TABLE OF CONTENTS
of contents vi-ix
1.1 Background Information 1-3
1.2 The Ube Program 3-5
1.3 Linkage between Infrastructures in Nigeria
1.4 Infrastructure Development and Economic
in Nigeria 8-13
1.5 Statement of the Problem 13-16
1.6 Research Questions 16-17
1.7a Objectives of the Study 17
1.7b Specific Objectives 17-18
1.8 Research Hypothesis 18
1.9 Justification of the Study 18-19
1.10 Scope of the Study 20
Literature Review and Theoretical
2.1 Theoretical Review 21-22
2.2 Concept of Infrastructure 22-25
2.3 Nature and Type of Infrastructure in Nigeria 25-29
2.4 Regulation and Competition of Infrastructure
2.5 Infrastructure Appraisal and Evaluation for
2.6 Funding and Financing of Infrastructure
for Nigerian economy 33-34
2.7 Government Expenditure and Economic Growth
2.8 Review of Nigeria Budgets (1979-2003) 39
2.9 Policy Reforms in Nigeria 40-42
2.9.1 Modeling the Link Between
Growth and Development 42-45
2.9.2 Problems of Infrastructural Development
2.9.3 Infrastructure Development in Nigeria,
2.9.4 Broad Based Economic Growth with Equity 48-50
3.0 An Overview of Nigeria Economy 51-55
3.1 Method of Data Collection 55
3.2 Source and Nature of Data 55
3.3 Analytical Techniques 56
4.0 Empirical Analysis of Regression 57
4.1 Variable Identification 57-58
4.2 Model Specification 58-59
4.3 Presentation of Regression Result 59
4.4 Interpretation and Discussion 59-61
4.5 Research Findings and Implication 61
Summary, Conclusion and
5.1 Summary 62-63
5.2 Conclusion 63-64
5.3 Recommendations 64-65
1.1 BACKGROUND INFORMATION
government has made significant efforts in recent years, not only in the fair
distribution of such facilities to different parts of the country but also to
increase the quality and improve the quality of such facilities.
development of infrastructural facilities today is the responsibility of the
Federal and state government. However, it should be noted, that until recently
most of the infrastructure facilities developed in the country were
established, staffed and controlled by religious organization, private initative
and other voluntary agencies such as local communities, individual and local
councils as pointed out by Stolper (1982).
fourth National Development plan of Nigeria (1981-1985) was made to
address the inadequacies and imbalance in infrastructural development and it
had a projected capital expenditure of about N82.2 billion, 86% of this was to
be spend on public sectors especially in the development of various infrastructures.
This was the first time the local government participated in their capacities
as the third tier of the government created by the constitution.
education as essential for the development of high quality manpower as been
recognized in the level of public expenditure on such institution like primary,
secondary and tertiary institutions in Nigeria and in the number of
scholarships to Nigerians on education both at home and abroad. The literacy
rate is about 20 percent in urban areas and 2 percent in the rural areas
is the primary objective of the Federal and State government to reduce the rate
of illiteracy; hence there is a rapid increase in Primary, Secondary and
University enrolment to a substantially increased level. Though the enrolment
in other educational institutions has shown a similar trend. The government
made education free especially primary education throughout the country. The
Universal Basic Education (UBE) has now made education compulsory up to Junior Secondary
1.2 THE UBE PROGRAM
renovation that is realistic and child centered, that is quick in rejuvenating
and revitalizing hope and passion for acquisition of broad based knowledge that
is worthwhile in a learner should be the focus of the structure. Methodology
that will aid self discovery and problem-solving ability which allow learners
the opportunity for creativity should be entrenched in the curriculum. Quality
and relevance are the two features that curriculum development in Nigeria now
needs. Equally, changes and innovations of a school system of our globalized
environment must involve the emergence of elastic curricula models and
educational policies which emphasize interdisciplinary courses, open-ended
systems, intergenerational and inter-professional relationships,
multi-culturalism and sustainability. The need for a paradigm shift from
theoretical and paper certification to a practical application of knowledge
necessary for future employment and skills development for self-employment
should be the cardinal objectives of Nigerian education. Curriculum developers
should also adopt the interdisciplinary approach to curriculum especially at
the primary and junior secondary school levels. Emphasis should be on the
changing needs of the society through enhance on the understanding and
application of new technologies. Finally, to teach a new curriculum at all
levels of education, the teachers and instructors currently employed by the
Government have to receive further training.
to Ukpong (1979), inspite of the growth rate in electricity production and
consumption in Nigeria,
the per capital consumption of electricity is among the lowest in Africa. In term of per capital consumption 107HWHK for
developing countries per capital consumption of less than 40KWH etc.
role of infrastructure and its effects as an agent of growth and development is
not a new phenomenon’s is a very important parameter for economic growth that
no one can deny. Development of infrastructure implies a complete modernization
of the economy as a while which leads to substantially increased output and
productivity. It entails conversion from peasant farming society to an
industrial nation; it is a way of change in the living standard, life
expectancy, reduction in infant mortality. It is perhaps for these reasons that
there is no unanimity as to the criteria for measures development of
1.3 LINKAGE BETWEEN INFRASTRUCTURES IN NIGERIA
millennium development Goals (MDGS) are a series of time-bound development
targets aimed at addressing the challenge of under-development. The MDGS
address issues on infrastructural facilities and global partnerships for
development, agreed by the international community to be achieved by year 2015.
This is perhaps the most significant step in the war against poverty.
of the Millennium Development Goals (MDGS) is largely dependent on the
availability of functional infrastructure. Decentralization is an opportunity
that can be used to realize the MDGS especially at the lower levels of the
society and Government. Decentralization, which is about central government
increasingly devolving certain jurisdictional functions to local authorities,
has diverse impact. A major impact area that can have direct benefit to
communities in the provision of infrastructure. This is because economic growth
is linked to poverty reduction and improved access to infrastructural services
induces economic growth in a cyclical manner. Therefore, carefully thought out
mechanism that ensures functional nexus of infrastructural services and
economic activities are rudimentary ingredients for liveable human settlements.
suitability and sustainability of human settlement for economic development is
strongly linked to the level of serviceability and liveability. Serviceability
connotes the quality of being able to provide good services and the extent to
which these services are adequately available in an area. Liveability, refers
to overcoming poverty, providing basic public services, maintaining minimum
level of environmental standards, adequate housing, security and safe
environment, access to amenity and learning institutions. The issue of
settlement service ability and liveability is infrastructure-based, where water
services function, as a basic amenity.
is the worlds most important resource and a necessity of life. Adequate access
to social welfare services, such as medical services, education, portable water
supply, roads, electricity e.t.c. are strong indices of development (Adeyemo,
1989). Portable water supply is both a function of adequate and accessible
functional water infrastructure.
infrastructure stands out of all infrastructures (Physical and social) as
critical to the attainment of the MDGS. This is because beside goal number 7
and target 10 which are specifically water based, issues addressed by goal 1-7
in general directly or indirectly relate to water availability. Meeting the
water needs of African countries would be many steps closer to attaining the
overall MDGS (AWDR 2006).
United Nation’s estimates 1.1 billion people lacking access to safe drinking
water, is compounded by the record of 2.4 billion people without access to
adequate sanction (Cunningham, 2004). African countries have embraced the
decentralization as a mark of good governance, given that it is an antidote to
poverty perpetuation. Nigeria
are the most populous countries in Africa and
operates decentralized systems.
2004 for example, safe water coverage in Nigeria was only 48 percent (FGN,
2004). Ironically, water is very important for socio-economic development, this
is in addition to portable drinking water supply being a basic human need and
sufficient water for good hygiene is a prerequisite for public health (World
Bank, 1994) when access to water is disrupted, people therefore face acute
human security risks transmitted through poor health and the disruption of
livelihood (UNDP, 2006).
view of the foregoing, it is obvious that water front is where the war of
poverty and by implication attainment of the MDGS would be won or lost. The
contention is that infrastructure, especially water infrastructure is critical
if MDGS are to be attained.
1.4 INFRASTRUCTURE DEVELOPMENT AND ECONOMIC
role of infrastructure as an agent of development is not a new phenomenon. A
wide range of evidence on the importance of infrastructure on an economy,
drawing the conclusion that infrastructure contributes to economic growth both
through supply and demand channels by reducing cost of production, contributing
to the diversification of the economy and providing access to the application
of the modern technology, raising the economic return to labour (by reducing
worker time in non-productive activities and improving health with skill).
infrastructure raises the quality of life by creating amenities, providing
consumption goods (Transport and Communication services) and contributing to
Micro economic stability (Kesside 1993).
Bank Report (2003), examined that ICT has definitely influenced, “Capital
deepening”, (Increased the intensity of Physical capital per unit labour) and
shown additional gains in assisting more efficient work organization outside of
ICT sector, where productivity gain have been significant both inside and
outside of ICT sector, it is proposed that this is the result of policy and
institution setting conducive to innovation and adoption of new technologies.
The report further stated that “Sound infrastructural development policy
setting is a key ingredient for sustainable long term growth”. Investment in
human, physical and knowledge capital is identified as the key driver of
economic growth and macro economic policies (including price stability, inflation
control, tax structure system, facilitating of international trade growth,
pro-competitive regulation facilitating the entry of innovation firm,
facilitating the skill and education of the existing and potential work force,
encouraging R and D (Research and Development) removing barrier to network
access) are found to facilitate investment.
observed by the United Nation, the provision of adequate amount of electric
power is important in the establishment and maintenance of a modern economy and
ensuring its growth.
(1979) stated that the disparities in the level of development between the
different states and geographical regions of Nigeria are attributed in part to
the uneven distribution of such facilities as education, health, transport, power
and Communication, he stated further that Nigeria has made significant efforts
in recent years, not only in the fair distribution of such facilities to the
different parts of the country but also increase the quality and improve the
quality of such facilities.
GOVERNANCE, TRANSPARENCY, ACCOUNTABILITY, SOCIAL RESPONSIBILITY AND
INFRASTRUCTURE DEVELOPMENT IN NIGERIA.
is generally acknowledged as having adversely affected previous infrastructural
development effort in Nigeria.
Corruption is one of the aspects of bad governance. The anti-corruption crusade
of the past and present administration is expected to have favorable
implication on infrastructural development and poverty alleviation, if
successfully carried out. The communiqué earlier referred to as one of the
imperatives for success of the infrastructure development, “Ensuring that
corruption and other sharp practices at any stage of the programme are not
condoled but severely punished”.
manifestation and problem associated with corruption have various dimensions.
Among these are project substitution, plan distortion, mis-representation of
project finances, diversion of resources for usage to which were not meant for,
conversion of public funds to private use etc. The effect of corruption is both
direct and indirect on infrastructure shortage and increase in poverty. On the
other hand, the indirect effect follows from the reduction or misapplication of
resources which paralyses growth rate and growth potential. When growth rate are
lowered, there will be no output and income to be redistributed, so poverty
will escalate. Direct effect is that the poor in the society are denied
resources and access to required life support infrastructural facilities that
could have been provided through judicious application of siphoned or diverted
resources. (Todaro, 2007).
related problem is that lack of social responsibility manifest in vandalization
or willful destruction of facilities that benefit the poor. It is expected that
the bottom up approach identification with attendant association of
beneficiaries with the project, will minimize vanadilization. But beyond that,
it is crucially necessary that efforts and resources are committed to security
in order to ensure transparency and accountability in the management of poverty
reduction and infrastructure development programmes and projects, all the
stakeholders should be involved in the monitoring and evaluation of such
projects. To this end, there is the need for agreed infrastructure development
and poverty reduction agenda that can be used by all stakeholders’ i.e. Federal
government, state government, local government, NGO’s and the international
it is generally agreed that development of infrastructure is multi-dimensional
in nature having political and socio-economic implications.
1.5 STATEMENT OF THE PROBLEM
state of the Nigerian roads has not been satisfactory despite its enormous
potentials for growth and development. The poor transport facilities and
infrastructure have severally delayed economic development, and this has weakened
the transport sector. However, only purposeful and realistic planning can lay
the solid foundation for sustained economic greatness of the Nigerian roads
which will form the base for the coming generation to build upon.
provision of roads and transportation facilities are fundamentally important to
the development of Nigeria
as well as the well-being of her citizens (Minton, 2000).
roads needs urgent attentions, considering that an average of 50 people die
everyday by road accidents, as claimed by a survey (Minton 2000).
80% of federal roads in Nigeria
are partially paved, out of the nation’s over 900,000km2 landmass
(World Bank report 2004). Technically, over N200b will be required to construct
and maintain it. The entire roads in the country are just a bit less than
200,000km2 of federal state and local roads of which only about
50,000km are paved. Considering president Obasanjo’s inaugural address of May
1999: “Transport is the lifeline of the economy and social interactions. An
efficient transport system implies stagnation in all sectors”. The federal
ministry of works is charged with the responsibility for the planning, design,
construction and maintenance of the Federal Highways. The 36 states ministries
of works and transport have similar responsibility for the state roads while
the 774 local government works departments have the responsibilities for local
roads (Adeyemo 1999). Simply put, they have failed. The works and the workings
of the works ministry are no longer workable. As at date, the ministry has
committed the total sum of over N360 billion during the period from May 1999 up
to July 2003, however, they have only a very scantly in road maintenance and
construction to show for it. The drafted budget of 2002 provides only N5.1
billion for maintenance works only compared to the N38.6 billion provided for
rehabilitation. This only shows the extent of our understanding in
differentiating between rehabilitation and maintenance. We are only interested
in design and construction of roads network, neglecting the normal simple international
procedures of planning, design, construction, maintenance and rehabilitation
(PDCMR) Federal ministry of works (2003).
is obvious that “Numbers of accidents on the particular road, political
interest and concern and economic benefits form proposals submitted from
stakeholders serves as characteristics of pavement condition used in evaluating
pavement rehabilitation to Nigerian roads.
a 23, 000km of federal roads network, a workable senerio is the tasking of
about 60 small size specialized company to maintain about 400km of federal
roads each. This will only involve just 2 contractors per states with the total
cost per states with the total cost per year less than N160m. (Eberts &
McMillan 1996) there is urgent need to preach breakage from past wastefulness,
negligence, deceit and bad policy as regard the road network in the country.
However, the state of infrastructure in the country is alarming and calls for
urgent intervention of the government, private initiatives, public-private partnership
etc. so as to make infrastructure perform its role of nation-building and
1.6 RESEARCH QUESTIONS
importance of this study is to show the role of infrastructure and its effects
on economic growth of Nigeria.
To achieve these purposes, the following research questions are raised and
answered, these research questions includes:
What are the effects of
infrastructural development on the overall economy of Nigeria?
How can reliable infrastructure
development plan be achieved?
How can Nigeria improve the existing
infrastructure for the overall growth of her economy?
What are the benefits of building
additional infrastructure to the existing ones?
1.7a. OBJECTIVES OF THE STUDY
broad or major objective of this study is to examine the role of infrastructure
and its effects on the economic growth of Nigeria likewise to examine the
rate of overall growth in the economy.
1.7b. SPECIFIC OBJECTIVES
To determine the trend of expenditure
To examine the relationship between
various infrastructure expenditures and economic growth?
To make useful recommendations based
on the research findings.
There is no significant relationship between infrastructure expenditures and
There exist a significant relationship between infrastructure expenditures and
1.9 JUSTIFICATION OF THE STUDY
purported drastic changes that lead to overall infrastructure development is
being expected to bring about a higher growth rate for economic production,
implying high output and supply of goods and services resulting in a reduction
in the general price level of goods and services. Ironically, this has not been
the case for instance; inflation has continuously rage against the economy.
inspite of the numerous natural attraction of investment within the economy
such as the abundance of natural resources, extensive markets and enormous
amount of entrepreneurial skills e.t.c. This is as a result of several
unfavorable factors such as uncertainty about the policy environment, restrictive
and cumbersome regulatory framework, inadequate incentives, political
instability, reduction in cash flow as a result of weak demand and high
interest e.t.c. These has this worsened the unemployment situation which
otherwise should have been reduced by huge investment in infrastructure and
increase the infrastructural level for massive employment opportunities and
it is evident that a conflict exists between the expected role of
infrastructure in the overall economic development of Nigeria and
what infrastructure actually does. Therefore, this study is justified in trying
to examine the actual role infrastructure played in the economy compared with
the expected role of infrastructure. The study will also recommend ways in
which infrastructure development can be improved in order to boost the growth
and development of the economy likewise to improve the living standard of Nigeria
1.10 SCOPE OF THE STUDY
study covers the period 1981-2005. This was the period during which the Nigeria
government failed to improve on infrastructure and the time of democratic
moments when bold steps were taken through the establishment and implementation
of various policies to speed up the development and expansion of infrastructure
in the Nigeria
economy. The study is particular to Nigeria economy, it tries to
explain the linkage between infrastructures and its effects on the economic
growth of Nigeria.
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