased output, which allows more wealth to be divided by the various participants. One theory of economic growth depicts innovation as the key, not only in developing new products or service for the market but also in stimulating investment interest in the new ventures being created (Duru, 2011). Entrepreneurship has been recognized as an important aspect and functioning of organization and economies (Dickson et al, 2008). It contributes in an immeasurable ways toward creating new job, wealth creation, poverty reduction, and income generating for both government and individuals. Schumpeter in 1934 argued that entrepreneurship is very significant to the growth and development of economies (Garba, 2010). Hamilton and Harper (1994) examine the economist view about the entrepreneur as the act of profit making and the sole motivating factor for entrepreneur, while the sociologist and psychologist view of culture and trait are flatly ignored by the economist, thus Hamilton and Harper (1994) sum up that while the economist views are necessary but not sufficient, the sociologist and psychologist view should also be corporate in the axiom of entrepreneurship. Small and Medium Enterprises Development The majority of business enterprises in Nigeria like most other countries consist of small and medium businesses. Small business constitutes a vital element in the business life of any country such as Nigeria. Nigeria small business enterprises are still predominantly in the traditional state with only a few in the better-organised stage. National Council on Industry (2001) see ‘Owa Afolabi, F.I (2008) brought out four broad definitions of Small and Medium Enterprises; (a) Micro/Cottage Enterprises, (b) Small Scale Industry/Enterprises and (c) Medium Scale Industry/Enterprises and (d) Large Scale /Companies. The first term refers to an industry/enterprise with a labour size of not more than 10 workers or total cost of not more than N1.5 million, including Working Capital but excluding the cost of land. Second, this is an industry or enterprise with workers’ strength of between 11 and 100 or a total cost of not more than N50 million, including the cost of land. Third, a Medium Scale Industry refers to an industry with a labour size of between 101-300 workers or a total cost of over N50 million, but not more than N200 13

millioin including working capital, but excluding the cost of land. The forth term refers to an industry or enterprise with a labour size of over 300 workers or a total cost of over N200 million. The Development of any enterprise whether (micro, small, medium or large) is a necessity that calls for concern by any entrepreneur. It involves the size of the business which consists of many factors such as market and technology, Tambunan (2009). If the market is small, only small or micro economic activities will be viable. This is because the market size itself is also determined by the level of real income per capital and the size of population, which together determine the actual number of buyers. Small and Medium Enterprises (SMEs) involved in manufacturing industry produce a variety of goods that can be grouped into two categories viz consumer and industrial goods. Their consumer goods can be sold in the market. Despite the strong competition by the large enterprises, SMEs are able to survive because their products are differentiated by nature or acquirement thereby creating niche for themselves e.g handicrafts which are outside the competitive area of items that are similar but more sophisticated and produced by large enterprises with machines. As a result SMEs have a better chance to survive and hence to grow and develop, whereas they would be out priced in the market if they tried to compete with large enterprises by making exactly the same products when the economic scale of output prescribes large enterprises accessing modern technologies. However, concerning the manufacturing of industrial goods, SMEs manufacture products for other manufacturers, this makes them often regarded as ancilliaries to large enterprises. Large Enterprises (LEs) in order to remain competitive always focus on core competence and buy in other products and services. Through such production linkages mainly in the form of subcontracting, SMEs are often exposed to muscle power of the LEs, leading to problems for SMEs e.g inability to meet tight schedules and product specifications for LEs that is caused mainly by a technical, management and organization nature. Also, in addition, SMEs face difficulties delivering products “just-in-time” and with high standards of quality required by LEs. Technological factor is another problem which is the pressure to respond to growing rivalry, forces managers to attend more carefully to their companies’ ability to innovate, Cohen (2002). Constant technological break-through compels companies to become more entrepreneurial in identifying and exploring new ideas. If the economic size dictated by the technology is large, SMEs will be outcompeted in the market because they cannot produce efficiently due to a lack of economies of scale e.g. electronics industry, the state-of-the-art technology may indicate a large size, so LEs are viable. But neither the market nor the technology is fixed for all time, they constantly change. Entrepreneurship and Economic Development in Nigeria A nation economic development depends on the successful entrepreneurship combined with the forces of established corporation. Martin Career (2002) wrote that “In the theory of Economic Development”, Schumpeter stated the responsibility of the entrepreneurs as prime cause of economic development. He explained how large firms outstands the smaller firm in innovation and appropriation process through strong feedback loop from innovation to increased research and development activities. Entrepreneurs are significant because they have important effect on world economy, Wickham (2004). An entrepreneur is an innovator, someone who transforms innovations and ideas into economically viable entities; independent of whether in the process she creates or operates a firm (Baumol, 1993). However, when the firm has been created, sometime they do not meet a practicable sustainability; they are often times faced with problems and when the problems happen, the entrepreneurship is logically affected 14

not only economically but also mentally and emotionally. Entrepreneurship occupies an important place in the process of economic development as a result it has become a key concept in social and human development discourse; it is considered to be a factor of economic and human development (Abubakar, 2010). There is probably no regime in Nigeria which at one time or another has not emphasized the development of small business enterprises. For example, the need for encouraging increased productivity and self-employment has been recognized since 1970s with formulation of the Small Scale Enterprises Promotion Policy. Until now, government pronouncements on promoting small business enterprises are not always translated into serious policy statements backed by effective implementation mechanisms. In fact, most of the programmes introduced to assist small business enterprises only reached a small portion of the total of small business population. In actual sense, policy makers were more concerned with the establishment of few large enterprises than developing small ones. This was what partly informed the Import Substitution Industry (ISI) Strategy of the late 1970s where huge sum of money was spent on unsustainable mammoth companies (Sagagi, 2005). In Nigeria, according to Odeyemi (2003), there was an estimate of more than seventy percent of the entrepreneurship and small scale industries´ employments in the country and more than fifty percent gross domestic product created by entrepreneurship and small business enterprises. Entrepreneurship businesses easily have the tendency to either “failure” or “success”. An amount of entrepreneurs also have the tendency to survive the cause when it results to failure. These causes or factors such as economic recession, lack of access to credit facilities especially from financial institutions, lack of infrastructure, corruption and lack of support from government, and more, results to failure. In as much as there are many factors which challenge the survival and growth of entrepreneurship business both in developing and developed countries, fund has always been known as one of the most important factor among the problems of entrepreneurs. Ekpeyong (2002) wrote that the Nigerian government tried to support the entrepreneurship and small business enterprise by creating the public sector; a part of the social and economic of the society. Entrepreneurship in Nigeria really needs attention from different sectors to help in every angle of its operation as it is one of the contributors of economic and social development in most developing and developed countries. The entrepreneurship business contributes to the economic and social development, bringing about employment opportunities. Challenges of Entrepreneurship Development in Nigeria Having known the significant prospective of Entrepreneurship in fetching economic and social development which is supposed to be the concern of the government of various countries globally. Nigeria popularly known as the “Giant of Africa” is a country that has the highest population in the continent of Africa, accounting for fifteen percent of Africans population, also contributing about eleven percent of Africa`s total output and sixteen percent of its foreign reserves. Nigeria is still far away in achieving the economic progress needed to influence or better the well being of an average Nigerian citizen where more than half of the populations still live on a dollar daily, and they are among the top three countries in the world with largest number of poor people. There are wide range business opportunities that are not given much attention by both the government and the entrepreneurs. Such businesses include organized transSahara trade; solid minerals, solar energy, waste disposal and recycling; tourism; garment exports, medium tech equipment, mechanized agriculture, food/materials processing, 15

industrial chemicals and supplies among others. Most of these activities tap directly into agriculture, local knowledge/skills and trade which are the main activities for an average Nigerian (Sagagi, 2005). There are a number of problems limiting the growth of small and medium size businesses in Nigeria, ranging from limited financing and support; inadequate infrastructure, insecurity and lack of training/vocational facilities are believed to be responsible for slow business creation and growth in the country. Lack of basic infrastructure and security crippled small businesses in Nigeria. Thus, poor road networks, irregular electricity and water supply continued to make the cost of doing businesses extremely high in Nigeria. Insecurity of lives and property also take its toll on businesses. In particular, business owners in the southern part of the country attribute low business growth to the high incidences of robbery and theft in their communities. In managing the Nigerian economy, successive governments have attempted a reengineering of key sectors of the economy – particularly the banking, insurance and oil sectors. A change in the capitalization requirements could result in mergers [a forced succession] which jeopardize the sustainability of the enterprise. In Nigeria, experience abound where different governments use state power to foreclose renowned entrepreneur’s businesses or craft policies targeted at ruining his business. Therefore, in order to address critical issues surrounding the development of entrepreneurship in Nigeria many observers argue that the Asian model for economic growth should be explored. This is in view of the success recorded by many Asian countries that formulated and implemented policies aimed at promoting small and medium enterprises at the grassroots level. Conclusion and Policy Implications Entrepreneurship is essential for rapid and sustained economic growth and development. There are a number of entrepreneurship development programmes in Nigeria many of which are expected to offer direct support to small and medium size enterprises. However, the absence of a harmonized and well focused national entrepreneurship development agenda render most of the initiatives ineffective. Also, entrepreneurs should recognize that new ventures require strategy. They have to see their competitive environment with particular clarity and endeavour to create unique position that is worth defending. The practice where businesses imitate one another is at variance with creativity and innovation necessary for great success. Businesses could strategize by becoming customer driven, obsessed with improvements, responsive to new challenges, networked through business alliances and adopting long range thinking. For the entrepreneurs to be effective in creating wealth and employment opportunities, the government needs to create an investor-friendly environment encompassing stable macro-economic policies. Government need to address urgently the dilapidated infrastructural facilities in the country, starting with the power sector, roads and railways, provide adequate security and give every citizen the sense of belonging. The inputs into an entrepreneurial process; capital, management, technology, buildings, communications and transportation infrastructure, distribution channels and skilled labor, tend to be easier to find in urban areas. Professional advice is also hard to come by. Consequently, entrepreneurial behavior, which is essentially the ability to spot unconventional market opportunities, is most lacking in those rural areas where it is most needed i.e., where the scarcity of 'these other inputs' is the highest. Bradford (2003) maintains that a shift towards integration with the rest of the world and a shift in promoting entrepreneurship attitude underscore the India’s economic growth. This he comments could be a good lesson for countries that could not live up to Asian miracle. 16

Asian success model could not be replicated wholesale in Nigeria due to certain peculiarities, but vital lessons could be drawn from innovation, technology, and best practices. The vast population of the country is made up of small scale farmers and petty traders. Over time, the performance of the industrial sector which is expected to create substantial job opportunities and serves as a link to the primary sector has not been impressive. Due to low domestic productive capacity, living conditions deteriorate (Sagagi, 2005). However, the improvement of infrastructure and transport facilities in rural areas may also create new markets (in urban areas), and hence a new growth impulse, for rural industries. Such improvement makes it easier for rural producers to sell their products, either with the help of traders or by themselves in nearby urban areas. The improvement encourages rural small and medium producers to expand their business or to change their market location. Enterprises in villages near to urban centres will produce more goods for urban markets to have larger markets than their counterparts in more isolated villages. This implies that rural-urban economic integration does not always mean that all rural industries are outcompeted or die. It depends especially on how rural industries can adjust quickly, for example, by changing or diversifying their products lines, increasing their products’ quality and shifting their marketing strategy, in response to a changing situation (i.e newly appearing market opportunities). This ability to adjust does not depend only on the abilities of the owners/producers; the more objective and general characteristics of the establishment themselves also play a role. Every rational entrepreneur agree that at a particular period in business cycle, business could be very profitable and at the other dull. When good business lasts for a fairly long time, the period is regarded as a boom or prosperity. However, where poor business is experienced for long duration in business cycle, such situation is recognized as economic recession. These two periods (boom and recession) have been witnessed in Nigeria business environment by entrepreneurs as recorded between 1970 – 2005 by Akinfolarin, (2007) that gives an insight into booms and recessions to demonstrate how enterprises have been exposed to cyclical business fluctuations in the recent times in Nigeria. This boom and recession period could have negative or positive roles on SMEs development. BOOMS AND RECESSIONS PERIODS IN NIGERIA (1970 TO 2005) Period 1970 – 1976

Boom or Recession High Boom

1977 – 1979

Low Boom

1980 – 1983

High Boom

1984 – 1987

Recession

1987 – 1993

Low Boom

1994 – 1999

Recession

2000 – 2005

Low Boom/Recession

Causes Post-war period, high earnings from crude oil. Spring up of many investments. Drop in crude oil earnings; Austerity measures by the Government. High oil earnings, Government engaged in expansionary economy through unsustainable trade debt build-up. Low crude oil earnings, Government engaged in economic restructuring. Deregulation of the economy, and Government expansionary policy. Internal and political crisis; international isolation, low oil earnings. Fairly steady policy of Government, tight fiscal management despite high oil earnings.

Source: Akinfolarin, Bioye (2007). Comprehensive Enterprise Management for Assured Business Success. Lagos. Bamacs Associates Limited. Pg.446.

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In order to address critical issues surrounding the development of entrepreneurship in Nigeria many observers argue that the Asian model for economic growth should be explored. This is in view of the success recorded by many Asian countries that formulated and implemented policies aimed at promoting small and medium enterprises at the grassroots level. There is the need to ensure that those with innovative ideas are provided with the financial support to translate such ideas into reality and a strong commitment to entrepreneurial education at both the secondary and tertiary levels is necessary for SMEs development in Nigeria. References Abubakar, S. G. (2010). Refocusing Education System towards Entrepreneurship Development in Nigeria: a Tool for Poverty Eradication. European Journal of Social Sciences. 15 (1): 140-150. Acs, Z.J and Armington, C. (2004). Employment Growth and Entrepreneurial Activity in Cities. Regional Studies. 38: 911–927. Adejumo, G. (2001). Indigenous Entrepreneurship Development in Nigeria: Characteristics, Problems and Prospects. Advances in Management: Journal of Department of Business Administration, University of Ilorin, Ilorin Nigeria, 2(1): 112-122. Agbonifoh B.A, Ehiametalor E.T, Inegbenebor A.U and Iyayi F.I (1999). The Business Enterprise in Nigeria. Lagos: Longman Nigeria Plc. Audretsch, D.B. (1995). Innovation and Industry Evolution. Cambridge, MA: MIT Press. Audretsch, D.B., and Fritsch, M. (2002). Growth Regimes over Time and Space. Regional Studies, 36:113–124. Cantillon, R. (1931). The Circulation and Exchange of Goods and Merchandise. Higgs, H. (Ed.), Essai sur la Nature du Commerce en Général. London: Macmillan. Caves, R.E. (1998). Industrial Organization and new Findings on the Turnover and Mobility of Firms. Journal of Economic Literature, 36: 1947–1982. Charper, C. (2003). Growth and Distribution Effects of Education Policy in the Endogenous Growth Model with Human Capital Accumulation. in Hagemann, H. and Seiter, S. (eds). Growth Theory and Growth Policy. London: Routledge. Cohen, A.R (2002). The Portable MBA in Management. New York. John Wiley & Sons, Inc. Davidsson, P., Delmar, F., and Wiklund, J. (2006). Entrepreneurship and the Growth of Firms. Cheltenham and Northampton, MA: Edward Elgar. Duru, M. (2011). Entrepreneurship Opportunities and Challenges in Nigeria. Business and Management Reveiw 1(1): 41-48. 18

Ebiringa, T. (2012). Perspectives: Entrepreneurship Development and Growth of Enterprises in Nigeria. Entrepreneurial Practice Review. 2(2):31-35 Egelhoff, T. (2005). Entrepreneurs: Have you got what it takes? www.smalltownmarketing.com/enterprenuership.html Garba, A.S. (2010). Refocusing Education System towards Entrepreneurship Development in Nigeria: a Tool for Poverty Eradication Hamilton, R.T. and Harper, D.A. (1994). The Entrepreneur in Theory and Practice. Journal of Economic Studies . 21(6):3-18. Hisrich, R.D and Peters, M.P (2002). Entrepreneurship. New York. Mcgraw-Hill Companies. Inc. Kuratko, D.F. and Hodgetts, R.M. (1998). Entrepreneurship: A Contemporary Approach, 4th edition. New Tork: The Dry Press. Lazear, E.P. (2002). Entrepreneurship. National Bureau of Economic Research, Cambridge, MA, August 2002, Working Paper 9106. Long, W. (1983). The Meaning of Entrepreneurship. American Journal of Small Business. 8(2): 47-59. Mueller, S.L. and Thomas, A.S. (2000). A Case for Comparative Entrepreneurship: Assessing the relevance of Culture. Journal of International Business Studies. 31(2): 287. Ogundele, O.J.K and Olayemi, O.O. (2004). Entrepreneurial Education and Social Economic Reconstruction. Nigerian Journal of Curriculum and Instruction. 12(1):161-165 Ogundele, O.J.K (2007), Introduction to Entrepreneurship Development, Corporate Governance and Small Business Management. Lagos. Molofin Nominees. ‘Owa Afolabi, F.I (2008). Entrepreneurship Development. Lagos. Solar Flares. Porter, M. E. 1990. The Competitive Advantage of Nations. New York: Free Press. Reynolds, P.D. (1987). New Firm's Societal Contribution versus Survival Potential. Journal of Business Venturing 2: 231-246. Sagagi, M.S. (2005). Entrepreneurship Development Policy: A Renewed Perspective for Achieving Economic Development in Nigeria. Being a paper presented at the Inaugural National Conference organized by the Academy of Management Nigeria from Nov. 2223, 2005 at Rockview Hotel, Abuja Shapero, A.C. (1981). Self-renewing Economies. Economic Development Commentary, 5 (April), 19-22. Shapiro, A. (1975). Entrepreneurship Development, project ISEED, Milwaukee, I, Center For venture Management, summer pp187. Sue, B. and Dan, M. (2000). Mastering Entrepreneurship. Pearson Education limited, Great Britian.

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Millennium Development Goals, Mangrove Resource Utilization and Coastal Niger Delta Women Economic Livelihood By

Ibeme, Nwamaka P.

Abstract This paper is a sociological assessment of mangrove resource utilization and the impact on women livelihood in the coastal communities of the Niger Delta based in the context of the Millennium Development Goals that makes the case for women empowerment through gainful livelihood activity. The analysis reveals a growing incidence of rural coastal women indiscriminate exploitation of mangrove resources in an unsustainable manner. The paper argues that this indiscriminate exploitation and depletion of mangrove resources are potential catalysts for food insecurity and mass poverty among the women of the area since the mangrove provides the basis for occupation and thus the major sources of livelihood for them. Based on the foregoing the paper makes broad proposals for the sustainable use of mangrove resources in order to avoid further decline or depletion in their stock which could greatly worsen the already compromised living conditions of these rural women. In the circumstance, we recommend that more conversation efforts should be adopted to preserve the mangrove resources that are most significant to rural coastal women’s earnings and economic livelihood.

Introduction The eight millennium development goals (MDGs), were agreed to at the United Nations millennium summit in September 2000. The broad goals are to: - Eradicate poverty and hunger - Achieve universal primary education - Reduce child mortality - Improve material health - Combat HIV and AIDS, malaria and other diseases - Ensure environmental sustainability - Develop global partnership for development The MDGs represent a global partnership that is aimed at promoting poverty reduction, availability of universal primary education, material health, gender equality, combating child mortality, AIDS and other diseases. Set for the year 2015, the MDGs are an agreed set of goals that can be achieved if all actors work together and do their part. Based on these, developing countries like Nigeria have pledged to govern better, and invest in their people through health care and education. On the other hand, rich countries have pledged to support them, through aid, debt relief, and fairer trade. Although the millennium development goals are eight but implicit in them are 21 targets. The targets are the need to: - Halve between 1990 and 2015, the proportion of people whose income is less than one dollar a day. - Achieve full and productive employment and decent work for all, including women and young people. - Halve, between 1990 and 2015, the proportion of people who suffer from hunger. School of Management Sciences, National Open University of Nigeria, 14/16 Ahmadu Bello Way, Victorial Island, Lagos. E-mail: [email protected]

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Ensure that by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling.

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Eliminate gender disparity in primary and secondary education preferably by 2005, and at all levels by 2015. Reduce by two – thirds, between 1990 and 2015, the under five mortality rate. Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio. Achieve, by 2015, universal access to reproductive health. Have halted by 2015 and begun to reverse the spread of HIV/AIDS. Achieve, by 2010, universal access to treatment for HIV/AIDS for all those who need it. Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases. Integrate the principles of sustainable development into country policies and programmes; reverse loss of environmental resources. Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss. Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation (for more information see the entry on water supply). By 2020, to have achieved a significant improvement in the lives of at least 100 million slum –dwellers. Develop further an open trading and financial system that is rule based, predictable and non discriminatory. Includes a commitment to good governance, development and poverty reduction nationally and internationally. Address the special needs of the least developed countries. This includes tariff and quota free access for their exports; enhanced programme of debt relief for heavily indebted poor countries; and cancellation of official bilateral debt; and more generous official development assistance for countries committed to poverty reduction. Address the special needs of landlocked and small island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially information and communications.

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Our interests in this paper are the first, third and seventh goals and the specific targets that are contained therein. While the first Goal targets the eradication of poverty, the third encourages the need for the empowerment of women and the seventh makes proposals on the need for the empowermental resources in sustainable manner. With these at the background, coupled with the environmental interface to the Niger Delta crisis in Nigeria, this chapter examines women’s mangrove economic livelihood activities in the Niger Delta particularly in terms of its impact on the mangrove economic livelihood activities in the Niger Delta particularly in terms of its impact on the mangrove resources.

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The Mangrove in the Niger Delta Political Economy The growing literature on the importance of natural resources has been shown through their socio –economic benefits to the rural population in the rainforest zone, both in aggregate and regional terms (FAO, 1978; FAO, 1987; and Rodda, 1991 in Bisong and Ajake, 2001). Many of these studies conclude that there are differential benefits that are derived from these forest resources. These benefits include energy requirement for domestic and industrial activities; food consumption; income earnings; medicinal value; and employment opportunities. For instance, the FAO (1978) reveals that the income of rural people in the Philippines and India is dependent on the gathering of forest products. Studies by UNESCAP (1985), Francisco and Israel (1991), on women’s roles in coastal communities in the Philippines also show that although economic diversification is increasing their employment options, women still depend mostly on natural resources to meet their economic and household needs. In coastal communities in the Niger Delta of Nigeria, the mangrove and its marine products such as fish and shellfish are the basis for subsistence and a significant portion of each income. The mangrove is thus exceptionally important in the Niger Delta political economy. In most fishing communities, women engage in a number of other part time seasonal income earning activities (often in the informal sector), many of which are also resource dependent. Among the more important subsistence and income generating activities, which involve women, are fish and shellfish processing and marketing. The success of both activities depends on the availability and quality of marine mangrove resources. In their studies, Ejituwu and Gabriel (2003), and Oshin (1972), observed that the economic value of mangroves to women of coastal communities in the Eastern Niger Delta can better be appreciated from the harvestable products which households consumed and the surplus that are sold in far away places like Onitsha, Aba, Owerri, Nsukka and Kano. Enemugwen (2001) in his study corroborated this position where he recorded that in Andoni ( a coastal community) fish and shellfish were sold as far as Tripoli in North Africa. In this instance too, women are more involved in the fish trade. Thus, coastal communities women play an important role in Niger Delta economy, particularly in the area of trade on mangroves and their products, both internally and across long distances. There is however current concern about the integrity, particularly in terms of yield of the Niger Delta mangrove ecology. This has been largely blamed on the lack of conservation consideration of these resources, through indiscriminate use, thus leading to severe economic crisis and poverty in the region. Generally, the issue of indiscriminate exploitation and depletion of the mangrove resources as potential catalyst for the current mass poverty among women in the coastal communities of the Niger Delta enclave requires examination. Looking at households’ activities of the coastal communities and how these relate to the mangrove ecosystem it shows that women make primary contacts with those products of the mangroves that are fundamental to family life. Their domestic roles coupled with the exploitation of mangrove products for food and income, bring them into daily contact with the natural mangrove forest ecosystem. Women are thus the first to feel the impact of large scale mangrove forest degradation of mangrove products or resources for improved economic activities in the coastal communities of the Niger Delta. The paucity of data about the coastal women’s earnings from the mangrove forest as well as the systematic decline in the resources may undermine efforts at improving the socio –economic conditions of the rural women. This also translates into faulty mangrove forest economic conditions of the rural women. This also translates into faulty mangrove 22

forest economic development policies, which could negatively affect the livelihood of the women in particular, and the coastal population in general. No doubt, this is leading to the urgent need for the culture of seafood like oysters, periwinkles, cockles, etc. in coastal communities of the Niger Delta region. In one breath, the political economic crisis in the region occasioned by environmental degradation, poverty and long neglect by government over the decades suggests this. In another perspective, the fact is also that these communities over the years have either abandoned the indigenous (traditional) methods of cultivating these seafoods or are massively and indiscriminately over exploiting them without the indigenous practice of conserving these mangrove resources. The coastal communities in the region have always been major sources and suppliers of seafood, but present realities reveal a drastic dwindling and abandonment of the indigenous sources of livelihood which women are more engaged in. yet the seafood is what the local people depend on for their livelihood and protein, iodine and calcium supply. In the same vein, the current mass poverty amongst the local population, especially women which has compelled them to paddle long distances with canoes in search of these sea foods has equally heightened the fear of famine, thus necessitating the imperativeness in embarking on the return to the traditional or extensive cultivation of these fisheries. The culture of fishery can effectively be managed sustainably by the local populace (Irikana, 2006). The absence of improved methods of cultivating sea foods, mass poverty, indiscriminate exploitation of available ones and the eventual scarcity of sea foods within the neighborhood now demand journeying long distances on the river via paddling locally made canoes in search of the sea foods and other mangrove products or resources. Recognizing the mass involvement of women in the livelihood activities from which they are able to sustain and complement efforts of their husbands and families, and train their children in schools from the sale of both fresh and dried sea foods; and who today can no longer fulfill their role as women, this study attempts to highlight the importance of culture and cultivation of sea foods to resuscitate these once vibrant sources of subsistence. The need for this can therefore be realized through extensive culture and cultivation of oysters, cockles, periwinkles, crabs, shrimps, etc (Wilcox and Powell, 1985; Irikana, 2006) that will be strategically located in the mangrove swamps of the coastal communities. Furthermore, addressing the scarcity of sea foods in the area would, to a large extent, meet the required food nutrient of the local population, especially women and children. It would also revamp the livelihood opportunities opened to women to sustain food production as well as bring about development of the sea food fishing, sector that is gradually becoming extinct. Coastal Women Utilization of Mangrove in the Niger Delta Mangroves are one of the coastal resource ecosystems (e.g sea grass and coral reefs) found at the crossroads between the land and the sea. As in the case of Niger Delta region, the tidal flat constitutes its theoretical boundary, which sometimes extends to the shallow waters in the coastal areas. They are found throughout the Niger Delta coastline. According to Scott (1966) in Irikana (2006), the mangrove swamp in the Niger Delta covers 5,048km2. Mangroves are an irreplaceable and unique ecosystem, hosting incredible biodiversity. They are among the most productive ecosystems in the world. They house a wide variety of life migratory birds, marine creatures and associated species of flora. A wide variety of representatives of the plant kingdom live on them. The aerial roots of the 23

aquatic plants form a web, hosting a multitude of animal species such as fin –fish, mollusks (oysters, cockles, periwinkles, etc) and crustaceans (shrimps, crabs). They operate as zones for mating refuge and nursery areas for a large number of species; many of them of importance as human food which has made it possible for populations to settle around them, having their subsistence in resources generated by this ecosystem (Moses 1985; Baandaranayake 2001). Indeed, mangroves are of immense utility to the people of coastal communities of the Niger Delta region. The environment or socio –physical conditions of the area affect and / or determine the condition and behavior of the people. The occupational choice of communities in the ecosystem is, to a large degree, made within the confines set by the environment. What this implies is that the socio –economic activities of the people are environment –specific or environment –bound. The mangrove ecosystem of the coastal communities thus influences the socio – economic activities of the local population with women being, more involved in the utilization of the resources and the socio political fallouts from that seemingly economic activity, Consequently, with a local economy that depends mainly on mangroves for food, shelter, income, and employment, people of coastal communities are found in indiscriminate exploitation and utilization of the unique and valuable range of resources and services provided by the ecosystem. Apart from the harvesting of fish, oysters and other sea foods by the local people, they also utilize the mangroves as timbers and fronds in a wide variety of ways, including firewood charcoal, scaffolding, etc. however, beneath these seemingly indiscriminate activities is a highly sophisticated organizational structure and system. This structure ensures stability and sustainability. Changes brought about by oil and gas exploration and exploitation in addition to nypa palm invasion as well as poverty have given rise to the continuous depletion of the mangrove with potentially dangerous consequences for the people’s struggle for existence as it threatens related marine species dependent on the ecosystem. This portends great danger to the users and consumers of mangrove products (Irikana, 2006). It has to be added and emphasized too that this fundamental error that brings about mangrove resources depletion and a legacy of environmental degradation in the region is traceable to the people’s lack of knowledge in relating with their environment. In utilizing the resources available in the mangrove ecosystem, the people have failed to connect human development to the natural environment – the basis of all life. As Ashion Jones et al (1998) contend and we agree with them, ecological problems such as these arise when an ecosystem is seen in ignorance by the people while carrying out their activities as something out there, which have no connection to humankind., What is therefore needed to avert this problem and to maintain biological diversity – the variety of life on earth, and subsequent assurance of food security in the coastal communities is the integration of both the environment and human production activities for sustainable development. This means a long term culture process of maintaining a balance between population and natural resources within a given environment. Mangroves, which are found throughout the extensive coastline of the Niger Delta, represent a rich and valuable ecosystem. More importantly, both marine and mangrove fishing in the coastal communities depend on them. However, the widespread use and over exploitation of the mangroves by the local people have contributed directly to their depletion. Most of what is remaining today is secondary growth of mangrove forest especially in the eastern part of the region. The fundamental change in the mangrove forest, according to Irikana (2006) is inversely related to changes in number, occurrence, and size of various resources within the environments. 24

The consequence of the foregoing on the people and environment is a progressive decline of marine and mangrove resources. In most coastal communities, there is a steady reduction in the quantities of perinwinkles, oysters, cockles, cramps, chrimps, and fin – fishes collected and caught. For example, in his study, Irikana (2006) observed that between 1973 and 2004, there were dramatic reductions in the number of baskets of the resources collected per week. Specifically, between 1973 and 1983, perinwinkles yielded estimated five baskets per week but declined to three and a half baskets per week between 1984 and 1994; and between 1995 and 2004, this same resource has dropped in quantity to only two baskets per week. This study supports Ashton – Jones et al (1998) findings in the whole of coastal communities of Niger Delta. They stated that between 1980 and 1986, annual recorded catches of fin –fish ranged between three hundred and seventy thousand and one hundred and thirty seven thousand tones on a declining plain, and that fisher men complained that their catches were going down day by day. Indeed, the disappearance of the mangroves translates into economic loss. No doubt, the various indiscriminate and unsustainable utilization of the mangroves forest and other human activities have impacted negatively on the forests leading to poor harvest of mangrove resources, loss of biodiversity, poor quality of life and food insecurity. In addition, the economic hardship is translated into lack of funds that has led to poor shelter, feeding, clothing, education, marriage breakdowns and crises, and prevalence of diseases. Similarly, fish and shellfish, which constitute the major source of diet, are now scarce. This has brought about low protein and iodine intake whose deficiency leads to the prevalence of diseases like beriberi, goiter and kwashiorkor among children (Ukoima, 2002). In earlier times, women were seen complementing the efforts of their husbands in providing funds for their children’s education. Today they can no longer render such assistance to their husbands and this has affected the training of their children in schools. Marriage, which has been a respected institution before this time, is today debased. Cases of divorce arising from economic hardship are a common phenomenon. Women have taken to prostitution as a vocation thereby debasing womanhood and the sanctity of marriage and the institution of family. Furthermore, since the local people depend on mangrove trees for cooking and ironing of their clothes, the scarcity of these trees has forced them to depend on unavailable kerosene for most domestic activities. This has aggravated the already existing economic hardship among the people, particularly women with the unpredictable daily increases in the prices of petroleum products including kerosene. Trapped under the present circumstance, the young fishermen and fisherwomen have been compelled to migrate to the urban centres for better opportunities that never existed anyway. Some of the demeaning situations in which women are found in the cities today are consequences of the compelling rural urban migration. Beyond the rural urban migration, the economic problem in the enclave has raised a fundamental political question; and as the political issue has not been sufficiently addressed, social issues have emerged, and these issue has not been sufficiently addressed, social issues have emerged, and these impart are youth restiveness, street gangs or cultism, hostage taking, kidnapping and other forms of anti – social behaviours that have today bedeviled the region. Summary and Conclusion This paper has examined the impact of the unsustainable utilization of mangrove resources on coastal women livelihood against the stated objectives of Millenium Development Goals (MDGs). The paper noted instances of indiscriminate exploitation of these resources by coastal women that depend on them as major source of economic 25

livelihood. It shows that the mass poverty among the women in the region is occasioned by the depletion of mangrove resources. Thus, the indiscriminate exploitation and the consequent depletion of mangrove resources are therefore adjudged to be part of the critical catalysts for the worsening living conditions especially among women in the coastal communities of the region. The implications of the foregoing are that: the local people need to tend the mangrove forest in order to maintain its naturalness and productivity for future use. To that extent, what seems necessary to be done is a change in attitude towards the environment. The need to adopt a more environment friendly approach to the exploitation and utilization of the mangrove forest resources based on traditional practices becomes apparent and urgent. It also calls for a new and sustainable strategy of economic empowerment of the coastal women. It may well be stated that the understanding of the household activities of coastal women and the mangrove resources they collect for income would enhance the formulation of rural economic policies designed to improve sustainable mangrove forest management in the coastal communities of Niger Delta. In order to realize the objectives of the Millennium Development Goals (MDGs) of enhancing sustainable development and guaranteeing economic access for women generally and in the Niger Delta in particular, there is need to continue to realize the highest possible rate of economic return from the mangrove forest. Based on the foregoing, the following recommendations are made: -

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It would be necessary to make an inventory of the mangrove species and the resources in them so as to be able to sustainably harvest them. Local legislation could be put in place and enforced as to the kind of species, minimum size, and maximum number that could be extracted or exploited per year. This would go a long way in conserving the natural environment. A deliberate effort at regenerating mangrove tree species and their resources could be embarked upon. This could be started by focusing on the seedlings/nurseries of desirable species of sea foods /fin fishes. Communities should be made to enact local legislation in controlling the rate of exploitation of these resources, and enforce their implementation. Local communities can set up environment committees to monitor activities that impose threat to their existence and future. The multi national oil companies and the government should be made to adopt environment friendly practices according to international standards in their seismic and oil exploration/exploitation activities. Specific sustainable poverty reduction projects based on the environmental communities. These women would be organized in co-operatives. Effective public enlightenment in the conservation of mangrove resources should be put in place and carried out. Manpower training and research for conservation should be more purposefully focused and substantially funded than what is obtained presently.

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References Ashton – Jones, N et al (1998). The Human Ecosystems of the Niger Delta: An handbook. Benin City: Environmental Rights Action.

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Bandaranayake, W. (2001). Mangroves and their products. Queensland, Australia: Australian Institute of Marine Science. Bisong E.E. and Ajake, A.O. (2001). An Economic Analysis of Women’s Dependence on Forest Resources in the Rainforest Communities of South Eastern Nigeria. Global Journal of Pure and Applied Sciences. vol. 7 No. 2 Ejiluwu, N.C. and Gabriel, A.O.O., (eds). (2003). Women in Nigerian History: The River and Bayelsa States Experience. Choba: Oyoma Research Publications. Enemugwem, J.H. (2001). The Significance of the Niger Delta In the Political and Economic Development of Nigeria. Unpublished Ph.d Dissertation, Department of History, University of Port-Harcourt. FAO (1978). Forestry for local community development. FAO Forestry paper, Rome, SIDA. FAO (1987). Restoring The Balance: Women And Forest Resources. Rome: SIDA. Francisco, J.S and Lorna Israel. (1991). A draft report on Gender needs assessments with fishermen. Quezon City, Philippines: (Miriam College), Women’s Resources Centre. Illo, J.F.I and Polo, J.B (1990). Fishers, Traders, Farmers, Wives: The life story of ten women in a fishing village. Atanco de manila University, Manila: Institute of Philippine Culture. Irikana, G.J. (2006). Mangrove Utilization and Poverty Alleviation in the NigerDelta: A case study of Andoni Women. An unpublished Ph.D Dissertation, Department of Sociology, University of Port Harcourt. Mehra, R. et al (1993). Womens Participation in the Cogtong Bay Mangrove Management Project: A Case Study. A collaborative research report on Gender, Community Development and Conservation of Biological Resources, Washington DC: International Centre for Research on Women and World Wildlife Fund.

Moses, B.S (1985). Mangrove Swamp As Potential Food Source. in Wilcox, B.H.R and Powell C.B, eds. The mangrove Ecosystem of the Niger Delta: Proceedings of a workshop, university of Port Harcourt: University of Port Harcourt publications committee. Oshin, O. (1972). Population Movement Integration: The historical role of Railways in the USA and Nigeria. Nigeria Journal of American studies.

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Pomery, R.S. (1985). The Role of Women and Children in Small Scale Fishing Household: A Case Study In Matalom, Leyte, Philipines. Philipine Quarterly of Culture and Society 15. Ukoima, N.H.

(2002). Nypa Palm/Youths In Politics: Issues Affecting The Obollo People. Ujama Magazine Vol. 7. No 1. The Annual Publication of National Union of Andor Students, December.

UNESCAP (1985). Women in Fisheries. Bangkok, Thailand. Wilcox, B.H.R. and Powell C.B. (1985). The mangrove Ecosystem of the Niger Delta. Proceedings of a Workshop University of Port Harcourt, University of Port Harcourt Publications Committee.

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Microcredit Alternatives for Sustainable National Development: a Focus on Nigeria’s Political Economy Okeke, Remi Chukwudi Abstract Sometimes in developing countries there arises the tendency for the true fundamentals of credit provision to be overlooked, in pursuit of the orthodoxy. In this regard, a functional conceptualization of microcredit is considered crucial. Hence in this study, microcredit concept is considered critical to the understanding of the importance of credit delivery in the formulation and implementation of strategies for accelerating the pace of economic growth and sustainable national development. Invariably, the general objective of the study was to examine the microcredit alternatives for sustainable national development, with a focus on the political economy of Nigeria. Thus, the specific objectives were to (i) highlight the prevailing concept of microcredit in the political economy of Nigeria (ii) examine the contribution of prevailing microcredit practice in Nigeria, to sustainable national development and (iii) recommend how microcredit administration can be utilized in accelerating the pace of development in Nigeria. The study adopted as methodology, the critical mode of research and utilized as theoretical framework, the political economy approach. Findings of the study indicate that the prevailing concept of microcredit in the political economy of Nigeria, centers on poverty alleviation. However, the prevailing microcredit practice has not produced evidence of overt poverty reduction. An alternative form of microcredit recommended by the study is the type that its packaging guarantees full credit recovery. The second alternative conceptualization in the study is that microcredit is principally for the generation of multiplier effects in the economy, not singly for the fighting of poverty. In conclusion the study posits that the current fixation with microcredit as the supreme poverty alleviation methodology in Nigeria requires urgent rejection. KEYWORDS: Microcredit, Sustainable National Development, Political Economy

Introduction The formulation and implementation of strategies for accelerating the pace of growth and sustained economic development has continued to occupy the political and reforms agenda of developing countries such as Nigeria. An essential component of this endeavour is the need to properly identify development priorities, the financing gaps and measures to address them (Alegieuno, 2010:1). Sometimes, development priorities, financing gaps and measures to address them translate to a single important matter, which is provision of credit. Hence, in an era of financialization (Foster, 2008), there may arise in some developing countries, the tendency for the true fundamentals of credit provision to be overlooked, in pursuit of the orthodoxy. In other words, there is the tendency that some developing economies may ill-define their credit deliver needs. According to Palley (2007:2) financialization is a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. Financialization transforms the functioning of economic systems at both the macro and micro levels. Its principal impacts are to (1) elevate the significance of the financial sector relative to the real sector, (2) transfer income from the real sector to the financial sector, and (3) increase income inequality and contribute to wage Department of Public Administration and Local Government, University of Nigeria, Nsukka Email: [email protected], Phone: 2348035523818

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Stagnation. Additionally, there are reasons to believe that financialization may put the economy at risk of debt deflation and prolonged recession. Financialization operates through three different conduits: changes in the structure and operation of financial markets, changes in the behavior of nonfinancial corporations, and changes in economic policy (Palley, 2007:2). Financialization reformulates the financial foundations of national economies and invariably the international financial architecture and in the process can divert the attention of national political economists from the fundamentals of effective credit delivery. It is not within the scope of the paper to consider if financialization is receding or not. Financialization is only mentioned in the study, in the context of how a sound credit culture may enhance the chances of cyclical shocks being effectively absorbed by a national economy (Soludo, 2008). In this regard, the availability of microcredit is considered crucial. In this study therefore, microcredit concept is considered critical to the understanding of the importance of credit in the formulation and implementation of strategies for accelerating the pace of growth and sustained economic development. In other words, what is the prevailing conceptualization of microcredit in the political economy of Nigeria? What has the prevailing microcredit practice contributed to sustainable national development in Nigeria? How can microcredit administration be utilized in accelerating the pace of development in Nigeria? Invariably, the general objective of the study is to examine the microcredit alternatives for sustainable national development, with a focus on the political economy of Nigeria. Thus, the specific objectives are to (i) highlight the prevailing concept of microcredit in the political economy of Nigeria (ii) examine the contribution of prevailing microcredit practice in Nigeria, to sustainable national development and (iii) recommend how microcredit administration can be utilized in accelerating the pace of development in Nigeria. The study adopts as methodology, the critical mode of research. The theoretical framework is the political economy framework The Concept of Micro Credit and the Practice of Micro Finance The definition of microcredit (in Nigeria) has continued to be characterized by multifarious tendencies. According to Idumanje (2001:255), microcredit refers to credit facilities given to small scale business proprietors, to enable them engage in productive economic activities, capable of generating income (Idumanje, 2001:255). This definition incidentally suggests that only small-scale business proprietors may approach the lender for microcredit negotiation. But Idumanje (2001:255) continues: small-scale businessmen and the rural and urban poor have low propensity to save, hence they need credit intervention. Parenthetically, Idumanje (2001:255) hereby acknowledges that the rural and urban poor, not necessarily small scale business proprietors can benefit from microcredit. In other words, a beneficiary of microcredit can purely spend it for instance, on consumer goods and can also spend it on income-yielding ventures. Reminiscent of the diverse tendencies, reflected in the definition of microcredit by Idumanje (2001:255), Ugwu (2008:91), citing Okali and Otiti (1992), argues: microcredit has to do with soft loans usually given to small and medium scale entrepreneurs, farmers and artisans /craftsmen, etc, to enable them procure, produce or improve their productivity as well as increase their general welfare. Microcredit could lead to the establishment of cottage industries, livestock farming, fish ponds and piggery farming. It could lead to real successful farming, to the extent of export promotion of agricultural products such as palm produce, cashew, coconut and allied products. Microcredit could be facilitated by 30

organized groups such as cooperative societies, clubs, town unions, age grades, etc and /or individuals (Ugwu, 2008:91). Ugwu (2011:51) further asserts that “micro credit is not profit oriented venture”. This assertion indeed raises the issue of whether the funds involved are rather grants-inaid. It however, truly begins to appear as if the bottom-line is that microcredit in its broadest conceptualization, places emphases on low interest rates, as different from its non-interest element consideration. Sometimes also, the impression is created that microcredit can only be talked about, in the context of community and rural banks (See Uche, 2007:19). Furthermore, in a somewhat dreary explication of availability of microcredit, Ezeudo (2010:40) has also contended that availability of microcredit can also be described as the existence of microcredit, as provided by micro finance institutions, conventional financial institutions or government agencies (Ezeudo, 2010:40). The tedious nature of this contention aside, it exemplifies the confusion surrounding the definition and consequently, the effective utilization of microcredit, in the political economy of the Nigerian state, for sustainable national development. Fundamentally, microcredit in the opinion of this paper is squarely a credit product. Hence, once the possibilities of non-interest and non-performance are permitted to be embedded in the packaging of the product, it begins to lose the features of credit and begins to appear more like grants-in-aid. Let it be duly noted at this juncture that the institutionalization of the microcredit concept in its modern popular conceptualization is attributable to the intervention of Mohammad Yunus. According to The Encyclopedia Britannica (2010) microcredit, also called micro banking or microfinance, refers to a means of extending credit, usually in the form of small loans with no collateral, to nontraditional borrowers such as the poor in rural or undeveloped areas. This approach was institutionalized in 1976 by Muhammad Yunus, an American-educated Bangladeshi economist, who had observed that a significant percentage of the world’s population has been barred from acquiring the capital, necessary to migrate out of poverty. Yunus set out to solve this problem through the creation of the Grameen Bank in Bangladesh. The Grameen approach is unique because the small loans are guaranteed by members of the borrower’s community; pressure within the group encourages borrowers to pay back the loans in a timely manner. Grameen’s clients are among the poorest of the poor, many of whom had never possessed any money and relied on a barter economy to meet their daily needs. Using microloans, borrowers are able to purchase livestock or start their own businesses. By 1996, Grameen had extended credit to more than three million borrowers and was the largest bank in Bangladesh, with more than 1,000 branches. The success of microloans in Bangladesh led to similar programs in other less-developed nations, including Bolivia and Indonesia. Some are sponsored by foundations, religious organizations, or nongovernmental organizations, such as Opportunity International and the Foundation for International Community Assistance (Encyclopedia Britannica, 2010). In 2008, the Mexican bank, Compartamos, was criticized for parlaying its micro lending program into a profitmaking operation, charging high interest rates, widely regarded as usurious (Encyclopedia Britannica, 2010). Developments such as the foregoing tend to give credence to the assumption that microcredit must be devoid of the profit element. But microcredit is characterized by manifold conceptualizations. Yunus (2006) provides the following elaborate exposition: The word “microcredit” did not exist before the seventies. Now it has become a buzz-word among the development practitioners. In the process, the word has been imputed to mean everything to everybody. No one now gets shocked if somebody uses the term “microcredit” to mean agricultural credit, or rural credit, or cooperative credit, or 31

consumer credit, credit from the savings and loan associations, or from credit unions, or from money lenders. Thus, when someone claims microcredit has a thousand year history, or a hundred year history, nobody finds it as an exciting piece of historical information (Yunus, 2006:1). According to Yunus (2006:1) this is creating a lot of misunderstanding and confusion in the discussion about microcredit and in so doing; we really don’t know who is talking about what and he proposes that we put labels to various types of microcredit, so that we can clarify at the beginning of our discussion which microcredit we are talking about. To him, this is very important for arriving at clear conclusions, formulating right policies, designing appropriate institutions and methodologies. Hence, instead of just saying “microcredit” we should specify which category of microcredit. He went ahead to suggest a broad classification of microcredit as follows: (1) Traditional (informal) microcredit (such as, moneylender’s credit, pawn shops, loans from friends and relatives, consumer credit in informal market, etc.) (2) Microcredit based on traditional informal groups (such as, tontin, Susu, ROSCA, etc.) (3) Activity-based microcredit through conventional or specialized banks (such as, agricultural credit, livestock credit, fisheries credit, handloom credit, etc.) (4) Rural credit through specialized banks (5) Cooperative microcredit (cooperative credit, credit union, savings and loan associations, savings banks) (6) Consumer microcredit (7) Bank-NGO partnership based microcredit (8) Grameen-type microcredit or Grameencredit (9) Other types of NGO microcredit and (10) Other types of non-NGO non-collateralized microcredit. Yunus (2006:2) further asserts: the point is that every time we use the word “microcredit” we should make it clear which type (or cluster of types) of microcredit we are talking about. Otherwise we’ll continue to create endless confusion in our discussion (Yunus, 2006:2). Grameen-type microcredit or Grameencredit has understandably become a re-occurring version of the microcredit system and in the process too, its peculiar features have also become the source of the manifold mixtures in the microcredit literature and ostensible microcredit practice. In this regard, Yunus (2006:2-4) has tabled a comprehensive list of the distinguishing features of Grameencredit, on the basis of which the Grameen replication programmes or Grameen type programmes are known. These general features of Grameencredit are: (1) It promotes credit as a human right (2) Its mission is to help the poor families to help themselves to overcome poverty. It is targeted to the poor, particularly poor women (3) Most distinctive feature of Grameencredit is that it is not based on any collateral or legally enforceable contracts. It is based on “trust”, not on legal procedures and system (4) It is offered for creating selfemployment for income-generating activities and housing for the poor, as opposed to consumption (5) It was initiated as a challenge to the conventional banking which rejected the poor by classifying them to be “not creditworthy”. As a result it rejected the basic methodology of the conventional banking and created its own methodology (6) It provides service at the doorstep of the poor based on the principle that the people should not go to the bank, bank should go to the people (7) In order to obtain loans a borrower must join a group of borrowers (8) Loans can be received in a continuous sequence. New loan becomes available to a borrower if her previous loan is repaid (9) All loans are to be paid back in installments (weekly, or bi-weekly) (10) Simultaneously more than one loan can be received by a borrower (11) It comes with both obligatory and voluntary savings programmes for the borrower (12) Generally, these loans are given through non-profit organizations or through institutions owned primarily by the borrowers. If it is done through for-profit institutions not owned by the borrowers, efforts are made to keep the interest rate at a level, which is close to a level commensurate with sustainability of the programme rather than bringing attractive return for the investors. Grameen credit’s 32

thumb-rule is to keep the interest rate as close to the market rate, prevailing in the commercial banking sector, as possible, without sacrificing sustain-ability. In fixing the interest rate, market interest rate is taken as the reference rate, rather than the moneylenders’ rate. Reaching the poor is its nonnegotiable mission. Reaching sustainability is a directional goal. It must reach sustainability as soon as possible, so that it can expand its outreach without fund constraints (13) Grameencredit gives high priority on building social capital. It is promoted through formation of groups and centers, developing leadership quality through annual election of group and centre leaders, electing board members when the institution is owned by the borrowers (Yunus, 2006). To develop a social agenda owned by the borrowers it undertakes a process of intensive discussion among the borrowers, and encourages them to take these decisions seriously and implement them. It gives special emphasis on the formation of human capital and concern for protecting environment. It monitors children’s education, provides scholarships and student loans for higher education. For formation of human capital, it makes efforts to bring technology, like mobile phones, solar power, and promote mechanical power to replace manual power. Grameencredit is based on the premise that the poor have skills which remain unutilized or under-utilized. It is definitely not the lack of skills which make poor people poor. Grameen believes that poverty is not created by the poor; it is created by the institutions and policies which surround them. In order to eliminate poverty all that is needed to be done is to make appropriate changes in the institutions and policies, and/or create new ones. Grameen believes that charity is not an answer to poverty. It only helps poverty to continue. It creates dependency and takes away individual’s initiative to break through the wall of poverty. Unleashing of energy and creativity in each human being is the answer to poverty. Grameen brought credit to the poor, women, the illiterate, and the people who pleaded that they did not know how to invest money and earn an income. Grameen created a methodology and an institution around the financial needs of the poor, and created access to credit on reasonable terms, enabling the poor to build on their existing skill, to earn a better income in each cycle of loans (Yunus, 2006). Accordingly, Yunus (2010:1) contends: I want to see a world free from poverty. Poverty does not belong in a civilized human society. Its proper place is in a museum. The Grameen Bank and affiliated institutions are dedicated to providing opportunities that can help improve the socioeconomic condition of people who live in abject poverty. I believe that microcredit has a key role to play in reducing poverty (Yunus, 2010:1). Hence, it is this poverty alleviation philosophical foundation of the founder of the Grameencredit - the most popular of modern microcredits that has given rise to the impression that all microcredits are devoid of profit-making considerations and that all microcredits are indeed, for the wretched of the earth. Micro finance on the other hand, has been described as the provision of credit, savings and financial services to very poor people in order to create opportunities for them to create, own and accumulate assets and to facilitate consumption (Focus, 1998; cited in Owualah, 1999:66). This immediately explains that microcredit is an aspect of micro finance. However, the emphasis on “the very poor” in this definition also throws up the issue of whether micro finance is truly meant for only the wretched of the earth. Microcredit it seems is an integral part of micro finance and in practical terms, their nuances are interwoven. Owualah (1999:66) thus contends that micro finance therefore, refers to the provision of credits to the poor (the poor again), at subsidized interest rates, with little or no recovery rates at public sponsored financial institutions (Owualah, 1999:66). We see again that it is this element of subsidized interest rates, offered by public sponsored financial institutions which tolerate little or no recovery that creates the 33

impression that all microcredits are devoid of profit motives. In the process, conventional banks, particularly in the Nigerian context, shun microcredit instruments. As already pointed out above, it is erroneously held by some scholars that microcredits are only talked about, in the context of community and rural banks but not within the orbit of conventional banks (Uche, 2007:19). However, it has been posited by Focus (1998), cited in Owualah (1999:66) that the apparent lack of interest in micro finance operations by conventional financial institutions can be traced to the following reasons: (1) High transaction cost of micro lending which are usually higher than in conventional bank lending (2) The more labour intensive nature of micro finance services and the special challenges in the recruitment, training and motivation of staff engaged in micro finance operations (3) The opportunity costs of using bank deposits for micro lending compared with returns from alternative uses (4) High reserve requirements, which usually leaves little deposit base for micro lending in the face of competing demands (Owualah, 1999:66). The issue of the position of the commercial/conventional banks on microcredit/micro finance has been summarized by Owualah (1999:67) as follows: despite these constraints, conventional commercial banks have both organizational and structural characteristics that make them amenable to successful micro finance operations. These include their extensive branch network and physical infrastructure to cater for a large number of micro finance customers and their well established internal controls, administrative and accounting systems, to keep track of large number of transactions. Others are their access to deposit and equity funds instead of depending on budgetary allocations and volatile donor resources; ability to offer loans, deposit and a wide range of other financial services and the pursuit of goals which foster prudent management, cost effectiveness, profitability and sustainability of banking operations…It is against the foregoing background that commercial banks in developing countries have begun to perceive micro finance not only as a profitable venture but a veritable public relations tool; although there exists a wide gap between their present level of accomplishments and what they are capable of doing (Owualah, 1999:67). In other words, it is not really the banks that hoisted on the political economy, the notion that microcredits are principally, poverty alleviation designs. Therefore, in re-contextualizing and repositioning microcredit, for economic development in Nigeria, the banks are likely to be willing partners. Furthermore, microcredit in the context of this paper, is specifically speaking, a product of many variants. Micro finance on the other hand, refers to the collectivities of methodologies for delivering microcredit. The Political Economy Of Nigeria in the Cntext of the Developmental Challenges According to Majekodunmi and Adejuwon (2012:193), who cited Sumner (2008), political economy is a comprehensive interdisciplinary framework that is based in Marxist social theory. It involves not only the interrelationship between economics and politics but also the interconnections between the various levels of social interaction, from the local through the national to the global. The primary goal of political economy is to know how societies are, and can be transformed. A political economy approach helps us to develop a critical attitude toward organized power and understand the challenges and opportunities we face in building dynamic and democratic alternatives (Majekodunmi and Adejuwon, 2012:193). Furthermore, according to Youngman (2000:3), also cited in Majekodunmi and Adejuwon (2012:193), the political economy approach deliberately moves the focus of analysis from individual choice and behavior to a consideration of the historical and structural context within which individual action takes place. This approach entails a number of basic concepts. First, social phenomena 34

exist within a historical and structural context shaped by the mode of production and its class relations. Second, the manner and extent of the influence of the economic foundation on particular aspects of society is a matter for specific investigation in each case. Third, the dominance of the capitalist mode of production at the world level means that country-level studies must situate their analysis within the context of the global political economy. Fourth, the different classes pursue their own interests, and these interests are conflictual. Fifth, although class relations are the main determinant of social phenomena, they are not the sole determinant - other inequalities such as gender, ethnicity, and race have significant effects. Sixth, the conflicts in society are reflected in the state, which institutionally serves the interests of capitalist accumulation and reproduction. Seventh, intellectual and cultural lives are shaped by the capitalist mode of production and by the contestation between different classes and groups in society. And eighth, opposition to the existing capitalist socioeconomic order is expressed not only by political parties but also by social movements and other organizations in civil society that articulate alternative conceptions of society and how it should develop (Youngman, 2000:29-30, cited in Majekodunmi and Adejuwon, 2012:193). Essentially, this paper is not rooted in Marxism, even if as highlighted above, the political economy framework of analysis possesses immense Marxist antecedents. In this paper therefore, the political economy is the manifestation of the interplay of politics and economics in the nation-state. Hence, we talk about the political economy of Nigeria. Usually, the local political economy exists with linkages with the international political economy which invariably is a product of the interface of politics and economics. Against this background, we proceed to look at the political economy of Nigeria which essentially presents a picture of democratic capitalism. Streeck (2011:3) characterizes democratic capitalism as follows: a political economy ruled by two conflicting principles, or regimes, of resource allocation: one operating according to marginal productivity, or what is revealed as merit by a “free play of market forces,” and the other following social need, or entitlement, as certified by the collective choices of democratic politics. Governments under democratic capitalism are under pressure to honor both principles simultaneously, although substantively, the two almost never agree - or they can afford to neglect one in favor of the other only for a short time until they are punished by the consequences, political in the one case and economic in the other. Governments that fail to attend to democratic claims for protection and redistribution risk losing their majority while governments that disregard the claims for compensation from the owners of productive resources, as expressed in the language of marginal productivity, cause economic dysfunctions and distortions that will be increasingly unsustainable and will thereby also undermine political support (Streeck, 2011:3). Hence, the orthodox Nigerian conceptualization of microcredit as the supreme poverty reduction methodology (see Ediomo-Ubong and Iboro, 2010; Appah, et al, 2012; Jegede, et al (2011) is interwoven with democratic capitalism. In this regard, the populist political elite embrace microcredit as poverty alleviation largesse. The motivation is the satisfaction of social need. The motivation is more about populism than economic determinism. Invariably, in the Nigerian experience, microcredit practices have not aided the course of economic progress and national development. Streeck (2011:3/40 further contends that economics as a “science” instructs citizens and politicians that markets are better for them than politics, and that real justice is market justice under which everybody is rewarded according to contribution rather than to needs redefined as rights. Incidentally, the political economy of Nigeria is ruled by market justice exponents. The highly influential World Bank bureaucrat and current Minister of Finance and Coordinating Minister for the Economy in Nigeria, Dr Ngozi Okonjo-Iweala is both 35

nationally and internationally, a leading market justice practitioner. Her influential contributions to policy directions in the political economy of Nigeria are obviously coloured by her World Bank background. However, Amaefule (2013:1) quotes the World Bank as announcing that over 100 million Nigerians live in destitution. The World Bank Country Director for Nigeria, Marie-Francoise Marie-Nelly, said this at the bank’s Country Programme Portfolio Review in Enugu, Nigeria, on Tuesday, November 12, 2013. According to the World Bank boss, the number of Nigerians living in destitution makes up 8.33 per cent of the total number of people living in destitution all over the world (Amaefule, 2013:1). In this paper, the incidence of over 100million destitute Nigerians typifies the developmental challenges of the Nigerian state and in particular the contradictions of the political economy that is enveloped by democratic capitalism. By 1996 in Bangladesh, Grameen had extended credit to more than three million borrowers and was the largest bank in the country, with more than 1,000 branches. The success of microloans in Bangladesh led to similar programs in other less-developed nations, including Bolivia and Indonesia (Encyclopedia Britannica, 2010). As at 2013, over 100 million Nigerians out of a total population of 174.5 million people (CIA, 2013) are destitute. In the political economy of Nigeria, a routine matter, such as the preparation, consideration and approval of the annual budget of the state, is usually exacerbated to the status of miniature warfare. Let us attempt some illustrations with the 2014 budget, already presented to Nigeria’s National Assembly, but debate is yet to commence on the budget proposal as the month of January 2014 comes to an end. In the first place, according to Effanga (2014), the budget proposal itself is scandalous. The first observation to make is that the budget proposal allocates 76.3% to recurrent expenditure and just 23.7% to capital expenditure. One interpretation of this is that the budget is meant to just keep the country and its institutions running with nothing spectacular to show for it. A budget focused on massive development of infrastructure would assign more to capital expenditure rather than to recurrent which covers personnel and overhead costs (Effanga, 2014). According to Alechenu, et al (2014), the All Progressives Congress (the main opposition group of politicians in the country) is set for a showdown with the Federal Government as it has directed its members in the National Assembly to block all legislative proposals, including the 2014 Appropriation Bill, until constitutionalism is restored in Rivers State, in particular and the nation in general. On the other hand, Ameh et al (2014) report as follows: Senators and House of Representatives members elected on the platform of the Peoples Democratic Party (the ruling party in Nigeria) have vowed to crush a plan by the opposition All Progressives Congress to block the passage of the 2014 budget. Indeed, if all of this display of arsenal of warfare is about passage of mere Appropriation Bill, the Nigerian state merits being known as a giant that can ruthlessly deal with its detractors, especially if they decide to come from across the Nigerian borders. Essentially, the orchestrated distractions such as the type in the foregoing prevent the political elite from concentrating on the development challenges in the political economy. Development in this context would be exemplified by reduction in the level of destitution in the land, as different from the construction of airports, hosting of international conferences and making of speeches of doubtful value, as indications of development consciousness. Hence, it is strongly opined in this paper that microcredit be retabled as a development-inducing credit instrument, as opposed to a poverty management instrumentation. The microcredit Alternatives for Sustainable National Development in Nigeria Sustainable national development in the context of this study is intrinsically related to sustainable economic development. It is also important at this juncture to highlight that 36

economic development in this study also highly relates with economic security, which in the final analysis should be human-centered. It is quite distinct from economic development as represented by growth-figures from the officialdom. Hence, by the problem of economic development may be meant the problem of accounting for the observed pattern, across countries and across time, in levels and rates of growth of per capita income (Lucas, Jr, 1988:3). In this study, per capita income still means a measure of the amount of money that is being earned per person in a certain area (http://www.investopedia.com). However, the twin concepts of poverty and inequality, which in their extreme cases translate to destitution, are more in tune with our methodology (Okeke, 2014:8). However, to combat poverty and inequality requires job creation, employment generation, availability of food and provision of shelter that can come through credit provision that guarantees multiplier effects, not the extension of ostensible credit in the form of charity. In effect, in the political economy of Nigeria, where microcredit is perceived highly as poverty alleviation instrumentation, the politicoeconomic elite also engage in the massive looting of public treasury that leaves the very poor, perpetually in avoidable poverty (see Ojukwu and Shopeju, 2010). In the history of Nigeria’s political economy, it was once doggedly contended that there were no alternatives to a certain economic prescription. We refer of course to the Structural Adjustment Programme (SAP) of the Ibrahim Badamasi Babangida Administration (1985-1993). Citing Nigeria’s Newswatch Magazine of July 24, 1989:14, Ofuebe (2001:224), quotes the then Nigeria’s Military President as follows: The Structural Adjustment Programme is the only alternative we have if we are to reduce Nigeria’s total dependence on oil as its foreign exchange earner. This administration is committed to the programme because there is no viable alternative (Ofuebe, 2001:224). Political economists on the other side of the then SAP debate of course reminded the SAP apologists that even in death, there is an alternative, which is death. But we must return to our microcredit mainstream. The SAP-aside was for the purpose of highlighting that economic concepts do have alternatives. Hence, we proceed to contend that microcredit, as a financial intermediation product, has very many conceptual alternatives. If we go by the orthodoxy, its interest element may be de-emphasized but what must be considered very strange is the notion that microcredit may be availed as a form of largesse that does not have to be recovered. In other words, we strongly contend that one of the alternative forms of microcredit is the type that its packaging guarantees full recovery. For instance, microcredit can be delivered against the emoluments of junior academics in a Nigerian University community, to facilitate research productivity. Indeed, the dearth of productivity linkages between academic research and the industries in Nigeria is among the critical problems of the Nigerian economy (Offiong and Chikwem, 2011: 20-21). In this regard, the earlier the research initiatives of the budding researchers are duly funded, the higher the possibilities of productivity linkages between their ultimate research output and the intended end-usages. We highlight that the governing elite in Nigeria are not enamored by such unattractive suggestions that border on research and development. Therefore, to wait for them to properly fund research and development, increasingly resembles waiting for Goddot! Our second alternative conceptualization is that microcredit is principally for the generation of multiplier effects in the economy, not for the fighting of poverty as sole purpose. Indeed, microcredit is principally a credit instrument. It is not fundamentally a chance to dole out funds to the wretched of the earth. Hence, the defining feature of microcredit is in the comparatively minimal value of the credit. It is neither in the pricing nor in the credit’s non-performance. As a result of these misconceptions, microcredit in the developing economies such as that of Nigeria continues to face the issues classified as 37

constraints. Thus, Aryeetey (2005) cited in Ediomo-Ubong and Iboro (2010:175) has noted that most microcredit programs in the developing world are hampered by constraints, including limited loan portfolio, administrative problems, lack of proper coordination of activities and problems associated with loans and interest repayment. Ediomo-Ubong and Iboro (2010:176), in respect of their study area continues: Although, the scheme has made a difference in the lives of benefiting rural households, it is also fraught with a number of setbacks. Among these constraints, problems with repayment of credit and interest are the most prominent. The rate of repayment has been very slow as to render the scheme inefficient. Key managers of the program, including program officers, monitoring and evaluation officers and credit recovering team members, pointed out that most of the beneficiaries pay their monthly loan funds several weeks or months after the date they are supposed to remit. They further observed that even the interest due to the organization, which goes into administrative cost and payment of lender's interest, are also tied down by the majority of beneficiaries. In some cases, resort has been made to litigation as a way of obtaining repayments. Such drastic measures, however, further compounds the problem. The problem of repayment of loan funds and interests arise from a number of factors, which together constitute clogs in the wheel of the scheme's progress. These factors include the perception that credits are rural people's share of government's revenue allocation. One of the program officers told us that: Since they see the loan we give them as their share of government revenue, some of the beneficiaries do not take the demand for repayment of loans seriously, much less interest repayment; they regard this as a way of ensuring that they use the funds properly and not squander it. Unfortunately, this deeply embedded cultural attitude towards credit program has been very impervious to change, despite effort to educate beneficiaries on the need to make remittance. Poor savings culture of beneficiaries poses another formidable constraint to microcredit schemes. Most beneficiaries find savings a very difficult practice to imbibe. They spend most of their income on household food, children's education and on the acquisition or redemption of leased lands. Furthermore, some beneficiaries consider their income too small to be saved. Thus, in the face of pressing economic challenges such as feeding, they consider spending the funds to address these needs a rational decision. The value that rural people bestow on feeding, children's well-being, and land makes saving a secondary consideration. As a result, they often lack the funds to make repayments for credit obtained (Ediomo-Ubong and Iboro, 2010:176) According to Akanji (2002:13), by the understanding of the level of poverty in Nigeria, Government attempted with several microcredit programs to alleviate poverty programs/projects such as Agricultural Development programs (ADPs), National Directorate of Employments (NDE), Better Life for Rural Dwellers (Later named Family Support Programs), the Directorate of Food, Roads and Rural Infrastructure (DFRRI) were pursued during 1986 to 1999. Other institutions that have also attempted purveying micro-credit were the rural banking scheme (1977-1990), People’s Bank (1987-1990); Community Bank (1990 to date) and in addition, the Central Bank of Nigeria’s Agricultural Credit Guarantee Scheme, which came into existence since 1977. Although all the programs were directed at improving the productive base for sustainable growth, most of the efforts at purveying microcredit to alleviate poverty were largely irrelevant and urban structured from the standpoint of the realities of (who is the poor?) understanding the poor. The programs in terms of resource endowment were dominated by government who gave paternalistic subventions in trickles. The way the programs had functioned over the years was such that the credit system was essentially directed at meeting the needs of elites whereas the program is largely for small peasant poor group. The semi-bank agencies in the system, some of which were created precisely to redress 38

the weaknesses of the existing system were saddled with myriads of problems, especially inadequate funding as well as lack of appropriate skills to mobilize/identify the poor and cannot therefore provide the essential remedy in a sustainable way. The most serious problem in the agencies set to provide credit (NACB, etc) was the fact that they lacked adequate professional staff. CBN (1986) credit study shared that some 64% of personnel of NACB were administrative staff. Lending procedure were tortuous, with extremely demanding forms for completion by uniformed and illiterate farmers and the target group who are basically seeking relatively small loans (Akanji, 2002:13). Indeed, the problem has to do with the prevailing viewpoint that microcredit can not be effectively delivered within the operational templates of the existing conventional banks. Paradoxically, there were delivery bottlenecks in the conventional banks and there have also been serious delivery bottlenecks in the new creations for microcredit service to the poor. The alternative is to use financial intermediation, to provide jobs, food and shelter for citizens. According to Owualah (1999:67), despite their constraints, conventional commercial banks have both organizational and structural characteristics that make them amenable to successful micro finance operations. These include their extensive branch network and physical infrastructure to cater for a large number of micro finance customers and their well established internal controls, administrative and accounting systems, to keep track of large number of transactions. Others are their access to deposit and equity funds instead of depending on budgetary allocations and volatile donor resources; ability to offer loans, deposit and a wide range of other financial services and the pursuit of goals which foster prudent management, cost effectiveness, profitability and sustainability of banking operations (Owualah, 1999:67). Essentially, microcredit that would generate further multipliers for sustainable national development in Nigeria has to be delivered within the larger operational template of the reformed conventional banks, as the current contrary designs amount to playing the ostrich. Conclusion Indeed, there are no universal decrees to the effect that microcredits should be availed, devoid of interest elements or with its credit performance imperatives overlooked. It is true that a seminal strategy of Muhammad Yunus, which emanated from Bangladesh, transformed microcredit into a universal weapon of the fight against poverty. However, microcredit remains fundamentally, an instrument of financial intermediation. In developing economies and indeed elsewhere, microcredit can also be given some seminal reconceptualization. Microcredit can for instance, be utilized in the bridging of the research gap between budding academics in the developing countries and their counterparts in the First World. In this regard, what is desired in the political economy of Nigeria is a new national microcredit template that can enhance the prospects of sustainable national development, by being devoid of designs to convert it to poverty amelioration largesse in the hands of market justice political economists. It should also not be a recipe for a harvest of failed banks. In conclusion therefore, we posit that the current fixation with microcredit as the supreme poverty alleviation methodology in Nigeria requires urgent rejection.

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References Akanji, O. (2002): “Micro-Finance as a Strategy for Poverty Reduction” CBN Economic & Financial Review, 39 (4) 1-20 Alechenu, J.et al. (2014): “Rivers Crisis: APC Set for Showdown with Federal Government: Directs Members in the National Assembly to Block Budget Passage” http://www.punchng.com/news/rivers-crisis-apc-set-for-showdown-with-fg/. Accessed, 26/01/14 Alegieuno, J. (2010): “Microcredit Financing by Deposit Money Banks/Microfinance Banks And the Agricultural Sector Development in Nigeria” Central Bank of Nigeria Economic and Financial Review 48(4) 165-180 Amaefule, A. (2013): “100 Million Nigerians Live in Destitution - World Bank.” http://www.punchng.com/news/100-million-nigerians-live-inAccessed, 20/12/13. Ameh, J. et al. (2014): “We Will Crush APC Anti-Budget Plot - PDP” http://www.punchng.com/news/we-will-crush-apc-anti-budget-plot-pdplawmakers/ Accessed, 26/01/14 Appah, E. et al. (20120: “An Analysis of Microfinance and Poverty Reduction in Bayelsa State of Nigeria” Kuwait Chapter of Arabian Journal of Business and Management Review 1(7) 38-57 Aryeetey, E. (2005): Filling the Niche: Informal Finance in Africa. Nairobi: African Economic Research Consortium

Central Intelligence Agency (2013): “The World Factbook” https://www.cia.gov/library/publications/the-worldfactbook/rankorder/2119rank.html Accessed, 26/01/14 Ediomo-Ubong, E and Iboro, E. (2010): “Micro-Credit Programme and Poverty Alleviation in Rural Nigeria: A Case Study of Akwa Ibom State” International Journal of Economic Development Research and Investment, 1(2&3) 168-180 Effanga, O. (2014): “Inside Nigeria’s Scandalous 2014 Budget” http://premiumtimesng.com/news/153138-investigation-inside-nigeriasscandalous2014-budget.html. Accessed, 26/01/14. 40

Encyclopedia Britannica (2010): “Microcredit”. Encyclopedia Britannica: Student and Home Edition, Chicago: Encyclopedia Britannica. Focus (1998): The Consultative Group to Assist the Poor.No12 and No1. Foster, J. (2008): “The Financialization of Capital and the Crisis” Monthly Review. 59(11) http://monthlyreview.org/2008/04/01/the-financialization-of-capital-and-thecrisis Idumanje J. (2001): “Micro-Credit and Poverty Alleviation in Nigeria: A Mega Analysis” African Journal of Business and Economic Research 2(1&2): 254-258 Jegede, C. et al. (2011): “Impact of Microfinance on Poverty Alleviation in Nigeria: An Empirical Investigation” European Journal of Humanities and Social Sciences 2(1) 7-111 Lucas Jr, R. (1988): “On the Mechanics of Economic Development.” Journal of Monetary Economics 22 (-) 3-42. Majekodunmi, A and Adejuwon, K. (2012): “Globalization and African Political Economy: The Nigerian Experience” International Journal of Academic Research in Business and Social Sciences 2(8) 189-206 Okali, C and Otite, O. (1992): Readings in Nigeria Rural Society and Rural Economy. Ibadan: Heinemann Education Books Nig, Ltd. Offiong, O and Chikwem, F. (2011): “Low Technological Development and Application: Implications for Nigeria’s Socio-Economic Development and International Relations”. Journal of Modern Political Economy.2 (1) 14-34 Ofuebe, C. (2001): “Prolegomena to Military: An Analysis of the Economic and Political Policies of the Babangida Administration in Nigeria”, in C. Ofuebe (Ed): Dynamics of Social Studies. Enugu: New Generation Books. Ojukwu, C and Shopeju, J. (2010): “Elite Corruption and the Culture of Primitive Accumulation in 21st Century Nigeria” International Journal of Peace and Development Studies 1(2) 15-24. Okeke, R. (2014): Democracy and Sustainable National Development in Nigeria: Reimagining the Nexus. European Scientific Journal. Accepted, 13/01/14 Owualah, S. (1999): Entrepreneurship in Small Business Firms. Lagos: G-Mag Investments Ltd. Palley, T. (2007): “Financialization: What It Is and Why It Matters” The Levy Economics Institute Working Paper No 525 http://www.levyinstitute.org/pubs/wp_525.pdf. Accessed, 26/01/14 41

Soludo, C. (2008): “Financial Globalization and Domestic Monetary Policy: Wither the Economics for the 21st Century”. An Inaugural Lecture of the University of Nigeria, Nsukka Streeck, W. (2011): “The Crisis in Context: Democratic Capitalism and Its Contradictions.” MPIfG Discussion Paper 11/15. Max Planck Institute For the Study of Societies, Cologne http://www.mpifg.de/pu/mpifg_dp/dp11-15.pdf. Accessed, 19/12/13. Sumner, J (2008). “Governance, Globalization, and Political Economy: Perspectives from Canadian Adult Education”, Adult Education Quarterly 59 (1) 22-41 Uche, C. (2007): “The Future of the Past in Banking” 24th Inaugural Lecture. University of Nigeria, Nsukka. Ugwu, S. (2008): “Micro-Credit as a Sustainable Economic Development and Poverty Reduction Tool: The Enugu State Experience” Professor Bassey Andah Journal of Cultural Studies 1(1) 90-100. Ugwu, S. (2011): “Micro Credit and Capacity Enhancement in Nigeria: An Evaluation of The National Poverty Eradication Programme (NAPEP) in Enugu State (20012007). A Thesis presented to the Department of Public Administration and Local Government, University of Nigeria, Nsukka; in Fulfillment of the Requirements for The Award of Degree of Doctor of Philosophy (Ph.D) in Public Administration Youngman, F. (2000): The Political Economy of Adult Education and Development. London: Zed Books Yunus, M. (2006): “What is Microcredit?” http://www.grameen-info.org/bank/WhatisMicrocredit.htm. Accessed, 20/02/13. Yunus, M. (2010): “The Battle against Poverty”. Encyclopedia Britannica: Student and Home Edition, Chicago: Encyclopedia Britannica

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Human Capital Accounting: The Dichotomy of Value Representation By Kehinde James Sunday Ph.D

Abstract The study is an attempt to examine the weakness in the current method of reporting and treating the human capital value within the firm reporting system. A survey method was adopted using structured questionnaire the chi-square a non-parametric method of data analysis with used for the interpretation and data analysis. The study revealed that capitalizing the value of human capital using the discounted usage system means accepted as obviously better than the current realization method. It was recommended that productivity rather than only training and qualification should be used for promotion and value determination.

Introduction Capital human remain the most valuation factor is the work organization, the process of securing, training and rewarding human capital however remain difficulty and cumbersome also being an asset of the organization means the value should be accounted for in the balance sheet of the firm, however, they are not machinery, property, land, buildings are all regarded as asset side of the balance sheet, in fact cash, debtor, etc are regarded as current asset of the firm and are accorded treated in the asset side of the balance sheet. However, the human capital value of a firm although are regarded as asset but are treated to the profit and loss account of the organization as an expenses. This pose a problem to the value accorded human capital as asset of the firm. Thus basic problem of human capital have made many organization today to invest less on human capital development other organization that doe invest on human capital do so is a selective manner. The other issue regarding human capital is the fluidity of human capital asset itself. It can die and go to extinction, or become obsolete, or leave the organization after huge investment on their development for other better opportunity this, thus limit the reliability of human capital unlike other asset of the organization. The asset difficulty regarding human capital have made their asset status in organization rather debatable not withstanding human capital remain the most value factor in the organization system for the obvious reason that human capital is the only factor that can effectively put all other factor to work. Thus, the problem arise of how to treat human capital value to the financial report of the organization should human capital value be treated as a pure asset of the firm or realized is the profit and cost account of the firm. The study therefore is an attempt to examine the current treatment is goal of estimating weather the current treatment is good enough or recommend other method for treating human capital value in the financial report of the firm therefore accorded better value in real term to human capital of the firm in boosting the market value of the firm.

Department of Accounting and Finance Lagos state university E-mail [email protected]

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Literature Review Flamholz (1972) define human capital accounting as “The process of identifying, measuring and communicating information about human resources to decision makers Dess and Picken (1999) also define human capital accounting as “capabilities, knowledge, skills and experience of the company’s employees and managers as well as the capacity to add to this reservoir of knowledge, skills, and experience through individual learning.” CEDEFOP (1998) define human resource accounting as the process of identifying, measuring and communicating information about human resources in order to facilitate effective management within an organization. It is an extension of the accounting principles of matching costs and revenues and of organizing data to communicate relevant information in financial terms.Human Resource Accounting is a technique of measuring the effectiveness of personnel management activities and the use of people in an organization. There are two approaches to human resource accounting, namely the cost approach, also called human resource cost accounting method or model and the value approach method, the cost approach include a) Acquisition cost model and b) replacement cost model. The value approach includes the present value of future earnings method, the discounted future wage model, and competitive bidding model, (Wikipedia). These definitions fails to recognize or give collective value to human capital, it also fails to account for the accounting estimation of the value of the human capital however, the definition is of import in capturing the need for determination of human capital value as an assets of the firm rather than treating it as an expenses. Human capital theories Economists estimate human capital on the basis of years of schooling or formal educational attainment levels regardless of actual productive capacity however, financial accounting and reporting leave human capital off the balance sheet for want of rules or conventions. Financial accountants and educators are developing methods for systematically evaluating and recording knowledge assets acquired through experience, education and training such that human capital accounting measurement become an issue in financial reporting ( ) Approaches to Human resource accounting was first developed 1691 the next stage was during 1691-1960 and third phase post-1960..(Wikipedia) Determination of the value of a firm as been the bone of contention for financial managers, the "value" of an enterprise as measured within traditional balance sheets, include stating wasting assets such as buildings, production plant as fixed assets and others such as cash and stocks as current assets the two making the total value of the firm, while human capital value is regarded as expenses in measuring the enterprise's assets. However, with the growing emergence of the knowledge economy, this traditional valuation has been called into question due to the recognition that human capital is an increasingly important part of an enterprise's total value. This has led to two important questions: how to assess the value of human capital in addition to an enterprise's tangible assets and how to improve the development of human capital in enterprises. The emergence of methods for accounting for human resources aimed at measuring, developing and managing the human capital in an enterprise, can thus be said to reflect the need for improving value measurement and accounting for human capital value as well as ensuring effective human resource management. (CEDEFOP, 1998) Flamholz (1973) was one of the earliest theorists to give serious thought to the problems of measuring the value of an individual. He argued that this should be based on three variables: productivity, transferability, and promotability (these could perhaps be 44

seen as surrogate ways of measuring skills and knowledge). He also proposed, however, that the value of an individual will be linked to the likelihood that that individual will stay with the organisation (loyalty, perhaps measured by job satisfaction). The difficulty, of course, is measurement. It is possible to construct profiles of employees, assessed on key variables, such as loyalty, trust, motivation, effectiveness, experience, etc. Cataloguing these, individually, and in total, may give a useful insight into the development of the organisation. It could be, for example, that a short-term increase in profit has been brought about only at the expense of an overall decline in motivation Flamholmay tz and Pyle (1985) developed the acquisition cost model. This method measures the organization’s investment in employees using five parameters which includes recruiting, acquisition; formal training and familiarization; informal training, Informal familiarization; experience and development. This model suggest instead of charging the costs relating to human capital to profit and loss accounting it should be capitalized in the balance sheet. The process of giving a status of asset to the expenditure item is called capitalization; the capitalized value of human resource is thereafter amortized over a period of time. It is done by taking the age of the employee at the time of recruitment and at the time of retirement, out of these a few employees may leave the organization before attaining the superannuation; this value is aggregated and then amortized over the years. The limitation of this method includes false assumption that the currency value is stable. Secondly since the assets cannot be sold there is no independent check of valuation. Lastly, this method measures only the costs to the organization but ignores completely any measure of the value of the employee to the organization (Cascio, 1991). Hekimian and Jones in Cascio (1991) proposed in relation to the value of human capital to the origination that where an organization had several divisions seeking the same employee, the employee should be allocated to the highest bidder and the bid price incorporated into that division’s investment base. For example a value of a professional athlete’s service is often determined by how much money a particular team, acting in an open competitive market is willing to pay him or her. OECD (1996) in relating the concept of human capital accounting to “return-oninvestment” (ROI) in education and training, and education/training reform, the OECD notes that it is common practice in most countries for industries and firms to make budgetary decisions on funding for compulsory schooling based on the assumption that the social and economic benefits outweigh the costs; however, in many areas, the requirements of the knowledge-based economy increase the pressure to improve the effectiveness and efficiency of human capital formulation. It is concluded that “a variety of problems are posed by the predominant methods for assessing human capital that are geared to the needs of an education system that extracts fees by controlling credentials as opposed to a system where the output potential of human capital is measured on the basis of competence to produce regardless of how much knowledge was acquired.” However, one of the obstacles to measuring the output potential of human capital is the segmented and oligopolistic character of educational and professional certificate which is based on the historical power of universities and professions to forbid the utilization of acquired competences without certificate which is a measure of how well individual have acquire professional and academic knowledge. The traditional state-sanctioned assertion of property rights over the knowledge acquired when people invest in human capital is one way of resolving the paradox of knowledge as a public good and as inalienable (OCED, 1996) The accounting of human resources can be seen as just as much a question of philosophy as of technique. This is one of the reasons behind the variety of approaches 45

and is further underlined by the broad range of purposes for which accounting human resources can be used, e.g. as an information tool for internal and/or external use (employees, customers, investors, etc.), and as a decision-making tool for human resource management (investments in human resources as well as personnel management in general). In determining the relationship between HCA and the Assessment of Acquired Learning The return on in investment in human capital become of more value Prior Learning Assessment (PLA) and the learning record, PLA offers to individuals reduced risk of investing in human capital. For firms, it makes HCA simpler and less expensive. For governments, there is the incentive of more efficient expenditure allocation during times of fiscal pressure. PLA “renders knowledge acquisition methods neutral,” giving all forms of learning equal chances at being validated the OECD averred, The PLA has the general impact of reducing the transaction costs both for individuals seeking to Invest in human capital or enter into a contract to rent their skills and for the firm’s internal and external labor market decision making. Using PLA to reduce the cost and duration of incremental human capital investments relative to an individual’s existing asset base is a contribution to efficient allocation of individual resources and investment incentive that reflects rates of return to recurrent education. the OECD asserts that to reap the benefits of PLA and human resources accounting practices, there should be means to strengthen market valuation of training and competences and developing a system for measuring competences designed to favour modular and continuing learning, and “reduce the lumpiness of investment imposed by the current certification system” thus the assertion is to reduce the overbearing on knowledge based training that emphasis certificate as the bedrock of competence and training more over for maximum gaining from human capital development firms must be encouraged to capitalize, collateralize and amortize knowledge; Work organization must also give clear title to well-defined competences through universal institutions for assessment and broadly recognized mechanisms for financial accounting; there should be transparency in labour contracting by revealing employee assets and employer benefits for maximum benefit firms must validate alternative learning acquisition. The work of Drucker and Reich ( ) on human capital accounting revealed that firms and governments are making choices and using resources to invest in the acquisition of human capital based on signals. CEDEFOP Report (1998) have identified three ways of solving the policy problems relating to measurement of human capital training value in the organization this include the voluntary market-based method (the ISO standard method), i.e. develop a consistent framework which can be operational across sectors and countries and promote this through a rewarding and image campaign. There is also the voluntary rewarding method (the Investing in People method in the United Kingdom), i.e. develop a consistent framework supported by rewarding mechanisms once it is introduced and approved at enterprise level (enterprises pay for their training evaluation whether they meet the standard or not). Third is the compulsory method (the Green accounting method in Denmark), i.e. identify disclosure on human resources as a societal concern and prepare (inter-)national regulations

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Human Capital and Performance Recognition of human capital value can be of import in relation to the organization performance, human capital being a strong assets of the firm should necessarily be of value to the performance of the firm however, most time the attempt to establish a causal relationship between various human resource management (HRM) practices and organization performance have proved to be problematical. It may be intuitive to suggest that “good” HRM practice will improve organizational performance, but this has been difficult to prove conclusively, given the many confounding variables. It is even possible to suspect a reverse causation that the profitable firms can afford to treat their employees well. Benefit of human capital accounting It is worth noting that measurement of human capital is likely to provide useful information both to management and other stakeholders of the firm. several benefit could be adduced to accrue form the recognition of the value of human capital in the estimation of the firms assets, some of these includes Measurement of business performance, based on all the assets employed, rather than just those that can be measured readily in money terms; another is the allocation of personnel on the basis of most valuable to most critical tasks; there is also the comparison of the use of labour as against the use of other resources, such as machinery. Estimation of the human capital value would be of benefit in the consideration of the effectiveness of training and development expenditure and of business valuation for take-over and merger purposes it will also benefit the firm in the provision of a basis for more appropriate calculation of wages and salaries and in the setting of human resources policies. Research problem The basic problem of human capital valuation is cardinal to human capital management , today most firm do not want to invest in human capital development due to quick waste nature of human capital, also the basis of human capital management is the valuation process of human capital and how to account for the value in their financial report. However the there is no acceptable way of evaluating human capital for financial record purpose, it is a wasting assets of a long term nature and at the same time it asset nature can not be adequately quantified in their financial terms except treated as an expense the problem therefore with human capital value is that while it is variously regarded as assets but it is treated as expenses in their financial treatment. Method of study The study made use of descriptive method of data collection. The survey method using standard questionnaire to gather necessary data was used, the questionnaire was designed to gather relevant data relating to human capital accounting. The judgmental sampling technique was adopted since the opinion of expert and professionals were needed and the fact that the total population of the study cannot be determined. Lagos state was selected for the purpose of the study; Ikeja, Ojo and Lagos Island local government were selected for the study. Seventy questionnaires were distributed in all, of which sixty was retrieved of which only fifty-six were usable. The chi-square, a non-parametric method of data analysis was adopted using a 5points likertscale technique starting with strongly agreed to strongly disagreed with scale of 5,4,3,2,and 1 respectively.

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Analyses and Interpretation of Study Meaning Ranking Mean

Standard deviation

1

Var 004

2.6077

0.49281

2 3 4 5 6 7 8 9

Var 001 Var 006 Var 003 Var 002 Var 009 Var 005 Var008 Var007

3.3929 3.3929 3.3929 3.1964 3.1964 3.000 3.000 2.6071

0.49281 0.75593 0.40089 0.74881 0.74881 0.000 0.63246 0.49281

The table 1 above is the table that shows the mean ranking of the variables, the determined at 3.17 -_ 3.2. thus all variables with mean above and while all variables with mean less than 3.2 are classed as less important to the research at hand thus, var004, var001, varoo6, varo03, var002, and var009 are of very important value, these variable, very important value, these variable, var004 remain most valuable while var001 was next in ranking followed by record and var002 and var009 in representative order of value. The earn value able of all the variable is var007. The table also show the standard deviation of the variables, var003 has the highest standard deviation, it has neither a rate is var009 with S.D. of 0.748. it means respondent are more divergent in their view on the variable the least standard deviation is var005 with a standard deviation of 0.000, while 89 suggest that respondent are least divergent on their opinion on the variable. Hypothesis Table Variables Var001 Var002 Var003 Var004 Var006 Var007 Var008 Var009

X2 2.521 20.643 4.750 2.571 2.571 2.571 18.893 4.750

Significant level X Xx

X Xx

Note: x (one asterisk) connote accept at 5%, Xx (asterisk) connote accept at 10% The variables tested were done at 5% and 10% significant level respectively. Var002 and var008 were accepted at significant level of 5% which is a strong acceptance of the variable these variables were the most valuable variable and other variables were tested at 95% confidence level. Var003 and var009 were all accept at 10% significant level that is at 90% confidence level. All other variables were rejected at both 5% and 10% significant level.

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Summary and Conclusion Summary The study estimates the relative importance of human capital value in relation to the value of the firm. The following are the findings from the study 1. Human capital value should be estimated by productivity rather than certificate and training. Many emphases should be placed on human capital productivity within the firm. 2. The study discovered that human capital value should be best accounted using discounting future wages method of evaluation. 3. The study also revealed that both qualification and training should not be the bases of accounting for the value of human capital. 4. It was accepted that human capital should be classified as long term assets of the firm and their value should be capitalized rather than expense in the profit and loss account of the firm 5. The human capital value should be accounted for in the financial report of the firm as depreciable assets over the years rather than expense in the profit and loss account. Conclusion The study is an attempt to estimate the value of human capital and the treatment it should be accorded in the balance sheet and profit and loss account of the firm. This study concluded that human capital of the firm is the most value asset of the firm, it should not be therefore treated in value as expenses, rather as an asset, as asset of the firm it should be evaluated on the bases of discounted future wages method and should be capitalized in the balance sheet as depreciable asset of the firm, the value however should not be stated at replacement cost value. The value should also not be based on qualification and training but on productivity and value to the firm. This agreed with the principle of talent management of human capital (Kehinde, 2011). Conclusively human capital should be treated with value and esteem in the work of organization Recommendation 1. Work organization should decide strategic method of evaluating human capital in their firm based on productivity and should be compensated rewarded as such. 2. Talent management should be given utmost value in the firm and human capital should be regarded as talent of the firm and should given topmost priority. 3. Organization should begin the capital of the firm to improve on the market value of the firm. Since organization leadership as a basic fundamental of the firm in the capital market. Reference Cascio, Wayne F. (1991) Costing Human Resources: The Financial Impact of Behavior in Organizations, (Boston) PWS-Kent Pub. Co. CEDEFOP (1998) Human resource Accounting: interests and conflicts" CEDEFOP panorama 5085 Cat. n°: HX-18-98-445-EN-C www.cedefop.gr, Dess, G and Picken, J (1999) Beyond Productivity: how leading companies achieve superior performance by leveraging their human capital. New York: American Management Association 49

Dess, G G and Picken, J C (2000) “Changing roles: Leadership in the 21st century”Organizational Dynamics, 29 pp18-34. Drucker and Reich(1998) Measuring What People Know: Human Capital Accounting for the Knowledge Economy OECD publishing. Flamholz, E (1972) “Toward a Theory of Human-Resource Value in Formal Flamholtz, Eric. (1985) Human resource accounting: [advances in concepts, methods, and applications]. 2nd edition San Francisco: Jossey-Bass, 1985. OECD, (1996) HCA to Promote Return-on-Investment Organizations.” The Accounting Review, October, pp666-78 Organization for Economic Co-operation and Development (OECD). (1998). Human Capital Investment: An International Comparison. Paris: OECD, Centre for Educational Research and Innovation. Wikipedia (2011) Human resources accounting www.wikipedia Kehinde, J. S. (2011). Talent Management: Effect on Organization Performance. Journal of Management Research, 4(2). 178-186

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Approaches, Skills And Styles Of Leadership In Organizations By Stanley Aibieyi, Ph.D Abstract Leadership entails changing an organization and making active choices among plausible alternatives, and depends on development of others and mobilizing them to get the job done. A good leader is one who is capable of persuading others to move enthusiastically towards the achievement of group goals. What is normally expected from employees is that they work with total zeal and determination, but this is not always the case. Without a good leadership style, the performance level of staff will be poor. This, no doubt reduces credibility of the services rendered. The situation of the problem is poor delegation of duty, lack of dedication to work as a result of poor leadership style. The objectives of this study are to examine the various leadership styles, approaches to the study of leadership styles and the impact of leadership style in organization. In carrying out this research, the documentary analysis method of research was adopted and information and data were elicited from relevant literature for the study. The study reveals that a good leadership style, such as the democratic style could persuade workers towards a high level of performance and that acquisition of leadership skill is very important for a leader to lead well and so on. The paper recommends amongst others that leaders should encourage inter-personal relationship with their employees and that merit award should be established in every organization to spur workers to put in their best. Key words: Leadership, Style, Impact, Autocratic, Democratic, Approaches, Organization.

Introduction Leadership is an essential function in every organization. In fact, no organization can exist without a leader. The goal of any organization depends on the people that are employed to achieve the organizational objectives. Effective administration depends to a very great extent on sound leadership that can influence the workers in such a way that they all strive towards achieving the desired objective of the organization. Importantly, workers should be encouraged to work willingly with zeal and confidence. Since leadership is very important in organization, there is need to look at different views that have been given by some scholars about leadership and leaders. Leadership is about innovation and initiative. Leadership is creative, adaptive and agile. Leadership looks at the horizon, not just the bottom line (Aibieyi,2009). Leadership has to do with influencing workers behavior towards the attainment of organizational goals and objectives. Leadership exhibited by the quality of behavior of an individual in guiding people or their activities in organized effort. It is an essential indispensable social essence that common purpose. It also creates the incentive that makes other incentive effective, that infuse decision without which cooperation is impossible. Leadership is based on the personal qualities of the leader to influence workers to voluntarily comply with all working principles of the organization. Associate Professor, Inst. of Public Administration and Extension Services, University of Benin, P. M. B. 1154, Ekehuan Campus, Benin City,Edo State, Nigeria, West Africa. GSM: 08050283517, 07067409537 E-Mail: [email protected]

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Leadership is the ability to inspire others to willingly perform their institutional duties. Leadership always shows where we want to go and the way forward. Leadership also means inspiring others to perform organized duties freely and willingly to achieve the objectives and the organizational goals. Literature Review The concept of leadership has been defined by different scholars in various ways. In fact, there are many definitions of leadership as there are writers. The literary meaning of leadership in universal dictionary and thesaurus says that it is the act of leading, the ability to be a leader, the leaders of an organization or movement collectively. However, the meaning of leadership was further explained by scholars since the dictionary meaning does not explain fully. Aibieyi (2009), defines the subject matter as the innovation and initiative, leadership is creative adaptive and agile. Herold Koontz (1988) defines Leadership as the art of influencing people so that they strive willingly and enthusiastically towards the accomplishment of group goals. Heresay and Blanchard (1977) view leadership as a process of influencing the activities of an individual or a group in efforts towards achievement in a given situation. Arubayi (1995) defines leadership in the secondary school context as a situation where the principal or administrator tries to influence the behaviour of teachers and students to achieve the goals and objectives of the school. Macfarland (1979) asserts that leadership is the quality of behaviour of an individual where by they guide people or their activities in organized effort. He further says that leadership is an essential indispensable social essence that gives common meaning to a common purpose. It also creates the incentive that makes other incentive effective, that infuse decision without which cooperation is impossible. Unugbro (1995) cited Terry G (1977) definition of leadership as the activity of influencing people to strive willingly for group objectives. Chester (1973) sees leadership as a social influence process in which the leaders seek the voluntary participation of his subordinates in an effort to meet organizational objectives. Katz and Khan (1979) view leadership as an influential increment over and above mechanical compliance with the routine directives of an organization. Finally, Etzoni (1964) was not left out, he defines leadership as the ability based on the personal qualities of the leaders to influence the followers voluntary with compliance in broad range of matter. From the above definitions, it shows that they all have a common word that is, the art of influence. Leadership involves other people, that is, subordinate or followers, group members help define leader’s status and make the leadership process possible. Without subordinate, all the leadership qualities of a leader will be irrelevant. The leader’s major duty as an influential person is to influence the behaviour of the followers. The way the followers are influenced makes him have the urge to work in an extra ordinary way than he is naturally willing to perform. This suggests that the essence is cooperative followership.

Approaches To The Study Of Followership There are three major approaches or theories to the study of leadership. These are the traits or psychological approach, the situational or contingency approach and thirdly the behavioral approach. The traitist approach had the belief that leaders are born and not made and that there are certain qualities that are limited to only leaders which constitute the 52

distinguishing factors between the leader and others. This approach according to Edem (1987) is that because an individual has certain behaivour partially which forms the product of his personality which makes it easier to distinguish him from others. These traits, the approach argued are knowledge, flexibility of mind, will-power, integrity and physical and emotion stamina. The approach conceives the fact that these leadership traits are present in all leaders and groups in which leadership exists. Moreover, trait theories failed to consider the influence of situational factors. It has been possible to identity universal, specific traits common to all leaders. Since leaders do not function in a vacuum, the social, cultural and physical environment plays complex role in the development and existence of a leader. According to Unugbro (1995), there are some weaknesses of trait theory, which include the following; 1. List of traits usually do not indicate which ones are most or lesser important. 2. Trait studies do not distinguish between trait that are needed for acquiring leadership and those that are necessary for maintaining leadership position. 3. Trait theories are based on debatable assumptions regarding personality which for example ignore the fact that personality is not the mere summation of a collection of traits but a function of the total organization of the individuals. Situational Approach The situational approach believes that leadership is a function of a social situation, in which there is interaction between the leader and the subordinate. Gibb (1984) argues that leadership is a concept applied to the interaction between two or more persons, any group is a system of interaction in which every member is assigned a role within the system. This role is any expression of his interactions with other members. Therefore, leadership is a combination of personality and social system in interaction. Leadership cannot have impact if it is not in interaction with the environment. Thus Edem (1987) argued that leaders in different situations may exhibits dissimilar characteristics and that their success in one situation may not be observed in another. Behavioural Approach This approach sees the leader as one who is passive. This is because leadership is the possession or the interaction of personality and the social environment is propelled by the virtue of the status. It is important to point out that administrators are appointed based on the qualifications and length of service. It is important to not that on his appointment, he makes some relevant efforts to introduce measures and behaviour that promotes friendship report mutual trust, respect and warmth between himself and the staff. The major criticism by the proponents of the behavioural approach is that one does not need to be a leader by virtue of trace or being able to interact with the social system before becoming a leader, but upon becoming a leader, should be able to take initiatives that is, behaviour is contingent upon purpose. Leadership Skills Another way of analyzing leadership behaviour is in terms of the skills that the leader may exhibit. Included here are technical human and conceptual skills. Technical Skills: Technical skills are most important at lower managerial levels where the products or service of the organization are produced. Examples of these skills are the 53

training and experience of engineers mechanists, computer operator, technicians and accountants. As a manager moves up the organization hierarchy, the importance of technical knowledge decreases and the job begins to require increased amount of other skills. Then the leader personally must rely more and more on the technical skills of the subordinate. Human Skill: The second kind of skill is the human skill. Human skills are important throughout all management levels. They are concerned with the interpersonal relationship between the manager and those with whom the manager comes in contact. They are also concerned with applying external motivation to group member and obtaining cooperation from both peers and superiors. Conceptual Skill: The third skill is the conceptual skill which involve the ability to view the most important at the top levels of management where long planning and broad thinking are required. As leaders move to higher positions in the organizational hierarchy, they must develop and utilize the skill increasingly. Proportional Skill Requirement: The proportion of technical and concept are skills requirement which varies with managerial levels. The skills are necessary for dealing with people who remain important for all levels in the managerial hierarchy. Leadership Styles Some considerable amount of work has been done on leader’s style, by several scholars. Rensis Likert (1967) developed universal theory or style ranging from autocratic to participative, that is system one to four theory; System One: Exploitative or Authoritative Here managers make all decisions. They decide what is to be done, who will do it and how and when it is to be accomplished. Failure to complete work as assigned results in threats or punishment. According to Likert (1967) there is low level of trust and confidence between management and employees when system one is used. It is task – oriented. System Two: Benevolent – Autocratic Manager still make the decisions, but employees have some degree of freedom and flexibility in performing their job so long as they conform to the specific procedures under this system, managers take a very paternalistic attitude. With system two, there is a fairly low level of trust between the management and the employees which causes employees to use caution when dealing with management. System Three: Consultative Managers consult with employees prior to establishing the goals and making decision about the work. Employees have considerable degree of freedom in making their own decision as to how to accomplish the work. Management tends to rely on rewards as opposed to accomplishment to motivate employees. Also, the level of trust between the employees and management is fairly high creating a climate in which employees feel relatively free to openly discuss work-related matter with management. System Four: Participative Team This is the most like recommended system or style of leadership. The emphasis of system four is on a group participative role with full involvement of the employees in 54

the process of establishing goals and making jobs-related decisions. Employees feel free to discuss matters with their leaders who display supportive behavior. The leader provides a link between the organizations and the employees.. Decision making is widespread throughout the enterprise. However, this last style was deemed best in the long run for all situations because any leader who adopt this participative style will definitely have greater management effectiveness and efficiency. The Impact Of Leadership Style On The Organization The impact of leadership style on the organization cannot be over emphasized. For example, an effective subordinate could be rendered ineffective if the leadership style is in conflict with the task role of the subordinates. On the other hand, an ineffective subordinate could be made effective if the leadership style encourages such improvement and dedication. Specifically, the way in which a leader disciplines his staff, his human relations feelings, his consideration and inspiration to members of staff, his handling of staff welfare, his staff development and host of other attributes are likely to affect the impact of the staff. Thus, the more positive approach adopted by the leader in handling the above attributes, the more effective the staff will be, all things being equal.

Conclusion Leadership is the art of influencing workers to work willingly and enthusiastically for group goal accomplishment. There are several alternatives available to every leader to make a choice in order to develop his employees and mobilize them to get the work done. Leaders influence subordinates to contribute effectively in the manner that all strive towards the achievement of desired goals. This study is basically a review of the leadership skills, leadership style and their approaches and impact on workers performance. The paper reveals that in order for any organization to succeed in actualizing its goals and objectives, there must be a good leader with the appropriate leadership style such as democratic and participative style of leadership which are capable of involving employees in decision making process as well as persuading them towards the attainment of organizational goals and objectives. The acquisition of leadership skills was also proved to be very important for a leader to lead well and with positive impact on the organization. Recommendations In view of the foregoing discussion, the following recommendations are made; 1. Efforts should be geared by the leaders to encourage the interpersonal relationship with the staff of the organization. 2. Annual merit award should be established in every organization to enhance greater performance and as a motivational compensation programme for the best behaved and highest performer of the year. 3. The democratic and participative leadership styles should be encouraged, so as to encourage workers to participate in decision making process. Every worker in an organization should be encouraged to work whenever he or she is given freedom to work and allow participating fully towards the realization of the organization goals and objectives. 55

4.

It is necessary for organization to always organize orientation programme for the leaders and subordinates to enable them know what it takes to lead and direct people. The leaders and their subordinates should work as a team; that is, all hands should be on deck to enhance the organization to sustain its standard in productivity and survival.

Bibliography Aibieyi, Stanley and J.N Egbri (2011), Management Skills; A Necessity for Organizational Goals Attainment, African Journal of Modern Society, Dept. of Sociology, Nasarawa State University, Keffi Vol. 2, No 1, Jan – July 2011, p9 Aibieyi, Stan (2009): Essential of Organization, Management and Administration, Amfitop Books Co Ltd, Lagos. Arubayi. E. (1995): The Relationship of Selected Demographic Characteristics and Leadership Styles of Principal in Bendel State Benin Journal of Social Science vol. , University of Benin, Benin City. Chester, A.S (1973): Leadership Theory: Some Implications of Managers John Willey and Sons. Edem A.D (1987): Introduction to Educational Administration in Nigeria Ibadan; Nigeria Spectrum Books, p 57. Etzioni, A. (1964): Modern Organization (New Jersey) Prentice Hall Inc. Englewood Cliff 1964. Gibb, A.C (1984): Leadership Gardener Lindsey (ed) Handbook of Social Psychology, Cambridge: Addison Wesley 1954 p 61 McFarland, D.E (1979): Management Foundations and Practice Mc Milan Publishing Co. Inc. N.Y 1979 5TH Ed. Unugbo, A.O (1995): Management Theory and Practice, Delbe Publishers Ikeja Lagos 1995 1st Ed. Heresy P. and Balanchachard K.M (1972): Management of Organizational Behavior; Utilizing Human Resources New Jersey: Prentice Hall, P. 62. Kartz, D and Khan, R.L (1979): The Social Psychology of Organization New York: John Wiley and Sons Inc. P, 34. Koontz H. (1988): Management, Mc Graw-Hill Book Company N.Y Ed. Linkert R. (1967): The Human Organization McGraw Hill Book Company N.Y. Webster’s Universal Dictionary and Thesauras (2007), Geddes and Grosset, David Dale House, New Lanark, Scotland.

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Poverty-Development Nexus: The Nigerian Paradox By 1

Samson Obamwonyi And

2

Stanley Aibieyi, Ph.D.

Abstract For quite some time, the country, Nigeria, has been grappling with the issues of poverty and development. In spite of the efforts made so far to tackle poverty, it is still very visible among the people. This paper examines the relationship between poverty and development. It stresses that poverty in the country has impacted negatively on the development and economic growth of the country as the poor cannot have access to the basic necessities of life like food, shelter, and clothing. As a result, the poor cannot contribute meaningfully to the economic growth and development of the country. This has affected the country in meeting its peers in other parts of the world in all aspects of development – politically, economically and socially. Most of the policies and programmes of the various past governments, both military and civilian (democratic), put in place in the past to reduce poverty in the country are discussed and the reasons responsible for their failure are pointed out. The continued pauperization of the people would continue to under develop the country as they are denied the opportunity to contribute to the economic and overall development of the country. The poor should be given the enablement and necessary support, like opportunity to be heard, access to credit and as so forth to enable them contribute their quota to the growth and development of the country. Key words: Development, Economic Growth, Poverty

Introduction Over the years, especially from the period of independence, the country has been grappling with development issues. However, Nigeria is not alone in this regard among the developing countries. Many policies and programmes have been put in place since 1960s, including development plans, to address development matters. Yet, the country is still making strenuous efforts to develop so as to meet and match its peers in other parts of the world. Similarly, various efforts in terms of policies and programmes have been put in place at various times since independence to fight poverty in the country. Yet, it is still a persistence cankerworm that is hindering the growth and development of the country. Poverty has done a lot of devastating damage to the country in terms of development, politically and economically. Until the government at all levels make serious and bold steps to address it, poverty will continue to eclipse all efforts at addressing the development of the country. One of the major issues in policy and development debate and literature is how to tackle poverty. Poverty reduction is one of the Millennium Development Goals which nations, especially less developed ones, must address. Consequently, majority of developing countries have put in place many poverty reduction strategies. The whole aim of poverty reduction. 1

Faculty of Law, University of Benin, Benin City, Nigeria. GSM: 08056734299; 08092835123. E-mail: [email protected] 2

Senior Lecturer, Institute of Public Administration and Extension Services, University of Benin, Benin City, Nigeria. GSM: 08050283517; E-mail: [email protected]

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Strategy is to ensure the wellbeing of the poor and low-income groups which is multidimensional in nature, comprising material and psychological needs. Wellbeing has been described as peace of mind, good health, belonging to a community, safety, freedom of choice and action, steady source of income, food and dependable livelihood (Animalu, 2002). Concept of Poverty Literature on development and economics is replete with several meanings and concepts of poverty. This is because some of the definitions of poverty are reflections of the environment of the authors defining the concept. Many scholars have said that poverty is multidimensional with different meanings; hence Gordon (2000) said that poverty can be considered to have a cluster of different overlapping meanings depending on what subject area or discourse is being examined. Poverty has material dimension, physical dimension, and psychological dimension. The material dimension has to do with economic issues like income and asset. The physical dimension has to do with both physiological and social dimensions like hunger, poor health, and poor education. The psychological dimension relates to both sociological and political; this includes voice, freedom, and power (Lindah, 2005). The poor person views poverty as being unable to get enough to survive as a human being. This connotes a deprivation of survival needs (Lindah, 2005). Poverty is also regarded as inability within ability to meet the basic necessities of life like food, shelter, and clothing. This is similar to the physiological needs dimension. People are considered poor when their measured standard of living in terms of consumption is below the poverty line, that is, the value of income or consumption necessary to attain the minimum standards of nutrition and other necessities of life (Ravilion and Bidani, 1994). The poor people themselves are of the view that violence and crime, discrimination, insecurity and political repression, biased or brutal policing, and victimization by rude, neglectful or corrupt public agencies are signs of their poverty (Nayarana, 1999). Tollens (2002) opined that poverty is not an intrinsic attribute of people, but a product of livelihood systems and the socio-political forces that shape them. The World Bank (2000) also noted that poverty is an outcome of more than economic process but also include social and political processes that interact with and reinforce each other. The Poor The poor are those who are unable to obtain an adequate income, find a stable job, own property, or maintain healthy living conditions. They also lack adequate level of education and cannot satisfy their basic health needs. Often, the poor are illiterate, in poor health, and have a short life span and lack basic necessities of life. Very often, the poor lack the capacity to escape from their situation by themselves. This characteristic is what causes the social conditions of extreme poverty to persist and to be transmitted from one generation to the next. In their view, Aluko (1975) and Edozien (1975) see the poor as (a) Those whose ability to contribute to the productive process is insufficient. That is, those who are unable to contribute adequately to the productive process to warrant an income that would raise them above the poverty line.

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(b) Those for whom the economy has failed to provide jobs, that is, those who are willing and capable of earning an adequate income if only jobs were available. (c) Those whose opportunities to participate in the productive process are restricted by discrimination of various kinds, like age, sex, race and so forth. Among the groups most affected by extreme poverty throughout the world are those who are most vulnerable and lack resources, along with those who do not have the capacity to organize themselves nor to exercise the right to protest their situation (Sancho, 1996). Poverty indicators in Nigeria There are many indicators of poverty in Nigeria. In spite of attempts at reducing poverty in the country, these indicators, mostly social, have not abated. According to the National Economic Empowerment and Development Strategy (NEEDS) (2004), the poverty rate in Nigeria increased from 27 per cent in 1980 to 66 per cent in 1996. By 1999 it was estimated that more than 70 per cent of Nigerians lived in poverty. Life expectancy in the country was a mere 54 years, while infant mortality was 77 per 1,000 and maternal mortality was 704 per 100,000 live births; this is among of the highest in the world. Other social indicators of poverty in Nigeria (particularly from 1999) are as follows: (i) Only about 10 per cent of the population had access to essential drugs. (ii) There were fewer than 30 physicians per 100,000 people. (iii) More than 5 million adults were estimated to be living with HIV/AIDS. (iv) Among children under five, almost 30 per cent were underweight. (v) Only 17 per cent of children were fully immunized – down from 30 per cent in 1990 – and almost 40 per cent had never been vaccinated. (vi) Only about half of the population had access to safe drinking water (40 per cent in rural areas, 80 per cent in urban areas). (vii) Some 29 per cent of the total population lived at risk from annual floods. (viii) More than 90 per cent of the rural population depended on forests for livelihood and domestic energy sources (ix) Rural households spent an average of 1.5 hours per day collecting water and fuel wood, with household members walking an average of one kilometer per day to collect water and fuel wood. Incidence of Poverty in Nigeria by Zones between 1980 and 2004 Zone National Urban South-South South East South West North Central North East

Total Poor Core Poor Total poor Core poor Total poor Core poor Total poor Core poor Total poor Core poor Total poor Core poor Total poor Core poor

1980 28.1 6.2 17.2 3.0 13.2 3.3 12.9 2.4 13.4 2.1 32.2 5.7 35.6 11.8

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1985 46.3 12.1 37.8 7.5 45.7 9.3 30.4 9.0 38.6 9.0 50.8 16.4 54.9 16.4

1992 42.7 13.9 37.5 10.7 40.8 13.0 41.0 15.7 43.1 15.7 46.0 14.8 54.0 18.5

1996 65.6 29.3 58.2 25.2 58.2 23.4 53.5 18.2 60.9 27.5 64.7 28.0 70.1 34.4

2004 54.4 22.0 43.2 15.7 35.1 17.0 26.7 7.8 43.0 18.9 67.0 29.8 71.2 27.9

North West

Total poor Core poor Population in poverty (million)

37.7 8.3 17.7

52.1 14.2 34.7

36.5 9.0 39.2

77.2 37.3 67.1

71.2 26.8 68.7

Source: National Bureau of Statistics, 2005, Poverty Profile for Nigeria, 1980-2004. Culled from UNDP Human Development Report, Nigeria 2008-2009.

Similarly, the National Bureau of Statistics (2010) reported in its 2010 report that over 100 million Nigerians still live on less than $1.00 per day. Based on 150 million population, the Bureau reported that 112.47 million Nigerians were reported to be living below the poverty line. The Bureau further reported the proportions of the poor in the country thus: (a) Extremely poor 38.7 per cent (b) Moderately poor 30.3 per cent (c) Non-poor 31 per cent The report added that poverty was worse in the North West and North East zones of the country; while the least affected were South West and South East zones. The gap between the rich and poor is widening. This is in spite of the economic growth of the country with Gross Domestic Product of 7.75 per cent. Causes of Poverty in Nigeria The causes of poverty in Nigeria are evident everywhere among which are: (i) Inadequate access to the means of supporting rural development in poor regions. Often times, government gives preference to areas with high potential and strong urban biases in the design of development programmes. This is the result of minimal commitment to rural development programmes by policy makers. In Nigeria, lip service is always paid to rural development. (ii) Rapid population growth: There is a common argument which says that the more densely populated a country, the higher the probability of being poor. The rate at which population increases in Nigeria is alarming. It moves at geometric proportion which invariably leads to large family size. This encourages poverty to spread. The resources that would be used to cater for few people are spread to large population. This Malthusian thought contends that over population generates higher level of consumption which leads to low level of savings available for investment. This also in turn leads to low investment hence limited production. (iii) Lack of involvement of the poor in the design of programmes: In Nigeria, all the poverty alleviation programmes enunciated by the various governments (military and civilian) excluded the poor (who ought to be the beneficiaries) in their planning and execution/implementation. Hence the poor did not benefit from the policies and programmes. (iv) Low endowment of human capital. Human capital development is one of the keys to economic growth, development and social progress. It creates knowledge, broadens skills, and improves health which thereby constitutes a key to sustaining economic growth, raising living standards and enriching people’s lives. The neglect of human capital formation pauperises a society. In Nigeria, many people do not have the basic skills for employment which can guarantee them comfortable means of livelihood. (v) Destruction of natural resources. This leads to environmental degradation and reduced productivity of agriculture, forestry, and fisheries; this is often the 60

desperate survival strategies of the poor, as well as inadequate and ineffective public policies on natural resource management and industrial pollution. Consequences and Economic Implications of Poverty Poverty can result in many negative things in the personal life of individual in particular and to a larger extent, the society at large. Whatever negative effects it has on the individual must equally extend to the society as a whole. The inability of the system or leadership to provide the basic necessities of life to its citizens would have negative effects in many ways. Specifically, in a society where the majority of its members are poverty-stricken, there is a general loss of confidence in the constituted authority, thereby generating disrespect and rendering government policies ineffective. So long as people feel uncared for, and their loyalty to the system is not being reciprocated, the expectation effect, which is expected to facilitate the programme, would in this case incapacitate the success of policies as has been the case in Nigeria. In addition, poverty has the consequence of breeding social disillusionment with respect to what the societal objectives are and members’ responsibilities towards the attainment of these objectives. Just as ignorance maintains poverty, so also can poverty perpetuate ignorance since the victims cannot think and plan beyond where the next meal is coming from. It is a vicious circle, reproducing itself in perpetuity. To some extent, corruption, nepotism, crimes and other social vices are byproducts of poverty. So long as making ends meet remains difficult, the propensity to explore other avenues, such as stealing, is high. Suffice it to say here that unmitigated corruption in high places as is the case in Nigeria currently, breeds corruption lower down, since the desire to amass wealth by those with responsibility of leadership can only be satisfied through the appropriation of that which is meant for the majority. In so doing, the majority is compelled to fend for itself ‘by any means available’. Economically, because people are poor and cannot afford the capital needed to expand production, production itself remains largely subsistence. Labour is therefore intensive and the margin of productivity is low. Even subsistence production is not fully utilized because of poor processing and storage techniques, the effect of changing weather conditions, and damage caused by pests and diseases. The intensification of agricultural production resulting from increasing population, and the lack of financial capital and equipment has brought to the fore evidence of an increasingly overworked soil. The linkage between economic performance and poverty has serious consequences, and can be very vicious. No doubt, poverty has dampening effects on economic growth and development through inefficient use of resources, promotion of social and political upheavals and depletion of natural resources. The policy focus on poverty reduction in Nigeria has spanned many decades. There have been several attempts to put poverty reduction policies and programmes in the front burner so as to ensure the wellbeing of the poor. However, despite the efforts of governments, the conditions of the poor have continued to deteriorate, and the population of the poor has continued to increase at an alarming rate. The poverty level appears as a contradiction considering the country’s immense human and material resources. Also, poverty situation is a paradox because despite the huge resources that have been devoted to poverty reduction by successive military and civilian governments, no tangible and substantial success has been achieved from the efforts. Before the late 1980s, poverty was more prevalent in the rural areas of the country. Therefore, no wonder the governments directed poverty reduction policies 61

towards the rural areas. However, from the late 1980s till date, poverty has spread to the urban areas thereby encompassing both rural and urban areas of the country. Poverty and Development Development means many things to different people. Often times, development refers to economic development. Some scholars relate growth with economic development or development. However, an economy can grow without developing. Some scholars also distinguish between growth and development as phenomenon that takes place in different societies. Hence it is said that “economic development refers to the problems of under developed countries and economic growth refers to those of developed countries (Jhigan, 2008). According to Todaro and Smith (2008), development has at least three objectives. These are: (i) to increase the availability and widen the distribution of basic life sustainable goods such as food, shelter, health and protection to all members of society; (ii) to raise standard of living, in addition to higher incomes, the provision of more jobs, better education and more attention to cultural and humanistic values. All these serve not only to enhance material well-being, but also to generate greater individual and national self esteem; (iii) to expand the range of economic and social choice to individuals and nations by freeing them from servitude and dependence, not only in relation to other people and nation-states but to the forces of ignorance and human misery. Development in human society is a many-sided process. At the level of the individual, it implies increased skill and capacity, greater freedom, creativity, self-discipline, responsibility and material well-being (Rodney, 1972). Development came to be conceived of as a multidimensional process involving major changes in social structures, popular attitudes, and national institutions, as well as the acceleration of economic growth, the reduction of inequality and the eradication of poverty (Thomas, 2010). In the Nigerian political landscape, the poor are voiceless. Often times they are used and dumped. The poor are merely used to make up the numbers during electioneering campaigns. At the end of every campaign rally they are given pecuniary reward for their participation and “services”. On the day of voting exercise where every citizen ought to exercise their franchise to vote for candidates of their choice, the poor are paid to vote against their conscience and for candidates they do not like because their leaders who use them for their personal aggrandizement have directed them to do so. After the voting exercise they become irrelevant till the next election. Politically, the poor have no base as far as party membership is concerned because whichever party that brings more money is their party. They have no say on who become the party leaders or candidates. Socially, the poor are denied access to basic amenities such as potable water supply, electricity, good roads, health care, and other necessary infrastructural facilities that can make life more meaningful to them. The most affected victims in this regard are those in the rural areas and semi urban areas of the country. The poor cannot make any meaningful contribution to the development of any society except they are empowered economically while social amenities are provided. The person who cannot feed or have no roof over his head cannot develop his community in particular and the country in general. Instead, it should be the other way round. That is, the growth and development of the society would help the poor to meaningfully impact on the economy. 62

In order to ensure the contribution of the poor to economic growth or development of the country, therefore, the government or leadership must empower the poor economically, and by so doing the poverty has to be alleviated through various strategies or means. However, Nigerian governments (both military and civilian) have attempted to alleviate poverty in the country. 9. Poverty Alleviation Policies Policies made or enunciated by government are public policies. “Public policies are those developed by governmental bodies and officials” (Anderson, 1997.) Public policies are meant to solve people’s problems. This may be referred to as a policy problem. A policy problem is “a human need, deprivation, or dissatisfaction, self identified or identified by others for which relief is sought” (Egonmwan, 2000). In order for a situation or social situation to become a public policy problem, some of the following conditions must apply or occur: (a) A large number of people are in unfortunate conditions, suffer deprivation, are dissatisfied with an undesirable situation. (b) These adverse conditions are recognized by many people. (c) In addition to those who suffer the unsatisfactory situation, the decision makers are aware of the situation as they have responsibilities for coping with it. (d) People outside the immediate social problem (i.e. third parties) must show concern. (e) Large number of people think something must be done about the situation apart from merely recognizing the undesirable situation (Egonmwan, 2000). Some of the poverty reduction policies put in place were as follows: 1. In 1975 the Universal Primary Education policy was enunciated. The purpose of the policy which was targeted at the illiterates was to provide free primary education. However the programme has been absorbed by the Universal Basic Education. 2. In 1986 the Directorate of Food, Roads, and Rural Infrastructure was established. The functions were a) To coordinate and streamline all rural development activities in the country and to accelerate the pace of integrated rural development. b) To promote a framework for grassroots social mobilization c) To mount a virile programme of development, monitoring and performance evaluation d) To provide rural areas with access roads and potable water e) To improve rural sanitation, literacy and technology. It was targeted at the rural areas. It was to make rural areas more attractive to live in so as to stem migration to urban areas. It was also to change for better, the rural ways of life and modes of production in order to meet the challenges of increased agricultural and industrial production. 3. In 1986 the National Directorate of Employment (NDE) was established. The objectives of the policy were: a) To provide vocational skills development programme to secondary school leavers and graduates from tertiary institutions. b) Special public works programme. 63

c) Small-scale Enterprises programme. d) Agricultural Employment programme It was targeted at the youths in particular so as to provide skill for the unskilled; that to enable the youths acquire vocation. 4. The People’s Bank of Nigeria was set up in 1989 to a) To provide credit at low interest to encourage micro enterprises b) Provision of opportunities for self-employment for the vast unutilized and underutilized manpower resources in the country c) Inculcating banking habits at the grassroots and reducing the rural-urban migration d) Eradication of poverty and provision of succor to the poor e) Bringing relief to the financially marginalized groups in the society However, this programme has been phased out. 5. In the year 2000 the National Poverty Eradication Programme (NAPEP). Its activity was to coordinate implementation of all Federal Government of Nigeria poverty eradication programmes. Its main focus was to coordinate all government poverty alleviation policies and programmes In similar vein, the federal government also enunciated other programmes and projects which were aimed at reducing or alleviating poverty in the country at both rural and urban areas of the country. The various programmes were enunciated so as to achieve the actions and intentions of the various poverty alleviation policies. A programme is “the set or package of structures, processes, resources, and activities and actions designed to implement a particular policy” (Ikelegbe, 2005). According to Webster’s Ninth New Collegiate Dictionary (1990), a programme is a plan or system under which action is to be taken toward a goal. Also, a programme is “a plan of future events and activities” (Hornby, 1995). A project is “a piece of work or plan that is organized carefully and designed to achieve a particular aim” (Hornby, 1995). The following programmes and projects were set up as fillip to complement the various policies earlier put in place: 1. The Agricultural Development Projects (ADPs). This programme was established in 1975 to actualize the following activities: a) Provision of decentralized opportunities and resources in agriculture to small farmers b) To increase production of food and fibre as well as producer incomes. This programme represented a truly innovative approach to agriculture and rural development both in their integrated supply of farm inputs and infrastructural support and in their efforts to revamp and revitalize extension services. 2. The River Basin Development Authority. This was established in 1976 to undertake comprehensive development of both surface and underground water resources for various purposes (e.g. provision of irrigation, infrastructure, and control of floods, soil erosion, and watershed management). 3. In 2000, the Nigerian Agricultural Cooperative and Rural Development Bank was 64

established. Its main activities include the provision of credit for the production, processing and marketing of agricultural products. 4. Also in 2000, the Universal Basic Education Programme (UBE) was established. Its activities include the provision of compulsory basic education for all up to the level of junior secondary school year 3 (that is, JSS 3) 5. The National Action Committee on HIV/AIDS (NACA) was set up in 2001 to provide advocacy programme to phase out the spread of HIV/AIDS (NEEDS, 2004). Nonetheless, most of these poverty alleviation policies, programmes and projects enumerated in this chapter failed due largely to the following factors: (a) Complete absence of mechanisms to ensure sustainability of programmes and projects (b) Excessive political interference in both military and democratic regimes (c) Absence of a comprehensive policy framework (d) Lack of proper coordination of policies, programmes and projects (e) Lack of involvement of beneficiaries in project design, implementation, monitoring, and evaluation (f) Ineffective targeting of the poor which led to leakage of benefits to unintended beneficiaries or targets (g) Unwieldy scope of programmes which resulted in resources being thinly allocated to projects. (h) overlapping of functions of the agencies/institutions which ultimately led to institutional rivalry and conflicts. (NEEDS, 2004) 10. Conclusion Poverty and development are strange bed-fellows. Poverty is a hindrance to growth and development of any nation. In Nigeria, a very large proportion of the population is poor (about 70%). This is one of the factors responsible for the under development of the country, hence the country is poles apart from its peers in other parts of the world. The poor cannot contribute to development of any country as they lack the basic necessities of life like food, shelter and clothing. Most of the policies and programmes enunciated in past by the various governments have not helped the poor to move away from the shackles of poverty. The reasons are either the policies and programmes were targeted at the wrong population of the country, or corruption and lack of good governance prevented the poor from benefiting from the policies and programmes. As far as poverty continues to soar in the country and no immediate solution found to it, the country will find it difficult to develop politically, socially and economically as the poor will continue to remain voiceless ad powerless. Whether the country likes it or not, the generality of the people is worse for it. The empowerment of the poor can help in no small measure to the development of the country in all its ramifications. With the present situation, the poor are incapacitated. 11.

Recommendations For the country to achieve rapid economic growth and political development like her peers in other parts of the world, poverty must be eradicated and must be seen to be eradicated; and the following recommendations should be carried out: (i) Any policies and programmes aimed at poverty reduction in the country must be taken seriously. (ii) One of the ways to ensure such policies and programmes are implemented is by enlisting the poor themselves in the implementation. 65

(iii) The basic necessities of life – food, shelter, and clothing, must be provided and made affordable to the poor. (iv) On a similar note, access to economic resources like credit or finance should be guaranteed for the poor so that they can contribute to the economic growth of the country. Collateral should not be introduced as the poor and low income persons cannot afford it.

References Aluko, S. (1975) “Poverty: Its Remedies”, cited in Poverty Alleviation in Nigeria, Selected Papers for by The Nigerian Economic Society, 1997 Annual Conference. Animalu et al (2002): The World Summit on Sustainable Development at Johannesburg 2002:Emerging Issues in Nigeria (ed.) p. 199. Collins Nweze: Sanusi: Wealth imbalance fuels insecurity, growth not impacting on welfare; The Nation, Thursday, 16th February, 2012, p. 11. Edozien, E.C. (1975): Poverty: Some issues in concept and theory, cited in: Poverty Alleviation in Nigeria, Selected Papers for The Nigerian Economic Society, 1997 Annual Conference. James Anderson (1997): Public Policy Analysis, published by Houghton Mifflin Co., USA, p. 9. Gordon, S. (2000)(ed.): CROP International Glossary of Poverty in Akpotor et al (Eds.), “Cost of Governance in Nigeria – An Evaluative Analysis” Hornby, A.S. (1995): Oxford Advanced Learner’s Dictionary of current English, 5th edition, pp.925 & 926. Ikelegbe, A.O. (2006): Public Policy Analysis: Concepts, Issues and Cases, Published by Imprint Services, Lagos, Nigeria. p. 3. Jensen, A. (1978): Transportation Needs of the Poor: A Case study of New York Study Jhigan, M.L. (2008): Economic of Planning and Development, Vrinda Publications (P) Ltd., 38th edition, India Lindal, H. (2005): Wealth of the Poor: Eliminating Poverty Through Market and Private Sector Development, p. 44m May 1996 World Bank Report on Poverty in Nigeria. National Bureau of Statistics: 2010 Report National Economic Empowerment and Development Strategy (NEEDS) (2004), pp. 28, 30, 33-34. 66

Narayan, D. et al, (1999): Global Synthesis: Consultation with the Poor, in Oyeranti, O. and Olayiwola, K. (2005): “Policies and Programmes for Poverty Reduction in rural Nigeria, An Interim Research Report submitted to AERC.” Odejide, A.F. (1997): Breaking the vicious circle of poverty among women in developing countries: The Case for Microcredit in Poverty Alleviation in Nigeria, in “Poverty Alleviation In Nigeria”: Selected papers for The1997 Nigerian Economic Society Annual Conference. Pratchatt, L. (2002): “The Inherently Unethical Nature of Public Service Ethics” in Chapman R. (ed.), Ethics in Public Service for the New Millennium, England, Ashgate Press. Ravalion, M. and Bidani, B. (1994): How Robust is a poverty profile? The World Bank Economic Review 8(1), January, in Akinowo et al (eds.)(2008): Socio-Economic Policies and Millennium Development Goals in Africa; published by Faculty of Social Sciences, Adekunle Ajasin University, Akunmgba Akoko. Sancho, A. (1996): Policies and Programs for Social and Human Development, A Handbook produced for the United Nations World Summit for Social Development; International Centre for Economic Growth, San Francisco, in “Poverty Alleviation in Nigeria”, Selected Papers for The Nigerian Economic Society, 1997 Annual Conference. Sen, A. (1999): “Development as Freedom” in Oyeranti, O. and Olayiwola, K. (2005): “Policies and Programmes for Poverty Reduction in rural Nigeria, An Interim Research Report submitted to AERC”. Thomas, A. N. (2010): The Praxis of Development and Underdevelopment; Ethiope Publishing Corporation, Benin City, p.91. Rodney, W. (1972): How Europe Underdeveloped Africa, Panaf Publishing, Inc. Todaro, M.P. and Smith, S.C. (2008): Education Ltd, England, p. 22.

Economic Development, 10th ed., Pearson

Webster’s Ninth New Collegiate Dictionary, 1990 p. 940 Wilson Ezi-Herbert: Imperatives of Nigeria’s Slide in Global HDI for Good Governance; The Guardian, Sunday, 16th October, 2011, p.58 World Bank (2002): A Sources Book for Poverty Reduction Strategies; vol. 1, Washington D.C. World Bank Report (2005): Poverty Profile for Nigeria, National Bureau of Statistics World Bank Report (2000) World Bank Report (1990) World Health Organisation, in “Poverty Profile for Nigeria (2005)” by National Bureau of Statistic 67

Nigeria and the ECOWAS Trade Liberalization Scheme: The Journey So Far. By 1

2

Chibuike R. Oguanobi, Anthony A. Akamobi, Ph.D, 3 Chibueze A Aniebo, 4 Emilia M. Mgbemena.

Abstract This paper is an attempt at examining the extent to which Nigeria as a country has enhanced its trade relations with other member countries of ECOWAS, given the objectives of the region’s trade liberalization scheme. Data on the country’s exports to and imports from these other countries were collected for the period 1996 to 2008. Applying a simple descriptive statistics, it was found that the total trades between these countries were insignificant over the period. The paper went further to highlight some of the possible causes of poor trade in the region, which revolves around tariff and non-tariff barriers to trade. It is finally recommended among other things that the authorities in these countries especially in Nigeria should ensure that the provisions of the ETLS are comprehensively adhered to. Key words: ECOWAS, Nigeria, Intra-regional trade, ETLS, JEL Classification: F15, F53, F55.

Introduction Over the years, the macroeconomic implication of cross-border economic integration has drawn the attention of most scholars of international economics. There has been a longstanding debate regarding the benefits of such integration. One of the major areas of integration is trade. Others include security, politics, and conflict resolution, among others. However, in the context of this paper, emphasis shall be on trade alone. Trade and investment are the essential factors for economic integration process (Balassa, 1965). Trade within an economic region (trade between countries of a particular regional group) is known as intra-regional trade. Regional trade arrangements are instrumental in promoting global trade and foreign direct investment (Muluvi et al, 2012). Efforts at regional and sub-regional integration have often focused on eliminating regional barriers to trade; enhancing the free movement of people, goods and capital across the region’s national borders. The Economic Community of West African States (ECOWAS) was established on May 28 1975 in Lagos, Nigeria by the Heads of States and governments of fourteen (14) West African nations: Benin, Burkina-Faso, Cote d’Ivoire, Gambia, Ghana, Guinea, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal Sierra-Leone and Togo. The major objective of its establishment was to liberalize trade among member countries; eliminate barriers (both tariff and non-tariff) to trade; enhance the process of free-trade-area, custom union and common market; and finally achieve a common economic and monetary union for the region. 1,2 3,4

Anambra State University Igbariam Madona University Okija

68

According to ECOWAS Vanguard (2003), ECOWAS was set up specifically to eliminate all tariff and non-tariff barriers to intra-ECOWAS trade, establish a common external tariff (CET) and commercial policy against non-ECOWAS countries, abolish all obstacles to the movement of factors of production and harmonization of domestic policies across its member countries. The community articulated a comprehensive trade liberalization programme known as the ECOWAS Trade Liberalization Scheme (ETLS). The ETLS was launched in 1990 as a progressive reduction resulting in total elimination of all barriers (tariff and non-tariff) to intra-ECOWAS trade. There were three categories of countries with varying annual tariff reduction rates. The least developed countries had up to 10 years, the middle group countries (8 years) and the most developed countries (6 years). According to ECOWAS Vanguard (2013), the non-realization of the agreed implementation schedule aimed at eliminating all trade barriers by end of 1999 led the community to review the plan. The new plan which adopted a fast-track approach to achieve the region’s economic integration proclaimed the region as a free-trade-area (FTA) in the year 2000 and set January 1, 2000 for transformation into a customs union. Customs union was expected to enable member countries to charge a common tariff to nonmembers while eliminating tariff among members. It is however quite unfortunate that up till now, this plan has not been fully implemented. In view of the above, this paper is an attempt at exposing the activities that has taken place at Nigerian borders with other ECOWAS members over the years. This exposure would help us towards ascertaining whether or not the country has achieved its goals of embracing the ETLS. No doubt, Nigeria is the largest country in West Africa accounting for about 60 Percent of the region’s Gross Domestic Product (GDP). Under this scheme, Nigeria targeted the following: Securing greater regional market access, promoting industrialization through export-led growth and capacity building required to meet global market competition. However, the achievement of these targets has been hindered by several factors. We shall discuss some of these factors in a later section. Ngeria’s Trade within ECOWAS Export The fluctuations in the volume and values of Nigeria’s export to other ECOWAS countries are shown in Table 1. In 1996, 7225188 tonnes of commodities worth US $222098552 were exported. This value is about 60.67% of the total intra-community export value. The export volume decreased to 4140003 tonnes in 1997. This quantity worth US $257412517, constituting about 66.63% of the community’s total local exports earnings. Export volume fluctuated drastically until 2005 when it increased from 2747884 tonnes in 2004 to 28896949 tonnes. The value of this quantity was US $201326271 which constitutes 28.85% of the total intra-community value earnings.

69

Table 1: Nigeria’s export to other ECOWAS members (1996-2008). Year

Quantity in Tonnes

Value in $m

Export as % of total export

1996

76251,88

2220985,52

60.67

2574125,17 1727313,14 1045976,07 1439173,68 817851,91 1194204,51 1100612,78 1425504,81 2013262,71 3727143,35 2318641,73 2434573,82

66.63 54.57 40.48 50.55 35.46 37.93 33.67 34.08 28.85 53.40 33.22 34.88

41400,03 1997 27025,50 1998 28391,96 1999 16375,16 2000 11787,08 2001 53680,49 2002 26491,80 2003 27478,84 2004 288969,49 2005 33198,59 2006 340684,03 2007 357718,23 2008 Source: ECOWAS external trade statistics

It decreased again to 3319859 tonnes in 2006. The value was estimated at US $3727143, 35 constituting just 53.40% of the total intra-ECOWAS export. Though the country’s share of total intra-ECOWAS export reduced significantly to 33.22% in 2007, the volume of export increased tremendously to 34068403 tonnes of commodities at a reduced value of US $2318641, 73. In 2008, the volume still increased to 357718, 23 tonnes worth US $2434573,82 tonnes of commodities. This value represented 34.88% of the total intracommunity export. Import Over the years, the volume of Nigeria’s annual import from other ECOWAS countries has fluctuated. Data available to us (see table 2) shows that in 1996, 8873575 tonnes of goods worth US $134859,32 were imported from other member states of the community. This value constitutes just 8.30% of the entire intra-community imports. Table 2: Nigeria’s imports from other ECOWAS members (1996-2008). Year

Quantity in Tonnes

Value in $m

Import as % of total import

1996

8873576

13485932

8.30

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

9432143 12137717 6607062 5294280 16162183 17455197 77988140 19461461 19365954 145751802 59255638 61033307

15031434 13993664 2017955 7689831 33264041 8354492 36136229 31468448 78160591 23642596 75715510 77986975

8.51 5.30 1.20 3.31 12.60 3.44 10.09 6.98 12.84 3.88 12.44 12.81

Source: ECOWAS external trade statistics

70

The volume of import increased until the 1999 fiscal year when it decreased to 6607060 tonnes worth US $20179, 55 constituting about 1.20% of the total intra-community import value. There was however decrease in volume to 5294280 tonnes of commodities in 2000, but the value increased insignificantly to US $76898, 31 constituting about 3.31% of total intra-ECOWAS import value. The period 2001-2003 recorded highly significant increases in both volume and values as well as the country’s share in total import value. The 2003 figures were 77988140 tonnes of commodities worth US $361362, 29 and constituting about 10.09% of the total intra-community imports. There were fluctuations for some periods until 2008 when the volume of import became 61033307 tonnes worth US $779869, 75 which constituted about 12.81% of the total intra-community imports. From tables 1 and 2 above and the discussions that followed, we observed that over the years, Nigeria experienced unfavourable balance in its trade with other ECOWAS countries. Between 1996 and 2008, Nigeria’s export to other members of the community increased by only 9.6%, while its import from these countries increased by about 478.3%. This scenario may be attributed to the fact that Nigeria’s major export commodity is crude oil whose destination is mainly the advanced countries of Europe and America. Yet, Nigeria imports several consumer goods, including foods, from countries of this community. 1. Causes Of Nigeria’s Low Trade with Other ECOWAS Countries. Following the statistics given in the previous section, it is quite clear that there have been improvement in the volume and value of Nigeria’s trade within ECOWAS. However, Nigeria has not yet fully exploited the opportunities offered to it by the regional trade liberalization scheme, a problem that is significantly associated with some institutional and regulatory barriers to regional trade. Some of these barriers are:  Customs procedure: The customs and excise management Act governs the importation of goods into Nigeria. Under the provisions of this Act, provisions of the customs and excise notices and the provisions of the Ministry of Finance, importers do not need any other registration except with the Corporate Affairs Commission (CAC). But now, importers are compelled to make several registrations requiring several documents and payments. Though the government does these to bring efficiency to customs administration, they not only delay the process of trading but also increases the cost of trading, thereby discouraging some potential businessmen.  Rules of Origin: Nigeria applies the ECOWAS rules of origin. Under this rule, a finished product is expected to have a community origin, meaning that the good must wholly be produced or contain imported content of no more than 40% of the total cost of production. However, the procedure for obtaining the certificate of origin is too complex, lengthy and also costly for the business community. This also posses a great treat to trade progress in the region.  Custom tariffs: Under the ETLS, Nigeria was expected to keep adjusting its tariffs towards the ECOWAS common external tariff, which ranges from zero to 20% by 2007. But generally, Nigeria had failed in its trade reforms and therefore has high average tariffs. This high average tariff proves to be a significant obstacle to the growth of trade in the country in particular and the entire region in general. 71











Immigration requirement: For citizens of ECOWAS member countries, Visa is not a necessity for travelling within the community. An ECOWAS passport with common features issued by member states’ governments is allowed for intraregional travel of member states’ citizens for a period of no more that 90 days. However, in some countries like Nigeria, the processes of obtaining this ECOWAS passport are too cumbersome and significantly costly. This makes the cost of movement across borders very high, thereby having a significant negative impact on cross-border trade. Roadblocks and checks: Within the ECOWAS territory, there are so many roadblocks mounted by the police, custom officers and other agencies along the major roads. For instance, while ECOWAS recommended just two checkpoints between Nigeria’s Mile-2 and Seme border, there are over 40 checkpoints along that road (Chimeziri, 2011). These checks are costly in terms of time and money. Making matters worse, police officers at these check-points especially in Nigeria often solicit bribes from transporters and traders. All these disrupt the efficient movement of people and goods within the community. Language barrier: ECOWAS has three official languages: English, French and Portuguese. This makes free and efficient movement difficult, especially when an English-speaking traveller runs into a French speaking custom official or vice versa. Chimeziri (2011) narrated his 2010 experience. According to him, an English-speaking trader suspected to be a Nigerian was trying to move his goods across the Togo’s border into Ghana. He was held by custom officers at the Togo’s border with Ghana. Because the custom officers kept asking him questions in French and he could not hear or speak French, he was advised to pay an equivalent of 7,500 NGN to an interpreter, which he did in order to keep moving. Exposing the level of corruption among the custom officials, the same officer who refused to speak English finally spoke English fluently while trying to buy a pack of cigarette immediately. Standard checks: In ECOWAS region, countries have agencies that screen goods to ascertain if they are of accepted standards. In Nigeria, there are the Standard Organisation of Nigeria (SON) and the National Agency for Food and Drug Administration and Control (NAFDAC). However, each country has its own approved standards. What is accepted in one country may not be accepted in another. Moreover, the screening and re-screening of goods by agencies of different countries adds to the cost of trade in terms of both money and time. Licenses and permits: Crossing of borders in Sub-Saharan Africa is one of the most difficult tasks facing every traveller (both motorists and passengers). So many licenses are required. They include import/export licenses, road transportation licenses, evidence of roadworthiness etc. Where multiple licenses are required for the production and distribution of goods, costs of doing business in that area are also multiplied. This is also a treat to the willingness of people to do business across national borders.

2. Promoting Trade within Ecowas Region: The Way Forward Enhancing regional growth and development through intra-regional trade has been the major objective of floating the ECOWAS trade liberalisation scheme. But following the statistics given in this paper, one would find it not unwise to believe that the level of trade between ECOWAS countries has been insignificant, at least during the period examined. The low level of trade in this region has been attributed to some institutional and 72

regulatory barriers as listed in section 3 above. Having known the causes of low intraECOWAS trade, we hereby recommend as follows, the way forward.  The governments of member states of ECOWAS especially Nigeria must make the processes of business registration very simple and less expensive.  The procedure for obtaining the certificate of origin for goods to be traded must also be made simple and less expensive too.  Countries such as Nigeria must ensure that their average custom tariffs are in accordance with the provisions of ETLS.  To reduce the cost of movement of people and goods, governments must ensure that the cost (time and money) of obtaining an ECOWAS passport is reasonably bearable.  The governments of member countries especially Nigeria must limit the number of roadblocks and checkpoints to the number recommended by ECOWAS protocol. This is to enhance easy movement of people and their goods.  At every point of contact for internationals (business people and government officials) within the ECOWAS sub-region, there must be provision for speaking and understanding all the three approved languages for the region. This will go a long way in enhancing fast movement of people and goods across national borders.  ECOWAS as a unit should set up an agency to be responsible for ensuring that goods produced within the community are of good standard. There should be a common standard for all countries of the region. This is to ensure that time and money are not wasted by the receiving country in screening goods after that same good must have undergone similar screening at the country of origin. Conclusion Having in mind the broad objectives of ETLS, this paper examined the extent to which trade between Nigeria and other ECOWAS countries have geared towards achieving those objectives. After examining the data collected for the purpose of this verification, we found that trade between Nigeria and other countries of this region have been insignificant over the period examined. After highlighting the possible causes of insignificant trading in the region, we made some recommendations as seen in section 4 above. We therefore conclude that if the content of section 4 (recommendations) are comprehensively implemented, trade in the region would be enhanced and the objectives of ETLS achieved. References Balassa, B. (1965), “Trade Liberalisation and Revealed Comparative Advantage”, The Manchester School, Vol. 33, 99-123. Chimeziri U. (2011) “ECOWAS Trade Liberalization Scheme: Still in the Doldrums”, online at www.articlesbase.com ECOWAS Vanguard (2013) “The ECOWAS Trade Liberalization Scheme: Genesis, Conditions and Appraisal”, Vol. 2, Issue 3. Muluvi A., Kamau P., Githuku S. and Ikiara M. (2012) “Kenya’s Trade within the East African Community: Institutional and Regulatory Barriers”, in Accelerating Growth Through Improved Intra-African Trade, Kenya Institute for Public Policy Research and Analysis (KIPPRA). 73

The Possible Impact of Tourism Industry on Nigeria Economy By 1

Ndajiya, Abdulrahman (Ph.D), & 2 Shehu Muhammad (M.Sc) & 3 Yunusa Hashim Muhammad (Ph.D) Abstract Tourism is one of the fastest growing industries in the world. It embraces areas of Physical attractions like falls and rocks and so on; Manmade like amusement and holiday resorts; Wild life based attractions like games, gardens and fishing grounds; Cultural attractions like festivals,arts and crafts; Sports like local, regional and international; and Business tourism like seminars conferences and meetings. Scholars have argued even with models to justify that tourism is the best option for rapid socio-economic development of any nation, though still require much attention. The harrold-Domar model, confirmed to the fact that international arrivals and receipts expanded at an average of 7% annually. Thus, I is obvious that it is the growth of 21st century which has brought about rise in employment,elimination of social barriers, cultural revival, health therapy improved balance of payments, and so on. Although, inadequate funding, investment and political will have been a constraint to tourism industry, it has bright prospects if its policies are well articulated to develop it in a sustainable, equitable and responsive manner to raise the living standard of Nigerians.

1.0

Introduction

Tourism is believed to be the fastest growing industries across the world. Facts and figures have shown that it has an annual growth rate of 4% in countries like USA, Italy, France, Spain, UK, and Caribbean and of recent, African countries likeKenya. South Africa, Morocco, Tunisia, Gambia, Egypt, and so on, earned substantially from tourism as analyzed by Mani (2003). He further explained that both receipts and tourist arrivals have been on an increase, which implies the growth trend of the industry. In fact, according to ILO (2001), globally the World Tourist Organization (WTO) predicts that the number of international tourists will reach almost 1.6bn by the yea 2020 (as opposed to 565mn in 1995). Similarly, international tourism receipts will exceed US $2,000bn. Thus, this development and indeed the mono-cultural nature of Nigerian economy leave no one in doubt as to the need to develop and sustain our tourism industry. Nigeria is a vast and fascinating country with varying geographical regions and ecological zones. It has diverse and amiable climatic variables rich in biological diversity. Cascading water systems, rolling links, pleasant and distinctive sceneries. Accordingly the Nigeria government has to diversify the economy to incorporate the tourism sector with the launching of Nigeria Tourist Association (NTA) in September, 1962. 1

Department of Political Science, University of Abuja. [email protected], GSM: 08065314242;

2

Departmen of Economics, University of Abuja.

3

Department of Political Science Ibrahim Badamasi Babaginda University Lapai, [email protected], GSM: 07032413818.

74

The dwindling mono-cultural oil economy in 70’s though rising in resent time still require Nigeria to develop its tourism sector because oil is vulnerable to fluctuations in demand and price in the international market. So, for the sector to contribute to the wealth of the nation and the well-being of Nigerians, the Nigerian Tourist Association (NTA) metamorphosed into Nigeria Tourist Board (NTB) which now changed to Nigeria Tourist Development Corporation (NTDC) by the virtue of degree 81 of 1992 under the supervision of Ministry of Culture and Tourism. According to Omotosho (2000) the NTDC has the following responsibilities: Encourages people living in Nigeria to take Holidays in the country and People abroad to Visit Nigeria; Encourage the provision and Improvement of tourism amenities and Facilities in Nigeria like development of Hotels and ancillary facilities; Development Of sites to assist tourist agents; offer Technical and information advice to state and Tourism entrepreneurs on tourism joint Ventures and promotion.

Thereafter, the rest of the paper is organized as follows: part 2 dealt on the theoretical and conceptual issues in tourism. In part 3, growth, potentials and socio-economic impacts of tourism were examined while part 4 discusses problems and prospects of tourism. Part 5, is on Summary, Conclusion and Recommendations. 2.0

Theorical And Conceptual issues In Tourism The concept of tourism has been defined by so many experts and Scholars. For instance, Dada (1986) defined tourism as “Migration of people, families and groups to places outside their normal residential areas for a limited period of time and their personal choice. While Ikwu (1992) defined it “as a temporary short movement of people to destination outside the place where they normally live and work”. However, a clear definition adopted by the International Association of scientific Experts in Tourism (IASET) reads “Tourism is the sum total of the phenomenon and relationship arising from the travel and stay of non-residents, in so far as they do not lead to permanent residence” (Ladan, 2003). From these definitions given, it is quite apparent that tourism involves eating. Sleeping and moving around both at domestic and international levels, however, this all important sector could not grow in Nigeria. Although it has celebrated or observed its 30th Anniversary, people still wonder if there is anything to celebrate. But DA’ Silva (1992), feels we have a lot to celebrate since a high level of National Tourism Consciousness and Mobilization has been put in place such as establishment of Nigerian Tourist association (NTA) which has finally metamorphosed into Nigerian Tourist Development Corporation (NTDC) in 1992; also is private and public awareness in Nigerian Airways, Nigerian Railways, Dempster line; there is also professional and trade associations in hotels and travels, government has also put in place tourism policies e.g. DFRRI, MAMSER, NOA, Cultural Policy, Economic Diplomacy, BLP, WOTCLEF, strengthening of local governments, and so on. However, DA’Silva (1994) argued for the need to reactivate tourism, thus in his words out of 450mn international tourist arrivals, Africa accounted for 13mn which Nigeria belongs. This situation is unacceptable, he therefore, urge 75

Nigerian government to place emphasis on promotion and marketing of tourism industry. To this end Goyang (1994) argued for an appraisal of 1990 National policy for tourism in Nigeria which is crucial in developing the moribund industry. He explained that a new National Policy was timely, though prior to this, Lagos and Plateau States have their policy but this cannot create a well articulated socio-economic ideology for the nation. This idea was equally buttressed by Sani (1990), in which he presented a private sector’s view of what tourism policy should be and who should control tourism policy. He then argued that a National tourism policy must be dynamic, responsive and reflect current trends and development in the environment. Goyang (1994) maintained that the national policy would develop our viable natural resources in a joint effort as opposed to each state on its own. This procedurebeing adopted in education and health sectors, therefore, tourism should toe the same line. Accordingly, he called for an institutional arrangement where tourism will develop from the grassroots level to the federal level. This view was shared by Ladan (2003), in which he argued that development can only be sustained if grassroots development of tourism is always imbibed on. He explained that artisans would remain and be encouraged at the expense of modern industrialization. So, also when a cultural event is prepared for tourism consumption however good, the original often- spiritual meaning is lost. In fact, tourism development must be vigorously pursued as observed by Ojo (1994). Because Nigeria has the resource potentials and he identified some economic circumstances of the post-colonial era, conductive to the development of tourism like rapid industrialization which has engaged many workers; phenomenal rise in real income levels; reduction of number of working days; increased ownership of mobility, and so on. Coupled with pride of rich diversity of physical, wildlife and human resources, varying from spectacular land from sceneries to populated game reserve, and from impressive historical monuments to captivating cultivating cultural festivals, all of which can become first-class tourism resources assuming effective and forward looking management, this position was quote in line with Ogbemudia (1991) when he recognizedthe economic potentials of tourism; particularly foreign exchange earnings. Nevertheless, Atutu (2001) believed that for a successive tourism development to be achieved there is the need to draw up a comprehensive tourism plan. In other words, the overall national planning should take into account tourism planning, such that a detailed environmental analysis is carried out identifying areas of agriculture, ecological, geographical, mythological, lands are surveyed to capture industrial areas, airports, historic interests, towers, forts and palaces, traditional village cores and clusters, beaches as well as design and development programmes made available to visitors. Ikwu (1992) therefore emphasized that the tourism plan should also encapsulate marketing and product improvement programme if tourism was to be properly developed. He however, argued that this again depends on the technical and social conditions, such as good road networks, portable water, electricity, telephone, hospitality services, security, and patriotism like local patronage. etc. The promotional aspect should be geared towards enhancing the existing tourist facilities and developing new areas; control over factors that adversely affect the environment; ensuring the adequate provision of transport and communication systems. Awoseyin (1991) and Adejuwon (1986) asserted also that another major potentials required in developing tourism is the need for the hospitality industry to play major role which has been estimated at about 50% of all other potentials. Therefore, they argued for the hospitality industry to re-orientate its developmenttowards tourist needs, such as models, structures, technology, and management skill. Although, views and opinions continued, on the need to develop 76

Tourism by providing the necessary infrastructures coupled with the available potentials but these has not been realized. The constraint in realizing them is what Awoseyin (1990) termed as the lack of methodology for financing tourism projects. He thus suggests the need to identify the projects and the method required in financing it. Furthermore, a cross analysis of the views revealed that much is required in the tourism industry of which think the theory of Big Push and HarroldDomar model may become expedient. In the sense that, while Harrold-Domar requires not only the growth of the savings and investment but to ensure growth rate of GDP at the least rate of 7% On the other hand, Big Push theory will argue that a viable industry like tourism all over the world requires a huge and substantial amount to be invested in such sector if at all we want to develop it. 3.0

Growth, potentials and Socio-economic Impact of Tourism in Nigeria The tourism sector has witnessed phenomenal growth across the world which has had a symbolic impact on Nigeria; with the launch of 1990 National tourism Policy in a bid to develop its tourism industry. More so, every year substantial percentage of the world population travel on unrestricted movements both within the country and outside it. Indeed, this growth has brought about high employment worldwide, increasing wealth of nations, improving balance of payments and as a veritable tool of human development. An acceptable index for measuring growth of tourism is usually in term of international arrivals and receipts, thus, over the past forty years, global tourism has expanded at an average of 7% a year in arrivals and 12% a year in receipts, a growth record unmatched by any other economic sector (Omotosho, 2000). This can be analysed within the framework of Hoarrold - Dormarmodel, who saw growth and development as dependent on capital formation. More so, WTO forecast shows that, international tourist arrivals worldwide is predicted to reach 1bn by the year 2010, also receipts are predicted to reach US$1,550. Between 1950 and 1999, movement of person across frontiers exceeded 664mn, while receipts from tourism which dues not include fares paid to corners is also in excess of $455bn representing per annual receipt of US$685. There has been a remarkable expansion in tourism activities aided modern by transportation, growth in human activities and international politics. It has become the source of wealth and economic diversification to Asia, North Africa, Latin America and the Caribbean nations. Although, Europe and America were initially toping the regions, Asia and the pacific religion have dominated for the past 15years. Resent developments by tourists to discover new grounds for fun and excitement would have made Africa and indeed Nigeria very relevance but this is not so and thus, Europe and America has took over the dominance of this industry again. For many centuries, international tourism is an indispensable source of foreign currency earnings. According to the world Tourism Organisation, tourism is one of the top five export categories for 83% of countries and the main source of foreign currency for at least 38% of them. Appendix 3.2 and 3.3 show the growth rates in receipts from international tourism in the different regions of the world as defined by the WTO (see Appendix 3.1.) and their perspective market shares. Thus, Appendix 3.2 shows that in 1985 when the world total receipts was 118.1b. Africa received 2.5b of the figure, Americas received 33.3b, Asia got 15.6b, Europe 63.5b and Middle East 4.2b. The trend continued in 1990, with Europe maintaining a steady growth of 143.5b receipts and a share of 54.4% of world receipt flow, followed by Americas and then Asia with more than double the 1995 figure. However Africa and Middle East marginally increased 1995 to 1998 however, from Appendix 3.2 to 3.3 we can see a remarkable change in the trend 77

of tourists flow. For instance, in 1998, when world receipts were 441.0b, Africa’s share was 9.8b, which was 2.22%. However, the shares of other religions have continued to dwindle. Approximately 15years, percentage receipts in America declined from 28.2% in 1985 to 26.2% in 1998 and European share also reduced from 53.8% to 52.3% in the same period. This decline in their share was quite unbelievable because most crowdpulling major world events took place in either of the two regions. Atlanta 1996 Olympic games, USA’94 World Cup finals, France’98World Cup finals are examples of those events, which boosted the regional receipts without significant flow over previous years of significance is the average growth rate of the six region within the period. The Middle East, Asia and Africa got the biggest boost with growth rate of 6.9%, 7.0% and 7.02% respectively. Although, the other three regionsgrowth were not bad but Europe and Americas from Appendix 3.3 have shown the world’s leading earners of tourism spending considering individual countries within the regions. Again, Appendix 3.4 have shown the world top earners from international tourism leading by united states, followed by Spain, etc. This is reflecting the fact that closeness to origin of the travelers still matters and the fact that countries in these region have had the time, resources and demand needed to develop their tourism industry. From appendix 3.5 the Americas clearly the unchallenged leader with about 4.8% share of tourism receipts, while Africa’s earning from tourism same year exceeded that of the middle east (23.2b) The significance of these statistics is that it is much cheaper to visit Africa in view of the very weak currencies at the destinations. The North, East and South Africa have reminded the primary destinations. For example, North Africa countries, notably Algeria, Morocco, Sudan and Tunisia took 35.3% of Africa’s share in 1999 whereas 13 countries in West Africa shared only 9.7%. East Africa shared 22.6% and South Africa 30.4%, Thus, these figures portends that Africa is the region of the future world Tourism in Nigeria cannot be an exception. The reasons justifying the statement are as follows; The average international tourism are seeking new natural grounds and endowment devoid of man-made as the case in the western world. Conflicts and political uncertainties, which have constrained Africa tourism, are beginning to fade away. Countries are achieving independence, absence of apartheid and military dictatorship; and In fact Western Tourist destinations have reached the points of satiety in which the marginal utility of tourism tends to negative both on humans and environment. Therefore, Why not turn to Africa tourist destinations which are largely unused. Nigeria has all the above advantages, hence the need to explore the following tourist attractions in Nigeria. Potentials of Tourism Tourism has been growing since the 70’s and 80’s but at this time Nigeria’s hopes, dreams and thought were not matured enough to pursue that sector of the economy until the 90’s. By this time factors or potentials which are prerequisite for tourism development were very much there, and are still there and will most probably be there for a long time to come, for instance, the Gurara Water Falls, Ikogosi and Wikki warm springs, Mambilla Plateau, Riyom rock formation, Idanre Hills, Zuma Rock, Olumo Rock, Ikom Water Falls, etc. 78

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Ikeja water parks, Snake Island, Ibadan Amusement Centre, Abuja parks and Amusement, Lagos bar beach, Obudu Cattle Ranch, Nicon and Sheraton Hotels, Zaranda Hotels. Etc. Yankari, New Bussa and Bauchi Game Reserves. Plateau Gardens and Monuments, Kano and Ibadan zoo’s, Cross river boat and fishing regatta, Argungu fishing festival etc. Atilogu Dancers, kuntigi and kalangu local guitarists, Yam festival, Gale and GboyaNupeTraditon, Eyo masquerades, Ekwechi Festival in Ebira Bronze Statutes from Benin, local fan and hat from North, local cloth dyers from China etc. Dambe and Langa Traditional from North, Circus from China etc. Varieties of Seminars, conferences, meetings and Workshops in hotspot tourist locations across Nigeria.

3.3

Social-economic Impact of Tourism From the foregoing explanations of potentials or opportunities of tourism in Nigeria, the following socio-economic impacts are clearly indentified. First and foremost, the economic impact of tourism is the income and wealth it creates for the people and the nation. This is further heightened by the concept of Tourism income multiplier (TIM) meaning that a demand by a tourist to an area implies spending some money with the people in those areas who in turn spend in other places, this continues on and on. Again, it is gravifying to note that the percentage of jobs that depends directly or indirectly on tourism demands average at 5 to 7%. These employment are found in tourism sites, hotels, airlines, travel agencies and other associated products to tourism. In fact, the growth of tourism would not have been possible without a vibrant labour. Also, another economic impact of tourism is that it it increases foreign exchange earning to provide the investment necessary so as to finance economic growth, while rectifying our balance of payment deficit. Figures have shown the increasing number of international tourist arrivals and receipts thereby ensuring that balance of payment always balance. Economic impact of tourism could be in terms of investment and development. That is, once the business of tourism is booming in an area then investors are poised to invest while the area develops rapidly e.g. industries, infrastructures (road, water, etc.) On the other hand, social impact in terms of public awareness and information flow. For instance, WAI.MAMSER.NOA.Etcwerelaunched to equally create social awareness and the need to warmly received visitors. Another social is that tourism visits enable one to meet people from differentbackgrounds, thereby creating understanding, peaceful co-existence, exchange of ideas, Pleasantries and promote unity. Social impact of tourism could be in form of cultural revival or reawakening, promoting natural arts and crafts, health therapy, etc. Another social impact of tourism is creating a good relationship between man and his natural environment, conservation and protection. More so, social impact could create positive international image, cultural exchange and enrichment. 4.0

Problem and prospects of Tourism in Nigeria Despite the potentials and opportunities available for tourism development in Nigeria, it is still bogged with the following problems: 79

The major problem facing the tourism industry is the lack of political will on the part of the government which give rise to the numerous problemsfacing the industry. Again, is the urgent need for the review of national policy on tourism so as to make it more encompassing, broad based proper planning and dynamism, such as giving tourism its rightful place in the constitution, offering tourism courses in universities, standardization of hotels, funding, zoning etc. Also, the model and structure couple with technology and management still of the hotel in Western Europe is not peculiar to our environment. That doesn’t mean that we shouldn’t transfer such ideas but they should be monitored, tailored and adopted to our tradition and cultural inclinations. Another problem of tourism is that of funding. It is not advisable and not the case in place, where tourism has developed to have too much government involvement but rather government provide the guidelines then allow the private sectors and financial institutions to take up the development of tourism industry. In fact, tourism is a product of sectoral cooperation and governmental backing. More so let us not lose the sight of developing infrastructures. This is a very big problem in Nigeria. A situation where roads are in bad shape, inadequate and in some cases absence of portable water, erratic power supply, poor communication networks and other aspects of social amenities required to support tourism are not in existence will not augur well for tourism industry. Political instability, conflicts, insecurity and poor attitudinal changes among Nigerians will tend to scare away genuine tourists. Nevertheless, from the catalogue of problems plaguing the prospects of this viable industry cannot be overemphasized due to the following reasons. Nigeria has all the potentials of tourist attractions from rocks and falls cut through wildlife parks and gardens down to hotels and conference centres. Though we have observed tourism policy as a problem but the launch of the first tourism policy is an indication of government intention to that sector, coupled with the so many awareness and campaigns to instill discipline and respect by Nigerians towards visitors. Also, a relative political stability with the young democracy put in place has been achieved. Intensified effort to develop infrastructures, creation of tourism ministry and corporation are all indication towards developing a prosperous tourism industry. 5.0 Summary and Conclusion The paper has made it clear that the place of tourism industry in any economy including Nigeria, which is endowed with so many potentials, cannot be overemphasized. Because we have seen the growth in the sector couple with the need to comb all aspects of tourism industry as well as constraints and prospects of the industry. In fact, this is the only sector that experiences forward and backward linkages. Therefore, it is my conclusion that effort should be geared towards increasing the political will, funding and all the investment required to fully develop the industry. Recommendation There is the need to develop an encompassing tourism policy if it has to be sustainable, equitable and responsive so as to contribute to Nigeria’s economic development and in effect raise the quantity of life of all her people. Government should intensify vigorously the marketing and promotion of Nigeria cultural, historical and archaeological treasures. Funding of tourism should be tackled. To this end, government should provide all the enabling environment to support private sectors in tourism development. Much 80

attention should be given to environmental aspects of tourism i.e. Ecotourism which consists of wildlife tourism and natural parks. Thus, the federal Ministry of commerce and Tourism as well as Tourism Corporation be strengthened. The collection and collation of tourism statistics and the establishment of tourism satellite accounts as is done across the world be vigorously pursued. Tourism information should as a matter of significance be available on Internet for users and investors. There is the need to embark on aggressive manpower development required in the tourism industry, such as in hotels and catering, training schools and institutions should be established. References Aboyade, O. (1983), Integrated Economics; A study of Development Economics, 1st ed.,ELBS and Addison-Wesley Publishers, London. Adejuwon, F.J.(1986), Organising a system of Tourism and Hotels in West Africa Hospitality, Vol.1, No.1 Aturu. A. S (2001), Tourism Planning approach the key to Nigeria Tourism Development IICIMA Bulletin. Vol. 1, No. 15, April-July Awoseyin, L. (1990), Methodology for financing tourism projects in Developing Countries African Hospitality, Vol. 1, No., 2, July-September. Awoseyin L. (2002), Africa is the Tourists` Destination of the future African Hospitality Vol. 5. No.1 Dada, M. O. (1986), Economic aspect of the Tourism Industry in Nigeria, Hospitality in Nigeria, Vol. 1, No. 1. DA`silva M. E. (1992) Tourism in Nigeria: Causes of underdevelopment And need for reactivation, African Hospitality, Vol. 3, No.3. DA`silva M. E. (1992) Tourism in Nigeria Need for reactivation (Technical), African Hospitality, Vol. 4, No.1. Goyang. G. (1994) Tourism policy for Nigeria: A Critical Review, African Hospitality, Vol. 5, No.1. Ikwu, F. (1992) The concept of marketing and promotion of tourism in A Structural Adjustment Economy. African Hospitality, Vol. 3, No.3. ILO (2001) Report on Human Resources Development, employment And Globalization in the Hotel, Catering and Tourism sector, Geneva, 2-6th April Jhingan, M. L. (2000), The Economic Development and Planning, 33rd ed., New A.S Offset Press, New Delhi, India Ladan A. F. (2003) Grassroots` Tourism for a sustainable development, Tourist Flash, September-November. 81

Mani. A. I. (2003) Tourism: A Goldmine untapped-A paper delivered at conference of the Federation of tourism Associations of Nigeria held at Sheraton Hotel, Abuja, November 21st Ogbemudia. D. (1991) Tourism and its potentials, African Hospitality Vol. 2, No. 1. January-March. Ojo, A. (1994) An overview of Tourism Development, Resources PotentialsProblems and Constraints in Nigeria, African Hospitality, Vol. 5, No, 1. Omotosho O. (2000), Tourism Development, Oppurtunities, Benefits and Challenges in Nigeria, - A paper presented at Annual Conference of world conference of Mayors October 15-19th Abuja. SaniA. I. (1990), Tourism Policy: Its framework and investors` Expectations, African Hospitality, Vol. 1, No.3, October-December.

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Business Process Re-Engineering and Customer Responses in Selected Food and Beverages Companies in Lagos State By

Waidi Adeniyi Akingbade {Corresponding Author} Abstract Business Process Reengineering (BPR) is the method by which the existing business practices are designed and changed to achieve dramatic improvement in organizational performance. Organizational re-engineering is often directed towards customer satisfactions and retention for profitability and competitiveness. But most organizational re-engineering are often implemented without measuring customer responses in order to improve their present and future performance. This study assess customer responses in selected food and beverages industry in order to further make strategic decision for improved performance and competitiveness. Two hypotheses were tested to determine, whether: there is a significant relationship between customer satisfaction and quality product; there is a significant relationship between price and customer retention. Survey research method was adopted for the study and 2150questionnaires were given to the respondents which were selected randomly, out of which 1900 returned duly completed and properly filled questionnaires. Correlation was used to test the hypotheses for data analysis. Findings show that provision of quality product enhances customer satisfaction and competitive prices in the industry improved customer retention. The study recommends that BPR should be used by company for production of quality product, quick service delivery, charging of reasonable price, cost reduction which result in profitability and cost savings for the company in the long run. Keywords: Business Process Re-engineering, Quality Product, Customer Satisfaction.

1. Introduction Organizations in competitive environment are forced to re-evaluate their business models and underlying business processes to cope with the changing condition. Business process re-engineering represents a core of the functioning of an organization because the company or business primarily consists of processes not product or services. In other words, managing a business means managing its processes (Groover, Jeong, Keitinger, Jeng 2011). Despite the importance, business processes have been neglected for a long time in managerial studies mainly due to the fact that departments are structured in a functional or product oriented way. The extensive literature on business process management (e.g. Davenport, 1993, Hammer & Champy 1993; Caron, Jarvenpea, and Stoddard, 1994; Earl, Sampler and Short, 2005) suggests that organizations can enhance their overall performance by adopting a process view of business. The corporate world has historically measured financial performance and sales volume. Measures of financial performance, sales volume and customer satisfaction are not wrong: they are merely insufficient. Many organizations fail to understand how these indicators fit within the comprehensive measurement strategy that is required to effectively re-engineer and re-design processes (Davenport, 1994). An increasing number of academics are now extolling the central role of business process re-engineering in improving organization performance. Most importantly, Kaplan and Norton (2004) places business process re-engineering at the Centre of their approach of measuring a firm`s progress in implementing strategy. In moving to Department of Business Administration & Management Technology, Lagos state University, Ojo; Lagos, Nigeria. P.O. BOX 10149, LASU, Post Office, Ojo, Lagos State, Nigeria Tel: 234-80-3050-0622 E-mail: [email protected]

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a process enterprise, manager needs to conduct a thorough analysis to determine what aspect of process performance are most directly linked to achieving the organization’s overall objectives. Business process re-engineering involves the radical redesign of core business processes to achieve dramatic improvement in productivity, quality product, cycle times, quick service delivery, charging of reasonable price and quality control. Most organizations that have used process re-engineering agree that it does indeed provide numerous benefits including cost saving, quick service delivery, more efficient execution of work, improved customer’s focus and better integration across the organization to enable them satisfy their customers in order to retain them. The quality of product and price competitiveness leads to customer satisfaction and retention by the organization. This paper assesses the concept of process re-engineering. It also seeks to evaluate its integration in to organization system and how it could be implemented for organization improved performance. Statement of the Problem The concept of Business Process Re-engineering could be traced to the Business Process Management of the 1990’s. Many organizations have adopted it to be competitive as to cope with the changing condition. However, experiences have shown that companies that are adopting Business Process Re-engineering have different success level (Hammer & Champy, 1993). Individual organization success depends on established balance between organization structure and organization’s environment. In other words, not all organizations have benefitted substantially from Business Process Re-engineering. Many firms have found that even dramatic level of Process re-engineering and improvements often do not translate into better business performance. Many organizations have based their application of Business Process Re-engineering on faulty methods and assumption that tend to undermine quality products, quick service delivery, competitive prices, customers satisfaction and retention. Many managers that have adopted it lack project management re-orientation and are unaware of the organization resistance to change. The extent to which these have influenced the effectiveness of business process reengineering in selected food and beverages companies in Lagos State is the main focus of this paper. Research Questions i. To what extent does quality product improved customer satisfaction? ii. Does reasonable price enhance customer retention? Hypotheses Two null hypotheses were postulated: 1. There is no significant relationship between Customer satisfaction and quality product. 2. There is no significant relationship between price and customer retention. Literature Review Goal and Objectives of Business Process Re-engineering The goal of business process re-engineering is to redesign and change the existing business practices or process to achieve dramatic improvement in organizational performance. Organizational development is a continuous process but the pace of change has increased in manifolds. In a volatile global world, organizations enhance competitive 84

advantage through Business Process Re-engineering (BPR) by radically redesigning selected processes. Sharma (2006) posited that business process re-engineering implies transformed processes that together form a component of a larger system aimed at enabling organization to empower themselves with contemporary technologies business solution and innovations. Organizational effective performance has become a watchword in modern business; as a result there are inexorable pressures for Business Process Reengineering. The rampant and rapid expansion of competition across markets and geographic raises important questions such as:  How should work be redesigned?  Who does it?  Where do they do it?  How to get it performed? These questions necessitate venturing of Business Process Re-engineering into the overall strategy for sustained competitive advantage, check costs, and differentiate products and effective price management with greater intensity and then flawless execution (Groover, et al 2011). At this juncture, it is pertinent to ask what is “Business Process” and as well as “Business Process Re-engineering.” According to Stoddard and Jarvenpea (1995) Business Process are simply a set of activities that transformed a set of inputs into a set of outputs (goods or services) for another person or process using people and equipment’s. Business process entails set of logically related tasks performed to achieve a defined business output or outcome. It involves a wide spectrum of activities procurement, order fulfillment, product development, customer service and sale (Sharma 2006). Thus, Business Process Reengineering becomes an offshoot of Business Process. Hammer and Champy (1993) argued that “the fundamental reconsideration and radical redesign of organizational process, in order to achieve drastic improvement of current performance in cost, service and speed enjoys a fair measure of consensus. One can then assume that Business Process Re-engineering connotes the analysis and design of workflows and processes within and between organizations (Davenport and Short 1990). Basic Assumptions of Business Process Re-engineering. Business Process Reengineering relies on a different school of thought. It believes in continuous process improvement, re-engineering assumes that current process is irrelevant and there is need to commence another one. Such a clean slate perspective enables the designers of business process to focus on new process. This is to project oneself on  What should the process look like?  How do my customers want it to be like?  How do best-in-class companies do it?  What we might be able to do with no technology? Business Process Re-engineering in the actual sense, have mixed successes therefore, business process reengineering projects aimed at transforming inefficient work process. Henceforth, organizations such as food and beverages industry and other manufacturing industries need to optimize results from this model in real business situations.

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Application of Business Process Re-engineering in Nigeria Food and Beverages Industry. Food and beverages industry comprises of companies that are in to the production of soft drinks, beer, wine, table and sachet water, cocoa beverages, fast foods, etc. In Nigeria, the changing dynamics of food and beverages and other manufacturing industries market forced players at all levels to re-engineer. The food and beverages industry operations and functions were redesigned to meet emerging challenges of diversification, slashing operating cost, outsourcing, portfolio investment, production and manufacturing systems. The change brought about by re-engineering in food and beverages industry are reflected in product and services to give a new form or structure by introducing product and service scheme such as sachet beverages of different price range. In order to survive and flourish in a global economy business must respond to major trends reshaping markets. Hence, the dynamics of the underlying forces at work require a renewed thrust on BPR in food and beverages industry to contribute to management and diversification of growth horizons by impacting on productivity and profitability (Aremu & Saka, 2006). Acting on this conviction, BPR has continuously improved organizational performance in Nigeria and the manufacturing sector has in recent times witnessed tremendous reengineering process in Nigeria. The modern business is characterized by stiff competition both locally and globally, hence, reengineering process becomes a veritable engine of organizational survival. Besides an organization which relies on arm chair business process risks redundancy or even extinction in the face of modern technological order. The multiplier effects of BPR provide an impetus to the industry through impressive success across companies. Several authors have provided their own interpretation of the changes being applied to the organization, Davenport and Short (1990) have described BPR as the analysis and design of work flows and processes within and between organizations. Hammer and Champy (1993) have promoted the fundamental rethinking and radical design of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost reduction, quality product, quick service delivery. Sharma (2006) has focused on the rethinking, restructuring and streamlining of the business structure, processes, methods of working, management systems and external relationships through which value is created and delivered. Keitinger and Groove (2004) on the other hand, believe that BPR involves the concurrent redesign of processes, organizations and their supporting information systems to achieve radical improvement in time, cost quality and customer’s regard for the company’s products and services. While Robert (2007) describes the fundamental rethinking and design of operating processes and organizational structure, the focus is on the organization’s core competencies to achieve dramatic improvements in organizational performance, as BPR’s essential components. Although the definition by the Davenport and Short (1990) is much narrower, their description of the concept is as far reaching. In practice, both TQM and BPR have focused on the definition and operation of business processes to produce products and services within a defined business scope. However, neither TQM nor BPR have focused on strategic business direction setting or planning but of course this may be necessary components in achieving this vision. Also each methodology, in its own right, does not have the intention or the capability of reinventing business or industry. More importantly only one of these definitions refers to information systems. It can thus be said that BPR is not necessarily dependent on IT solutions. This is general agreement that IT can be 86

powerful enabler, with the “radical improvements sought more a function of organizational process redesign rather than IT implementation” (Davenport & Beer, 1995; Hammer and Champy, 1993). While IT specialists insists that new systems are central to BPR, the challenge is increasingly one of organizational change and the visioning involved in that change rather than the technology itself (Earl, et al, 2005). Theoretical framework The concept of reengineering traces its root back to management theories developed as early as nineteenth (19th) century. The purpose of reengineering is to “make all your processes the best-in class”. Fredrick Taylor suggested in the 1860’s that managers could discover the best process of performing work and reengineering echoes the classical believe that there is one best to conduct tasks. In Taylor’s time, technology did not allow large companies to design processes in a cross-functional or cross dimensional manner. Specialization was the stake-of- the- art method to improve efficiency given the technology situation at that time. According to Hammer and Champy (1993) business process reengineering (BPR) is defined as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed." Although Hammer and Champy (1993) declared that classical organizational theory is obsolete, classical ideas such as division of labour had an enduring power and applicability that reengineering has failed to demonstrate. Business process reengineering (BPR) does not appear to qualify as a scientific theory because among other things, it is not duplicable and it is limited in scope (Maureen et al, 2005). Today organizational development is a continuous process but the pace of change had increased in manifold. This means that in this competitive environment organizations will enhance its competitive advantage in its operation if it effectively design and implement Business Process Reengineering (BPR) selected processes. Davenport (1993) a famous BPR theorist emphasized the term process innovation, in his definition and he described it as ”encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions”. The question now is what is Business Process Reengineering? Business Process Reengineering (BPR)” is the analysis and design of workflows and processes within and between organizations (Davenport and Short, 1990). At this juncture, it is relevant to emphasize the term “business process”. Davenport and Short (1990) defined business process as a set of logically related tasks performed to achieve defined business actions. A process is a structured measure set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization, Davenport (1993). Examples of processes include developing a new product, ordering goods from a supplier, creating marketing plan, etc.

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Fig 1: Relationship between business process reengineering and customer responses BPR: Cost Reduction,

Customer Responses: Customers Satisfaction. Attributes of CS:  Repurchase  Cross selling  Reduce price sensitivity Positive word of mouth

Quality Product, Quick Service Delivery, Reasonable Price, Features of QP:     

Tangibility Responsiveness Reliability Empathy Assurance

Customers Retention

Source: Adapted from Matzler, K, et al (2005) The relationship between customer satisfaction and shareholder value, total quality management, vol.16, No. 5

Dimension Tangible Reliability Responsiveness Assurance Empathy Cross selling

Low price sensibility Word of mouth

Repurchase

Description Appearance of physical product Ability to perform the promised service dependably, accurately Willingness to help customers and provide prompt service Knowledge and courtesy of employees and their ability to inspire trust and confidence in the product Caring individualized attention to firm provides to its customers. The total sales of the company grow and markets can be penetrated faster because customers who have become loyal are responding between firms marketing efforts. Satisfied customers are less price sensitive. The lower price – sensibility increase the willingness of the customers to pay for the benefits they receive. Positive word- of – mouth can significantly enhance the effectiveness of marketing communication and therefore, lower acquisition costs for new customers, which increases a firms cash flow. The continuous repurchase of a company’s product results in a stable relationship between customer and supplier which allow a firm to generate meaningfully knowledge about the customers.

Source: Source: Matzler, K, et al (2005) The relationship between customer satisfaction and shareholder value, total quality management, vol.16, No.5

Concept of Business Process Reengineering The concept of reengineering has been widely adopted by industries such as food and beverages, financial services, retailing and manufacturing. Reengineering is the radical redesign of an organization’s processes, especially its business processes. Rather than organizing a firm into functional specialties’ like production, accounting, marketing e.t.c, and looking at the task that each function performs, we should according to the reengineering theory, be looking at complete process from materials acquisitions, to production, to marketing and distribution. The firm should be reengineered into a series of processes.

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The reengineering concepts involve four dimensions that are stated below: i. Innovative Rethinking: This is a process that it is itself utterly dependent on creativity, inspiration and old fashion luck. Drucker (1993) argues that this paradox is apparent only not real most of what happens in successful innovations is not the happy occurrences of a blinding flash of insight but rather, the careful implementation of spectacular but systematic management discipline. ii. Process Function: Taking a systematic perspective, Hammer and Champy (1993) describes process functions as a collection of activities that take one or more kinds of input and creates an output that is of value to the customer. Typical process of this includes ordering of organizational structure, manufacturing, production, development, delivery and invoicing. iii. Radical Change: In radical change, a key business process is the transformation of organizational element; it is essential to an organization survival. Change leads to new ideas, technology, innovation and improvement. Therefore, it is important that organizations recognize the need for change and learns to manage the process effectively (Pamela et al, 1995). iv. Organizational Development and Performance: It takes a look at the firm’s level of efficiency and way to improve its current activity in order to meet up to standards and survive the competitive pressure. One way to judge the performance of an organization is to compare it with other unit within the company. Comparisons with outsiders however can highlight the best industrial practices and promote their adoption. This technique is commonly term “bench making” (Roberts, 2007). Relationship between Business Process Reengineering and Information Technology Hammer (1990) considers information technology (IT) as the key factor in the BPR for organization that wants to witness a “radical change” in its operation. He prescribes the use of IT to challenge the assumption inherent in the work processes that have existed since long before the advent of modern computer and communication technology. He argues that at the heart of reengineering is the notion of discontinuous thinking or recognizing and breaking away from the outdated rules and fundamental assumptions about technology, people and organizational goals that no longer hold. Aremu and Saka (2006) argued that information technology (IT) is a strategic resources that facilitates major changes in competitive behavior, marketing and customer service. In essence, IT enables a firm to achieve competitive advantages. Davenport and Short (1990) further posted that business process reengineering requires taking a broader view of both information technology (IT) and business activity and of the relationships between them. IT should be viewed as more than an automating or mechanizing force to fundamentally reshape the way business is done. Information technology and business process reengineering have recursive relationship. IT capabilities should support business process and business should be in terms of the capabilities IT can provide. Davenport and Short (1990) refer to this broadened, recursive view of IT and BPR as the new industrial engineering business process represents a new approach to coordination across the firm, IT promises and its ultimate impact is to be the most powerful tool for reducing cost of coordination. 89

Elements of Re-engineering in an Organization According to Ezigbo (2003), the essential elements or principles of reengineering include the following:  Rethinking the theory of the business.  Challenging old assumptions and discharging old rules that are no longer applicable.  Breaking away from the conventional wisdom and the constraints of organizational boundaries.  Using information technology not to automatic outdated process but to redesign new ones  Externally focus on customers and the generation of greater value for customers.  Internal focus on harnessing more of the potential of people and applying to those activities that identify and deliver values to customers.  Encourages training and development by building creative work environment.  Think and execute as much activity as possible horizontally, concentrating on flows and processes through the organization. Steps Involved in Business Process Reengineering Davenport and Short (1990) prescribe a five step approach to business process reengineering. These are: i. Develop the business vision and process objectives: Business process reengineering is driven by a business vision which implies specific business objectives such as cost reduction, time reduction, output quality improvement, quality of work life. ii. Identify the processes to be redesigned: Most firms use high impact approach which focuses on most important processes or those that conflict most with the business vision. Few numbers of firms use the exhaustive approach that attempts to identify all the processes within an organization and they prioritize them in order to redesign urgency. iii. Understand and measure the existing process: For avoiding the repeating of old mistake and for providing a baseline for future improvements. iv. Identify information technology (IT) levels: Awareness of IT capabilities can and should influence process. This is because IT is a sine qua non to the business process reengineering. v. Design and build a prototype of new processes: The actual design should not be viewed as the end of the BPR process rather, it should be viewed as a prototype, aligns the BPR approach with quick delivery of results and the involvement and satisfaction of customers. Benefits of Business Process Re-engineering The hard task of re-examining mission and how it is being delivered on a day to day basis will have fundamental impacts on an organization, especially in terms of responsiveness and accountability to customers and stakeholders. Reengineering as a must tool to improve efficiency, productivity and quality of product or service and the motivation for reengineering usually the realization that there is a need to speed up the process, reduce needed resources, improve the productivity, efficiency and improve competitiveness. Also the rewards of reengineering are many including empowering employees, eliminate waste, unnecessary management overhead and obsolete or inefficient processes, producing often significant reductions in cost and 90

cycle times, enabling revolutionary improvements in many business processes as measured by quality and customer service, helping top organizations stay on top and low achievers to become effective competitors. Besides, process reengineering radically changes the work environments. Individual processes are combined to gain efficiencies and productivity. Workers are allowed to make decisions on the spot to eliminate process roadblocks and increase speed to market. Not only is this beneficial for overall business performance, it can also increase employee satisfaction and loyalty. Employees can expand their skill and knowledge into other areas and have the ability to make decisions that affect their individual performance (Hammer 1996). Hammer and Champy (1993) have identified five major functions of Business Process Re-engineering and they are; business growth, increased effectiveness, improved effectiveness, reduced cost, and meaningful job for employees. Although BPR is very effective in controlling cost and improving efficiency, its implementation is a hard nut to crack. Employees are very resistant to this kind of change thus, it is important to have extensive support from the top management. Furthermore, there are several impacts of reengineering on customer and company itself. Customer  BPR increases the customer satisfaction about the services that are provided such service become more efficient and systematic.  BPR motivate the customer loyalty because the company product is of high quality at affordable prices.  Customers valued speed, efficiency and easy access to information about the company products. Company  Improve the value of the company because the BPR increase the efficiencies and effectiveness in the service and also their productivity.  Systematic and efficient procedure in the organization structure.  The strengths and weakness of an organization service can be evaluated in terms of the relative importance of the services attributes to the customer.  Encourage organization to strive toward short term financial results while utilizing methods that damage long term employee morale and customer service.  BPR can give the dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed in the business. Problems of Business Process Re-engineering Project in company Despite the sound theoretical background and striking results, business process reengineering has not always led to stellar performance. In fact, Bashein et al (1994) showed that only 30% of BPR projects achieved performance breakthrough. Reasons for large failure include: a) Lack of sustained management commitment and leadership b) Unrealistic scope and expectation c) Resistance to change d) Non encouragement to conceptualization of business process e) Non- detailing of rewards and recognition with new business process. Methods and Materials In order to examine the relationships that exists between BPR and customer responses in selected food and beverages companies in Lagos State. The study was conducted in 91

Lagos State, the most densely populated city in Nigeria and the commercial capital of the country. It therefore implies that Lagos could serve as a good representative of industrial characteristics of Nigeria. A cross-sectional survey design was used by collecting data from a defined population. The use of survey research method was justified because it follow a correlational research strategy and helps in predicting behaviour (Borden and Abbott, 2002) It also helps to ascertain whether or not a relationship exists between the variables of study (Kerlinger, 1973). Responses were sought from both employees and those that consumed food and beverages products in Lagos State. The target population consisted of those that consumed food and beverages products. A simple random Sampling technique was used in selecting respondents. A sample size of 2150 from the general customers was used for the study. Simple random sampling method was adopted in selecting respondents from the population of study and this helped to ensure that each customer has an equal chance of being selected. The instrument used for collecting data in the study was a questionnaire and was mainly designed to elicit information from customers. The questionnaire was made up of 20 items grouped into four main parts. Part 1 collected data on customer satisfaction and was made up of five items, part 2 collected data on quality product and also contained five items, part 3 collected data on product price and has five items, part 4 collected data on customer retention and was made up of five items. The dependent variables examined in this study are customer satisfactions and customer retention that result from the application of independent variables; quality products and reasonable price by food and beverages industry. The questions were tailored along a five point likert scale. The responses were coded and mapped in to numeric values such as Strongly Agree=5points, Agree=4points, Undecided=3points, Disagree=2points, Strongly Disagree=1point. According to Saunders, Lewis and Thonhill, (2003), sampling is a part of the entire population carefully selected to represent that population. The justification for using random sampling technique is that it eliminates the possibility that the sample is biased by the preference of the individual selecting the sample (Bordens and Abbott, 2002). Another justification is that it is particularly necessary when one wants to apply research findings directly to a population (Mook, 1983). The inferential study design was also employed because it consists of correlation, regression and anova which help in ascertaining relationship and strength of relationship between variables. Normality tests were conducted on all variables so as to ensure that the data was normally distributed and thus applicable for further statistical analysis. Validity and reliability tests were conducted to verify the quality and integrity of the constructs used in this research. In emerging markets, a Cronbach Alpha of above 0.6 represents a reliable set of measures of the underlying construct (Burgess & Steenkamp, 2006). The analysis showed that all constructs were reliable and the questions forming these constructs were internally consistent. The questionnaire formed the main source of primary data whilst related published literature particularly from the internet, journals, textbooks and reports provided secondary data for the study. Correlation analysis, Anova and simple regression analysis were performed to test the strength of relationships between variables. 250 out of 2150 responses received were rejected due to non-responding and incompleteness. Therefore, 1900 questionnaire representing 79% were completely filled and returned for the study.

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Correlations Customer satisfaction Customer satisfaction

Quality product

Product price

Pearson Correlation

Customer retention .

Sig. (2-tailed) Quality product

Product price

Customer retention

N

1900

Pearson Correlation

.589 **

Sig. (2-tailed)

.000

N

1900

1900

Pearson Correlation

-.126 **

-.143**

.

Sig. (2-tailed)

.000

.000

N

1900

1900

1900

Pearson Correlation

.145 **

-.011

.677 **

Sig. (2-tailed)

.000

.646

.000

N

1900

1900

1900

**. Correlation is significant at the 0.01 level (2-tailed).

The table shows the correlation coefficients between each pair of variables listed, the significance level and the number of cases. Form the table, it could be established that there is a positive correlation between customer satisfaction and quality product given the pearson correlation coefficient (0.589). The more the quality of products of an organization, the higher the level of customer satisfaction that would be attained. The strength of their relationship can also be determined based on the suggestion of Borden and Abbott, (2002). It can be seen that r=.589, this means that there is a high correlation between the two variables suggesting quite a strong relationship between customer satisfaction and quality of product. We can also say that the high value can be attributed to characteristics of quality product such as tangibility, reliability, responsiveness, assurance and empathy (Agbor, 2011). Secondly, it could be established that there is also a positive correlation between product price and customer retention given the pearson correlation coefficient (0.677). The lower the price or a moderate price, the higher customer retention advantage available to the organization. The strength of their relationship can also be determined based on the suggestion of Borden and Abbott, (2002). It can be seen that r=.677, this means that there is also a medium correlation between the two variables suggesting quite a weak relationship between price and customer retention. Confidence was established in the results as the respective levels of statistical significances have their value less than 0.05 level (Sig. = 0.000). Hypothesis One: There is no significant relationship between customer satisfaction and quality product. Model Summary Model 1

R .589 a

R Square .347

Adjusted R Square .135

a. Predictors: (Constant), Quality product

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Std. Error of the Estimate .46991

1900

The R square is given as 0.347. This means that the model (quality product) was able to explain 34.7% (expressed as a percentage, multiply by 100, by shifting the decimal point two places to the right) variation in the dependent variable (customer satisfaction). R square value in the sample tends to be a rather optimistic overestimation of the true value in the population as the Adjusted R square depicted a small value. It helps to correct the R square to provide a better estimate of the true population value. ANOVAb Model 1

Sum of Squares 15.587 419.106 434.692

Regression Residual Total

df

Mean Square 15.587 .221

1 1898 1899

F 70.588

Sig. .000a

a. Predictors: (Constant), Quality product b. Dependent Variable: Customer satisfaction

This table helps to assess the statistical significance of the result. It helps to test the null hypothesis and given a statistical significance (Sig. = .000; this really means p