NILE UNIVERSITY OF NIGERIA

FACULTY MANAGEMENT SCIENCE

DEPARTMENT OF PUBLIC ADMINISTRATION

COURSE CODE: PUB 416

COURSE TITLE: Development Administration
CREDIT UNIT: Three (3) Credit Units
COURSE LECTURER: Dr. Usman Emmanuel Bassi

DEFINITION AND ORIGIN OF DEVELOPMENT ADMINISTRATION

The concept of Development Administration is a development of the post 1945 era. The
term came into use in the 1950s to represent those aspects of public administration and
changes in public administration, which are needed to carry out policies, projects, and
programs to improve social and economic conditions. During a period of 15 years
following the end of World War II, in 1945, colony after colony threw off the imperial yoke.
Country after country achieved independence and political autonomy. This new status
gave promise of freedom and liberty and self-determination in political systems of
representative democracy. It gave hope of greater individual freedom and equality of
treatment in the society. Even in countries which had not been colonies but had been
administered by some other form of authoritarian government, this was a generation of
rising and insistent expectations pressing for rapid political, social, and economic change.
New governments and their bureaucracies, their administrative agencies and processes,
were expected to give reality to these anticipated fruits of independence and liberty.
These new functions, these demands upon the administration system, were not only
enormous in size and weight; they were novel and complex in character.
The task of development in the developing countries is said to be a most challenging one
for a variety of reasons: first, because, unlike in the advanced countries where the
pressure on the government is for more social services for a society already at an
advanced stage of development in which most of its members possess and enjoy the basic
necessities for a decent life, in the new nation seven, those basic necessities are either
non-existent or minimal for the vast majority of the population. Moreover, the task of
development was an urgent one since upon it depended the very survival or nation itself.
The people had also been made to expect that independence would bring about an
immediate improvement in their conditions.
It was therefore; felt that the traditional model of public administration would be in
adequate in providing guidelines for building a nation-state out of traditional society.
Thus, a new model of administration termed development administration-especially
within the broader field of public administration was adopted in the new nations to
'modernize' their economies, and accelerate development to be equivalent, eventually, to
the advanced countries. It was reasoned that a technocratic bureaucracy f o l l o w i n g
rational-legal principles as set out by Max Weber would be all that was needed to
overcome tribal authority and superstition, combined with the application of technical
expertise to agriculture and industry.
Development is a widely participatory process of directed social change in society,
intended to bring about both social and material advancement including great equality,
freedom, and other valued qualities for the majority of the people. Development as a
concept is a by-product of the comparative study of public administration in developing
countries that are making efforts to attain self-generated economic growth. The term
‘development administration’ was first coined by U.L. Goswami, an Indian scholar. He
used this term in his article entitled. The Structure of Development Administration in
India, published in 1955. However, it is George Gant, an American Scholar, who is regarded
as the father of development administration. He too started using the term during the
same period. His book ‘Development Administration: Concepts, Goals and Methods’ was
first published in 1979.
Edward Wiedner is the foremost proponent of development administration. He is also the
first to conceptually explain the definition of development administration.
Development administration is the process of executing developmental programs and
projects in the direction of nation-building and socio-economic progress through public
administration. There are two main issues identified as development administration goals
1. Nation-building and
2. Socio-economic development.
The term ‘development administration was first coined in 1955 by an Indian scholar U.L
Goswami in his writing “The Structure of Development Administration in India”
According to Ferrel Heady, “George Gant himself is generally credited with having coined
the term ‘development administration’ in the mid-1950s”. Prabhat Datta, on the other
hand, observes: “Though the term ‘development administration’ is claimed to have been
coined by the Indian scholar, Goswami, development administration is essentially a
Western concept. The term was first used by Donald C. Stone."
EXPONENTS OF DEVELOPMENT ADMINISTRATION
Edward W. Weidner, Fred W. Riggs, Joseph La Polombara, John D. Montogomery, Ferrel
Heady, Milton J. Esman, Albert Waterson, Lucian Pye, Merle Fainsod, Alfred Diamant,
Irving Swerdlow, William J. Saffin, and Han been Lee have contributed to the
popularization and growth of the concept of development administration in the field of
public administration.
DEFINITIONS: Some of the important definitions of development administration are as
follows:
George Gant: ‘Development Administration is that aspect of public administration in
which the focus of attention is on organizing and administering public agencies in such a
way to stimulate and facilitate defined programmes of social and economic progress. It
has the purpose of making change attractive and possible’.
He further stated: ‘Development administration denotes the complex web of agencies,
management systems and processes, a government establishes to achieve the
development goals. Development administration is the administration of policies,
programmes and projects to serve development purposes.’
Donald Stone: ‘Broadly, Development Administration is concerned with achieving
national development.’
Merle Fainsod: ‘Development administration is a carrier of innovating values. It embraces
the array of new functions assumed by developing countries embarking on the path of
modernization and industrialization. Development administration ordinarily involves the
establishment of machinery for planning, economic growth and mobilizing and allocating
resources to expand national income.’
Jose V. Abueva: ‘Development Administration is the administration of development
programmes in the economic, social and political spheres, including the programmes for
improving the organization and management of the bureaucracy as a major instrument
for national development.’
K. R. Hope: ‘Development Administration in contextual and operational terms implies
efficient organization and management of the development activities of a nation to
attain the goals of development.’
Katz: ‘Development administration’ is generally similar to the traditional Concept of
Development ‘public administration’ in its concern with how a government implements
its rules, policies, and norms. It differs, however, in its objectives, scope, and complexity.
Development administration is innovative since it is concerned with the societal changes
involved in achieving developmental objectives.’ Then, despite his first sentence, he adds:
‘It follows... that the administrative functions of decision, specification, communication,
and control may take different forms in development administration as compared with
traditional public administration.’
Esman says of development administration ‘…central core is the role of governmental
administration in inducing, guiding, and managing the interrelated processes of nation
building, economic growth, and societal change.’
Prof. S. R. Maheswari: ‘The administration of developmental programs designed to
promote nation-building and socio-economic development and the concomitant
development of administrative practices and institutions necessary for the
implementation of such programs.’
Development administration can therefore be defined as a system of administration
geared towards development. It initiates and manages innovation-political, s o c i a l and
economic. Development administration is characterized by innovation and social
engineering. Explaining development administration, Fainsod (1963:1-5) says:
It is a carrier of innovation values. It embraces the array of new functions assumed by
developing countries embarking on the path of modernization and industrialization.
Development administration ordinarily involves the establishment of machinery for
planning economic growth and mobilizing and allocating resources to expand national
income.
Main objectives: The development administration is an action-oriented and goal-
oriented administrative system. The Development Administration has following
objectives:
a. The application of innovative strategies for development.

b. Emphasis on development at the grass-roots level.

c. Development has to be a need-oriented and self-reliant process.

d. Stress on social development and human capital as a major resource.

e. Development has to be viewed not merely as a technological problem but also as

an ideological norm.
f. It gives birth to new administrative approaches like ecological studies in
administration.
g. Profound and rapid change in order to establish a distinct and just social order.

h. Recognizing and highlighting the unity, rather than dichotomy between politics
and administration.
i. Effective and efficient use of scarce resources.

j. Creation of a politics-administrative environment that is oriented towards

securing the basic needs of the population.
Thus, modernization, socio-economic, and institutions were regarded as major objectives
of development administration.
Development administration is the process of executing developmental programs and
projects in the direction of nation-building and socio-economic progress through public
administration. There are two main issues identified as development administration goals
1. Nation-building and
2. Socio-economic development.
The term ‘development administration was first coined in 1955 by an Indian scholar U.L
Goswami in his writing “The Structure of Development Administration in India”.
Edward Weidner is the first scholar who gave a proper systematic explanation of the
development administration. According to him, development administration is “an action-
oriented, goal-oriented administrative system…guiding an organization towards the
achievement of progressive political, economic and social objectives”.
Other contributors to development administration are George F. Gant, F.W. Riggs, Han Bee
Lee, John D. Montgomery, and Alfred Diamant.
THE ORIGIN OF DEVELOPMENT ADMINISTRATION
Following the socialist revolution in Russia in 1917 private ownership of the means of
production was abolished. With that went private enterprise and the free market
mechanism as vehicles for economic development. Planning and public enterprise were
instituted in its place. The results were remarkable. The state mobilized high rates of
public savings and investment. Capital accumulation and national income grew at
unprecedented rates. By the end of the Second World War, the Soviet Union emerged as
the second big power in the world. In about four decades, from a situation of under
development and backwardness the Soviet Union became a developed country.
This was, thus, a very successful example of planned economic development for the
countries developing later to learn and emulate. The strategy adopted by Third world
countries was greatly influenced by the soviet experience. However, with the collapse of
socialism, planned economy gave way for a free market system in the Soviet Union (now
Russia).
You may have heard the Great Depression of 1929, also called the World Economic Crisis.
What happened was that the market system, especially in the industrial countries of the
West, ground to a halt. There was over production; stock of unsold goods piled up;
factories were shut down; share markets collapsed; unemployment soared up. All this
meant a complete mismatch between production and market demand. It had been known
that the free-market system did not ensure smooth development of an economy based
on private enterprise. But the Great Depression made it crystal clear for everyone to see.
Incidentally, one should also note that the Soviet economy, being a planned economy
remained unaffected by the Great Depression. How was the crisis of the Great Depression
handled? By state intervention.
The states in the badly affected countries of the West intervened to push up market
demand by undertaking public works and financing them by money creation (printing
currency notes, also known as deficit financing). This step generated additional income
and employment. Market demands for goods and services gradually picked up as a result
of this policy. In the course of time, normalcy was restored and development resumed.
This course of state intervention is also known as the 'Keynesian solution ‘of the economic
crisis, named after the famous English economist, I.M Keynes, who provided the economic
theory on which this solution was based. In the United States, this course of state
intervention came to be known as the new deal.
The experience of the Great Depression had, apart from other things, one very major
effect. The faith in a laissez-faire state, a fence-sitting state not actively intervening in the
economic life to control the functioning of the market, was shaken. Since then, state
intervention in the market system wherever and whenever necessary, has become a
normal feature of the capitalist. So far, this was occasionally practiced in a war economy
or in an emergency. Secondly, as noted earlier, the state in these countries oversees the
economy and engages in indicative planning (where the state does not actively play a role
in economic development but merely indicates the direction in which private enterprise
is to move).
Finally, it plans for, and undertakes, public works, especially in the field of social
infrastructure. Such developments in the developed capitalist countries, following the
Great Depression, had a lesson for the developing countries. The lesson was: economic
Development could not be left wholly to private enterprise based on the free market and
the state had a role to play in it. Shortly after the experience of the Great Depression came
the Second World War (1936-45). It necessitated not just state intervention in the
capitalist and fascist countries like Germany and Japan but an overall control of the
economy, Its regulation and production planning for meeting the war needs. This is what
is known as' planning of the War-Time Economies'. After the war, rehabilitation and
reconstruction required the active role of the state. This historical experience favours
development administration.
Alongside the above development, there arose the nation of welfare state which finally
came to be accepted in practice in all market economies after the war. Apart from its
intervention is role, a welfare state has also to correct the negative aspects of market-
based development and be concerned with the wider issue of social welfare. In the
develop countries of the West, the state makes a size able expenditure on old-age security,
unemployment benefits, health, education and such other social services. All these are
known as social security or welfare measures. Provision for all these requires planning. A
major negative effect of market-based development which has emerged lately is
environmental pollution with ecological degradation.
The welfare state is required not only to protect the environment and the ecology but also
to conserve and plan for restoration and development of the natural resources. The free
market mechanism, based on the accounting of private profit does not provide for these.
This also is a historical experience favoring development administration can be said to
have started in the developing countries after World War
The colonies started agitating for independence and many of them got it. However, most
of the newly independent countries were poverty stricken but the masses had been led
to expect that independence would bring about an immediate improvement in their
conditions. The non-realization of these expectations bred a mood of impatience. Unless,
therefore, improvement was affected as speedily as possible, this mode of impatience
could explode into violent reactions which would endanger, if not destroy, the state itself.
The governments of these nations quickly realized that the idea of gradual development
might not serve their purpose well. They were convinced that relevant administrative
theories and procedures would have to be adopted to modernize their economies and
accelerate development to be equivalent, eventually, to that of the West. Because there
was a chronic shortage of capital (money or wealth used to start a business) and capital
markets (where money used to start a business is sourced) such that private ownership
 would necessarily mean foreign Ownership and because the new nations wanted to
preserve their independence, they had to close their doors to foreign investors. It was
therefore, felt that government was the only agent organized enough to employ its
machinery to induce, promote, and manage socio-economic development.
Thus, in the post-independence period, the government became the prime agent of
economic development, providing infrastructure and producing goods and services, often
provided through the mechanism of public enterprise. In Nigeria, for example, most of
the known hospitals were built by governments and corporations like the Nigeria Railway
Corporation, National Electric Power Authority, and Nigerian Ports Authority are owned
by the Federal government. In 1977 Tanzania's 400 state-owned enterprises accounted
for 38 percent of gross fixed capital formation, and a similar level in Ethiopia (Jorgensen,
1990:62). The convergence of these streams of thought led the students of comparative
public administration to start what is now known as development administration.
FACTORS RESPONSIBLE FOR THE EMERGENCE OF DEVELOPMENT ADMINISTRATION
The following factors may be attributed to the growth of the concept of Development
Administration:
1. Emergence of newly independent developing countries: The traditional concept of
public Administration was transforming with the emergence of the ‘Welfare state’. The
narrow vision of public administration as “law and order machinery or revenue
administration” underwent overhauling to get armed with the socialistic-centered path
of the welfare state during the 20th Century. The development administration as the
movement was a response to the emergence of the ‘Newly Independent states’ in Asia
and Africa, and they were trying to address the problems of poverty, unemployment,
illiteracy, malnutrition etc. The governments in these countries were entrusted with an
agency role of welfare and development. The exigencies of time have made the
administration in developing countries development – oriented or welfare oriented.
2. Development schemes in the developing countries: These developments have had a
profound impact on the public administration. Development becomes a multi system
management. Complex socio-economic compendium gets processed by the political
systems for gaining balanced change. Developmental Administration in developing
countries represents a cluster of politico-bureaucratic nexus. Further, most developing
countries have realised that national development is essentially an integrated process of
change. It is a dynamic process directed towards transforming the entire society,
enmeshing its economic, social, political and administrative aspects, for an all-round,
balanced change. School of Distance Education
3. Establishment of Comparative Administration Group in 1960: D. Waldo, Fred Riggs,
Weidner etc were talk about New Public Administration. These scholars in 1968, in
Minnobrook conference, attempted to define public Administration a new. They focused
on the concept of development administration, in different ecological settings, operates
in order to achieve a set of social goals. The CAG attempted to make comparative study
of Public Administration as evolved in the developed nations with as adopted in
 developing as well as under developed nations of the world. Hereinafter the public
administration treated as a tool for ensuring development in developing and under
developing nations.
4. Attempt to make Area Studies in Administration: Area studies mean that we have to
understand the administrative system of each country with its own social, economic,
cultural and regional uniqueness. For instance, the administrative tactics used by Indian
Government must have close bearing with the plural culture of India. Nature of
distribution of power, role of civil service, the core areas where the governments have
given more importance like irrigation, agriculture, infrastructure, education etc.
5. Administration is not a technical matter alone: Development administration is not the
application of administrative theories for the improvement of administrative machinery
alone. It is a legitimate method for social transformation. It follows an evolutionary
process though which transformation of society is made possible. It fetches both internal
and external reformation; internally the system corrects itself to absorb social needs and
externally the society becomes capable of accepting the government as their sole agency
of social change.
SCOPE OF DEVELOPMENT ADMINISTRATION
There are two schools of thought that deal with the scope of development administration.
(i) Narrow view of development: This deals with the programme-oriented approach
given by Fainsod and John Montgomery; and
(ii) Broader view of development: This deals with the action-oriented approach given
by Lucian Pye, Riggs, and Edward Weidner.
About the first approach, Merle Fainsod observes that ‘development administration is a
carrier of innovating values. It embraces the array of new functions assumed by
developing countries embarking upon the path of modernization and industrialization.
It ordinarily involves the establishment of the machinery of planning, economic growth
and mobilizing and allocating resources to expand national income’. John Montgomery
said that: ‘Development administration is one which carries out planned change in the
economy, in agriculture, industry or the capital infrastructure supporting either of these
and to a lesser extent in the social services of the state, especially education and public
health.’
The scholars who stood for the action-oriented approach are Lucian Pye, Riggs and
Weidner. According to Edward Weidner, ‘Development administration is directly
concerned with goal oriented and emphasis on nation building and socio-economic
progress’. According to Fred Riggs, ‘Development Administration is characterized to both
administrative problems and governmental reform. The problem relate to
governmental tasks connected with agricultural, industrial, educational and medical
progress.’
By taking into account the functional approach, Merla Fair Soul, an eminent scholar, has
explicated the notion of development administration. This administration clasps the new
range of functions assumed by developing countries boarding on the path of
modernization and industrialization. It encompasses the establishment of apparatus for
planning economic growth and mobilizing and distributing resources to increase the
national income.
Thus, modernization, industrialization and institution building for planned economic
growth and development create some vital dimensions of development administration.
The notion of development has two essential facets. First, it looks into the process through
which a public administration system guides socio-economic and political change in the
social order, it measures the growth in the administrative capabilities; second, it studies
the crescendos of alteration within the administrative system i.e. to administer as a
mechanism of national development. The former refers to the administration of
development, while the second is related to administration development.
To briefly describe, the scope of developmental administration includes the following
areas:
1. Extension and community services: These services constitute a form of
partnership between the government agencies and the people. The government
provides technical, institutional or financial services while the people through
voluntary organization, provide active participation to make the operational
services successful. The developmental administration is based on the realization
that community participation in the task of national development is a sine qua non.
Thus, developmental administration makes investigation of social situations,
ascertains better devices and instruments for dealing with social disabilities,
psychological handicaps and formulates comprehensive social and economic
policies.
2. Programme planning: After the formulation of comprehensive social and
economic policies, another main task of developmental administration is
programme planning. This involves an accurate analysis of available supplies and
inputs and their management in such a way as to obtain the optimum outputs.
Much of the failure in developmental administration is due to faulty programme
planning either on account of lack of measurement and systematic estimation of
available resources or political pressures.
3. Project Management: Another area of developmental administration is project
management. The present trend is towards high-cost projects whether in the field
of irrigation, power or energy, environmental pollution, production of goods etc.
The Tehri Dam Project, Karnal Refinery Project, Cavery Project, are some such
examples.
4. Area Development. By area development, we mean the socio-economic
development of a particular area like a tribal area, hilly area or any backward area.
Earlier, it was assumed that the problems arising at area level can be adequately
dealt with by local people and institutions.
5. Personnel Development. It is also the responsibility of developmental
administration to ensure the availability of trained personnel at each level, organize
training, make effective use of trained personnel, and adopt improved methods of
planning and management. It would, therefore, be necessary for developmental
administration to organize training programs and carry out research in the various
aspects of management like policy formulation, decision-making, co-ordination,
supervision, directing etc.
FEATURES OF DEVELOPMENT ADMINISTRATION
The following features of development administration can be identified –
1. Action and Goal Orientation: Development administration is action as well as goal-
oriented. This means that it is related to achieving certain programmatic results.
Developing countries need to address socio-economic problems, and this is exactly
why development goals are set and development administrations take action
towards those goals.
2. Socio-economic change: Development administration is also change-oriented.
Here change means the socioeconomic change in underdeveloped or developing
countries. So, development administration is concerned with bringing socio-
economic development.
3. Client Orientation: It has to do with satisfying the needs of its clients. The need for
clients means the need for citizens. It is concerned with the uplift of the poorer
section of the society.
Almost every country announces various schemes for the betterment of the lower
class or community in the society and all those schemes are managed by the public
administration and this kind of administration is called client-based development
administration.
4. Commitment Orientation: The development administration is committed to its
goals and responsibilities. It has high morale and motivation in working conditions
to achieve developmental goals.
5. Time Orientation: It is time-oriented. The development administration has to
perform all its developmental tasks within a time frame. All development projects
have to be implemented within the time frame prescribed by the government.
6. Ecological Orientation: It is an open system. It continuously interacts with every
element of its environment (Social, economic, and political systems). It is
influenced by every social, political, and economic environment and influences
them as well. F.W. Rigg’s ecological perspective of public administration is a great
example of this.
7. Participation Oriented: The Development administration adopts the policy of
administrative collaborative and participatory systems for its purpose. Here,
people are not just considered passive recipients of services. The active
 participation of the people in the formulation and implementation of
developmental policies is given priority.
The expansion of the decentralized administrative system is recognized in the
development administration. Local self-government ensures people’s participation
in their grassroots administrative system.
8. Responsiveness: It is very responsive. That means it is responsive in terms of its
service. The administration implements every public welfare project of the
government. So the more responsive it is, the more development extends.
9. Innovativeness: Development administration is innovative as it relates to social
change in achieving developmental objectives. It is dynamic and progressive in
thought and action.
10. Integrated and holistic process: Development administration is inter-related in
nature. It refers to the structure, organisation and behaviour necessary for the
implementation of schemes and programmes of socio-economic change
undertaken by the governments.
11. Its scope of operation is wide: Traditional public administration was limited to its
function of maintaining law and order in the society. But the scope of development
administration is much wider in comparison to the earlier one.
12. Stress on planning: The development administration seeks change through proper
planning. The administrative capabilities are strengthened to achieve
developmental goals. This objective is closely linked with the planning. Because,
the planned development is intended to achieve specific results within the
specified time.
13. Democratization of Administration: Space for people’s involvement in the
decision-making process is another feature of development administration.
Citizen’s Charter, Grievances cells and the roll of Grama Sabha etc. are examples of
popular means of participation in decision-making in the government at different
levels by the people.
14. Interaction between Administration and Environment: FW Riggs placed greater
emphasis on the ecological dimension of development administration. Because the
development administration is directly related to the environment in which it
works.

DEVELOPMENT ADMINISTRATION VS TRADITIONAL ADMINISTRATION

The emergence of development administration has led certain scholars to make a
distinction between development and traditional administration. However, some scholars
are a bit apprehensive about making a distinction between the two. The reason is that if
we make a distinction between the two, then the government servants working under the
system of traditional administration will be labelled as unsuitable employees and will be
regarded as men of orthodox attitudes. Moreover, the term development is not correctly
analysed in its association with the prevailing governmental machinery. The other word
for traditional administration is general administration. The distinction between the two
can be made on the following lines:
I. Traditional administration did not respond to the demands of socio-economic
development, especially in colonies such as Thailand and Ethiopia. They were not
expected to be quick to respond to legislature or other representatives of the
people. Development administration responds to the socio-economic and political
needs of the people.
II. Traditional administration is a creation of industrial revolution, whereas
development administration is a product of post-colonial and post-World War II.
III. Development administration has more emphasis on approachable administration
in contrast to traditional administration.
IV. Development administration has more rigorous and all-encompassing interest in
planning, whereas traditional administration has partial concern in planning.
V. Traditional administration is supervisory and status quo-oriented, while
development administration is evolving and change oriented.
VI. Development administration is much more revolutionary and innovative than
traditional administration.
VII. Traditional administration focusses on chain of command-oriented structure,
whereas development administration lays emphasis on group orientation.
VIII. Development administration is more evolved, whereas traditional administration
is more consolidated. The bureaucracies were highly centralized. The authority was
concentrated at the centre level only. The top officials did not like to share their
power with their juniors.
IX. Development administration is vigorous, while traditional administration is not.
X. Traditional administration is limited, while development administration is
participatory and involved in its nature.
XI. Traditional administration is more inner-looking, while development
administration is outer-looking.

The differences between development administration and traditional administration as

follows.
Development Administration Traditional Public Administration
1. Change – oriented 1. Status –quo oriented
2. Goal and result oriented 2. Emphasis on economy and efficiency
 3. Flexible and dynamic 3. Hierarchal and rigid
4. Its objectives are complex and multiple 4. Simple and limited objectives
5. Concerned with new tasks 5. Concerned with routine operations
6. Believes in decentralization 6. Believes in centralization
7. Stress on planning 7. Does not rely much on planning
8. Creative and innovative 8. Resists organizational change
9. Stress on participation of people 9. Organizational stress due to control and
command structure.

APPROACHES OF DEVELOPMENT ADMINISTRATION

The various approaches of development can be categorized under two major headings,
i.e., Initial Approaches and Modern approaches.
1. Initial approaches: The scholars who supported the development theory during the
era of the 1950s and the 1960s view the term in the Western context. They believed
that developing countries and under-developing countries had to progress in a
Western way. The promoters of this approach have confidence that the Western
developed societies have attained administrative proficiencies that are transferable to
underdeveloped or developing countries. The supporters of this approach were of the
view that if bureaucratic changes can be brought about then the political development
will be achieved more easily. If such a change is accomplished, then political and
economic development can proceed more rapidly. According to them, the indicator
for the development is Gross National Product through which the development of the
Third World countries can be measured. The following approaches fall under this
ambit:
2. Economic approach: According to this approach, the underdeveloped countries
should save more and invest it as a capital. Economic progress is possible only through
the process of industrialization. The promoters of this approach are Keynes, J.S. Mill
and Adam Smith, among others.
3. Diffusion approach: According to this approach, the third world countries tried to
embrace capital, technology and social structure from westernized countries. Hence,
development is explained in terms of diffusion. It was propounded by R.S. Edari and E.
M. Rogers. In the work, Diffusion of Innovations’, Rogers defines diffusion as the
process by which an innovation is communicated through certain channels over time
among the members of a social system. He also emphasized industrialization for
development.
4. Psychosomatic approach: This approach laid emphasis on individual personality
mannerisms like accomplishment-enthusiasm and change orientation. The chief
exponents of this theory are David McClelland, Everett Hagen and Inkeles. Hence, this
approach emphasizes governmental reforms in administrative structural
arrangements, personnel NOTES Self-Instructional Material 29 Various Approaches to
 the Study of Development Administration management, administrative organization
and tax and revenue collection.
5. Modern approaches: During the 1970s and 1980s, the development theorists laid
emphasis on context- based approaches to development. There is no single concrete
theory of development. It looks into the following features:
▪ Widespread involvement, information sharing
▪ Independence and objectivity in development
▪ Restrictive growth of population
▪ Greater equality in the dissemination of development aids.
DEVELOPMENT ADMINISTRATION AND THE ADMINISTRATION OF DEVELOPMENT
There is a conceptual difference between development administration and administration
of development. But the relationship between the two is like that of an egg and a chicken,
one cannot continue without the other.
The main goal of development administration is to create a better social, political, and
economic environment. That is, it is related to socio-economic change and nation-
building. It focuses on the outcomes of the administrative work related to the nation’s
development.
On the other hand, Administration is the key to the administration of development or
administrative development. In every state system, the economy or social system is
developed, similarly, the administrative system is also developed. Whatever the form of
the state, that is, whether it is developed, developing, or underdeveloped, an
administrative system is formed everywhere.
The main function of the administrative system is to build resources and use them for
specific purposes in accordance with political directives.
In that sense, it can be said that there are a number of indicators that can be used to
understand the administration of development, such as
▪ Increasing budget allocations,
▪ Specializing administrative staff,
▪ Increasing diversity, efficiency, and capabilities.
▪ Professionalization and specialization of its personnel,
▪ Administrative reorganization and rationalization
On the other hand, the main vision of the development administration is development.
However, in order for the development administration to be successful, it has to take the
help of the administration of development, or simply put, it has to take the help of the
administration for the successful implementation of development work.
As a result, although development administration and administrative development are
interrelated, they are separate issues.
CHALLENGES OF DEVELOPMENT ADMINISTRATION
Development administration is a state-centric and citizen-centric administration. This
globalized world is transforming from a state-centric to a market-centric approach driven
by the New Public Management.
1. The inadequate concern with people-driven development: Development
administration has been developed keeping in view the objective of people-oriented
development. In any country, people live in different communities. In such a situation,
no general policy can bring about the overall development of the people. This requires
community-oriented development policies.
2. Bureaucratic domination in development: The role of bureaucracy as the main tool of
development is also questioned. The bureaucracy is an efficient instrument with which
administrative policies are implemented. But the bureaucracy proved to be a very
powerful institution for the common backward people.
In fact, bureaucratic power goes hand in hand with political power. In the case of
development projects in such organizations, there are allegations of nepotism.
Therefore, the general public has doubts about the importance of this institution in
the overall development of the state.
3. Political capability and politicization of development: The biggest problem of newly
independent countries is the lack of adequate political capabilities and the
politicization of development. Due to the weakness of both the political parties and
the interest groups, the correct problem is not represented. Its effect can be seen in
the policy. Fails to administer the proper implementation of that policy.
4. Low priority for quality assurance, monitoring, and evaluation: The policy is
formulated in the interest of socio-economic development but there is a lack of proper
assurance about its outcome. At the same time, it is not seen how effective those
projects are, that is, they are not properly evaluated.
5. Administrative Corruption: The biggest challenge for the development
administration is administrative corruption. The government allocates a lot of money
for development projects and that money is spent through the administration.
Corruption at the administrative level is often seen in developing countries. That
means that money is not spent in the right place.
6. Excessive Political Control and Nepotism in Administration: We call people-oriented
governments and welfare states the maximum state. In such a state system, the state
has a huge amount of power in its hands so that it can guide the development process
in the right way. But in reality, this state cannot function properly without effective
leadership.
In almost every developing country, politically influential people abuse their political
power to influence the administration. Political parties also in many cases appoint
 people of their choice in the administration. So the allegation of nepotism appears to
be fatal.
7. Lack of Bureaucratic professionalism: Different departments are required for different
types of work. In developing and underdeveloped countries, there is no separate
division for each job. As a result, there is a lack of bureaucratic professionalism in the
proper implementation of the policy.

RELATED CONCEPTS IN DEVELOPMENT ADMINISTRATION

Development
It is debatable whether listing the attributes of development does not constitute more
useful knowledge than the search for a precise definition of the concept. This is so because
development as a concept is multi-dimensional and thus appears elusive.
However, it is not altogether a semantic escapism for economists to search for a precise
definition of the concept and how to separate it from related concepts (for example
growth, modernization, undevelopment and underdevelopment). The concept
development is used to refer to the total transformation of a system: thus, when used to
describe a nation, describes the transformation of the various aspects of the life of the
nation. In fact, development implies a progression from a lower and often undesirable
state to a high and preferred one.
Development also can be defined in terms of attacking wide-spread absolute poverty,
reducing inequalities and removing the spectra of unemployment - all these being
achieved within the context of a growing economy. This led to their definition of
development in terms of both redistribution with growth and meeting the basic needs of
the masses of the population. Seers who posed the most fundamental questions relating
to the meaning of development when he wrote:
The questions to ask about a country's development are therefore what has been
happening to poverty? What has been happening to unemployment? What has been
happening to inequality? If all three of these declined from high levels, then beyond doubt
this has been a period of development for the country concerned. If one or two of these
central problems have been growing worse, especially if all three have, it would be strange
to call the result development even if percapita income doubled.
This way of posting the questions focuses the attention on the fundamental problems of
underdevelopment w h i c h economic development is supposed to solve .While one may
agree that the concept of development is a normative concept in the sense that it implies
progress from a less desirable state to a more desired one, it would be difficult to
find rational beings who would argue that the objective of eliminating poverty, inequality
and unemployment for the largest majority of the population is not a desirable one.
Hence, the emphasis today in the development literature is on meeting basic needs and
redistributing the benefits of growth.
According to Rodney (1974), development is a many-sided process. At the individual level,
it implies increased skill and capacity, greater freedom, creativity, self- discipline,
responsibility and material wellbeing. At the level of social groups, development implies
an increasing capacity to regulate both internal and external relationships. Rogers (1969),
defines development as a type of social change in which new ideas are introduced into a
social system in order to produce a high per capital income and levels of living through
more modern production methods and improved social organisation.
Development canal so be defined as the coincidence of structural change and liberation
of men from exploitation and oppression perpetrated by international capitalist
bourgeoisie and their internal collaborators. Following this definition, therefore, 'real
development involves a structural transformation of the economy, society, polity and
culture of the satellite that permits the self-generating and self-perpetuating use of
development of the people's potential. Rostow (1960) sees development in terms of
modernizing a basically traditional society or a subsistence sector of a developing society
with the aim of attaining sustained growth. He also regards four stage as essential in
delineating the process of development: the traditional society, the pre-conditions for
'take-off', the 'takeoff' and finally sustained economic progress.
Rostow's stages of growth have not received unreserved acceptance. Caincross (1961), for
example, has quarreled with the overlapping nature of the characteristics of these stages
of development. Szentes sees the definition of these stages of linear growth as
tautological and arbitrary. This, he maintains, would lead to a faulty interpretation of
economy and society, the essence of social development. Trade theorists like Prebisch,
Lewis and Singer who are critics of the conventional international trade theory see
development in terms of changes in external trade in particular and contemporary
international economic relations and the effects of colonialism as constituting obstacles
to the development of the periphery of the world economic system.
Wallman in his book, Perceptions of Development, also defines development as an
inevitable but certainly uni-linear movement towards a condition of maximum
industrialization, modern technology, high (est) GNP and high(est) material standards of
living. He went further to say that philosophically development implies’ progress' which
itself implies evolution toward some ultimate good. Development, thus, is an elusive term
meaning different things to different groups of social scientists. Most would agree
however that development implies more than just arise in real national income; that it
must be a sustained secular rise in real income accompanied by changes in social attitudes
and customs, which have in the past impeded economic progress.
When development is used to measure economic development, the issue of definition
becomes more complex. No single definition of economic development is entirely
satisfactory and it has been defined in various ways. For the average person, the term
economic development refers simply to achievement by poor countries of higher levels of
real per capital income and of improved condition of living for their people. In a technical
sense, economic development refers to a process of economic growth within an economy,
the central objective of the process being higher and rising real per capital income for that
economy (with the benefits of this higher and rising income being widely defused within
the economy).
Rodney (1974), also defines economic development as a process where a society develops
economically as its members increase jointly their capacity for dealing with the
environment. He, however, argues that development should not be seen purely as an
economic affair, but as an overall social process which is dependent upon the outcome of
man's efforts to deal with his natural environment. Some economists have defined
economic development as growth accompanied by change in the structure of the
economy in the country's social structure, and its political structure.
According to Jhigan (1980), economic development can be defined in three ways: One is
to measure economic development in terms of an increase in the economy's real national
income over a long period of time. But this is not a satisfactory definition. This definition
fails to take into consideration change in the growth of the population. If arise in the real
national income is accompanied by a faster growth in population, there will be no
economic development.
The second definition relates to an increase in the per capital income of the economy over
a long period. Economists are one in defining economic development in terms of an
increase in per capital real income or output. Meirer (1964) defines economic
development as the process whereby the real capita income of a country increases over
a long period of time. Baran (1957) says let economic development be defined as an
increase overtime in per capital output of materials goods.
According to Buchanan and Ellis (1955), it is income potentialities of the underdeveloped
areas by using investment to effect those changes to augment those productive resources
which promise to raise real income per person. These definitions also have difficulties. An
increase in per capital may not raise the standard of living of the masses because there is
the possibility of increased income going to the few rich instead of going to the many poor.
There is also a tendency to define economic development from the point of view of
economic welfare.
Economic development is referred to as a process of income and the satisfaction of the
preferences of the masses as a whole. In the words of Okun and Richardson (1961),
economic development is sustained, secular improvement in material wellbeing, which
we may consider to be reflected in an increasing flow of goods and services. This definition
is also not free from limitations. First, sustained growth in real national income does not
necessarily mean improvement in economic welfare. A mere increase in economic welfare
does not lead to economic development unless the resultant distribution of national
income is considered just.
GROWTH
Meaning of Growth
Let us look at some of the definitions of growth as given by some writers: Kuznets defines
growth as a long-term rise in capacity to supply increasingly diverse economic goods to
its population, this growing capacity being based on advancing technology and the
instructional and ideological adjustments that it demands.
This definition has three components:
a. The economic growth of a nation is identified by the sustained increase in the
supply of goods.
b. Advancing technology is the permissive factor, which determines the growth of
capacity in supplying diverse goods to the population.
c. For an efficient and wide use of technology, institutional and ideological
adjustments must be made to affect the proper use of innovations generated by
advancing stock of human knowledge.

The above definition supersedes the earlier definition by Kuznets. Kuznets (1955) defining
economic growth as sustained increase in per capital or per worker product, most often
accompanied by an increase in population and usually by sweeping structural changes.
According to Schumpeter (1934), growth is a gradual and steady change in the long run
which comes about by a general increase in the rate of savings and population. Some
economists generally use the term economic growth to refer to increase in a country's
real output of goods and services or more appropriately real output percapital.
As a concept, growth has a larger meaning and a more restricted meaning. Strictly it refers
to sustained increase in productivity over a relatively long period or long periods each
covering at least 10 years. An index of such growth at the national level is not an increase
in national product in concrete terms. Growth modifies structures, attitudes and
techniques, and where it is sustained; its economic effects are considerable.
In the larger sense, growth includes three variables: an upward trend in gross national
product and revenue over a long period; a self-sustained character of the growth and
which is largely irreversible and growth also movement of structural transformation.
Conceptually, growth implies change leading to increase in size including height and
weight. Thus, economic growth means increase in economic resources or increased
income. A nation is said to have recorded economic growth if that nation has experienced
increase in national income or in capital income.
Economic Growth versus Economic Development
The term economic development is used interchangeably w i t h such terms as economic
growth, economic welfare, economic progress, and secular change. However, some
economists like Schumpeter and Hicks have made a distinction between the more
commonly used terms, economic development and economic growth. Economic
development refers to the problems of underdeveloped c o u n t r i e s and economic
growth to those of advanced countries. Development, according to Schumpeter (1934), is
a discontinuous and spontaneous change in the stationary state which forever alters and
displaces the equilibrium state previously existing while growth is a gradual and steady
change in the long run which comes about by a general increase in the rate of savings and
population. Hicks (1957) point out that the problems of underdeveloped countries and
economic growth to those of advanced countries.
Development, according to Schumpeter (1934), is a discontinuous and spontaneous
change in the stationary state which forever alters and displaces the equilibrium state
previously existing while growth is a gradual and steady change in the long run which
comes about by a general increase in the rate of savings and population. Hicks (1957)
points out that the problems of underdeveloped countries are related to the development
of unused resource even though their uses are well known while those of advanced
countries are related to growth, most of their resources being already known and
developed to a considerable extent.
The simplest distinction is made by Maddision (1970) in these words. The rising of income
levels is generally called economic growth in rich countries and in poor one sit is called
economic development.
Everyman's Dictionary of Economics makes the distinction between economic growth and
economic development more explicit. Generally, economic development simply means
economic growth. More specifically, it is used to describe not only quantitative measures
of a growing economy (such as the rate of increase in real income per head) but also the
economic, social or other changes that lead to growth. Growth is measurable and
objective: it describes expansion in the labour force, in capital, in the volume of trade and
consumption. Economic development can be used to describe the underlying
determinants of economic growth, such as changes in techniques of production, social
attitudes and institutions. Such changes may produce economic growth.
Economists generally used the term economic growth to refer to increases over time in a
country's real output of goods and services or more appropriately, real output per capital.
Output is conveniently measured by gross national product (GNP) or national income,
though other measures could also be used. On the other hand, economic development is
a more comprehensive t e r m . Some economists have defined it as growth, accompanied
by change, changes in the structure of the economy, in the country's social structure and
in its political structure.
Growth does not necessarily imply development. Indeed, a well-known book about an
African country is entitled growth Without Development. What this essentially means is
that a country produces more of the same types of goods and services to keep up with a
growing population or send to overseas market, while the benefits of this growth continue
to go almost exclusively to a privileged elite and a small middle class, leaving the vast
majority of the country's population completely unaffected. Development goes beyond
this to imply changes in the composition of output and in the allocation of inputs by
sectors. As with humans, to stress 'growth' involves focusing on height or weight (orGNP)
while to emphasis 'development' draws attention to changes in functional capacity in
physical coordination, for example, or learning (or ability of the economy to adapt).
But despite these apparent differences some economists use these terms synonymously.
Baran (1957) maintained that the mere notions of development and growth suggest a
transition to something that is new from something that is old that has outlived itself.
Lewis (1955) says in this connection that most often we shall refer only to growth but
occasionally for the sake of variety to progress or to development.
Concept of Growth and Development
Let us look at some of the definitions of growth as given by some writers: Kuznets defines
growth as a long-term rise in capacity to supply increasingly diverse economic goods to
its population, this growing capacity being based on advancing technology and the
instructional and ideological adjustments that it demands This definition has three
components:
▪ The economic growth of a nation is identified by the sustained increase in the supply
of goods.
▪ Advancing technology is the permissive factor, which determines the growth of
capacity in supplying diverse goods to the population.
▪ For an efficient and wide use of technology, institutional and ideological adjustments
must be made to affect the proper use of innovations generated by advancing stock of
human knowledge.
The above definition supersedes the earlier definition by Kuznets. Kuznets (1955) defining
economic growth as sustained increase in per capita or per worker product, most often
accompanied by an increase in population and usually by sweeping structural changes.
According to Schumpeter (1934), growth is a gradual and steady change in the long run
which comes about by a general increase in the rate of savings and population. Some
economists generally use the term economic growth to refer to increase in a country’s
real output of goods and services or more appropriately real output per capita. As a
concept, growth has a larger meaning and a more restricted meaning. Strictly it refers to
sustained increase in productivity over a relatively long period or long periods each
covering at least 10 years. An index of such growth at the national level is not an increase
in national product in concrete terms. Growth modifies structures, attitudes and
techniques, and where it is sustained; its economic effects are considerable. In the larger
sense, growth includes three variables: an upward trend in gross national product and
revenue over a long period; a self-sustained character of the growth and which is largely
irreversible and growth also movement of structural transformation Conceptually, growth
implies change leading to increase in size including height and weight. Thus, economic
growth means increase in economic resources or increased income. A nation is said to
have recorded economic growth if that nation has experienced increase in national
income or in or capita income.
UNDERDEVELOPMENT
Ordinarily, the term underdevelopment, r e f e r s to a situation where the economic,
social, and political conditions of a nation are at their rudimentary stage of development.
Using the major indicators of development, the nation is backward. Thus, the nation lacks
key development facilities including the following: efficient and effective transportation
network, communication system and other infrastructural facilities such as power, water
supply, housing etc.
Other indicators of underdevelopment i n c l u d e poor education, poor health, and
generally low standard of living. This traditional approach to the description of
underdevelopment h a s been found to be very limited as it does not explain the causes
of underdevelopment n o r is it capable of providing prescriptions for underdevelopment.
In reaction to this limitation radical students of development such as Franck argue that it
is capitalism both world and national which produced under development in the past and
which still generates underdevelopment in the present Let us look at another
description by Rodney. According to Rodney, underdevelopment is not the absence of
development but it makes sense only as a way of comparing level development.
Underdevelopment is very much tied to the fact that human-social development has been
uneven and from a strictly economic view point some human groups have advanced
further by producing more and becoming more healthy (Rodney 1974).To Rodney,
underdevelopment e x p r e s s e s the relationship of exploitation, namely the exploitation
of one country by another.
In spite of all these, it is very difficult to give a precise definition of underdevelopment.
Underdevelopment can be defined in many ways by the incidence of poverty, ignorance
or diseases, mal-distribution of the national income, administrative in competence and
social disorganization. There is thus not a single definition which is so comprehensive as
to incorporate all the features of an underdeveloped country. Kuznets (1955) therefore,
suggests three definitions of underdevelopment:
First, it may mean failure to utilize fully the productive potential warranted by the existing
a Teo technical knowledge, a failure resulting from the resistance of social institutions.
Secondly, it may mean backwardness in economic performance compared with the few
economically leading countries of the period.
Third, it may mean economic poverty in the sense of failure to assure adequate
subsistence and material comfort to most of a country's population.
The problem of underdeveloped c o u n t r i e s in our discussion reflects elements of all
the three definitions. Its acuteness arises largely out of the material misery stressed in the
third definition; it is sharpened by the realization of a lack compared with other
economically more advanced countries, and it is generally viewed as a social problem
originating from the failure of social institutions rather than from a lack of technical
knowledge.
UNDERDEVELOPED AND UNDEVELOPED COUNTRIES
Let us now turn our attention to a related concept like underdeveloped countries. These
two terms, underdeveloped and undeveloped are often used as synonyms but they are
easily distinguishable. An undeveloped country is one which has no prospects of
development. An underdeveloped c o u n t r y on the other hand is one which has
potentialities of development. The Antarctic, Arctic and parts of the Sahara may be
termed as undeveloped while Pakistan. Nigeria and Uganda may be termed
underdeveloped. Poor and backward are also used as synonyms of underdeveloped but
certain economists like Baldwin and Meier (1957), prefer to use the term poor countries
instead of underdeveloped countries. In recent economic literature, a more responsible
term, the 'developing country' has come to be used in place of the 'underdeveloped
country'. Of late, a new term, third world is being used for underdeveloped countries.
MODERNISATION
Some writers define modernization in terms of changing institutions; others stress
changes in individual latitudes, other still emphasize group attitudes. Frequently,
modernization has been equated with the attitudes and institutions of capitalist western
countries, a strong personal work ethic and individual entrepreneurship. Materialism,
optimism and a group structure encouraging these attitudes and institutions. There is a
growing dissatisfaction, however, with ethnocentric definitions and broader definitions of
modernization have been sought which could encompass community as well as capitalist
institutions. Nash views modernization as the process of transformation towards the
establishment and institutionalization of modernity.
By modernity he means the social, cultural and psychological framework which facilitates
the application of tested knowledge to all phases and branches of production. A similar
view is that of Moore who refers to modernization as the rationalization of social behavior
and social organisation. Both definitions emphasize that modernization is a process of
social change, while the areas in which rationalization takes place are essentially the same
for all societies.
Moore lists the areas as follows:
i. Monetization and commercialization
ii. Modernization of production and distribution

iii. Demographic rationalization

iv. Education

v. Bureaucratization
vi. Secularization

The study by Inkeles and Smith is an interesting attempt to define modernization as a

syndrome of individual attitudes that could be expected to be common to all societies.
Specifically, the authors propose to classify as modern those personal qualities which are
likely to be inculcated by participation in large-scale modern productive enterprises such
as the factory, and perhaps more crucial that which may be required of the workers and
the staff if the factory is to operate efficiently and effectively.
Inkeles and Smith begin by identifying fourteen personal attributes of modernization,
including openness to new experiences, efficacy, understanding of productive processes,
placing a high value on technical skills and acceptance of skill as a valid base for
distributing rewards. In addition, they look at modernization from a 'topical' perspective
(e.g attitudes towards family, size, religion, politics, consumption) and a 'behavioral'
perceptive which involves 'psychological testing and interviews to determine political and
religious beliefs and other activities. Finally, a fourth perspective is obtained by devising
several modernity scales combining elements of the other three perspectives.
Inkeles and Smith conclude that 'modern man’s character' maybe summed up under four
major headings. He is an informed participant citizen; he has a marked sense of personal
efficacy; he is highly independent and autonomous in his relation to traditional sources of
influences, especially when he is making basis decisions on how to conduct his personal
affairs and he is ready for new experiences and ideas, that is, he is relatively open minded
and cognitively flexible (Inkeles and Smith 1960). The term modernization is also
employed by some authors to refer to the process by which a traditional society
undergoes transformation and becomes modern. Other authors use the term to describe
the process by which traditional societies become more western, or acquire the character
of the technologically advanced countries. Thus, a modern society or modernizing society
is highly educated and technologized.

FACEST/ENVIRONMENT OF DEVELOPMENT ADMINISTRATION

1. ECONOMIC ENVIRONMENT OF DEVELOPMENT ADMINISTRATION
An underdeveloped economy is predominantly agricultural and it engages up to 80% of
the labor force is engaged in agriculture. Production is based on age-old technology, is
largely for subsistence, and is carried out under feudal relations. Feudal landlords live an
ostentatious life and make little or no investment in agriculture. Within the industrial
sector, traditional household craft preponderate. Modern industry, if it exists at all, is
limited to a few lines, for instance, jute, and cotton textiles in India before the Second
WorldWar. Infrastructural services like transport and communications are extremely poor
and limited.
As in implicit in the structure of an underdeveloped e c o n o m y , its relative factor
endowment pattern is dominated by land or by land and labour together. Relative
availability of capital is extremely low. Capital goods are mainly those which are turned
out by the traditional craft. In countries like India and China marked by high population
pressure, the relative factor proportion between land and labour is itself adverse, with a
low land-labour ratio. Additional labour due to population growth stays back in agriculture
since little opportunity of other remains underemployed. Labour, the human capital
resource, is thus poor in quality.
Asset ownership, particularly of the most important factor of production, land, is very
unequally distributed in an underdeveloped e c o n o m y . It may so happen that a hand
ful of feudal lords own most of the land and the rest of therural population work as
tenants or landlords’ labourers, including bonded labourers. Disparity in incomes follows
from land ownership, with 70 percent of the product going to a small class of land owners.
The rest of the population lives at subsistence level under acute poverty. Furthermore, in
large countries such as India; there also exists disparity of incomes between different
regions as the relative factor endowments as well as the levels of development vary from
region to region. Since an underdeveloped e c o n o m y is characterized by stagnation in
production and operates at a low level equilibrium, savings are low, and so is investment.
A kind of various circles operates: low income, low savings, low investment, low income,
low savings and low investment capital accumulation. The vast majority of the people,
living at subsistence level have no capacity to save but engage in conspicuous
consumption. Merchants and traders do accumulate some money capital, but they lack in
enterprise and do not invest in industry. The other reason for this failure is the large size
of capital required by modern industrial units which individual holders of money capital
are unable to provide. Underdevelopment i s also characterized by low levels of scientific
and technical knowledge. Due to illiteracy and lack of education, the quality of human
capital is poor. On the other hand, an underdeveloped economy dependent on the
traditional means and methods of production has little scope for technological innovation.
2. POLITICAL ENVIRONMENT OF DEVELOPMENT ADMINISTRATION
One of the political features of the underdeveloped c o u n t r i e s is the growing gap
between expectations and the actual achievements. For example, when the Obasanjo
Administration took off in 1999 it promised to restore power supply to normalcy and
provide employment for all. The realization of these noble objectives has fallen below
expectations.
Power supply is still erratic and the rate of unemployment is on the increase. There is a
high unemployment and/or underemployment rate among the youths in underdeveloped
countries. In such conditions this age group presents a potent threat to political stability
and economic growth, being less amenable to nationalist anti-imperialist rhetoric as a
panacea for their problem (Mazrui, 1998). An idle mind is the devil's workshop goes
the adage and much of the political unrest on the African continent can be attributed to
the presence of unemployed, frustrated and alienated young people. They are easily
drawn to parties and groups that promote total and revolutionary change rather than
incremental and evolutionary change. If you observe well, they have been in the fore front
of pre-democracy movements in many of the African countries (Mazrui,1998).
The religious conflicts. For example, the activities of the Odua People Congress (OPC) in
the western part of Nigeria, Arewa People Congress (APC) in the north and Bakassi Boys
in the east. Structures that could have assisted in integrative function. In brief, the
common political features of developing countries include, a widely shared
developmental ideology as the source of basic goals, a high degree of reliance on the
political sector for achieving results in the society, a wide spread of insipient or actual
political instability, a modernizing elitist leadership accompanied by a wide political gap
between the rulers and the ruled and an imbalance in the growth of political institutions.
Some version of socialism tends to be the dominate preference with a philosophy having
a Marxist label while evils of foreign capital is mare denounced. The state is generally seen
as the main hope for guiding society towards modernisation. The politics played is
agitational.
Political instability is a prominent feature as survey shave shown that 40 percent of the
countries have had successful or attempted coups. Compared to developed countries the
politics of developing countries is that of uncertainty, discontinuity, and extra-legal
change.
3. SOCIAL – CULTURAL ENVIRONMENT OF DEVELOPMENT ADMINISTRATION
In cultural feature. For example, in many parts of Africa, people attribute their problems
to supernatural factors such as an angry deity, curses and witchcraft. In this view, man is
at the mercy of a bewildering array of unseen, often male volent forces that ate beyond
his control. The suffer may experience some relief when a culturally accepted explanation
for his problems is provided, for instance his problems explained as being caused by
witches. The fact that these forces are seen as beyond his control but amenable to the
intervention of the traditional healer renders the sufferer more open to his suggestions.
Is a person considered healed when he continues to live in fear of individuals, and unseen
forces in his environment? Our answer should be 'NO".
The price a nation pays for being uncritical of the beliefs held by the citizens, that their
lives are controlled by forces outside their control is grave indeed. A pathy becomes the
predominant attitude of such citizens and underdevelopment resultant consequence.
The belief that anyone with the help of the supernatural may bring harm to others does
little to promote mutual trust. In the absence of trust individuals cannot cooperate in
engineering solutions to pressing national or community issues.
These are societies where children are for instance, seen as needed to continue the linage
and perpetuate the family name and spirit. The aged are dependent on their adult sons
and daughters for supported hence fertility remains high in order to guarantee enough
children to meet the need. Developing countries like those of Africa have the fastest
alienated from functional government. People are differentiated on the basis of race. Tribe
and Religion.
Tribal sentiments usually determine the pattern of voting or appointment to positions of
responsibility. Most of the time merit is compromised and this effects executive capacity
and consequently, national development.
4. ADMINISTRATIVE ENVIRONMENT OF DEVELOPMENT ADMINISTRATION
There is usually an effective bureaucracy coupled with vigorous modernizing elite. The
basic pattern of administration is imitating rather than indigenous. In Nigeria, for instance,
the current administrative laws are those introduced by the British some 50 to 100 years
ago. Nigerian civil servants commonly claim that, their system follows the British system'.
Such claims are made with pride and are supposed to demonstrate the pedigree and
quality of their civil service.
They fail, though, to note that the system is based on a British colonial model (rather than
the British domestic model).
The colonial heritage is more elitist, more authoritarian, more aloof and paternalistic in
these developing countries. Bureaucracy maintains sole ownership of technical
knowledge in the various sole from agriculture to mining and industry. It is usually the sole
employer of Professional experts, most often trained in the country of the former colonial
master. The bureaucracy is often large and deficient in skilled manpower necessary for
developmental programs.
The countries emphasize orientations that are other than production directed. Freed
Riggs refers to this as preference for personal expediencies as against public principled
interests. Value attached to status is based on a scription rather than achievement.
Outwardly, they preach a merit system but practice a spoils system. Corruption is
widespread and bureaucracy is used as a social security programme to solve an
employment problem which in turn leads to padded bureaucracy. There is widespread
discrepancy between form and reality, what Riggs refers to as formalism.
ADMINISTRATIVE REFORMS IN NIGERIA
From time to time, the Executive arm of government introduces reforms to meet the
changing public service environment and to solve emerging or anticipated problems from
the day to day running of national affairs. You would recall that many Commissions were
set up to review aspects of the civil service. Some were set up to review salaries and
wages, while others were set up to review the administrative machinery processes,
structure and functions of the various arms of government. This unit will take you through
the salient features of these reforms.

THE DEVELOPMENT PLANNING

The 17th Century’s Industrial Revolution triggered development planning creating room
for Mercantilism, an era in which the possession of gold stimulated economic growth.
However, 1917 was a watershed in the history of development planning with the
establishment of the Communist Soviet Union; the government’s centralized planning in
order to achieve an egalitarian society was the order of the day.

It was a society where everybody was seen as equal and there was no room for private
ownership of the means of production. Therefore, the state and not the market forces of
demand and supply controlled the economic activities. At the other end was the extreme
capitalist system of America and her Western allies, where the market forces of demand
and supply controlled the economic activities as the means of production were privately
owned. The government only provides the enabling environment like security, rule of law,
and health services.

In between the extreme capitalism and communism lie the mixed economies that
adopted both the free market of capitalism and the centralized system of communism.
Many developing countries of Africa, Asia and Latin America embarked on National
Development Planning from this aspect. Here, the planning, programs and project
formulation, monitoring and evaluation were designed by the government in order to
stimulate economic activities and carter for the people’s welfare. Industries,
infrastructures like road networks, railways, power dams, schools, hospitals and
refineries came to fore through this system of planning While the developing countries
were embarking on National Development Plans, British and America developed the
Thatcherite economics and Reaganomics for free market economies. With these systems
sustaining the western developed economies, national development plans failed in the
developing economies leading to the introduction of Structural Adjustment Policies of the
IMF and the World Bank as was the case in Babangida’s administration in 1986.

The focus of the SAP was to reschedule foreign debts by currency devaluation and
increase international trade. The application of the SAP had plunged most of the countries
into an undending debt traps and recessions with hardship, hence the Millennium Summit
of September, 2000 that led to the adoption of the Millennium Development Goals
(MDGs). There were eight goals adopted to be achieved by 2015 which were:
1. Eradication extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development

It was from these goals that Obasanjo drew the National Economic Empowerment and
Development Strategy (NEEDS) in 2004 to 2007.

Planning is based on the theory of “thinking before acting”. Planning is an integral part of
our life. We make plans in each and every step of life whether it is to go to school or to
buy household goods during shopping. We make plans according to the limitations of our
budget and resources to get maximum satisfaction and to fulfill goals from out activities.
Planning is the most basic and primary function of management. It is the pre-decided
outline of the activities to be conducted in the organization. Planning is the process of
deciding when, what, when where and how to do a certain activity before starting to work.
It is an intellectual process which needs a lot of thinking before a formation of plans.
Planning is to set goals and to make certain guidelines achieve the goals. Also, Planning
means to formulate policies, segregation of budget, future programs etc. These are all
done to make the activity successful.
According to Theo Haimann, “Planning is deciding in advance, what is to be done. When
a manager plans, he projects a course of action for the future, attempting to achieve a
consistent, coordinated structure of operations aimed at the desired results
According to Alford and Beaty, “Planning is the thinking process, the organized foresight,
the vision based on fact and experience that is required for intelligent action.
According to ME. Hurley, “Planning is deciding in advance what is to be done. It involves
the selection of objectives, policies, procedures and programs from among alternatives.”
(Sharma, Surendra Raj; Jha , Surendra Kumar; 53-60)
Therefore, before an action is taken, there should be an exercise of forethought in an
attempt to selecting the best means of securing a specified end. This means that planning
is a means to an end. “Planning is also a process of preparing a set of decisions for actions
in the future directed for achieving stated goals by preferable means” (Faludi:1973). The
key issues to point out from this definition seek to address the following:
▪ A process
▪ Preparation
▪ Actions
▪ The future
▪ Direction
▪ Goals
▪ Preferable means

Categorization of the planning concept:

Plans are categorized based on the goals they seek to achieve at a given period. For
instance, the plan to marry is entirely different from the plan to build a house, while an
individuals’ plan is different in conception and application from a nation’s plan,
(Waterston: 1962). In a business enterprise for instance there is a Strategic Plan, Tactical
Plan, and Operational, this course looks at four broad categories of planning to cover:
1. Contingency planning
2. Town/Country planning
3. Anticyclical planning:
4. Development planning

Development Planning Process

Planning is a complex process that requires a high level of study and analysis. The process
of planning includes the determination of objectives and outlining the future actions that
are needed to achieve these objectives. To create a plan there must be a determination
of objectives and outlining of the course of action to achieve the goals. There is no set
formula for planning. A planning process which is suitable for one kind of organization
may not be suitable for another type of organization
Guidelines in the Formulation of a Good Plan
1. Analysis of the environment: Planning begins with the awareness of the opportunities
in the external environment and within the organization. For this SWOT analysis is
 most suitable. Strength and weaknesses are the internal factors whereas opportunities
and threats are the environmental factors which are to be analyzed.
2. Setting the objectives: The second step of planning is to set objectives and goals for
the organization as a whole and for each department. Long term, as well as short-term
plans, are to be created. Objectives are specified to each and every manager and
department head. Objectives give direction to the major plans. So managers should
have an opportunity to contribute their ideas for setting their own objectives and of
the organization.
3. Develop premises: Planning premises are the assumptions about the future on the
basis of which the plans will be ultimately formulated. Planning premises are the key
to the success of planning as they supply pertinent facts and information regarding the
future such as general economic conditions, production cost, and prices, probable
competitive behavior, governmental control etc. Forecasting is an essential part of
premises.
4. Determine and evaluate alternatives: The fourth step is to search and identify the
alternative course of action. It suggests that a particular objective can be achieved
through numerous ways. But the most relevant alternatives must be listed down so
that selection is made easier. Once various alternatives are identified, they must be
well analyzed with their strong and weak points.
5. Selection of Best Alternative: This is the point where the certain plan is adopted.
When the alternatives are determined most suitable alternative must be chosen out
from the list which can give maximum output with minimum risk.
6. Formulation of a derivative plan: Derivative plans are the backing plans which are very
essential. Once the basic plan has been formulated, it must be translated into day to
day operation of the organization. Middle and low-level managers must draw up the
appropriate plans, programs and budget for their sub-units.
7. Budget formulation: After decisions are made and plans are set the next step is giving
them sufficient funds to carry them out. Optimum budgeting must be done for every
course of action.
8. Implementation of a plan: Once the plans are set up, now the plans must be well
informed and shared with the employees and managers expecting full commitment
and trust. Finally, the plans must be carried out.
9. Follow up action: Obviously once a plan is carried out it generates certain output. The
progress must be well monitored and managers need to check the progress of their
plans so they can take necessary steps to improve the plans if needed.

Definition of Development Planning

Development planning was widely believed to offer the essential and perhaps the only
institutional and organizational mechanism for overcoming the major obstacles to
development and for ensuring a sustained high rate of economic growth.
To catch up with their former rulers, poor nations were persuaded that they required a
comprehensive national plan. The planning record, unfortunately, did not live up to its
advance billing. But a comprehensive development policy framework can play an
important role in accelerating growth, reducing poverty, and reaching human
development goals.
Development planning happens in many different contexts so to define it succinctly is
tricky. Basically, development planning refers to the strategic measurable goals that a
person, organization or community plans to meet within a certain amount of time.
Usually, the development plan includes time-based benchmarks. It generally also includes
the criteria that will be used to evaluate whether or not the goals were actually met.
Why countries embark on National Development Plan
The government is just like an individual. It plans for the social, economic, and physical
needs of the citizens, just like how an individual can. While the individual’s plan for the
future is personalised, the government’s plan is purely political. Therefore, the
government embarks on national development plans to;

1. Advance/promote political wills: During the electioneering campaigns, politicians

go about making various promises, and when in office, they try to fulfill such
promises which are born out of the people’s yearnings and aspirations. Thus, the
promises the make constitute part of the country’s development plan. For
instance, during the Shagari’s Green Revolution in the 1980’s, Obasanjo’s National
Economic Empowerment Development Strategy (NEEDS), Yar’Adua/Goodluck’s
Seven (7) Point Agenda, and Goodluck’s Vision 20:20:20, which is transformational
in nature.

2. Diversify the economy: This is an attempt by a country to create other means of

income/revenue in order to complement the nation’s economic mainstay. For
instance, to diversify Nigeria’s sole dependence on petroleum, the government
now promotes the agricultural and tourism sectors of the economy to complement
petroleum. Else the constant dependence on petroleum may pose a future threat
for the nation’s economy.

3. Reduce internal threats and tensions: When the government does not plan,
internal threats and tensions are bound to occur, which will affect the nation’s
security. For instance the Niger-Delta crises, the Boko Haram insurgence, high rate
of unemployment, poverty, rural-urban drift, and ethno-religious conflicts in the
Nigerian body polity. The second National Development Plan in Nigeria for
instance was focused on rehabilitating the economy which was ravaged by the
1967-1970 Civil war, and to reconcile the affected entities.

4. To reduce dependence on other nations: Countries also embark on development

plans to reduce dependence on other nations. Dependency is a popular trend
among developing nations especially those that rely on other developed nations
for goods and services. If a country is able to draw a proactive national
development plan, it will reduce dependence on other nations.
 5. To reduce budgetary anomalies: If the budget is the financial plan of the country
which is used to determine the income and expenditure of the country, it must be
fused into the national development plan so as to correct anomalies in the
country’s plan. From 2004-2007, the nation’s budgets were all drawn within the
framework of the NEEDS policy document.

6. To avoid future recurrence of socio-economic problem

The possibility of avoiding the future recurrence of a socio-economic problem is there
if a country embarks on a good development plan. Most Nigerians are victims of socio-
economic problems due to the haphazard implementation of government’s policies,
and this is because of repetition of such policy in different tags. E.g. Compare
Obasanjo’s NEEDS, Yar’ Adua’s Seven (7) Point Agenda, and Goodluck’s Vision
20:20:20: they mean the same thing with different names.

HISTORICAL DEVELOPMENT OF PLAN AND PLAN IMPLEMENTATION IN NIGERIA:

The historical development of plan and plan implementation in Nigeria can be discussed
under phases of development planning in Nigeria which involves five different stages of
national development plan in Nigeria.
THE FOUR PHASES OF DEVELOPMENT PLANNING IN NIGERIA:
Nigeria’s development planning could be classified under four phases. These can be
described as follows:
I. The Colonial Era. (1946-1955)
II. The Era of Fixed-Term planning (1962-85).
III. The Era of Rolling Plan (1990-1998), and
IV. The New Democratic Dispensation (1999 till date).

There exists between these periods some years dominated by sporadic governmental
actions and ad-hoc planning in which the country did not actually produce a plan
document that could be categorized into the four periods mentioned. These periods
represent times of major socio political upheaval and economic crisis that necessitated
transitory and sporadic actions from the incumbent administrations.
THE COLONIAL ERA: (1946-1955)
The Colonial Government was seen as a field of administrative organ of the colonial office
in London. Hence it was never understood by the colonial powers as a government of its
own.
Adamolekun (1986:34-35) clearly explains this fact when he wrote that: “The chief servant
of the Crown as far as running of the affairs of the African colonies in the empire was
concerned as the Secretary of State for the Colonies”. However, to underline the direct
allegiance of each colony to the Crown, one or more of the principal officials of the local
colonial government was appointed by the Crown. Thus, the successive Governors of
Nigeria between 1914 and 1951 and the Lieutenant-Governors between 1914 1nd 1931
were Crown appointees. The obvious consequence of the above was that planning during
the colonial period was masterminded from outside the country and thus, was in
accordance with the colonial objectives, which is believed by some scholars (Rodney 1969;
Obikeze and Obi 2004) to be exploitative. The issue of development planning from inside
during the colonial administration therefore became necessary only when the heat of
nationalism and the possibility of independence for the country become evident.
Thus, it was in 1946 that the first attempt of development planning was introduced. It was
a Ten-year plan of Development and Welfare for Nigeria. The plan was purely expenditure-
related as its aim was “primarily to guide the allocation of the development and welfare
funds made available by the imperial power, Britain. (Adamolekun 1983: 157). Major
areas of attention were transport, communication and a few cash crops (Obikeze and Obi
2004). Little attention was paid to developing the productive base and defining a
comprehensive development objective for the country. The plan suffered a revision half
way through in 1951 and the introduction of a federal structure in 1954 reduced its
efficacy. But it continued to guide both the central and regional governments until the
launching of the First National Development plan in 1962. Adamolekun (1983) and Ayo
(1988) have exhaustively documented the problems that marred the plan. These include
poor financial resources for plan implementation, weak formulation and implementation
machinery, lack of technical skills by the generalist administrators who prepared the plan,
and the absence of clearly defined national objectives.
THE ERA OF FIXED MEDIUM-TERM PLANS (1962-1985)
This Era of Fixed Medium-Term Plans witnessed four successful plans, namely:
1. First National Development Plan (1962-1968)
2. The Second National Development Plan (1970-1974).
3. The Third National Development Plan (1975-1980) and.
4. The Fourth National Development Plan (1981-1985).
PRE-INDEPENDENCE PLAN
Nigeria’s planning experience began with the Ten-Year Plan of Development and Welfare
for Nigeria which was introduced in 1946 by the colonial government (1945-1956) sequel
to a circular from the Secretary of State for Colonies to all British colonies, directing the
setting up of a Colonial Development Board (Onah, 2010).

The Ten-Year Plan of Development and Welfare for Nigeria could not be actually termed
as plan in real sense because it contained mainly a list of uncoordinated projects in various
regions. The objective of the plan, though not stated was to meet the perceived needs of
the colonial government rather than any conscious attempt to influence the overall
performance of the Nigerian economy then (Egonmwan and Ibodje, 2001).

The primary interest of the colonial government was to produce agricultural products
such as groundnuts, palm oil, and cocoa that were required by the British factories. No
attempt was made to articulate and incorporate the needs and interest of Nigerian
people into the objectives and priorities of development plans (Onah 2010). Ayo (1988)
observes that the programme “suffered from non-specialized colonial administrators
approach to development planning, the inadequacy of planning machinery and absence
of clearly defined national objectives.” Irrespective of the weaknesses of the plan, it
served as a launch pad to subsequent development plans in Nigeria.

1. FIRST NATIONAL DEVELOPMENT PLAN 1962-1970): Immediately after attainment

of independence in 1960, the first National Development Plan (1962-1968) was
launched.
The objectives of the plan were:
▪ to bring about equal distributions of national income;
▪ to speed up the rate of economic growth;
▪ to generate savings for investments so as to reduce its dependence on external
capital for the development of the nation;
▪ to get enough capital for the development of manpower;
▪ to increase the standard of living of the masses particularly in respect of food,
housing, health and clothing and to develop the infrastructure of the nation
(Onyenwigwe 2009).

It had a proposed total investment expenditure of about N2, 132billion. The public sector
was expected to invest about N1, 352.3billion while the remaining investment
expenditure of N780 million was expected to be made by the private sector (Obi, 2006).

Criticisms of the First National Development Plan:

Though, the plan appeared impressive, but due to political upheaval in the country which
resulted in 30-month civil war, the plan almost became redundant. According to Nnadozie
(2004), the objectives and targets of the 1962-68 plan were too large and over-ambitious
and therefore out of tune with financial technical and managerial capabilities of the
country. This made the plan to lack clarity and precision in the formulation of objectives
and targets (Onah, 2010). Above all, it was drawn by Woofang Stoler, a British
Development Economist.

Some of the achievements of the First National Development Plan:

Despite the weaknesses of the plan, some major projects were executed during that
period. These included the Nigerian Security and Minting Plant, the Jebba Paper Mill, the
Sugar Mill, Niger Dam, the Niger Bridge, Onitsha, Kainji Dam and Port Harcourt Refinery.

2. THE SECOND NATIONAL PLAN (1970-1974): At the end of 1970, national

reconstruction and rehabilitation were the focus of attention of the federal
government. In order to fasten the growth of national economy and ensure
equitable distribution of national income, it became imperative to launch the
Second National Development Plan. Initially, the plan was meant to cover the four-
year period, 1970-1974, it was later extended to cover the fiscal year of 1974-1975.

The plan put forward five national objectives:

▪ A United, strong and self-reliant nation
 ▪ A just and egalitarian society; a land of bright and full opportunities all citizens; and
▪ A free and democratic society (Onyenwigwe, 2009).

Ayo (1988) outlines the difference between this plan and others as:
“Besides being much bigger in size and more diversified in its project composition, it was
in fact the first truly national and fully integrated plan which viewed the economy as an
organic unit: the twelve states were fully integrated into national development plan. Also,
unlike the first plan, the second plan was formulated wholly by Nigerians.”

The total capital projected expenditure of about 4.9 billion was contained in the plan. Out
of this figure, the proposed public sector investment was 3.3 billion while the private
sector was expected to invest 1.6 billion (Obi, 2006). The highest orders of priorities in
public sector projected expenditure were accorded to transport and communication,
manufacturing, housing and education (Onah 2010). Second National Development Plan
laid much emphasis on indigenization. In the opinion of Okowa (1991) “indigenization was
seen by this plan as an instrument towards the long-term objective of economic
independence”.

Criticisms of the Second National Development Plan

Although the Second National Development Plan also attached importance on

agriculture, industry and the development of high level and intermediate level
manpower, the plan was beset with problems as in the first National Development Plan.
Onah (2010) alludes to this fact that “the high priority given to agriculture and industry
was not matched with action during the implementation of the plan”.

Advantages of the Second National Development Plan:

One of the basic tenets of Second National Development Plan is indigenization policy.
Indigenization policy was carefully designed to encourage Nigerians to participate fully in
the commercial, industrial and financial activities of the Nigerian economy. Several
indigenization decrees were made to realize the objectives of this policy.

It is a sad commentary that close to two years after enactment of the first indigenization
Decree (1972), out of about 950 affected enterprises, only 314 or 33 percent were
confirmed as having fully complied with the provisions of the decree (Onah, 2010). It
should also be emphasized that despite indigenization policy, there were over 16
multinational oil companies representing the United States, Dutch, Japanese, British,
Italian, German and French interest that have firm and massive grip on Nigeria’s
Petroleum till date (Koha, 1994).

The features of the Second National Development Plan

An interesting feature of the Second National Development Plan was the objective of
creating “a free and democratic society” that was being challenged by the military
government. This objective was put in place without considering any discussion on
political development in the plan document and any means of returning to civilian rule.
Despite the inadequacies of the plan, it witnessed achievements in the areas of industry
and agriculture. The industrial sector recorded more improvements.

Many industries in the war affected areas were rehabilitated, coupled with establishment
of two salt factories in Kaduna. Super phosphates project and two vehicle assembly plants
were also established. Other achievements included the establishment of colleges of
technology and trade centres by state governments and reconstruction of about 3000
kilometres of roads (Egonmwan and Ibodje, 2001).

THE THIRD NATIONAL DEVELOPMENT PLAN (1975:1980)

The Third National Development Plan had a projected jumbo investment of N30 billion
which was later increased to N43.3billion. This represented ten times that of the Second
Plan and about 15 times that of the first plan.

The objectives of the plan were:

▪ Increase in per capita income
▪ More even distribution of income; reduction in the level of unemployment;
increase in the supply of higher-level manpower; diversification of the economy;
▪ Balanced development and indigenization of economic activities. The approach of
the plan was to utilize resources from oil to develop the productive capacity of the
economy and thereby permanently improve the standard of living of the people.
Therefore, the plan was premised on the need for the public factor to provide facilities
for the poorer sections of the population including electrification, water supplies, health
services, urban housing and education (Egonmwan and Ibodje, 2001).

Criticisms of the third national development plan:

The assessment of the plan showed it focused to give priority to projects and programmes
that would directly impact positively on the rural dwellers, but the meager allocations to
agriculture and social development schemes did not indicate sincere intention of the
government to achieve the objective. Accordingly, agriculture and social development
scheme (education, housing, health, welfare etc) did not have direct bearing on the living
conditions of the rural population received who only received 5 per cent and 11.5 per
cent respectively of the financial allocations contained in the plan. It is appropriate to
state here that the meager allocation to agriculture and social development schemes,
which were priority areas, indicated the “lack of focus of the planners to careful sifting of
the criteria for allotting principles” (Paul, 2011).

Some achievements of the third national development plan:

In this context, nobody should expect the plan to achieve the desired objective. Like
other plans before it, the third plan did not really achieve its set targets. Irrespective of
the inadequacies of this plan, it witnessed achievements in some areas. In the opinion of
Okowa (1991), “in terms of achievement, the manufacturing sector recorded the fastest
growth rate with an average of 18.1 per cent per annum; Some other sectors that
witnessed growth were building and construction and government services.
FOURTH NATIONAL DEVELOPMENT PLAN (1981-1935)
The Fourth National Development Plan (1981-85) came on board in 1981. It was the first
that the civilian government prepared since the intervention of the military in Nigerian
politics in 1966.
The objectives of the plan were:
▪ Increase in the real income of the average citizen
▪ More even distribution of income among individuals and socio-economic groups
▪ Reduction in the level of unemployment and under employment;
▪ Increase in the supply of skilled manpower
▪ Reduction of the dependence of the economy on the narrow range of activities
▪ Increased participation by the citizens in the ownership and management of
productive
Enterprises
▪ Greater self-reliance that is, increased dependence on local resources in seeking
to achieve the various objectives of society
▪ Development of technology
▪ Increased productivity
▪ The promotion of a new national orientation conducive to greater discipline,
better attitude to work and cleaner environment.

Features of the Fourth National Plan

The projected capital investment of the plan was put at N82billion. Out of this figure, the
public sector investment was N70.5 billion while the private sector was expected to invest
N11.7 billion. According to Adedeji (1989) the plan was “the largest and most ambitious
programme of investment over launched in Nigeria”. The plan also adopted as its main
strategy the use of resources generated from oil to ensure all-round expansion in
production capacity of the economy and to lay a foundation for self sustaining growth
(Egonmwam and Ibodje, 2001).

Criticisms: It was anticipated in the Fourth Plan that exports led by petroleum products
would generate enough funds to actualize the plan that had been formulated. Eventually,
the revenue realized from exports was far below anticipated projections.

It is a sad commentary that only 54 per cent of the export proceeds projected for the
period was realized in 1984. For instance, it was projected that N79.449 million would be
earned from petroleum exports between 1980 and 1984, but only N52.78 million some
66.4 per cent of the projected figure was earned. With the dwindling resources to finance
the Fourth Plan, the Nigerian economy witnessed debt service and balance of payment
problem coupled with high level of inflation. Most of the projects that were started at the
beginning of the plan period could not be completed and these together with several
spillover projects from previous plan had to be abandoned (Jaja, 2000).

The growth rate of Gross Domestic Product (GDP) per annum was only 1.25 percent
compared to 5.5, 13.2 and 4.6 percent under the previous National Development plans
(Onah, 2010). Another problem of this plan was rise in the cost of living that led to a
reduction in the standard of living of a common man. There was also phenomenal
increase in unemployment among school leavers in the country. Our external reserves
kept on declining. Commenting on the plan, Alapiki (2009) observed that “the plan period
1981-85 proved to be the most dismal in the economic history of Nigeria at that time”.

Achievements:
The Fourth National Development Plan recorded some achievements in some areas in
spite of its drawbacks. The implementation of Agricultural Development Programme
(ADP) in most states was successfully completed, the commissioning of Egbim Power
Station, Dry Dock Project at snake Island, Lagos and the 87 telephone exchanges located
all over the federation which increased the number subscribers to telephone lines from
188,000 in 1981 to 297,000 in 1985 (Egonmwan and Ibodje, 2001).

THE FIFTH NATIONAL DEVELOPMENT PLAN:

Due to poor implementation of the Fourth National Development Plan, a machinery was
put in place for preparation of the Fifth National Development Plan. In order to facilitate
the exercise, a conference was held at the University of Ibadan in November 1984 to
deliberate on the appropriate mechanisms for the Fifth National Development Plan.

The conference suggested some measures which formed the corner stone of the policies
and strategies incorporated in the Fifth National Development Plan. The objectives of the
Fifth National Development Plan were:
▪ Diversification of the nation’s economy away from the monocultural one to which
it has been pushed by the fortunes of the oil sector/
▪ Revitalization of the agricultural sector with a view to achieving thorough integrate
rural development programmes
▪ Domestic production of raw materials for local industries in order to reduce the
importation of locally manufactured goods and (iv) promotion of employment
opportunities in order to arrest the deteriorating mass unemployment
(Onyenwigwe,2009).

Focus of the plan:

The primary focus of the plan was to correct the structural defects in the economy and
create a more self-reliant economy that would largely be regulated by market forces. The
economy was therefore expected to be restructured in favour of the production sector
especially those of agriculture and manufacturing. More than ever; the linkage between
the agricultural and manufacturing sectors of the economy were to be emphasized during
the plan (Ayo,1988).

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

THE PERSPECTIVE PLAN AND ROLLING PLANS (1990-1998):

The Babangida government had abandoned the previous fixed five-year development
plans and replaced it with two types of national plans viz: perspective plan which will
cover a period of 15-20 years that will provide opportunity for a realistic long-term view
of the problem of the country and the rolling plan which will cover three years subject to
review every year to ascertain whether economy is progressing or not.
The perspective plan which was to start from 1990 together with rolling plans did not take
off until 1996 when Abacha set-up the Vision 2010 Committee. The main report of Vision
2010 submitted to Abacha government in September 1997 among other things
recommended that the vision should provide the focus of all plans including long
(perspective), medium (rolling) and annual plans (budgets) (Adubi, 2002). Therefore, the
Vision became the first perspective plan for the country even though it failed to proceed
beyond Abacha’s death in 1998.

The three year rolling plan became operational from 1990 with the introduction of the
First National Rolling Plan (1990-1992). The primary objective of the rolling plan was to
afford the country the opportunity of revision in the “midst of increasing socio-political
and economic uncertainties” (Ikeanyibe (2009). But the preparation of medium term
plans turned out to be a yearly event and became almost indistinguishable from annual
budgets. Rolling plans are being prepared annually at all levels of government. At the end
of about ten rolling plans from 1990 to 1999, Nigerians are not better off than they were
during the years of fixed medium term planning (Okojie, 2002).

THE NEW DEMOCRATIC DISPENSATION (1999-2010)

(a) The Obasanjo Era (1999 – 2007)
Democratic governance returned to Nigeria in May 1999 with the military handing
over to a democratically elected government. The new administration started
development planning in 1999 on a clean slate with the initiation of a four-year
medium term plan document, the National Economic Direction (1999-2003). The plan
had the primary object of pursuing a strong, virile and broad- based economy with
adequate capacity to absorb externally generated shocks. While being a new plan
document, the objectives and policy direction was not significantly different from that
to which the country has followed since the introduction of SAP. According to Donli
(2004):
“The new plan was aimed at the development of an economy that is highly
competitive, responsive to incentives, private sector-led, diversified, market-
oriented and open, but based on internal momentum for its growth.”

However, with the re-election of the Obasanjo administration in 2003, there was a
rethink on the issue of development planning which gave birth to the National Economic
Empowerment and Development Strategy (NEEDS) - 2003-2007. This heralded the return
to serious medium term planning in Nigeria.
Needs- Vision, Objectives and Strategies

NEEDS is described as Nigeria’s plan for prosperity. It is a four-year medium term plan for

the period 2003 to 2007. Though a federal government plan, the States and Local

Governments were also expected to have their counterpart plans- the State Economic

Empowerment and Development Strategy (SEEDS) and the Local Government Economic

Empowerment and Development Strategy (LEEDS) respectively. It was a comprehensive

plan that sought to include not only all levels of government towards moving in the same

direction, but also, the organised private sector (OPS), the Non-Governmental

Organizations (NGOs) and the general public in cooperative activity in pursuit of

developmental goals. NEEDS as a plan, contained all the envisaged policies and

programmes of the federal government for the period 2003-2007 and far beyond and

served as the fountain of the much touted Obasanjo’s reforms. NEEDS was not only a

macro- economic plan document, but also a comprehensive vision, goals and principles

of a new Nigeria that would be made possible through re-enacting core Nigerian values

like respect for the elders, honesty and accountability, cooperation, industry, discipline,

self-confidence and moral courage. The primary goal of making Nigeria a ‘promised land’

would be realized according to NEEDS through four key strategies of wealth creation,

employment generation, poverty reduction and value reorientation. At the twilight of

the Obasanjo administration in 2007, printed draft of NEEDS-2 which was expected to

cover 2008-2011 was released into circulation.

However, the NEEDS plan had only limited successes vis a vis its stated objectives

especially as it related to deregulating the economy, reducing bureaucratic red-tapism in

governance, creating of jobs, alleviating of poverty and providing welfare programmes

and infrastructure such as water, improved health care, electricity and roads, etc.
Yar adua/Jonathan Administartion (2007 – 2011)
With the handover to a new civilian administration of President Musa Yar’Adua’s in 2007
– although from the same party with a cardinal campaign slogan of policy continuity -
NEEDS 1 and 2 were harmonized to give birth to another plan document christened “The
Seven Point Agenda”. This can be referred to as the new Medium Term National
Development Plan for 2008-2011. The policy thrusts of the seven point agenda are:
1. Critical Infrastructure (Power, Energy and Transport);
2. Land Reform; Human Capital Development (Health and Education);
3. Law, Order and Security; Food Security and Agriculture; Wealth Creation and Niger
Delta
With the death of President Musa Yar’Adua in 2020, his Vice Goodluck Jonathan who
took over promised to continue with the policies of his predecessor; however all is silent
about the Seven Point Agenda.
Nigeria Vision 20:2020 (NV 20:2020): Snapshot of Key Issues
Before his death in 2010, late President Musa Yar’Adua launched Nigeria Vision 2020 in
1999, a throwback to late General Sani Abacha’s Vision 2020 in 1996 that never saw the
light of the day due to Abacha’s sudden death.
NV20:2020 is an articulation of the long-term intent to launch Nigeria onto a path of
sustained social and economic progress and accelerate the emergence of a truly
prosperous and united Nigeria. Recognising the enormous human and natural
endowments of the nation, the blueprint is an expression of Nigeria’s intent to improve
the living standards of her citizens and place the country among the Top 20(T-20)
economies in the world with a minimum GDP of $900 billion and a per capita income of
no less than $4000 per annum.

Buhari’s Economic Policies within the context of the Change mantra:

On 29 May 2015, General Muhammadu Buhari was sworn in as the President of Nigeria.
His administration is expected to urgently tackle several challenges that have hindered
economic prosperity, sustainable security and overall national development in Nigeria.
These challenges include but are not limited to terrorism, violent conflicts, widespread
poverty, youth unemployment, electricity shortage, and corruption. For President
Muhammadu Buhari to make a success of his avowed intentions to bring the change that
Nigeria needs, he must put in place the right policies, programmes and personnel. Many
of his policies revolve around;
1. National safety net which is focused on combating the spate of terrorism, micro-
nationalism, insurgencies, kidnapping and other security challenges
 2. Nigeria Agricultural sector policy roadmap which focuses on combating extreme
hunger and diversifying the economy to reduce dependence on oil. Aside this, it
will create job opportunities for Nigerians
3. Nigerian Mining roadmap which focuses on minerals and other natural
endowments that will compliment oil production in this county as the nation’s
mainstay
4. Power Sector that has been poor and epileptic is another focus of Buhari’s
government. The aim is to improve power generation above 6000 KVG.
5. Immediate long and short term strategies for water sector
6. National Social Safety net whose focus is on creating job opportunities for
unemployed Nigerians etc.
7. Corruption and other vices

Though it said that the sum of N 6.3 trillion was earmarked for the 2016 fiscal year, there
has been wide cry by Nigerians as they expect government to do more. It is quite early to
assess this government from a critical standpoint, but it will be proper the government
sits up.
Pundits still argue that the failure of the political leadership to harness Nigeria’s huge
potential has created several security, economic and political challenges that have
prevented the country from becoming strong, stable and prosperous. The desire for
genuine transformation of Nigeria partly accounted for the thumping victory of
Muhammadu Buhari in the March 28 presidential election. The way the new
administration of President Buhari handles these challenges will go a long way in defining
the image of Nigeria in the years ahead. For President Muhammadu Buhari to make a
success of his avowed intentions to bring the change that Nigeria needs, he must
1. Put in place the right policies, programmes and personnel.
2. His effort should aim at achieving the following: Strengthening Security:
3. President Buhari’s government needs to further galvanise all segments of the
Nigerian society as well as regional bodies and international community to deal
with the Boko Haram threat. He needs to better equip the military, police and
security forces through a transparent and centralised procurement process to
enhance their capacity to deal with the security challenges.
4. Diversifying the Economy: Economic diversification holds the key to the
emergence of a robust economy that is capable of creating jobs and reducing
poverty and unemployment.
5. President Buhari’s administration needs to articulate and implement an economic
blueprint for the diversification of the Nigerian economy, leveraging sectors such
as agriculture, manufacturing, hospitality, tourism and ICT to boost productive
activities and revenue generation.
6. Reforming the Petroleum Sector: His administration should liberalise the entire
downstream sector of the petroleum industry and intensify efforts to encourage
 private sector participation in the refining of petroleum products in Nigeria. Also,
government’s effort to encourage the establishment of modular refineries in the
Niger Delta region will contribute to job creation, harnessing of indigenous
capacity of petroleum refining and reduce the spate of pipeline vandalism.
Improving Energy Supply: Nigeria’s near total reliance on gas for power supply is a
major hindrance to the economic growth. President Buhari-led administration
should consider a total reform of the energy sector in Nigeria, with a view to
investing on infrastructure for tapping renewable energy sources. This will
enhance diversification of energy sources like coal, wind, hydro and solar in order
to boost industrial productivity for enhanced job creation and poverty reduction.
Invigorating Anti-graft Efforts:
7. The Buhari government should to take deliberate efforts to strengthen and
reposition the Economic and Financial Crimes Commission (EFCC) and the
Independent Corrupt Practices and Other Related Offences Commission 9 (ICPC)
to vigorously prosecute all cases of corruption. The right calibre of persons need
to be appointed to head the two anti-graft agencies to ensure diligent prosecution
of corrupt officials, total recovery of looted funds and end the pillaging of public
treasury

CHALLENGES/PROBLEMS OF DEVELOPMENTS PLANS IN NIGERIA

Despite the series of development plans and visions introduced by successive Nigerian
governments since independence, the country has failed to produce much needed
sustainable development. Development plans in Nigeria have failed to achieve their
desired objectives due to many challenges that bedeviled the plans. These challenges are:
1. Corruption: Corruption in Nigerian political system has hampered development
plans and programmes. Corruption has been a pervasive social phenomenon. The
disheartening thing about the whole scenario is that the purported development
plans are to a large extent corruption avenues to some greedy Nigeria leaders. Illicit
misappropriation of privileges and opportunities in public and private sectors for
personal aggrandizement particularly those in positions of authority are sine-qua-
non to Nigeria (Ologbenla, 2007). The involvement of our political leaders in
massive corruption both in military and civilian governments has been a stumbling
block to national development plans. Onah (2006) observes that all development
visions and programmes fail in Nigeria because of poor handling by corrupt and
poor/hungry politicians and bureaucrats.
2. Lack of Plan Discipline: The failure of Nigerian political leaders and bureaucrats to
abide by the plan objectives has frustrated development plans in Nigeria. Many
previous plans in Nigeria were distorted during the implementation stages which
eventually killed the overall objectives of the plans. Indiscipline in the process
implementation of development plans has resulted in many abandoned projects in
all parts of the country. Many projects like Ajaokuta Steal Complex which could
 have fasten Nigeria’s industrialization are not yet completed after two decades of
their projected completion dates.
3. Lack of Commitment: Development plans are often prepared without consulting
the people, hence public apathy towards its implementation (Obi, 2006). Since the
plan is meant for the people, but they are not even aware of its existence or
objectives, they do not feel duty bound to contribute to its success (Obi, 2006).
This has made many development plans fail in Nigeria. It was an attempt to address
this problem that made the defunt Vision 2010 Committee to embark on series of
publicity programmes, like seminars, conferences and public enlightenment
campaigns (Obi, 2006).

4. Absence of Relevant Data: Development planning depends basically on availability

of data. This is due to inadequacies of Federal Office of Statistics, the unwillingness
of Nigerians to reveal information and outright manipulation of data for pecuniary
or other gains. A striking example of the problem in Nigeria is that until today,
nobody is sure about the exact population of Nigeria. Acountry that does not know
its population would definitely not be in position to determine the other vital
statistics necessary for planning life, birth rate, death rate, number of those of
school age and demographic changes in the population which are essential for
planning. (Ejumudo, 2013). The absence of reliable background data has made the
use of social indicators difficult and inadequate for plan preparation,
implementation and monitoring of national development (Ejumudo, 2013).

5. Over Ambitious Development Plans: National Development Plans are over

ambitious trying to achieve many objectives at the same time without considering
the conflicting and competing [Link], they are often grandiose in design
but vague on specific policies needed to achieve stated objectives (Onah, 2010). In
most cases, policy objectives are contradictory.

6. Lack of Continuity of Government Programmes: Lack of continuity of government

programmes has retarded development plans in Nigeria. Most of the development
programmes are usually abandoned once the government that introduced them
are out of power. Government officials did not feel committed to the national plans
of their predecessors and subsequently sought to change by introducing major
projects not incorporated in the original plan or introducing new ones (Oladapo,
2004). This is the reason for uncompleted projects in different parts of the country
today. The situation is worsened because of political instability to which the
country has been subjected since independence. Arguably, the frequent and
unpredictable changes in the government especially during the military regimes,
created room for uncertainty and for the retardation of development process
articulated in various plans.
 7. Public Service Inefficiency: Public service is an institution that is responsible to
execute development plans. It is worrisome that Nigerian public service is beset
with many problems which militate against its efforts in the implementation of
development plans. Some of these problems are: corruption, inadequate working
materials, poor communication system, red-tapism and political instability. It is
imperative to address these problems to enhance the capacity of Nigerian public
service to serve as appropriate instrument for implementing development plans in
Nigeria.

8. Public and Private Sector Partnership: There is poor collaboration between the
public and private sectors in development planning process in Nigeria. In fact,
development planning has largely followed bureaucratic process with little private
sector participation so much so that such efforts can be appropriately described as
lacking in synergy (Ejumudo, 2013).

National Development Planning?

In Nigeria between 1960 and the present, Nigeria has developed a series of
development plans as part of the efforts to move the country towards the path of
growth and development. The national development is a country’s national plan that
stipulates the Country’s medium-term strategic direction, development priorities and
implementation strategies for years.
Development planning happens in many different contexts so to define it succinctly
is tricky. Basically, development planning refers to the strategic measurable goals
that a person, organization or community plans to meet within a certain amount of
time. Usually the development plan includes time-based benchmarks. It generally also
includes the criteria that will be used to evaluate whether or not the goals were actually
met.
Development planning typically follows a set of distinct phases:
a. Situation analysis, both internal to the area, and the forces which are shaping the
area. This may involve a range of tools to assess the strengths, weaknesses,
threats and opportunities (SWOT) facing an area;
b. Prioritizing key issues, problems or outcomes;
c. Developing objectives;
d. Developing plans to address the objectives, including strategies, activities and
projects;
e. Developing a spatial picture of the situation as well as plans;
f. Developing budgets to achieve the plans.

What is National Development Plan?

A National Development Plan is a large-scale investment project to develop the
infrastructure of a country. It requires central planning and monitoring on a national
level and implementation on a micro, local level. Adequate funding from government
agencies as well as support from citizens, will allow short-, medium- and long-term
goals to be met.

a) Goals: Goals should focus on the micro and macro strategy for national growth.
This can include development of the economic infrastructure, education, social
welfare, science, and innovation. Before setting goals, a government should review
the current strengths of each sector and articulate room for growth (both in the
long and short term). The scope of goals will depend upon whether a country is a
developed or developing nation and should be tailored to the cultural, economic and
social needs of a specific country. Goals should avoid being politically motivated and
have sustainability regardless of what is politically popular at the time. Nations
should consider advice from outside consultants to review current national
conditions and proposed strategies to ensure that they are sustainable and not just
politically expedient.

b) Monitoring/Overseeing: The scope involved with a national project requires a large-

scale project manager, like a Central Monitoring Committee. Depending on the
government structure, it will usually be chaired by a top-level official in the office of
finance or treasury. Since the funding of a program is integral to its implementation,
the financial perspective will be crucial in setting and meeting goals. The
Monitoring Committee will ultimately report to the executive/cabinet level of the
government and the work of the overseeing committee can be audited by a
government accounting/accountability office.

c) Communication: A communication strategy for a development plan is important so

taxpayers and citizens understand w h a t i n v e s t m e n t s a n d i n i t i a t i v e s a r e
b e i n g a d d r e s s e d . Typically, t h e committee overseeing a national development
plan will develop an Information Office that will market and publicize the plan and
also can field questions/suggestions from concerned citizens.
d) Timeline: It's important that a national plan address short, medium and long terms
goals. The purpose of the plan is to prioritize for national immediate needs (food,
water, housing, and health-care) that should be met but also to predict in the
medium and long run, what are larger goals that should be achieved.

e) Implementation: The key to any national plan is actually accomplishing goals. A

central planning body typically oversees the national plan and acts as a project
manager of sorts to oversee the execution of goals on the micro level. This will
involve liaising with government agencies that regulate various sectors
(transportation, education, health & human services, etc.). It will also need to
coordinate with local and municipal governments.

f) Funding: Funding can come from a variety of sources. Depending on qualifications,

certain projects of a national development plan can be financed by foreign donors,
 international organizations or even corporate/non-profit partners. It also can liaise
with various government agencies responsible for an area or industry included in
a development plan. The funding issue will most likely be the most politically sensitive
and will require support from taxpayers and elected officials to advocate for funding
in the budgeting process. Realistic resource forecasts should be considered before
establishing a project because if funding dries up, cynicism may arise from voters.

g) Publicizing accomplishmentsL Once development goals have been met, it's

appropriate to publicize infrastructure and national improvements to other foreign
countries. Such improvements can encourage foreign direct investment,
international commerce and tourism that will further promote economic
productivity. The buzz and excitement of meeting national goals will also improve
morale among citizens since it demonstrates involvement and action by the national
government.

Sustainable Development
Sustainable development is a development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. This most widely
accepted definition of Sustainable Development was given by the Brundtland
Commission in its report Our Common Future (1987). Sustainable development (SD) calls
for concerted efforts towards building an inclusive, sustainable, and resilient future for
people and the planet.
Sustainable development, a concept that emerged in the context of a growing awareness
of an imminent ecological crisis, seems to have been one of the driving forces of world
history in the period around the end of the 20th century. However, as a contemporary
buzzword ‘sustainable development’ has become rather overworked. We often use it
without thinking of its real meaning and implications.
The 2030 Agenda for Sustainable Development, adopted by all United Nations Member
States in 2015, provides a shared blueprint for peace and prosperity for people and the
planet, now and into the future. At its heart are the 17 Sustainable Development Goals
(SDGs), which are an urgent call for action by all countries - developed and developing -
in a global partnership. They recognize that ending poverty and other deprivations must
go hand-in-hand with strategies that improve health and education, reduce inequality,
and spur economic growth – all while tackling climate change and working to preserve
our oceans and forests.
Core Elements of Sustainable Development
▪ Three core elements of sustainable development are economic growth, social
inclusion, and environmental protection. It is crucial to harmonize them.
▪ Sustainable economic growth, achieving sustainable livelihood, living in harmony
with nature, and appropriate technology are important for sustainable
development.

Environmental Sustainability:
▪ It prevents nature from being used as an inexhaustible source of resources and
ensures its protection and rational use.
▪ Aspects such as environmental conservation, investment in renewable energy,
saving water, supporting sustainable mobility, and innovation in sustainable
construction and architecture, contribute to achieving environmental
sustainability on several fronts.
Social Sustainability:
▪ It can foster gender equality and, the development of people, communities, and
cultures to help achieve a reasonable and fairly distributed quality of life,
healthcare, and education across the Globe.

Economic Sustainability:
▪ Focuses on equal economic growth that generates wealth for all, without harming
the environment.
▪ Investment and equal distribution of economic resources.
 ▪ Eradicating poverty in all its forms and dimensions.

Integration of Scientific and Traditional knowledge

If the people can contribute their local resources and practices to the process of change,
the development becomes not only sustainable but also accelerated. Combined
traditional and scientific knowledge is called community knowledge.
Moving towards SD in many areas will require community knowledge. Indigenous
knowledge is also a potential source for the conservation of biodiversity.

The significance of traditional knowledge has been recognized in India through initiatives
such as the National Ayush Mission (NAM) and the Traditional Knowledge Digital Library
(TKDL).

Global Issues Related to Sustainable Development

▪ Inequitable growth of national economies (North-South Divide)
▪ Loss of Biodiversity: Despite mounting efforts over the past 20 years, the loss of the
world’s biodiversity continues.
▪ Climate Change: As a global problem, climate change requires a global solution. Within
climate change, particular attention needs to be paid to the unique challenges facing
developing countries.
▪ Tackling climate change and fostering sustainable development are two mutually
reinforcing issues.
▪ Intellectual Property Rights (IPRs): There is a need for welfare for all rich and poor to
have affordable access to the results of innovation that can lead to sustainable
development.

Sustainable Development Goals: 17 Goals to Transform our World

1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition, and promote sustainable
agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning
opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable, and modern energy for all
8. Promote sustained, inclusive, and sustainable economic growth, full and productive
employment, and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialization, and
foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient, and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its impacts
14. Conserve and sustainably use the oceans, seas, and marine resources for sustainable
development
15. Protect, restore, and promote sustainable use of terrestrial ecosystems, sustainably
manage forests, combat desertification, halt and reverse land degradation, and halt
biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access
to justice for all, and build effective, accountable, and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalize the global partnership for
sustainable development

Way Forward
▪ To make the process of sustainable development feasible and operational, it is
important to establish a common focus that can integrate the outlook and efforts of
various participants in development, worldwide, realizing the diversity, in terms of
geography, society, economics, level of science, and technology capabilities and
capacities and education standards/levels.
▪ Developed countries need to change their production and consumption patterns,
including limiting the use of fossil fuels and plastics, and encouraging public and
private investments that align with the SDGs.
▪ Environmental commons—such as the atmosphere, rainforests, and oceans— must
be safeguarded as crucial sources of ecosystem services and natural resources. All
stakeholders must work together to conserve, restore and sustainably use natural
resources.
▪ The food system must undergo widespread changes to the infrastructure, cultural and
societal norms, and policies that are supporting the current, unsustainable, status quo.
▪ A much deeper, faster, and more ambitious response is needed to unleash the social
and economic transformation needed to achieve our 2030 goals.
▪ A far more optimistic future is still attainable only by drastically changing development
policies, incentives, and actions.

Contemporary Issues in Development Administration

Modern strategic thoughts in public administration otherwise known as New Public
Management emphasis the use of networks, partnerships, collaborations and very many
other terms that underscore governance as an external engagement rather than an
internal process of organizations. This new model involves public organizations
collaborating with stakeholders in joint decision-making procedures in a consensus-
oriented, formal and premeditated way (Berkett, Challenger, Sinner, & Tadaki 2013).
Contemporary governance is described as fundamentally social-political and it’s seen as
relatively continuous procedures of relations between societal actors, forces, groups and
public authorities, organizations or institutions. Interaction is key and is recognized as a
sequence of co-arrangements amongst non-state and state actors, more concerned
towards collaborative tactics to problem-solving. In such models, the communication of
knowledge and information and its valuation by means of those involved act a vital role;
and negotiation instead of directives has turn out to be an alternative mechanism of
handing the ambiguity and complexity problems which are political and social.
Issues like inequality, poverty, absence of rural development and unemployment can be
attributed to a combination of economic, political and social forces, which are internal
and external, which likely limit economic, political and social development
Concept of Modern Governance
Modern governance involves the interaction of public, private, corporate sectors, and civil
society. It shares an obligation for the administration of sound growth by addressing the
concerns of transparency, openness, accountability, participation, predictability, and rule
of law (United Nations Development Program, 2011).
The developmental alternatives in the arena of public administration which intellectuals
usually refer to as paradigm moves emphasize the new model of governance, which
contributes to the use of networks, stakeholders, partnerships, and collaboration in policy
and processes of government. The subject espouses the core governance challenges that
build agreement around some lasting socio-political and economic organization and the
interrelationship of various groups or stakeholders. It recognizes how to rationalize
administrative structure to make it further efficient regardless of whether a scientific
administrative approach or political evaluation approach is emphasized.
Early scholars in public administration have emphasized the dichotomy concerning politics
and public administration. Gulick and Urwick (1937) progressed more from separation to
advocate the principles of administration. They foresee a science of administration fully
separated from politics, which shall seek to straighten the paths of government, for more
effective and strengthened to disinfect its organization and to crest its responsibilities with
dutifulness (Gale, 1968). The achievement of good governance, therefore, remains a
distant dream in the absence of a vital and effective tool for public management.
Good Governance on the other hand as conceptualized by former World Bank President,
Barber Conable, means civic service that is effectual, a legal structure that is dependable,
and administration which is answerable to its public. (World Bank, 1994). This idea of good
governance essentially stressed the importance of ethically sound political leadership,
democracy, human rights and transparency and accountability reforms.
The duty of the state is to generate economic, legal and political conducive atmosphere
for enhancing individual competences and inspire private enterprises. Although the
market is anticipated to generate opportunities for individuals, the part of civil society is
facilitating. Development actions under the governance sector revolve around knowledge
management, organizational restructuring, institutional reforms, judicial reforms, law and
order, professional development, and service delivery.
This ' goodness’ in governance conferring to The Chartered Institute of Public Finance and
Accountancy (CIPFA) and the International Federation of Accountants (IFAC) entail of the
following:
1) Performing in the interest of the public: government bodies should performance in the
interest of public all the time, which requires a strong obligation to integrity, right
values, openness, rule of law and broad engagement of stakeholder.
2) Defining results in relations to viable economic, environmental and social benefits;

3) Determining the interferences required to optimize the accomplishment of proposed

outcomes;
 4) Developing the ability of the individual, including the competence of its leadership and
individuals inside it;
5) Handling performance and risks through vigorous internal control and robust financial
management of the public; and
6) Employing good practices in reporting to bring effective accountability.

Thus, while recognizing the necessity for engagement of stakeholder or participation of

non-governmental groups in government procedures as the other replicas of governance,
the suitable governance prototypical emphasizes the prominence of government official’s
role to performance in the interest of the public via visionary and active leadership,
transparency, integrity, and accountability.
Economic visions and National Development Plans in Nigeria
According to Onwuemele (2013), development planning in Nigeria happened under three
eras; the Period of Fixed- Term Planning (1962-1985), Period of Rolling Plan which span
from (1990-1998), New Democratic Dispensation (1999 until date).
The period of Fixed Medium-Term Plan (1962-1985) observed four efficacious plans in
Nigeria. Firstly, National Development Plan (1962-1968). Secondly is National
Development Plan (1970-1974), Thirdly National Development Plan (1975-1980) and
Fourthly National Development Plan (1981-1985). Aside from development plans; the
Nigeria government has also utilized other strategies aimed at achieving accelerated
development is critical sectors of the economy.
Table 1: Some Recent Development Programs in Nigeria

S/n Economic Sector Development Strategy Year

1 Employment promotion National Poverty Eradication Program (NAPEP) 2002
Program
2 Poverty Reduction Strategy National Economic Empowerment and 2001
Development Strategy (NEEDS)
3 Poverty Reduction Strategy Seed Economic Empowerment and Development 2001
Strategy (SEEDS)
4 Poverty Reduction Strategy Local Economic Empowerment and Development 2001
Strategy (LEEDS)
5 Economic Development Nigerian Vision 20-20 Program 2009
Program

Capacity Development and Institutional Development

The direct impact of development administration is the disclosure of the administrative
hindrances to the setting and execution of the development agenda. The exposé brought
forward the capacity lacuna and stimulated the interest of public administration
practitioners and stakeholders to find a solution to the gaps in human and institutional
capacity. Hence, the new public administration paradigm stressed the importance of
capacity and institutional development, utilization, promotion and creation of job
opportunities.
According to Onwuemele, (2013), capacity development are the activities, approaches,
strategies, and methodologies which help organizations, groups and individuals to
improve their performance, generate development benefits and achieve their objectives.
Onwuemele, (2013) stressed the importance of manpower development, utilization,
promotion and creation of job opportunities for overall national development. Rodman
(1968 opined that capacity development is the process by which individuals and
organizations increase their abilities to successfully apply their skills and resources toward
the accomplishment of their goals and the satisfaction of their stakeholders’ expectations
corroborates this view
Some Human Capital Development programs in Nigeria
S/n Economic Sector Development Strategy Year
1 Employment Promotion National Manpower Board 1962
Programme
2 Employment Promotion Expatriate Quota Allocation Policy 1963
3 Programme
Employment Promotion The Industrial Training Fund (ITF) 1973
4 Programme
Employment Promotion Administrative Staff College of Nigeria 1973
5 Programme
Employment Promotion (ASCON)
Centre for Management (CMD) 1976
Programme
6 Employment Promotion National Directorate of Employment 1989
Programme (NDE)

Economic Structural Adjustment Programme

Economic Structural Adjustment Policies (ESAP) are economic policies, that nations must
abide by to be suitable for new International Monetary Fund (IMF) loans and that of the
World Bank and assist them in debt repayments on outstanding debts owing to
commercial banks, World Bank and governments (Mlambo, 1997). Although Structural
Adjustment Programme (SAPs) are intended for individual nations but have shared
guiding ideologies and characteristics which comprise privatization export-led growth
and liberalization; and the efficacy of the free market. Hence, Lensink (1996) argues that
SAPs consist of loans delivered by the IMF and the World Bank (WB) to nation-states that
encounter crises in their economy. SAPs are formed to decrease the borrowing nation's
fiscal imbalances or to adjust the growth for the long term (Lall, 1995).
Lensink (1996) further observed that SAPs mostly require nations to devalue their
currencies compared to the dollar; boost export and import restrictions; stabilize their
budgets, eliminate overspending; and eliminate price controls and subsidies of state.
Devaluation enables their product inexpensive for foreigners to buy and tentatively,
makes foreign importations more costly. In principle, it should cause the nation wary of
purchasing costly foreign equipment. In reality, however, the IMF essentially disrupts this
by recompensing the nation with a huge foreign currency loan and that inspires them to
purchase imports,(Mlambo ,1997). Balancing countrywide budgets can be achieve by
increasing taxes, which the IMF glares upon, or by reducing spending of government
which it recommends (Lall, 1995). As such, SAPs usually result in high cuts in programs
like health, education and social care, and removal of grants intended to regulate the
price of essentials like food. So, SAPs offend the mostly the poor, because they rely
heavily on this subsidies and services (Mlambo, 1997). SAPs inspire countries to pay
attention on the manufacture and export of merchandises like coffee, cocoa and to
receive foreign exchange. However, these produces have extremely erratic prices owing
to the whims of international markets that can decrease prices just when nations have
invested in these cash crops (Mlambo, 1997).
Decentralization in the Public Sector
According to UNDP (1997), decentralizing governance or decentralization, is the
reorganization or restructuring of authority to facilitate a system of co-responsibility
among establishments of governance at all levels. This operates in alignment to the norm
of subsidiarity, thus boosting the total effectiveness and quality of the governance system
while enhancing the capacities and authority of sub-national levels (Treisman, 2000).
Decentralization of government is one of the most vexatious public-sector management
issues. While adopted in virtually every large country, its form and structure differ widely
and is always contentious United Nations Development Programme (1998).
Decentralization of government is promoted based on the following objectives:
▪ It brings the government closer to the people and hence makes it more accountable
▪ It allows the government to be more responsive to people since the localized
government is in a better position to understand the needs and priorities of the
people
▪ It can be more cost-effective since it is easier for local government to develop locally
suitable response mechanisms to deal with local needs.
While all of the above is generically true, these principles do not necessarily apply in
every context. Hence, the issue of decentralization must be dealt with cautiously, keeping
in mind that a particularly successful model in one country need not be appropriate in
another. Treisman (2000) distinguishes among different types of decentralization:
1. Structural decentralization - refers simply to the sum of tiers of government. The
higher the tiers are, the additional decentralized the system becomes. For example,
Singapore, where local government do not exist distinct from the nationwide
government, is maximally centralized. China, which has four tiers of government
below the national government; prefectures; counties and county-level cities;
villages, townships, and city districts-is far more decentralized.
2. Decision decentralization focuses on the scope of issues in which the government
of a subnational can choose autonomously (i.e., lacking fear of being overridden by
higher-level governments). A nation whose constitution investments a large division
of policymaking zones to the government of subnational is further decentralized
than that in which the ultimate decisions of issues are the central government’s
preserve.
3. Resource decentralization refers to how resources of government (manpower,
revenues) are shared among central and subnational tiers. Also, the extent of
autonomy and capacity of local governments to increase their revenue.
4. Electoral decentralization This is the technique by which subnational officers are
selected. If subnational officers are locally chosen (by appointment or election by
local communities), the system is farther decentralized in this sense than if entirely
local officers are selected by the principal authorities.
5. Institutional decentralization concerns the degree to which subnational
communities or its legislative body have recognized rights in the processes of
central decision-making. A system whereby the legislatures of the state must ratify
legitimate amendments is further decentralized in this sense than that in which the
constituents can be altered by a fair national referendum. Nations, whereby states
 have noteworthy veto powers above central legislature through their legislative
body, are furthermore “institutionally decentralized".
Decentralization tends to supply vital elements of good governance, like increasing
opportunities for people to participate in social, political, and economic decisions;
helping in developing the abilities of the people; and stimulating responsiveness,
accountability, and transparency of the government.
The World Bank (2013) offers an alternative typology for administrative (not necessarily
political) decentralization:
 1. Deconcentration: This redistributes decision-making authority, management
and financial responsibilities among various levels of the central government. It
merely shifts responsibilities from the officials of the central government in the
capital city to the regional, district or provincial workers, or create a strong local
administrative or field administration capacity under central government
ministries’ supervision.
2. Delegation: This is a more general form of decentralization in which transfer of
responsibility for decision-making and administration of public functions is made
from central governments to semi-autonomous organizations not fully regulated
by the central government, but ultimately accountable to it. Responsibilities are
delegated by Government when public enterprises or corporations, authorities,
special service districts, transportation authorities, housing, semi-autonomous
school districts, regional development corporations, or special project
implementation units are created. Usually, there are great deals of discretion in
decision-making by organizations which may be exempt from constraints on
regular civil service personnel and may be able to charge users directly for
services.
3. Devolution: This is the third type of administrative decentralization.
Governments can devolve functions by transferring authority for decision-
making, quasi-autonomous management units and finance of local government
with corporate status. Devolution often transfers duties of services to
metropolises that selects councils and mayors for themselves, generate self-
revenues, and own independent authority to make investment decisions. Local
governments in a devolved system have lucid and legally identified geographical
boundaries over which authority is exercised and in which public functions are
performed. This is the type of administrative decentralization that characterise
most political decentralization.
Decentralization according to UNDP (1998) also aims at an economic and political system
that responds more closely to people’s preferences and requirements. By linking the
differences between users of goods and services, and suppliers, measures of
decentralization tend to achieve three major objectives:
▪ Improved efficiency in service provision
▪ More transparency of service providers
▪ Better accountability to service users.
Decentralization of the public administration may associate with political
democratization this is by changing the duties and resources among certain levels and
agents of the government. There is a closer and more accountable relationship between
the electorate and the people in power when the people freely elect local governments.
Politicians are more accessible and approachable (Treisman, 2000). The political debate
is expected to pay more attention on location-specific issues and is more responsive to
the citizen voter. This, in turn, is expected to restructure the expenditure of the public as
it concerns the mix of activities that receives support from the public, and the
distribution of public expenditure over the national territory. Decentralization according
to (Treisman, 2000) will aid the following:
1. Increase the transparency of decision-making

2. Improve the quality and quantity of services it provides

3. Increase the willingness to pay for services received

4. Improve cost recovery, and facilitate resource raising from sources other than the
central government
5. Reduce the total expenditure of government.

7
World Bank (2013) further highlighted as the underlying assumptions on which these
potential benefits of decentralization rest include:
a) Representative elected bodies: Each member of the council has a directive to
articulate the needs of an identifiable constituency and can be held accountable.
b) Inclusive local decision-making: Decision-making that does not systematically
exclude the most vulnerable groups, poorest, specific ethnic or social groups.
Potential problem of decentralization according to World Bank (2013) include:
• Elite capture
• Corruption
• Patronage politics
• Feeling of compromise by Local civil servants
• Impedes further decentralization
• Incomplete information
• Inability of Constituents to hold representatives accountable
• Upwards and downwards effects of accountability by decisions of Opaque
• Delays of rationalizes reform and central clawback of power

Public-Private Partnership and Tri-parties Partnerships for Economic Development

A public-private partnership (PPP) is a type of contract in which the public partner

entrusts some responsibilities to a private partner under a long-term contract. The term
of the contract defines the rights and obligations of each party during the term as well
as the mode of financial re-equilibrium arising from unforeseen events or lack of
compliance of the parties (Marques, 2007). PPPs are agent of infrastructural
development, thus nurturing economic development. They are associated with such
infrastructures as ports, power, roads, airports, water, and treatment of solid waste, and
typically involve investment, operation, and maintenance. PPPs are also used in social
infrastructures like health and education, e.g., construction and maintenance of a
hospital or school facilities, but can also include total or partial clinical or education
services.

PPPs are complex long-term contracts (Marques, 2007). They typically span between 15
to 25 years, sometimes more, depending on the type of the project. During the period,
demographics, environment, technology, and politics may change, so there is need for
flexibility of contracts to regulate to the lifecycle of the project. PPP’s art resides in the
distribution of the project’s risks and in the definition of the principles, rules and
framework, to tackle change because it will occur.

According to the Government Finance Officers Association, if governments desires a PPP

alignment, it should check the following tools, processes, and practices in carrying out
due diligence on PPP agreements:
1. Conduct an Initial Review of Project Feasibility: Public entities should conduct a
feasibility study to determine long- and short-term financial viability of the
project. This realistic evaluation must be the initial review that determines
demand, expected revenues, project risks, cash flows, and the tendency to
actualise the goals of the project. All economic development and redevelopment
projects are subject to overall market fluctuations and involve the risk that the
project will not deliver expected outcomes.
 2. Evaluate the Project for Consistency with Community Priorities and Long-Term
Strategic Plans: All PPP Agreements should agree with the financial policies and
overall strategic, master plans of the organization. Also, the organization should
assess the project’s objectives and ascertain if participation in the project is in
line with the mission of the government.
3. Identify any Unmet Competencies on the Government Staff: Difficult projects
will need specialized resources; however, internal staff will be able to conduct
the analysis with other different agreement of P3. For all P3 Agreements, the
organization will need to gather a team that contains analysts, resources with
industry related expertise, legal counsel, potentially a financial advisor/municipal
advisor with economic development expertise, and/or bond counsel. Early
determination of whether outside resources are needed to complement staff
resources in executing the recommended processes of this best practice should
be done by public entities.
4. Determine the Fiscal and Economic Impact of the Project: The public entity
should establish the likely economic and fiscal impacts, taking into account
uncertainties in the calculation or risk of the proposed project. Factors to
consider when identifying potential costs and benefits include:

Governing by Contract

Governing by contract is aimed at making governance more innovative, effective, and

responsive to citizens’ demands. In addition, there are now more private organizations
as service providers involved (Pollitt & Bouckaert, 2004). The aims of public sector
reforms have also been set by the need to renew the public sector’s governing system
and practices (Osborn
& Gaebler, 1992). Governing by contracts, or contract management, are new practices
with the purpose to create a new model for governing public services.

The role of contracts in governance help in the acceleration of development through

building relationships between governmental organizations and other agencies,
communities, nonprofit groups, and private firms. This offers an opportunity for a
focused evaluation of the criteria and trade-offs, integration, agreement and authority,
separation and transformation, operations, and capacity building. Governance by
contract has the merits of seamless and interrupted implementation of the public-private
partnership since it gives direction on operating, forming, transformation and
terminating contracts among the inter-governmental relations’ complexities.
Governing by contract sees public sector organizations as a chain of low-trust
principal/agent relationships (rather than fiduciary or trustee-beneficiary ones) and a
network of contracts connecting incentives to performance. Government disaggregates
separable functions into quasi-market forms or quasi-contractual, particularly by
introducing provider/purchaser distinctions. Open up provider roles to competition
between firms and not-for-profit bodies, public agencies; and de-concentrates provider
roles to the smallest feasible sized agency, allowing more scope for 'exit' for users from
one provider to another, instead of relying on 'voice' options to influence how public
service provision affects them (Weber, 1978).

Coordination in Public Policy

To attain improved public management and administration that will guarantee "doing
things right" then the policy-making process might be described as determining the
appropriate things to do so that government is "doing the right things". In Nigeria, as in
other transition economies, public action through government is being restructured to
meet the needs of modern "market

9
economies". Aware of their weak policy-making environment, most developing nations
now pursue reforms to support policy coordination. These reforms are expected to drive
the strengthening government public administration systems to create the mechanisms
for horizontal coordination of public policies-making processes. This maximizes the
effectiveness of limited resources, intermission between public policy areas and
international policies. Solving the difficulties in a consistent manner need efficient
coordination, improving cooperation between ministries and involving citizens in the
planning of which more work still has to be done.
This aligns with the New Public Management (NPM) strategic thought that focuses on
issues like administrative decentralization and delegation of authority, managerial
autonomy, and flexibility. Performance measurement has also been strongly emphasized.
The logic of new public management is that there should be governing big issues and less
governing in small issues. Based on the NPM development, Pollitt and Bouckhaert (2000)
stress that output-based accountability which prioritizes effective and efficient service
delivery above input and process-based models that focuses on means and procedures.
Therefore, such varied managerial features as behavior, strategic stance, and the stability
of managerial and front-line personnel have stronger links to performance (O’Toole
&Meier 2010).

PUBLIC ENTERPRISE AND THE PRIVATIZATION DEBATE

Traditionally, business activities were left mainly to individual and private organizations, and
the government was taking care of only the essential services such as railways, electricity
supply, postal services etc. But it was observed that private sector did not take interest in
areas where the development period was long, investment was heavy and the profit margin
was low; such as machine building, infrastructure, oil exploration, etc. Not only that,
industries were also concentrated in some regions that had certain natural advantages like
availability of raw materials, skilled labour, nearness to market.
This led to regional imbalances. Hence, the government while regulating the business
activities of private enterprises went in for direct participation in business and set up public
enterprises in areas like coal industry, oil industry, machine building, steel manufacturing,
finance and banking, insurance etc. These units are not only owned by central, state or local
government but also managed and controlled by them and are termed as Public Sector
Enterprises.
Public enterprises in Nigeria dates back to the colonial era when the colonial government
established some public enterprises to private essential services like electricity, railway and
water. The post-independent era marked a watershed in the growth and spread of public
corporations. At independence in 1960, Nigeria had 50 public enterprises, 200 in the 1970s
and 500 in 1987, when government embarked upon economic reform programmes. As at
today 2017, Nigeria has estimated xxxx public enterprises.
Meaning of Public Enterprises:
A public enterprise is viewed as an artificial person who is authorized by law to carry on
particular activities and functions. It essentially has the features of several individuals who act
as one. It is described as a corporate body created by the legislature with defined powers and
functions and independently having a clear-cut jurisdiction over a specified area or over a
particular type of commercial activity. It is a part of government apparatus and three
implications are hereby highlighted. Public Enterprise, by virtue of its complex relationship
with government, is an instrument of public policy and its primary mission is in connection
with governmental objectives and programmes. It is, therefore, naturally under governmental
control. Second, a public enterprise by its nature mostly manages public resources, especially
public money and this means that attention must be paid to mechanisms for enforcing
accountability. Third, the combination of financial and economic objectives with social and
political arms invariably makes it difficult to devise appropriate performance measurement
instrument.
A public enterprise is an agency of the government through which the government manages
its commercial and economic activities. Government owned commercial or industrial
organization where the government may hold either majority shares or all the shares.
What Is Public Enterprise
The public enterprises came into existence as a result of the expanding scope of public
administration. The advent of the concept of welfare state after the Second World War and
the increasing developmental initiative undertaken by Government across the world, the
system of public enterprises was developed.
“Public enterprises are autonomous or semi-autonomous corporations and companies
established, owned and controlled by the state and engaged in industrial and commercial
activities.” Public enterprises as a form of business organisation have gained importance only
in recent times.
The multiplicity and diversity of the perspectives from which individual scholars and
practitioners can often tend to view public enterprise have naturally resulted in a excess of
definitions. Happily however, this has not prevented, at least not significantly, the
convergence of opinion on what key elements 'universally' constitute the central concern and
focus of public enterprises.
A Public Enterprise can be defined as “financially semi-autonomous body created by an Act
of Parliament to provide goods and services on a commercial basis and is ultimately
responsible to the minister through the parliament and the general public.”
It is an organization that is set up as a corporate body and as a part of the governmental
apparatus for entrepreneurial or entrepreneurial-like objectives. Public enterprises are
organizations which merged as a result of government acting in the capacity of an
entrepreneur. Public enterprises also known as public corporation can also be defined as
publicly-owned enterprise that has been chartered under Federal, State or Local Government
law for a particular business or financial purpose. It is a body framed for the purpose of
enabling a number of persons to act as a single person.
In an expert group meeting at the International Centre for Public Enterprises (ICPE) in
Yugoslavia, a conceptual definition of public enterprises was formulated as follows:- "A public
enterprise is an organisation which is owned by public authorities including central, state or
local authorities, to the extent of 50 per cent or more ; is under the top managerial control of
the owning public authorities, such control, including, inter alia, the right to appoint top
management and to formulate critical policy decisions; is established for the achievement of
a defined set of public purposes which may be multi- dimensional in character; and is
consequently placed under a system of public accountability; is engaged in activities of a
business character; involves the basic idea of investment and returns; and which markets its
output in the shape of goods and services".
This definition reflects the complex nature of the organisation described as public enterprises.
The idea of investment and returns could be interpreted either as financial returns in the
commercial sense or as social returns.
Companies Act 1956 has defined a public enterprise as follows: "A government company is
one in which not less than 51% of the paid-up share capital is held by the central government
or by any state government or governments or partly by the central government and partly
by state government or governments"
As state earlier, the business units owned, managed and controlled by the central, state or
local government are termed as public sector enterprises or public enterprises. These are also
known as public sector undertakings.
A public sector enterprise may be defined as any commercial or industrial undertaking owned
and managed by the government with a view to maximise social welfare and uphold the
public interest. “By public enterprise is meant economic undertakings, especially industries,
agricultural or commercial concerns, which are owned (wholly or in part) and controlled by
the state” – U.N Publication “A public enterprise means state ownership and operation of
industrial, agricultural, financial and commercial undertakings.”
 A.H. Henson Oshisani and Dean (l984) define public enterprises as “semi-autonomous bodies,
subject to the "overall control of the government, but having their own management
responsible for policies and decision within statutory defined field, they went further to say
that' because of the increasing popularity in Nigeria of the term, parastatals the two terms
can be used interchangeably. As organizations created by partly or wholly owned and largely
controlled by a public authority (federal, state or local government) „ and which -are
supposed or expected to operate along industrial, commercial or profit-making lines (even if
they also have social objectives) Aire 1986.
As economic undertaking, especially industrial, agricultural or commercial concerns which are
own (wholly or in part) and controlled by the state. It includes those mixed enterprises, which
are controlled by the state. A mixed enterprise is one jointly owned by private persons. If the
state contributes over half of its capital, it automatically has a controlling interest. In some
cases, the state even has control over a mixed enterprise for which it provides less than half
of its capital. United Nations: 1975
From all the different definitions given above, it can be concluded at this juncture that there
is no authoritative and universally accepted definition of a public enterprise, As a working
definition, public enterprise are (usually) government investment undertakings, managed
outside the regular ministry (or civil service) and accorded autonomy to enable the enterprise
to operate along commercial or business line, as it‟s the case inn private sector. Examples of
public enterprises in Nigeria include Nigerian Railway Corporation (NRC), Central Bank of
Nigeria, (CBN), water board/water corporation, Nigerian Postal Service, Nigerian Defence
Industries Corporation, National Universities Commission, several governments owned or
controlled manufacturing enterprises (breweries, textiles, cement, steel, flour and vehicle
assembly plants (PAN) fertilizer copany, mining etc)
Objectives of Public Enterprise
The major objectives of public enterprises could be summarized as follows:
a) To help in the rapid economic growth and industrialization of the country and create the
necessary infrastructure for economic development.
b) To earn return on investment and thus generate resources for development.
c) To promote redistribution of income and wealth.
d) To create employment opportunities.
e) To promote balanced regional development.
f) To assist the development of small scale and ancillary industries and,
g) To promote import substitution, and to save and earn foreign exchange for the economy.

Significance of Public Enterprise

I. Need for economic development and sound industrial base
 II. Modern economy being a planned economy
III. Instability of the private sector to start huge industries
IV. Need for balanced regional growth
V. Policy commitment of the government in power
VI. Establishment of a socialists and welfare-oriented society
VII. Need for optimum utilization of natural resources
VIII. Need for fulfilling social objectives
IX. Socio- political factor
X. Defense requirements
XI. To curb monopolies and preventing concentration of economic
XII. To act as a model employer
XIII. Stimulates research and development
XIV. Raising the standard of living
XV. Need for capital and technical knowhow
XVI. Employment opportunities and national dividend
XVII. Stimulates effective implementation of government policies

Characteristics of Public Enterprises

▪ Financed by Government:
▪ Government Management:
▪ Financial Independence:
▪ Public Services:
▪ Useful for Various Sectors:
▪ Direct Channels for Using Foreign Money:
▪ Helpful in Implementing Government Plans:
▪ Autonomous or Semi-autonomous Bodies
▪ Ownership with the government
▪ Subject to government control and management
▪ Public accountability
▪ Autonomous functioning
▪ Part of political and administrative structure
▪ Varied range of activities
▪ Public purpose
▪ Economic enterprise
▪ Considerable financial freedom

Looking at the nature of the public enterprises their basic characteristics can be summarized
as follows:
a. Government Ownership and Management: The public enterprises are owned and managed
by the central or state government, or by the local authority. The government may either
wholly own the public enterprises or the ownership may partly be with the government and
partly with the private industrialists and the public. In any case the control, management
and ownership remain primarily with the government. For example, National Thermal
Power Corporation (NTPC) is an industrial organisation established by the Central
Government and part of its share capital is provided by the public. So is the case with Oil
and Natural Gas Corporation Ltd. (ONGC).
b. Financed from Government Funds: The public enterprises get their capital from
Government Funds and the government has to make provision for their capital in its budget.
c. Public Welfare: Public enterprises are not guided by profit motive. Their major focus is on
providing the service or commodity at reasonable prices. Take the case of Indian Oil
Corporation or Gas Authority of India Limited (GAIL). They provide petroleum and gas at
subsidized prices to the public.
d. Public Utility Services: Public sector enterprises concentrate on providing public utility
services like transport, electricity, telecommunication etc.
e. Public Accountability: Public enterprises are governed by public policies formulated by the
government and are accountable to the legislature.
f. Excessive Formalities: The government rules and regulations force the public enterprises to
observe excessive formalities in their operations. This makes the task of management very
sensitive and cumbersome.
Summary: Owned, managed and controlled by Government, Funded by Government. Welfare
oriented, concentrate on public utility services, Responsible to parliament and the
Observance of Government formality is necessary.
Classification of Public Enterprise
A public enterprise is a particular kind of statutory authority: one that sells goods and services
to the public on a large scale, with the financial returns accruing in the first instance to the
authority itself. Most public enterprises are in the non-budget sector, and operate with
substantial independence. Public enterprises provide many services including, in some
countries, utilities such as telecommunications, electricity, gas supplies, water and sewerage;
transport, such as rail, airlines, shipping services and urban public transport; financial
services, notably banks and insurance companies; and agricultural marketing.
Some countries have government-owned oil companies, motor vehicle companies, and
tobacco and alcohol companies. Indeed, it is hard to imagine a particular product or service
that has not been government-owned in at least one country at one time. The only point in
common of all these is their government ownership. As they differ widely from each other,
and face quite different environments, some kind of classification needs to be developed.
Public Corporations are classified into three:
Public/Statutory Corporations: These are enterprises which arise when the government
assumes responsibility for the management of an economic or social pursuit through a special
entity that has its own legal personality and still keeps some of the special prerogatives or
privileges associated with a governmental organization. The blend of these features is aimed
at enabling the organization to function effectively as an autonomous body while it remains
an instrument of government policy. Enterprises that fall under statutory corporations include
Central Bank of Nigeria (CBN) and Nigerian Television Authority (NTA).
State-Owned Companies: These are companies created by the government under the
provisions of ordinary company law, though they belong entirely to the government. They are
registered in the registry of companies, with the government as the sole proprietor.
Government, therefore, appoints the Board of Directors as is customary in private companies,
e.g., the New Nigeria Development Company, Odua Investment Company Limited, etc.
Public/Private Partnership: These are enterprises where the government is the majority
shareholder in a partnership with private entrepreneurs. In such companies’ government
usually dominates the board since it is the major shareholder. An example is the Peugeot
Automobile Nigeria (PAN).
Adamolekum (1983) categorised public enterprise in to three.
Statutory Corporations: these are enterprises that are established by specific statutes
which contain provisions, relating to finance and personnel among other things; e.g
1. Public utility: NPA, NEPA, NNPC, PPMC, NITEL, NDIC,NFC,
2. Development and finance: CBN,NICON, FMBN, BOA,BOI
3. Welfare and social services: NTA, NEMA, FHA, scholarship board, pilgrimage, hospital
board.

State-Owned Enterprises: These are companies, which operate under the same company
laws that regulate the functioning of private sector enterprises, even though they are fully
owned by the government. E.g. Nigerian national shipping lines, New Nigerian Development
Company Limited, Odua investment Company Limited, New Nigerian Newspapers Limited,
Peugeot Automobile Nigeria Limited, Nigerian Hotels Limited, Gombe state investment and
property development limited.
Mixed-Economy Enterprises: A third category of enterprises are those in which the
government cooperates as a senior partner (i.e. with majority ownership) "with private
entrepreneur to establish an industrial or commercial venture. Union Bank of Nigeria Limited,
National Oil Nigeria Limited, Nigerian Romanian Wood Industry, Agip Nigeria Limited, Un-
petrol Nigeria Limited.
According to Burk head (1956) public enterprises might be classified according to the
economic activities they conduct. Accordingly, there are two types of public enterprise.
1. Those enterprises involving financial transactions, e.g. CBN, NIDB, NICON, etc.

2. Those enterprises involving transactions in goods and services. E.g. Transport, water,
electricity, education, health, etc.
CATEGORIZATION OF PUBLIC ENTERPRISE
Oshisami & Dean. (1984) categorized public enterprise in to four types.
a. Public utilities: examples as the Nigerian Railway Corporation (NRC), Nigeria Airways
(defunct), National Electric Power Authority (NEPA), Nigerian Ports Authority (NPA), Water
Corporation, Post and Telecommunications Dept. (P&T) defunct, water corporation. NTA,
FRCN (Radio) FHA.
b. Financial institution: Central bank of Nigeria, Nigerian industrial development bank,
federal mortgage bank of Nigeria, bank of agriculture, bank of industry.
c. Commercial and industrial companies: Nigerian steel development authority, NNPC,
PPMC, Nigerian national shipping line, Nigerian national supply company.
d. Regulatory or service board: Electoral Commission INEC, Public Service Commission,
Nigerian Enterprise Promotion Board. Marketing Boards, Advertising Practitioners council
of Nigeria.

REASONS FOR ESTABLISHMENT OF PUBLIC ENTERPRISE

There are many reasons for the establishment of public enterprises. They include:
1. The desire to use the public enterprise as an instrument of effective plan implementation
in a context where it appears a futile devise; a development plan for the private sector.
2. The need to secure economic independence.
3. The urgent desire to assure government control over “strategic” sectors of the economy,
e.g. the Central Bank.
4. The need to separate some activities from the civil service and allow more autonomy in
their running.
5. The perceived need to provide employment for the citizens in context where the private
sector offers very lucrative employment opportunities.
6. The need to ensure state control of key profitable enterprises with a view to generating
revenues that will add to available national capital for financing development
programmes and projects.
7. The desire of some socialist-oriented regimes to use sate control of key profitable
enterprises to pursue the objectives of preventing the concentration of wealth or of the
means of production and exchange in the hands of few individuals or of a group, i.e.,
promoting equitable distribution of wealth.

Governments have established public enterprises for a variety of reasons. These can include:
inadequate private supply of goods and services; rescuing private firms if their closure is
against the public interest; improving competition; reducing social costs such as
environmental externalities; even to protect national sovereignty in some way. Some
developing countries prefer having public enterprise to having foreign ownership of
important services.
Rees (1984) argues that there are four reasons for the existence of public enterprise:
1. To „correct‟ market failure.
2. To alter the structure of pay-offs in an economy.
3. To facilitate centralized long-term economic planning.
4. To change the nature of the economy, from capitalist to socialist.

The first point refers to services, which are desired, but will not be adequately provided by
the market. Market failure can occur for reasons of natural monopoly, restriction of
competition in some other way, externalities or spill-over effects on others and where the
goods produced are to some degree public goods (Chapter 4). To have these industries in
public hands may be „a way of retaining the cost advantage of a sole seller while preventing
the resource misallocation which would result from a profit-seeking monopoly‟ (Rees, 1984,
p. 3).
The second point – the structure of pay-offs – means altering the benefits received by
particular individuals or groups. Beneficiaries could include the employees, consumers or
government. One way of altering pay-offs is the extensive cross-subsidization prevalent in
public enterprise pricing. Rural electricity users may receive services at uneconomical rates,
while other consumers are charged more than the cost to provide that service. If rural
electricity services were provided privately, consumers would either pay more, or the
company might decide that providing the service was simply too expensive. Also, some critics
argue that government ownership leads to „featherbedding‟, providing terms and conditions
for employees above those which could be obtained elsewhere, including the employment of
more staff than may be needed. In other words, the pay-offs are being directed to the
enterprise’s own employees.
The third point – centralized long-term planning – is a motivation used in some countries.
Government ownership of electricity and rail in France enabled the provision of services
ahead of demand as part of the planning process for the nation, especially in regard to the
government’s attempts to decentralize the economy. Related to this is a general
developmental role of public enterprise, in particular the public utility sector. In some sparsely
settled countries like Australia and Canada, utilities were established in government hands
from the beginning, due to the inability of private providers to make an economic return. This
was not market failure because of natural monopoly problems, but for developmental ones:
that is, markets were not capable of providing the necessary infrastructure. No one other
than the government had the resources to carry out the development of key services
(Dwivedi, 1996). The choice was either to have the government provide services or for them
not to be provided to consumers at all.
The fourth point – to change the economy from capitalist to socialist – has been a major
factor in some countries. In the United Kingdom in the post-war period, railways, steel and
coal were nationalized so that the commanding heights of the economy were in government
hands. Public enterprise had been regarded as a form of „soft‟ socialism, perhaps a transition
stage on the way to full socialism. If important industries were in government hands as public
enterprises, this would facilitate the transition to a socialist state. In sum, there has been no
single consistent governmental aim for using public enterprise. There have been a set of
diverse reasons beyond mere profitmaking. Public enterprises have always had objectives
other than to make money. Of course, a government has the power to involve itself in any
part of society, which must include creating its own enterprises
Financing of Public Enterprises
Funding public enterprises in Nigeria has always been a critical issue, particularly because of
the strong linkage between finance and autonomy. It is therefore important to identify the
various sources of funding.
Internally Generated Revenues: these are trading surpluses, earnings from sales of goods
and serv1ces after payment of employed capital, taxes and dividends" public enterprises
cannot generally decide independently how to use their surpluses and profits. The
government has the last say and may allocate such funds to other purposes. Furthermore,
because the depreciation of equipment is not always adequately „assessed (accrual
accounting is still unknown in some cases and because the amount owing to the government
(as the shareholder) is generally arbitrary decided, the real profit that could be used for self-
financing is almost uncertain.
External Sources of funds: Public enterprises derive funds from the government, national,
financial institutions, local, private entrepreneurs, and international sources
Capitalisation funds: as a shareholder or proprietor the government provides the funds
necessary for the take-off of the business. Such allocations are rarely adequate to meet the
needs of public enterprises in terms of equipment, plant and running capital. The result is
that public enterprises generally are not in a good position to manage their affairs, as they
face very serious economic constraints.
Grants: There are different types of grants. There are statutory grants as well as Special or
categorical grants. Special or categorical grants are attached to specific projects or activities,
whereas statutory grants are regular and mandatory and could also be general or related to
specific activities. Regular grants are also referred to as subventions.
Subsidies: These are allocations made for-the primary objective of offsetting the losses
incurred by public enterprises. Public enterprises incurred losses either because government
control tariffs or because the objective of the service provision and employment creation
render profitability impossible.
Loans: Government lends money to public enterprises to ease their financial management
problems or to assist them in specific projects or interventions that are of special interest to
government.
Equity: Government in its capacity as a shareholder in a joint venture may contribute to
increase the capital of the enterprises or to increase its shares.
International Source of funds for public enterprises includes the foreign private sector
(financial institutions as well as entrepreneurs, international development agencies such as
IMF, World Bank, ADB and in some cases foreign governments. International sources of
require more guarantee and protection in international law than do internal sources. Political
strings are attached to loans from foreign governments, and loans from international
development agencies usually come with Conditionality’s (i .e. specific actions to be taken
before and during, the period when the loan is being drawn) and must-be guaranteed by
governments; On the whole, public enterprises in Nigeria depend more on external sources
of funds than on internally generated revenues.

Organization and Management of Public Enterprises

There are three different forms of organization used for the public sector enterprises. These
are (1) Departmental Undertaking; (2) Statutory (or Public) Corporation, and (3) Government
Company.
Departmental Undertaking: is a form of organization which is primarily used for provision of
essential services such as railways, postal services, broadcasting etc. Such organizations
function under the overall control of a ministry of the Government and are financed and
controlled in the same way as any other government department. This form is considered
suitable for activities where the government desires to have control over them in view of the
public interest. Departmental undertakings are the oldest among the public enterprises.
A departmental undertaking is organised, managed and financed by the Government. It is
controlled by a specific department of the government. Each such department is headed by
a minister. All policy matters and other important decisions are taken by the controlling
ministry. The Parliament lays down the general policy for such undertakings.
Features: The main features of departmental undertakings are as follows:
a. It is established by the government and its overall control rests with the minister.
b. It is a part of the government and is managed like any other government department.
c. It is financed through government funds.
d. It is subject to budgetary, accounting and audit control.
e. Its policy is laid down by the government and it is accountable to the legislature.

Merits: The following are the merits of departmental undertakings: -

1. Fulfilment of Social Objectives: The government has total control over these
undertakings. As such it can fulfil its social and economic objectives. For example, opening
of post offices in far off places, broadcasting and telecasting programmes, which may lead
to the social, economic and intellectual development of the people, are the social
objectives that the departmental undertakings try to fulfil.
2. Responsible to Legislature: Questions may be asked about the working of departmental
undertaking in the parliament and the concerned minister has to satisfy the public with
his replies. As such they cannot take any step, which may harm the interest of any
particular group of publics. These undertakings are responsible to the public through the
parliament.
3. Control over Economic Activities: It helps the government to exercise control over the
specialized economic activities and can act as instrument of making social and economic
policy.
4. Contribution to Government Revenue: The surplus, if any, of the departmental
undertakings belong to the government. This leads to increase in government income.
Similarly, if there is deficiency, it is to be met by the government.
5. Little Scope for Misuse of Funds: Since such undertakings are subject to budgetary
accounting and audit control, the possibility of misuse of their funds is considerably
reduced.

Limitations: Departmental undertakings suffer from the following limitations:

1. The Influence of Bureaucracy: On account of government control, a departmental
undertaking suffers from all the ills of bureaucratic functioning. For instance, government
 permission is required for each expenditure observance of government decisions
regarding appointment and promotion of the employees and so on. Because of these
reasons important decisions get delayed, employees cannot be given instant promotion
or punishment. On account of these reasons some difficulties come in the way of working
of departmental undertakings.
2. Excessive Parliamentary Control: On account of the Parliamentary control difficulties
come in the way of day-to-day administration. This is also because questions are
repeatedly asked in the parliament about the working of the undertaking.
3. Lack of Professional Expertise: The administrative officers who manage the affairs of the
departmental undertakings do not generally have the business experience as well as
expertise. Hence, these undertakings are not managed in a professional manner and
suffer from deficiency leading to excessive drainage of public funds.
4. Lack of Flexibility: Flexibility is necessary for a successful business so that the demand of
the changing times may be fulfilled. But departmental undertakings lack flexibility
because its policies cannot be changed instantly.
5. Inefficient Functioning: Such organizations suffer from inefficiency on account of
incompetent staff and lack of adequate incentives to improve efficiency of the employees.
It may be noted that departmental form of organisation for public enterprises is on its
way to oblivion. Most undertakings such as those providing telephone, electricity services
are now being converted into government companies, e.g., MTNL, BSNL, and so on.

STATUTORY CORPORATION: (or public corporation) refers to a corporate body created by the
Parliament or State Legislature by a special Act which defines its powers, functions and
pattern of management. Statutory Corporation is Also Known as Public Corporation. Its capital
is wholly provided by the government. The Statutory Corporation refers to such organizations
which are incorporated under the special Acts of the Parliament/State Legislative Assemblies.
Its management pattern, its powers and functions, the area of activity, rules and regulations
for its employees and its relationship with government departments, etc. are specified in the
concerned Act. Examples of statutory corporations are CBN, Nigerian Deposit Insurance
Company, etc. It may be noted that more than one corporation can also be established under
the same Act.
Features: The main features of Statutory Corporations are as follows:
a. It is incorporated under a special Act of Parliament or State Legislative Assembly.

b. It is an autonomous body and is free from government control in respect of its internal
management. However, it is accountable to parliament and state legislature.
c. It has a separate legal existence. Its capital is wholly provided by the government.

d. It is managed by Board of Directors, which is composed of individuals who are trained and
experienced in business management. The members of the board of Directors are
nominated by the government.
e. It is supposed to be self-sufficient in financial matters. However, in case of necessity it may
take loan and/or seek assistance from the government.
f. The employees of these enterprises are recruited as per their own requirement by
following the terms and conditions of recruitment decided by the Board.
Merits: Statutory Corporation as a form of organisation for public enterprises has certain
advantages that can be summarised as follows:
1. Expert Management: It has the advantages of both the departmental and private
undertakings. These enterprises are run on business principles under the guidance of
expert and experienced Directors.
2. Internal Autonomy: Government has no direct interference in the day-to-day
management of these corporations. Decisions can be taken promptly without any
hindrance.
3. Responsible to Parliament: Statutory organisations are responsible to Parliament. Their
activities are watched by the press and the public. As such they have to maintain a high
level of efficiency and accountability.
4. Flexibility: As these are independent in matters of management and finance, they enjoy
adequate flexibility in their operation. This helps in ensuring good performance and
operational results.
5. Promotion of National Interests: Statutory Corporations protect and promote national
interests. The government is authorized to give policy directions to the statutory
corporations under the provisions of the Acts governing them.
6. Easy to Raise Funds: Being government owned statutory bodies, they can easily get the
required funds by issuing bonds etc.

Limitations: Having studied the merits of statutory corporations we may now look to its
limitations also. The following limitations are observed in statutory corporations.
a. Government Interference: It is true that the greatest advantage of statutory corporation
is its independence and flexibility, but it is found only on paper. In reality, there is excessive
government interference in most of the matters.
b. Rigidity: The amendments to their activities and rights can be made only by the
Parliament. This results in several impediments in business of the corporations to respond
to the changing conditions and take bold decisions.
c. Ignoring Commercial Approach: The statutory corporations usually face little competition
and lack motivation for good performance. Hence, they suffer from ignorance of
commercial principles in managing their affairs.
Government Company: refers to the company in which 51 percent or more of the paid-up
capital is held by the government. It is registered under the Companies Act and is fully
governed by the provisions of the Act. Most business units owned and managed by
government fall in this category. As per the provisions of the Nigerian Companies Act, a
company in which 51% or more of its capital is held by central and/or state government is
regarded as a Government Company. These companies are registered under Nigerian
Companies Act, 1976 and follow all those rules and regulations as are applicable to any other
registered company. The Government of Nigeria has organized and registered a number of its
undertakings as government companies for ensuring managerial autonomy, operational
efficiency and provides competition to private sector.
Features: The main features of Government companies are as follows:
a. It is registered under the Companies Act, 1976.
b. It has a separate legal entity. It can sue and be sued, and can acquire property in its own
name.
c. The annual reports of the government companies are required to be presented in
parliament.
d. The capital is wholly or partially provided by the government. In case of partially owned
company the capital is provided both by the government and private investors. But in such
a case the central or state government must own at least 51% shares of the company.
e. It is managed by the Board of Directors. All the Directors or the majority of Directors are
appointed by the government, depending upon the extent of private participation.
f. Its accounting and audit practices are more like those of private enterprises and its
auditors are Chartered Accountants appointed by the government.
g. Its employees are not civil servants. It regulates its personnel policies according to its
articles of associations.
Merits: The merits of government company form of organising a public enterprise are as
follows:
a. Simple Procedure of Establishment: A government company, as compared to other public
enterprises, can be easily formed as there is no need to get a bill passed by th parliament
or state legislature. It can be formed simply by following the procedure laid down by the
Companies Act.
b. Efficient Working on Business Lines: The government company can be run on business
principles. It is fully independent in financial and administrative matters. Its Board of
Directors usually consists of some professionals and independent persons of repute.
c. Efficient Management: As the Annual Report of the government company is placed before
both the house of Parliament for discussion, its management is cautious in carrying out its
activities and ensures efficiency in managing the business.
d. Healthy Competition: These companies usually offer a healthy competition to private
sector and thus, ensure availability of goods and services at reasonable prices without
compromising on the quality.
Limitations: The government companies suffer from the following limitations:
a. Lack of Initiative: The management of government companies always have the fear of
public accountability. As a result, they lack initiative in taking right decisions at the right
time. Moreover, some directors may not take real interest in business for fear of public
criticism.
b. Lack of Business Experience: In practice, the management of these companies is
generally put into the hands of administrative service officers who often lack experience
in managing the business organisation on professional lines. So, in most cases, they fail
to achieve the required efficiency levels.
c. Change in Policies and Management: The policies and management of these companies
generally keep on changing with the change of government. Frequent change of rules,
policies and procedures leads to an unhealthy situation of the business enterprises.
Management and Control of Public Enterprises
Once any organization is in government hands, there must be questions about its
accountability. In theory all parts of government are accountable to the political leadership
and finally to the people. The question of accountability was once the major concern in public
administration studies of public enterprises and statutory authorities, with any concern about
ownership coming much later. Although the main question now is certainly that of
privatization, the concern with accountability remains important.
According to Aharoni, public enterprise inefficiency is not necessarily the result of ownership;
their abysmal record „has been the result of the structure of their control and processes of
their management, including their relations with the government‟ (1986). That accountability
is a fundamental problem can be seen from the three distinguishing characteristics of public
enterprises: „First…they must be owned by the government. Second…[they] must be engaged
in the production of goods and service for sale…Third, sales revenues … should bear some
relationship to cost‟ (Aharoni, 1986).
These characteristics can lead to confusion in accountability. Public enterprises are
organizations designed to be a part of the government sector, but also to operate
commercially. They operate commercially but have no shareholders; they are government-
owned but are usually not funded by government. They have their own management and
boards of directors, but are also responsible to a minister. A public enterprise is often required
to meet other objectives, rather than simply trying to maximize profit like a private company.
The theory of principal and agent suggests that accountability problems are inherently worse
in the public sector and in public enterprise in particular. This means that poor accountability
is a justification for privatization in addition to the economic rationale set out earlier. The
problem has been to find a mutually satisfactory accountability system for both government
and the enterprise. At present different parts of the accountability system have particular
problems. All government operations are under the control of a minister, but the minister has
political goals that may not necessarily relate to enterprise performance. And, in a way unlike
accountability in a government department, the minister is somehow responsible for
commercial performance in the marketplace, as well as political performance. Balancing
these two goals is, in practice, very difficult and leads to problems. The minister is directly
lobbied by interest groups, voters, unions and workers, other members of the government,
the bureaucracy of the minister’s own department, bureaucrats in other departments, as well
as what could be considered normal‟ links with the board and management of the enterprise.
With such complexity, it is unsurprising that problems of accountability occur.
Enterprise management is often regarded as risk-averse, desirous of the quiet life, without
adequate rewards or sanctions, and not as competent as in the private sector, in part because
the ultimate sanctions of dismissal or company failure are muted. With goals and objectives
being vague, it may not be possible to decide just how good public enterprise management
actually is. Poor accountability relationships allow the opportunity for evasion of
responsibility.
Management can blame government directions for any shortcoming; governments can blame
management; boards can blame both. Governments have often considered their public
enterprises to be beyond control, while at the same time public enterprise managements
have been consistently opposed to what they see as unnecessary levels of intrusion into their
activities. The questions of privatization and accountability are linked. One of the arguments
for privatization is that public ownership means an absence of real accountability. If
accountability is poor and improvements not possible, the case for privatization becomes
much stronger.
The management and control of public corporations are necessary in order to have effective
and efficient public enterprises. The management of public corporations is done through the
management boards and the policy board.
The Executive Board: In the executive board, majority of the board are staff of the
organization. They are usually the heads of the various departments of the organization.
However, a few outside representatives are brought to be in charge of some outside interest.
The Policy Board: Majority of the members of the policy board are from outside the
organization with few members from within the organization. The policy board is responsible
for managing all the policy decisions of the organization, but the implementation of policies
and the day-to-day operation of the organization are carried out by the Managing Director.
This method is applied to most public corporations in Nigeria. Even though public
corporations are created to enable them have some degree of freedom to manage their
affairs, they are still subject to various levels of control.
Ministerial Control: The supervising minister controls the public corporations under his
portfolio in the following modes:
i. By the appointments of Board members since the minister is politically responsible for
appointing members of the board, he can dissolve it, if he is not satisfied with their
performance. These controls may include the appointment of external auditors to audit the
account of public corporations, re-organization of departments and controls on borrowing.
ii. Parliamentary Control This control is necessary to ensure that the operation of public
corporations is in accordance with public policy. Such a control is through the Annual Report.
Public corporations are expected to submit comprehensive annual reports of their activities
to the parliament through the minister and such reports are tabled before the parliament.
The Performance of Public Enterprises in Nigeria
The performances of public corporations are dismal in nature. Instead of improving their
services most of them seemed to be retrogressing and became drain pipes on the economy
without making any meaningful contribution to the nation’s economic development through
service delivery. Virtually all public corporations in Nigeria render epileptic and unsatisfactory
service to the people. Due to problems faced by public corporations in Nigeria in the recent
past, which included corruption, inefficiency and poor management, the Nigerian
Government attempted to solve these problems by taking certain measures. A commission
was set up under Michael Ani, the then Minister, to look into the problems of public
corporations and make appropriate recommendations. The Ani Commission recommended
that the responsibility for personnel matters be removed from the boards and entrusted to
an independent body to be called the Statutory Corporation Service Commission (SCSC). The
recommendations were implemented at both the Federal and State levels. However, after its
review in the early 1970s, the Udoji Commission recommended that it should be abolished.
The government accepted the recommendation and SCSC was eventually abolished. The
second option to solve the problems of public corporations by the government was to invite
foreign management consultants to manage some of them. In 1979, the Federal Government
brought into the country some experts to manage public corporations. A two-year
management services agreement was signed between the Federal Government and Rail India
Technical and Economic services Corporation (RITES) for the management of Nigerian
Railways. Another agreement was signed with the Metallurgical Engineering Consultants of
India (MECON) to manage the Nigerian Steel Authority. The government later terminated
these agreements and reverted to the previous methods of management.
The Concept of Privatization
According to Iheme, 1997, privatization is “any of a variety of measurers adopted by
government to expose a public enterprise to competition or to bring in private ownership or
control or management into a public enterprise and accordingly to reduce the usual weight
of public ownership or control or management.
However, in a strict sense, privatization means the transfer of the ownership (and all the
incidence of ownership, including management) of a public enterprise to private investors.
The later meaning has the advantage of helping one to draw a line between privatization and
other varieties of public enterprise reform. It is also the sense in which the term has been
statutorily defined in Nigeria”.
Starr, 1998, defines privatization as a shift from the public to the private sector, not shifts
within sectors. According to him, the conversion of a state agency into an autonomous public
authority or state-owned enterprise is not privatization nether is conversion of a private non-
profit organization into a profit-making form.
Privatization primarily, is the process of transferring ownership of business, enterprise,
agency, public service or public property from a public sector (a government) to the private
sector, either to a business that operates for a profit or to a non-profit organization. It may
also mean government outsourcing of service or functions to private firms, for example,
revenue collection, law enforcement, and prison management. In other word it is the shifting
of services previously undertaken by the public sector into the private sector. Privatization has
become an important instrument for streamlining the public sector and promoting economic
development in countries all over the world. It is a strategy for reducing the size of
government expenditure and transferring assets and service functions from public to private
ownership and control.
Obadan (2000), defined privatization as an economic policy which in a narrow perspective
entails the transfer through the sale of public assets or enterprises to the private sector. In
the case of Igbuzor (2007), Privatization is defined as the process by which government equity
interest or ownership in business enterprise is transferred, in whole or in part, to private
investors. The World Bank defines privatization as “a transaction or transactions utilizing one
or more of the methods resulting in either the sale to private parties of controlling interest in
the share capital of public enterprises or of a substantial part of enterprises or of a substantial
part of its assets”.
From the above definitions one can easily deduce that there are forms Privatization namely:
a. Full Privatization
b. Partial privatization

Full Privatization has been defined as divestments by the federal Government of all ordinary
shareholding in the designated enterprise. Partial privatization has, on the hand; been defined
as divestments by the Federal Government of part or its ordinary shareholding in the
designated enterprise.
Privatization and Commercialization
Privatization is the fact that business should be left for those who are better qualified to
handle them, which is the private sector, while the government concentrates on its core duty
of governance and policy regulation through the ministries. Government involvement in
business takes the form of regulation and this is done through its agencies. The main motive
about government regulation in a purely private sector, amongst other things, is to achieve
public policy objectives of financial stability, high economic growth, stable prices, full
employment, levels of output and equilibrium and balance of payments position.
This privatization, without adequate regulatory agency measures, will mean allowing laissez-
faire attitude pervade the economy which may lead to what is known as economic disorder
and financial chaos. Businessmen driven by the pursuit of profit, employ both ethical and
unethical means. It is only law that will restrain their activities thereby protecting the people,
business and society in general.
Privatization and Public Corporation: In the Nigerian context, privatization involves the
disposal of all part of shares held by the government directly or through any of its agencies.
Privatization involves the sale of government shareholding in any enterprise to non-
governmental entities. The Nigerian economy is non-cultural being dependent on petroleum
for 90% of its foreign exchange earnings.
The Concept of Commercialization
Commercialization does not involve the alienation of government shareholding to the private
sector as in privatization but involves changing the way government owned companies
operate to ensure that they run commercially and that they make profit.
Igbuzor (2007) defines commercialization as a move towards the pursuit of efficiency and
effectiveness in attainment of objective with a dominance of financial consideration through
the adoption of management styles that reward good and penalizes poor performance.
Decree No.25 of 1998 on privatization and commercialization defines commercialization as
the reorganization of enterprises wholly and partially owned by the federal government in
which such commercial enterprises shall operate as profit-making commercial ventures and
without subvention from the federal government. Therefore, simply put, commercialization
is the process of running previously publicly owned and managed enterprises in such a
guarantee.
The maximization of profit in commercialization is the redirection of public welfare providing
ventures into a profit marking venture. Commercialization therefore can be said to be a kind
of reform of the public enterprises sector with the aim of subjecting them to market discipline
while still remaining a public enterprise.
Commercialization
This is the re-organization of enterprises wholly or partly owned by the government in which
such commercialized enterprises shall operate as a profit-making commercial venture and
without subvention from the government. In July, 1988, the Federal Military Government
promulgated Decree No. 25 on Privatization and Commercialization which gave a legal backing
to the execution of the privatization and commercialization programme in Nigeria. The decree
provides for the establishment of the Technical Committee on Privatization and
Commercialization (TCPC) which is vested with the responsibility of implementing the
programme.
Objectives
1. To re-orientate the enterprises for commercialization towards a new horizon of
performance improvement, viability and overall efficiency through the enforcement of
strict commercial principles and practices.
2. To develop the capital market.
3. To restructure the capital of affected enterprises in order to facilitate good management
and access to capital market.
4. To restructure and downsize the public sector in order to lessen the dominance of
unproductive investments in that sector.
5. To ensure positive reforms on public sector investments in commercialise enterprises.
6. To check the present absolute dependence on the treasury for the funding by the
otherwise commercially-oriented parastatals and encourage their approach to the capital
market.
7. To initiate the process of gradual cession to the private sector of such public enterprises
which by their nature and type of operations are best performed by the Nigerian capital
 Market.
8. To promote wide share ownership.
9. To undertake a comprehensive review of the accounting and management information
system of the parastatals with a view to installing and maintaining modern and effective
accounting systems which will produce promptly the necessary data for monitoring their
financial and operational performance.
10. To reduce the level of internal and external debts via privatisation/commercialisation.
11. To create a favourable investment climate for both local and foreign investors.

Methods of Privatization
The technical committees on privatization and commercialization (TCPC) now known as
Bureau of Public Enterprises (BPE) developed five main approaches for the privatization of
public enterprises. The five methods are as follows.
Public Sales of Shares: This method which is affected through the Nigerian capital market
enables such enterprises to be on the Nigerian stock exchange.
Private Placement: There are some enterprises in which government Holdings are so small
that the TCPC now BPE could not persuade shareholders to make a public offer of sales. In
such enterprises private placement of shares are always made.
Sales of Assets: There are some public enterprises which have unimpressive track records and
besides, the future outlook of such public enterprises is deemed hopeless. In case of this type,
such ventures are liquidated and their assets sold piecemeal through public tender.
Management Buyout: Under this approach the entire affected or a substantial part of its
equity capital is sold to the workers.
Deferred Public Offer: Some public enterprises may be considered viable and it is reckoned
that if such public enterprises are sold by shares, the anticipated revenue will be lower than
the real values of their underlying assets. In such cases, the deferred public offers approach
is adopted to revalue asset and negotiate, on a willing buyer/willing seller basis, a price that
will be more reflective of the current value of the affected public enterprise's assets. Many
hotels were privatized through this approach.
Advantage of Privatization
Improved efficiency: The main argument for privatization is that private companies have a
profit incentive to cut costs and be more efficient. If you work for a government run industry,
managers do not usually share in any profits. However, a private firm is interested in making
a profit, and so it is more likely to cut costs and be efficient. Since privatization, companies
such as BT and British Airways have shown degrees of improved efficiency and higher
profitability.
Lack of political interference: It is argued governments make poor economic managers. They
are motivated by political pressures rather than sound economic and business sense. For
example, a state enterprise may employ a surplus worker which is inefficient. The government
may be reluctant to get rid of the workers because of the negative publicity involved in job
losses. Therefore, state owned enterprises often employ too many workers increasing
inefficiency.
Short term view: A government many think only in terms of the next election. Therefore, they
may be unwilling to invest in infrastructure improvements which will benefit the firm in the
long term because they are more concerned about projects that give a benefit before the
election.
Shareholders: It is argued that a private firm has pressure from shareholders to perform
efficiently. If the firm is inefficient then the firm could be subject to a takeover. A state owned
firm doesn‟t have this pressure and so it is easier for them to be inefficient.
Increased competition: Often privatisation of state owned monopolies occurs alongside
deregulation – i.e. policies to allow more firms to enter the industry and increase the
competitiveness of the market. It is this increase in competition that can be the greatest spur
to improvements in efficiency. For example, there is now more competition in telecoms and
distribution of gas and electricity.
N.B: However, privatisation doesn‟t necessarily increase competition; it depends on the
nature of the market. E.g. there is no competition in tap water because it is a natural
monopoly. There is also very little competition within the rail industry.
Government will raise revenue from the sale: Selling state owned assets to the private sector
raised significant sums for the UK government in the 1980s. However, this is a one-off benefit.
It also means we lose out on future dividends from the profits of public companies.
Disadvantages of Privatization
1. Natural monopoly: A natural monopoly occurs when the most efficient number of
firms in an industry is one. For example, tap water has very significant fixed costs.
Therefore, there is no scope for having competition amongst several firms. Therefore,
in this case, privatization would just create a private monopoly which might seek to
set higher prices which exploit consumers. Therefore, it is better to have a public
monopoly rather than a private monopoly which can exploit the consumer.
2. Public interest: There are many industries which perform an important public service,
e.g., health care, education and public transport. In these industries, the profit motive
shouldn’t be the primary objective of firms and the industry. For example, in the case
 of health care, it is feared privatizing health care would mean a greater priority is given
to profit rather than patient care. Also, in an industry like health care, arguably we
don’t need a profit motive to improve standards. When doctors treat patients, they
are unlikely to try harder if they get a bonus.
3. Government loses out on potential dividends: Many of the privatized companies in
the UK are quite profitable. This means the government misses out on their dividends,
instead going to wealthy shareholders.
4. Problem of regulating private monopolies: Privatization creates private monopolies,
such as the water companies and rail companies. This need regulating to prevent
abuse of monopoly power. Therefore, there is still need for government regulation,
similar to under state ownership.
5. Fragmentation of industries: In the UK, rail privatization led to breaking up the rail
network into infrastructure and train operating companies. This led to areas where it
was unclear who had responsibility. For example, the Hatfield rail crash was blamed
on no one taking responsibility for safety. Different rail companies have increased the
complexity of rail tickets.
6. Short-termism of firms: As well as the government being motivated by short term
pressures, this is something private firms may do as well. To please shareholders they
may seek to increase short term profits and avoid investing in long term projects. For
example, the UK is suffering from a lack of investment in new energy sources; the
privatised companies are trying to make use of existing plants rather than invest in
new ones.

Rationale for Privatization and Commercialization of Public Enterprises in Nigeria

The objectives of the privatization and commercialization programmes are:
I. To send a clear message to the local and international community that a new transparent
Nigeria is now open for business.
II. To restructure and rationalize the public sector to substantially reduce the dominance of
unproductive government investment in the sector.
III. To change the orientation of the public enterprises engaged in economic activities
towards a new horizon of performance improvement, viability, and overall efficiency.
IV. To raise funds for financing socially-oriented programmes such as poverty eradication,
health, education, and infrastructure.
V. To ensure positive return on public sector investment in commercialized enterprises,
through more efficient private sector- oriented management.
VI. To check the present absolute dependence on the treasury for funding by otherwise
commercially oriented parastatals and so, encourage their approach to the Nigerian and
international capital market to meet their funding needs.
VII. To initiate the process of the gradual cession of public enterprises to the private sector
which are better operated by the latter.
VIII. To create jobs, acquire new knowledge, skills and technology and expose Nigeria to
international competition (Privatization Hand Book, 2004).

Privatization and commercialization are based on the premise of efficient management of

business and service providing entities. Against this backdrop, the following rationales are
highlighted to include among others:
1. To overcome inefficiency enterprises: over the years government enterprises have
become so inefficient, as epitomized by the epileptic services they render to the public.
This is even though the government has and still continues to pump in a lot of money into
them which instead of improving, most of them seem to be retrogressing. Acting as drain
pipes on the economy without making any meaningful contribution to our economic
development via service delivery, the government decided to transfer them to private
hands that have over the years proved to be better managers to reduce wastage. It is
assumed that because public enterprises are funded wholly or partly by government and
also run by the government they are run inefficiently. Consequently, in terms of public
enterprises, privatization will introduce new technologies and promote innovation while
the private investors will upgrade plant and equipment, increase productivity, including
utilization of industrial plant, improve the quality of the goods and services produced,
introduce new management methods and allow the enterprise to enter into domestic and
international markets and alliances essential to its survival.
2. To manage economic recessions: The Nigerian economy has been in a turbulent condition
especially looking at the level of unemployment that is simply unacceptable. The
excruciating foreign debt profile, food crisis, poor infrastructure, etc. are all evidence of
the economic challenges which the nation has found itself in. Apparently, the economy
can no longer sustain the level of wastages associated with public enterprises, hence a
solution found on how to reduce these wastes among them is privatization.
3. Structural Adjustment purpose: Following the downturn in the Nigerian economy in the
early eighties, the government of Shehu Shagari emphasized the adoption of many
austerity measures that were aimed at bringing about a reduction in government
expenditure and imports. These measures did not achieve much before the government
was overthrown by the military which also continued the search for policy measures that
will review the economy. In 1986, the Babangida government introduced the World
Bank/IMF which was a deepening effort towards salvaging the worsening economic
situation that culminated to 1986 Structural Adjustment Programme (SAP) which aimed
at restoring in the medium term a healthier path for national economic development. A
key course of action of SAP towards the realization of policy intention was to reform public
enterprises to lessen the dominance of unproductive investments in the economy and
improve their efficiency and intensify the growth potentials of the private sector.
To achieve the above, a re-packaging of a public enterprises reform program whose main
thrust were divestment of government interest in several non-strategic enterprises and
commercialization of others was embraced
A supportive decree, privatization and commercialization Decree was promulgated in 1988.
This decree makes provision for the privatization and commercialization of federal
government enterprises and other enterprises in which the federal government has equity
interests. This decree gave breath and life to effective public enterprises reforms in Nigeria
with the expectation that private sector would do better in managing the economies.
For instance, the proponents of SAP opined that implementation paved way for the economy
to accommodate private entities and individuals’ investment to reduce the high level of
inflation, huge domestic debt, high level of unemployment and low growth rate of the
national economy and the chronic deficit in the balance of payments position. Thus, the
privatization of the economy was expected to lead to a greater accountability, better factor
allocation, the ceasing of public subventions of industries (Yusuf, 2017).
4. Other rationale for privatization was to reduce the financial drain on the state in the form
of subsidies, unpaid taxes, loan arrears and guarantees given, mobilization of private
resources to finance investments that can no longer be funded from public finances,
generation of new sources of tax revenue, limitation of the future risk of demands on the
budget inherent in state ownership of businesses, including the need to provide capital
for their expansion or to rescue them if they are in financial crisis. A cursory look at the
appropriations made between 1970 and 1999 and there- on will show that no
appropriations were made to the public enterprises listed for privatization. Instead, the
proceeds of the sale were paid to the government treasury for the appropriation.
Problems Facing the Implementation Privatization and Commercialization of Public
Enterprises in Nigeria
The idea of privatization is that the state should ensure the supply of services where
necessary. It should ensure that essential goods and services are provided but not aimed to
be the sole producer. Whereas in the past government was seen as often squeezing out
market supplies, it is now expected to support their development and promote competition.
The task now is that with the fast incorporation of Nigerian State into the market-oriented
system, there seem to be some hindrances to grapple with in actualizing the dreams of public
enterprise reform.
Besides, the relative success in the public enterprise’s reform has some crucial problems
which are economic, political and ideological. These problems are summed up as follows:
1. Socio-political and ideological: Theoretically privatization of Public Enterprises (PEs) has
some ideological underpinnings as conceptualized by the classical or neo-classical and the
 liberal neoliberal schools of thought. Privatization was seen by some as a carry-over of the
structural adjustment program and also seen as a caricature of the international capitalist
imposition especially the World Bank / IMF. The structural adjustment of the 1980s was
seen as an inevitable circumstance that pervaded the world economy order then. The
socialist ideologue also sees public enterprises reform as a path towards consolidating
capitalism.
2. Uncooperative attitude of some government officials (Enterprises managers and staff):
Some officials were recalcitrant over the policy or privatization as this would undermine
the status quo particularly the supervising ministries. It was argued that the former
supervisory ministries misconceived the program as a way to reduce their power as the
affected PEs will be insulated from all ministerial controls and interference, and somehow
silently opposed to the policy arrangements. Similarly, managers and staff of these
privatized public enterprises are against the reform as it would undermine their position.
Some of these criticisms overtly or covertly may have devastating implications on the
program.
3. Weak market alternatives: As applicable to poor developing countries, Nigeria has less
mature formal business sectors, with higher start-up cost, less capacity to invest, and less
exposure to competition.
4. Geopolitical and income-group spread: The enabling decree laid emphasize on equity in
the spread of shareholding. But contrarily there were marked imbalances in equity
shareholders distribution among income groups and the different segments of the society.
Some income groups or geopolitical entity tends to have cornered the market.
5. Government capacity: Closely related to the attitude of the public officials and managers
of PEs over the delays in the implementation of PE reforms has to do with whether the
government has the administrative and political ability to undertake its new roles. The
government must have the capacity not only to make initial diagnoses and assessments
to decide on policy implementation and also to administer the state's roles once PEs
reforms have been established.
6. Poor funding of the National Committee on Privatization and Bureau of Public
Enterprises: The essential economic reform mandate of the Bureau and the various NCP
sector steering committees is threatened by poor funding.
7. The Problem of inaccessibility to credit facilities: Many prospective equity holders did not
have enough funds to process their application forms, contrary to the expectations of
government. The perceiving problem of financial limitations, the government directed all
licensed commercial banks to extend to all interested persons. Despite this directive,
banking system did not respond favourably due to what they called “operational lapses”.
 The financial problem thus dampened the enthusiasm, particularly of paid workers whose
salaries are not high enough to cope with the financial requirement to benefit from the
policy.
8. Institutional Investors versus Small Individual Investors: On many occasions, there were
reports of over-subscription in the shares for the offer of sales. This, in most cases, arose
from the intervention of institutional investors to broaden their investment portfolios.
This intervention, incidentally, obstructed the chances of small individual investors in
getting the quantities of equity shares they desired.
According to Mahmoud (n.d.), monitoring enterprise performance post- privatization is a
challenging task especially as private firms have no obligation to provide data and as such,
generally disclose only self- serving information. It is observed that, general macro-economic
conditions, including external economic shocks, a global economic downturn or boom or even
the usual business cycle affect enterprise performance which makes the analysis more
difficult and time-sensitive. This also makes establishing causality between privatization and
enterprise performance a very difficult challenge (Yusuf, 2017).
CHALLENGES AFFECTING DEVELOPMENT ADMINISTRATION IN NIGERIA
The challenges affecting the ability of states particularly in developing countries such as
Nigeria to effectively administer development are multi- faceted and range from environment
to environment. However, the work of Adam makes a serious attempt in shading more light
on the challenges affecting development administration in contemporary time.
In other words, much of the reliance by the new nations on public enterprise for rapid socio-
economic development was misplaced and the results were not what had been expected.
Instead of serving as an agent of national development, many public enterprises served only
the interests of their managers and workers. In 1991, public enterprises accounted for 23% of
employment in Africa and only 3% in Asia, while the poorer the country the larger the relative
size of the sector.
Adam (2017) further emphasizes that even if it could be argued that infrastructure needed to
be provided through public hands, there seemed little justification for government ownership
of jute factories in Bangladesh, mines in Africa or national airlines almost everywhere.
Following the bureaucratic approach to development, most developing countries adopted the
principle of a strong state sector in the economy, in many cases allied with the prevailing ideas
of socialism and Marxism then. There was the belief that the fastest way of attaining
economic development was through government ownership of enterprise and intervention
in the private economy and dominance by a bureaucratic technocracy. This also led to a
padded bureaucracy which was characterized by inefficiency and ineffectiveness. While the
motivations of the practitioners of development administration were high, there were
problems such as:
Development administration was supposed to be based on professionally - oriented,
technically competent, politically and ideologically neutral bureaucratic machinery. The
ostensible output was modernization- induced and predictable social change following
western perceptions preceded by institution- building and modernization of indigenous
bureaucratic machinery to undertake developmental tasks…But what was missing from the
expected picture-perfect imitation in the Third World was the necessary set of conditions for
bringing about a number of social, economic, cultural and political changes. These included
an expanding economic base, a tax base, professionally trained manpower, political
legitimacy, cultural secularization, universalism, a relatively open society and a strong political
superstructure capable of governing.
It was elaborated that even the World Bank declared that in general, the strategy has failed.
The Bank went further to argue that:
In a few countries, things have indeed worked out more or less as the technocrats expected.
But in many countries’ outcomes were very different. Governments embarked on fanciful
schemes. Private investors/ lacking in confidence in public policies or in the steadfastness of
leaders held back. Development fettered and poverty endured.
State through its machinery became the dominant player on the economic scene, controlling
the details of the economy in addition to its normal functions but did not have the standing
to be successful. The quantifiable return on the large volume of investment in the public
enterprise sector in Nigeria, for example, was not seen as satisfactory in the light of the
realities of the country's economy woes in the 1980s. Almost all the enterprises operated at
sub-optimal levels with huge losses in many cases, and these losses were charged against
public treasury.
This aptly captured the views of Obasanjo who emphasized that:
It is conservatively estimated that the nation (Nigeria) may have lost about $800 million due
to unreliable power supply by National Electric Power Authority (NEPA) and another $440
million through inadequate and inefficient fuel distribution. And the figures like this do not
even tell the whole story. The assessment does not for example; capture the scope of human
suffering and even loss of lives caused by the shortage of petroleum products. That is not to
mention the frustration and debilitation of the informal sector where business centres, repair
workshops, hairdressing salons etcetera depend on steady supply of electricity to function.
In some of these state-owned enterprises, cases of large-scale mega corruption were
rampant. Permanent officials colluded with political executives to engage in corrupt practices.
Merit-based recruitment and promotion were usually replaced by appointments and
promotions based on patronage and clientelism and other forms of favouritism which in most
cases involve corrupt practices. Following the end of the cold war and a global turning away
from statist and socialist ideas, Nigeria, like other sub-Saharan African countries started to
adopt principles of free markets and participation in the world trade system.
As part of these changes and under the direct encouragement of international financial
institutions such as the World Bank and the International Monetary Fund (IMF), Nigeria
started adopting principles of market liberalization, including scaling down the public sector
and restructuring to conform to the principles of the new approach to the management of
public affairs.
Privatization was therefore one of the reforms undertaken to overcome defective capital
structure, excessive bureaucratic control, inappropriate technology, incompetence,
mismanagement and monumental corruption. This, it was expected, would enable
government to concentrate resources on its core functions.
Regarding shortcomings, certain reasons have been advanced for the inability of development
administration to bring about the needed socio- economic development in the developing
countries. First, it is said that development administration means increased state bureaucratic
control over individual human beings. It contains implicit authoritarian assumptions
which are inconsistent with the liberal democratic values. This authoritarian approach of the
civil servants is not likely to motivate the public to actively participate in implementing public
policies and programmes.
Second, development administration is generally believed to have failed to fulfill its promises
of socio-economic progress and nation-building. A spirit of frustration and despair with
development in general is found in developing countries.
Hunger, poverty, unemployment, illiteracy, diseases and population explosion in the
developing nations have remained on the high side. The gap between the rich and the poor
has become a gulf and it is yawning. It has shown the inadequacy of administration for
development in developing societies. Development administration is weak and inadequately
equipped to face emerging challenges. The decision-making process and business methods
pursued are dilatory and exasperating to those citizens affected by them. Corruption is acute
and defies solution. Political interference in administration is another factor inhibiting socio-
economic development (Apeh, 2018).
The process of development presupposes a system of bureaucracy that accepts development
as its main goal however; bureaucracies in developing countries tend to emphasize non-
productive orientation. They work for the realisation of goals other than the achievement of
programme objectives. Loyalty to the organisation or its basic mission is not a powerful ethic
among the bureaucrats.
According to Anyebe (2017), the behavior of civil servants entrusted with development tasks
is said to have poor citizens-orientation and poorer commitment to work. The bureaucrats
usually show insensitivity to the poor and their needs. They are also accused of being
arrogant, harassing, ineffective, inefficient, as well as lacking the necessary skills and
competence to execute development tasks.
However, focusing on the basic administrative structures in developing countries which was
said was not only elitist in orientation but also generally imitative rather than indigenous to
the society. The borrowed western model of administration does not fit into the needs of
development administration. There is a widespread between form and reality, a wide gap
between government proposals and their implementation. Most of the laws are either
bypassed or not implemented at all. Bureaucracy enjoys an unusual degree of operational
autonomy.
Exacerbating the situation was the shortage of technically qualified and trained personnel
capable of performing development tasks. There is an undue concentration of authority at
the senior executive levels in the ministries in the developing nations. Delegation of authority
is limited as the senior executives want to control everything. Even the simplest
administrative decisions have to be approved at the top and this concentration of authority
at the top saps the initiative and the drive of the personnel working in the field.
There is rampant corruption which is usually institutionalized and out of control.
Development funds are often siphoned off to hire friends or relatives and the funds may as
well end up in private bank accounts. Corruption and inefficient administration go hand in
hand. Development goals may not be fulfilled and the new socio-economic order may never
be built unless corruption is checked or at least reduced to the lowest level.
Furthermore, the officials in the developing countries do not show much interest in the actual
administrative details necessary to accomplish development plans and programmes. Much
time of the bureaucrats is wasted on paperwork, big and flamboyant staff meetings or field
trips while the administration is characterized by red-tape and secrecy. Rules, regulations, and
forms are given precedence over the substance.
Safety and security of lives and property are necessary for the development of a nation.
However, Nigeria is currently bedeviled with the problems of crime and insecurity. The vices
manifest in the frequent cases of armed robbery, ethno-religious clashes, youth restiveness,
political thuggery, Boko Haram insurgency, ethnic militias, secret cult activities,
herdsmen/farmers clashes, child trafficking, kidnappings, armed banditry and a host of others
(Ani, 2017). These are serious issues of concern as they make lives and property unsafe and
threaten to dampen the country’s quest for national development.
These and other factors not mentioned could be said to be responsible for the massive failure
of development administration in most developing countries such as Nigeria. To this effect,
policymakers and administrators alike should put in more sincere efforts in administering
development accordingly which could no doubt move the country forward on the path of
development.
PROSPECT AND FUTURE OF DEVELOPMENT ADMINISTRATION
The perpetual challenges faced by development administration make it difficult for the
discipline to achieve development goals, socio-economic progress, and nation-building.
Therefore, efforts should be made to improve the techniques and methodologies of
development administration in developing countries such as Nigeria to serve as the
instrument to implement development programmes. The following aspects are capable of
addressing some of the challenges bedeviling development administration particularly in
Nigeria and which if the address would re-engineer the machinery of government to be able
to cope with the serious demands of development administration in conditioning national
development.
Strengthening Anti-Corruption Institutions
Anti-corruption institutions in Nigeria such as the Economic and Financial Crimes Commission
(EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC),
the Public Complaints Commission (PCC), the Public Accounts Commission (PAC), to mention
but a few require meaningful support from the government to give out their best. Reasons
for the support hinges on the fact that despite the existence of these institutions, corruption
in Nigeria continues to increase, especially in the public sector. Little wonder, the
Transparency International in her latest Corruption Perception Index (CPI) released on
Wednesday, 21st February 2018, ranked Nigeria 148th out of 180 least corrupt nations of the
world. Therefore, there is the need for the government to garner the necessary political will,
finance and the training and re-training of staff needed to ginger the institutions into more
acceptable performance so that development could be achieved (Apeh, 2018).
Human Capital Development through Quality Education
Education is no doubt the catalyzing factor in both human and national development which
also captured the attention of Ghandi who emphasized that “good education is the key to
development of our most valuable assets, and our human resources. It is through education
that hardbound traditional age-old prejudices give way to reason and the scientific spirit. It is
through good education that society is modernized”.
Also, good quality education involves teaching for character change, good moral values and
civic responsibility. It is this type of virtue that shapes the character of nations to embrace
means toward development. However, problems currently facing the educational system in
Nigeria include examination misconduct, monetization and sex for marks, recycling of
curriculums for several decades without substantial changes, lack of tools to produce
qualified graduates capable of managing national affairs (Apeh, 2018) efficiently and
effectively, nonchalant attitudes to teaching and learning by teachers and students
respectively, irregular payment of staff salaries and allowances, near-absence of staff training
and development and host of others. It is nevertheless noteworthy that only trained or
developed staff can render efficient services that can contribute effectively to national
development. The need therefore for Nigeria to, as a matter of urgency, invests heavily in
education-driven human capital development cannot be over-emphasized.
Adoption of Information and Communication Technology (ICT) Adopting information and
communication technology in public governance has become imperative in Nigeria to
run away from the problem of over-bureaucratization, and thereby ameliorate government
performance in terms of development. Doing so will also reduce the existence of red-tape
and rigidity syndrome. The essence of this point lies in the fact that administering
development in Nigeria is still characterized by traditional administrative principles and
practices in a fast-moving world in which speed and accuracy are the order of the day.
Consequently, administering development in Nigerian is very slow and lacks innovation and
drive, it is weak in translating policies into reality as these are the impediments that ICT tools
can be antidotes to its challenges.

Good Leadership
The problem with Nigeria, as discussed above, is that of leadership failure. The country needs
high-quality leaders who are knowledgeable, intelligent, honest, hardworking and ready to
face and tackle developmental challenges with an apparent sense of commitment. Therefore,
for national development to take place, the government should ensure that men and women
of sound pedigree are appointed to the helm of affairs (Apeh, 2018). They should be
outstanding Nigerians whose integrity and sense of dedication to duty are unquestionable
and who are characterized by a strong drive for responsibility and task completion, vigour and
persistence in pursuit of goals, originality in problem-solving, drive to exercise initiatives in
social situations, self-confidence and a sense of personal identity, willingness to tolerate
frustration and delay, ability to influence other persons’ behaviour, and capacity to structure
social interaction systems to the purpose at hand.

Improved Remuneration Packages

It is axiomatic that the most important input for achieving national development is the human
resource. There is therefore the need to have such human capital sufficiently motivated
especially in terms of improved remuneration because, according to Apeh (2014), a vital
element in the motivation of human capital is undoubtedly the quality of its remuneration
packages. This view is quite true in the case of Nigerian public servants whose remuneration
packages are currently low. The status quo should, therefore, be reviewed upwards to be able
to mobilize Nigerian government employees towards national development. The government
should also endeavour to ensure prompt and regular payment of staff emoluments, thereby
motivating them to more productive efforts.
Improving Energy Resources/Public Utilities
Development is strongly linked to the availability of energy for heat, light and mechanical
power. The major energy sources in Nigeria include fuel, wood, kerosene, diesel and liquefied
natural gas, fossil fuels and electricity. Water is also very essential for both industrial and
residential uses. The Nigerian government should, therefore, move quickly to revitalize the
organizations and agencies that provide the various types of energy, such as the various
electricity generation and distribution companies, oil companies and water boards and
agencies, so that the supply of these amenities which have been epileptic will become regular
at moderate prices. Such intervention can be through enhanced capacity building, greater
funding, inter-organizational collaboration, proactive control measures and staff training and
development programmes to improve effectiveness.
Tackling Crimes and Insecurity
The factors responsible for the increasing volume of crimes and insecurity in Nigeria include
population growth, poverty, illiteracy, high underemployment, and unemployment. One can
also mention unequal distribution of national resources, injustice, greed, inequality, laziness,
unpatriotism and embezzlement of public funds. Therefore, for national development to be
successful in Nigeria, government should take steps urgently to re-orientate Nigerians on the
need to be patriotic, sincere, hardworking and committed to nation-building. These virtues
can be taught as core values in primary, secondary and tertiary institutions in the form of civic
education. It can also be taught to Nigerians generally through a national orientation
programme.
Foster Unity and National Cohesion
In addition, genuine and concerted efforts should be made by Nigerian leaders to unite the
people of the various ethnic groups so that there will be unity in diversity. This action will
allow mutual trust, peace, love and honesty to rein in the country. Moreover, what is most
important, which should constitute security, is a multifaceted approach to addressing the
degrading conditions in which Nigerians live. Catering for Nigerians is the first step to
safeguarding the State because when the government considers people first in terms of
welfare, they will in turn safeguard the State.
Popular participation in development activities is a resource hence bureaucracy must work
very closely with the people under a general rubric of service ethic. If development is to have
meaningful content, defence expenditure has to be scaled down, population explosion
curbed, employment opportunities created and expanded, and literacy level has to be
improved substantially (Adam, 2017).