FIRST TERM: E-LEARNING NOTES

SUBJECT: ECONOMICS

CLASS: SS3

SCHEME OF WORK

WEEK TOPIC OBJECTIVES

1 Economic Lesson from ▪︎Economic History of the Asian Tigers

Asian Tigers, Japan.
▪︎Factors that account for rapid development of Tiger Economies.

▪︎Lesson for Nigerian Economy

▪︎Japanese miracle and lesson from Japan

2 Economic Lesson from ▪︎Economic Lesson from Europe.

Europe
▪︎Factors affecting the growth of Europe Economy.

3 Human Capital • Introduction to human capotal

development
▪︎Meaning and definition

• Factors affecting efficiency of human capital

• Brain drain

4 International Trade ▪︎Meaning international trade and domestic trade.

• Reasons for International Trade

• Theory of comparative cost a d its shortcomings

5 Balance of payment ▪︎Role of money ey in international trade.

▪︎Definition of Balance of payment

▪︎Favourable and unfavourable balance of payment

▪︎ Method of correcting balance of payment.

6 Economic growth and ▪︎Definition

development
▪︎Distinguish between economic growth and development

• Factors which influence economic development

7 Economic growth and ▪︎Problems of economic development in Nigeria

development cont"
▪︎Elements of Development Planning.

• Importance of Economic Planning in National Development.

8 International Economic ▪︎Historical development, Aims, Objectives and roles of the organizations
 organisation • ECOWAS, ECA, IMF, IBRD, ADB, OPEC, WACH, UNCTAD, GATT

9 Current Economic 1. Meanings and objectives of NEEDS, MDGs AND VISION 2020
plans
▪︎Economic development challenges

10 Economic Reform ▪︎Consolidation of Financial Institutions

Programe
▪︎ Privatization and Commercialization

•EFCC and ICPC, NAFDAC, SON.

11 Revision

Examination

FIRST TERM: E-LEARNING NOTES

SUBJECT: ECONOMICS

CLASS: SS3

WEEK 1--Revision

WEEK 2

SUBJECT: ECONOMICS

CLASS: SS3

TOPIC: ECONOMIC LESSONS FROM ASIAN TIGERS, JAPAN, EUROPE AND AMERICA

CONTENT: 1. ECONOMIC LESSONS FROM ASIAN TIGERS

2. ECONOMIC LESSONS FROM JAPAN

3. ECONOMIC LESSONS FROM EUROPE

Sup-Topic 1: Economic Lesson from Asia Tigers

Economic History of the Asian Tigers

The four Asian Tigers - Hong Kong, Singapore, South Korea and Taiwan consistently maintained high levels of
economic growth since the 1960s, fueled by exports and rapid industrialization, which enabled these economies to
join the ranks of the world's richest nations. Hong Kong and Singapore are among the biggest financial centers
worldwide, while SouthKorea and Taiwan are important hubs of global manufacturing in automobile/electronic
components and information technology, respectively.

Common characteristics of the four Asian tigers include:

They focus on exports,

They have educated populace

They have high savings rates

FACTORS THAT ACCOUNT FOR THE RAPID DEVELOPMENT OF TIGER ECONOMIES

1.High public and private saving rates

1.High life expectancy

2.Highly developed capital and money markets

3.High level of information technology development

4.Purposeful, honest and articulate leadership

5.Export-based industrial policies

6.Heavy government investment in education and human capital development

7.Quality and standardization

8.Culture and Religious beliefs

9.Slow growth rates of population

10.Effective and stringent public policies

11.Knowledge-driven economy

Lessons for the Nigerian Economy

Focus on exports: Whereas other developing countries use import substitution strategies for economic development,
the Asian tigers focused on export-oriented industrial development to richer countries. Domestic production was
discouraged through government policies such as high tariffs also trading the surplus with the richer countries.

Human capital development – They developed specialized skills for their personnel in order to improve productivity
through raising their educational standards.

They had an abundance of cheap labour. This is highly needed for economic development.

Existence of an adequately developed financial system: An adequately developed capital market would ensure
adequate mobilization of capital for industrial and economic development.

Maintaining social and political stability together with a stable macroeconomic environment,

High tariffs on imports in the early days to discourage import and encourage export.

Leadership that is interested in the welfare of the citizens would motivate labour to work hard, thereby raising the
level of productivity.
High saving rate will increase the rate of capital formation. This should be done by private institutions and
government instead of spending prestigious non-productive project.

Development of export industries and promotion of certain basic industries that produce competitive goods for the
world market.

JAPANESE MIRACLE AND LESSONS FROM JAPAN

The period between 1953 and the early 1970s which witnessed unprecedented growth rate in Japan is termed by
some people as “miracle period growth”. The Japanese economy was devastated by the world war II and the
economic activities almost grounded to a halt. But by the early 1970s, the Japanese industries had become
internationally competitive and the income gap between the country and the United State of America was closed
considerably.

World leader in tech

Unique combination of policies

Factors that triggered off the Japanese miracle are:

1.Private sector led investment.

2.High literacy rate and high education standards.

3.A well disciplined, relatively cheap, highly educated and skilled work force, with reasonable wage
demands by labour unions.

4.Proper management of natural resources.

5.Promotion of exports through the development of world-class, responsive export-oriented industries

which were provided with adequate incentives

6.Massive investments in infrastructure and in heavy manufacturing industries.

7.Highly developed financial and marketing systems

8.Adaptation of foreign or imported technology

9.Massive research and development made them to discover efficient production techniques.

Economic Lessons from Europe

There are lessons to learn by developing countries from Europe. These are:

Economic integration or co-operation:- This has helped to limit wars which led to waste of resources in the
past. Co-operation in many areas of development has created economies of scale in production and
increased the level of investment.

Export-oriented economies:- They bought cheap raw-materials from the developing countries and produced
manufactured goods in which they have comparative advantage.

Massive investments in manufacturing industries with reduced reliance on agriculture.

Massive investment in education and human capital development.

Agrarian and industrial revolutions in Britain led to discoveries and inventions which changed the
economic landscape of Europe.

A well developed financial sector: Europe has a well developed financial sector with financial institutions
among the leading ones in the world. This makes for easy accumulation and transfer of capital for
investment

Evaluation:
1 (a) Explain the meaning of the ‘Japanese miracle’

(b) What lessons can your country learn from the economic development of Japan?

2 What is meant by “Asian Tigers?” Examine the development strategies adopted by these countries and discuss the
economic lessons your country can learn from them.

3. Examine the development strategies of the countries of Western Europe. What economic lessons can your country
learn from them?

WEEK 3

SUBJECT: ECONOMICS

CLASS: SS 3

TOPIC: HUMAN CAPITAL DEVELOPMENT

CONTENT: 1. Introduction to human capital development

2. Meaning and definition of human capital development

Sub-Topic 1: Introduction to human capital development

According to modern growth theory, the accumulation of human capital is an important contributor to economic
growth. Numerous cross-country studies extensively explore whether educational attainment can contribute
significantly to the production of overall output in an economy. Although macro studies have produced inconsistent
and controversial results (Pritchett 1996), several micro studies that look into the same problem have shown a
consistently positive relationship between the education of the workforce and their labor productivity and earnings.
General finding is that individuals with more education tend to have better employment opportunities, greater
earnings, and produce more output than those who are less educated. These findings provide a strong rationale for
governments and households to invest substantial portions of their resources on education, with the expectation that
higher benefits will accrue over time.

Sub-Topic 2: Meaning and definition of human capital development

Human capital is the total stock or value of competencies, skills, knowledge, social and personality attributes, including
creativity, embodied in the ability to perform labour in order to produce economic value.

Factors Affecting the Efficiency of Human Capital

1.Increased level of education

2.On-the job training

3.Improved health condition

4. Incresed Standard of living

Brain Drain and its effect on Nigeria Economy

Brain drain is the large scale emigration, over a comparatively short period, of a large number of highly skilled intellectuals
and technical labour to more favourable geographic, economic and professional environment. E.g. large scale movement of
Nigerians health-care professionals to India, America and other high income countries. It is also referred to as “capital
flight”.

Reasons for Human Capital Flight

 Poor social environment in the source countries: The fewer life opportunities, political and social instability,
economic depression and health risk cause the movement of labour in large scale from less developed countries to
those countries with better opportunities.

Better social environment in host countries: Owing to rich opportunities for profitable employment, political
stability, better living conditions, developed economy, intellectual freedom, etc, there is large scale movement of
labour to these countries.

Individual reasons: These include family influence such as presence of overseas relatives, personal preference and
ambition for an improved career.

Effects Brain Drain on Nigeria Economy

1.Loss of professional skills and talents:

1.Capital waste

2.Increased level of poverty:

3.Decrease in wealth creation, employment and tax revenue

4.Encourages Individuals to acquire greater education and skills

Effects of Brain Drain on Destination Country

1.Higher labour skills are available for services and production in other sectors of the destination country

2.There is influx of illegal aliens who wish to take advantage of the greater opportunities available

How to Arrest Brain Drain

1.Committed and selfless leadership with a mission and vision

2.Provision of adequate working and living conditions

3.Value re-orientation:

4.Setting up a national commission to handle the issue of brain-drain

EVALUATION:

1.What is human capital development?

2.List five factors that affect the efficiency of human capital

3.How can brain drain be arrested?

WEEK 4

TOPIC INTERNATIONAL TRADE

CONTENT: (1) Meaning of International Trade and Domestic Trade

 Differences between Domestic and International Trade

(2) Reasons for International Trade

Theory of comparative costs and its shortcomings

(3) Globalization- Meaning, features, challenges and

opportunities to the Nigerian Economy

Sub Topic 1 Domestic Trade and International Trade

Domestic or Internal Trade or Home Trade involve the exchange of goods and services among the residents of
country. It includes all trading/selling and buying activities of all types within a particular country e.g. Nigeria.

International trade or External trade or foreign trade involves the exchange of goods and services between two or
more countries. It is trade among nation. E.g. between Nigeria and other countries. People firms, government and
agencies exchange goods and services across international boundaries.

International trade can be:

Bilateral-trade involving exchange of goods and services among two countries. Each country balances its
payments and receipt with each other.

Multilateral-trade in which a country exchanges goods and services with many other countries.

Similarities between International trade and internal trade

Both trades involve the use of money as a medium of exchange.

Both have to do with some degree of specialization between the trading partners which is the basis of
exchange.

Both trades involves the buying and selling of goods and services.

Both trades arise from inequitable distribution of natural endowments and production resources.

Both trades involve the activities of middle men.

Differences between International Trade and Internal (domestic) Trade

While International trade takes place across national boundaries, internal trade takes place within the
borders of a country.

Internal trade uses local or national currency whereas different currencies are used in foreign trade.

There is no restriction for home trade while foreign trade can be restricted by import/export duties, tariffs,
embargoed

International trade is a foreign exchange earner while home trade only generates internal revenue.

Factors of production are freely mobile in home trade, but there are restrictions for such in international
trade. e.g. labour mobility is subject to immigration laws among countries.

Barriers of distance, transport costs are greater in foreign trade than in home trade.

The problems of foreign exchange and balance of payments are peculiar to foreign trade while internal
trade has no such problems.

Sub Topic 2

REASONS/ BASIS FOR INTERNATIONAL TRADE

International trade arose from the international specialization and division of labour. These have to be for the
following reasons:

1. Uneven distribution or endowment in natural resources of nations such as minerals.

2. Differences in climate and soil which gives rise to the cultivation of different crops.

3. Differences in capital stock which determines the quantity and variety of goods and services each country will be
able to produce.

4. Differences in labour skills.

5. Differences in technology

6. International trade takes place because no country has attained self sufficiency.

7. The need to create a wider market for a nation’s goods and services is another reason for international trade.

8. International trade is also based on the premises that the cost of production of a commodity differs from one
country to another. So a country will choose to import a good if it is cheaper to do so than to produce it.

Barriers to International Trade

There are problems besetting trade among nations. These includes

Differences in currency

Natural barriers of distance, seas, deserts, etc

Differences in language

Trade restrictions by some nations

Long and sometimes difficult processing of documents for foreign trade

Hindrance from political ideologies of different countries

Differences in units of weights and measures

Advantages and disadvantages of international trade( refer to your textbook)

The principle of comparative cost Advantages

The law or theory or principle of comparative cost advantage propounded by David Ricardo in 19 th Century, states
that a country will be better off, if it specializes in the production of commodities in which it has the greatest
comparative cost advantage over others and exchange them for commodities in which it has comparative cost
disadvantage. This law is based on the premises of the law of opportunity cost.

A country is said to have comparative advantage over others in the production of a commodity in which it has the
lowest opportunity cost than others. The real cost of production in terms of the alternative goods forgone is used in
comparison with that of other nations.

The principle operates on some basic assumptions that:

1 There are only two trading countries

2.Only two items are produced

3.There is free flow and mobility of factors of production

4 There is no balance of trade between the two countries

 5.There is no transport cost

6.Technology and costs are constant

7.Labour is the only factor of production

Based on these assumptions, the principle can be illustrated in three stages as follows:

Stage1. Production situation of Nigeria and Thailand with no specialization and no trade.

Country Units of labour Output Opportunity Cost

Rice Cocoa

(in bags)

Nigeria 10 10 150 15 bags of Cocoa or 1

bag of rice

Thailand 10 100 20 5 bags of rice or 1 bag

of Cocoa

Total Output 110 170

Nigeria- will forgo 15 bags of Cocoa to produce 1 bag of rice or forgo 1 bag of rice to produce 15 bags of
Cocoa.

Thailand- will forgo 5 bags of rice to produce 1 bag of cocoa or forgo 1 bag of cocoa to produce 5 bags of
rice.

From the above, we can deduce that Nigeria has a comparative advantage in the production of cocoa while Thailand
has comparative advantage to produce rice.

Stage II. With Specialization

Country Units of labour Output

Rice Cocoa

(in bags)

Nigeria 10 --- 300

Thailand 10 200 ---

Total Output 200 300

Stage III. With Trade

Country Quantity of Consumption

Rice Cocoa

(in bags)

Nigeria 90 210
 Thailand 110 90

Total Output 200 300

From the tables,

The total production of the countries increased with specialization i.e Rice from the initial 110 bags to 200
bags and Cocoa from 170 bags to 300 bags.

The trading countries now enjoy improved or higher standard of living because they have more
commodities than they could produce before trade.

The trade enhanced more efficient allocation of productive resources i.e. labour.

EVALUATION

1.Explain the concept of comparative cost advantage in International trade.

2.What are it’s contributions to trade among nations?

3. Outline the major exports of Nigeria and state the contributions they make to her. economic development.

4.What are the obstacles to international trade

5.In tabular form, highlight the differences between internal and international trade.

6. Enumerate 5 reasons for international trade

7.State 5 barriers to international trade

WEEK 5

SUBJECT: ECONOMICS

CLASS: SS 3

TOPIC: BALANCE OF PAYMENT

CONTENT:

Role of money in international trade

Definition of Balance of payment

Favorable and unfavorable balance of payment

Methods of correcting balance of payment problems

Sup-Topic 1: ROLE OF MONEY IN INTERNATIONAL TRADE

 International trade is trade between two or more countries. Foreign trade is made possible as a result of international
specialization. Money plays prominent roles in international trade.

Roles of Money in International Trade

1.It is a medium of exchange of commodities in international trade.

2. In international trade, trade credits are sometimes given and payments are made later.

3.Surplus foreign exchange from international trade is kept as reserves in the form of gold or international currency
such as dollar.

4.It serves as unit of account because balance of trade and payment accounts are recorded in monetary terms.

5.At the international level, money can be used for making transfer payment like giving aids to poor countries.

6.It facilitates economic development: Foreign capital and skills are being imported , thereby helping the
development of developing countries.

TERMS OF TRADE

A term of trade is the rate at which a country’s exports exchange for its import. Simply put, terms of trade are the price ratio
between export and import. It is measured mathematically using this formula below:

Terms of trade = index of export price x 100

Index of import price 1

BALANCE OF TRADE

Balance of trade shows the difference between the values of a country’s visible exports and imports over a given period of time. It
is known as balance of payment on current account. Balance of trade is described as favorable when receipts from exports are more
than payments from imports. On the other hands, it is unfavorable when payments on imports are more than export receipt. Nigeria
visible exports are cotton, cocoa and imports are electronics, cars etc.

Sub topic 2: Definition of Balance of payment

This is statement showing the monetary value of all transactions between a country and the rest of the world during a given period.
It is a record of all payments to and receipts from foreign countries during a particular period of time usually a year. Balance of
payment can be favorable or unfavorable. If the total receipts are more than total payments, the BOP is favourable. On the other
hand, if the total payments are more than total receipts, then it is unfavorable. It is made up of the current account, capital account
and monetary movement account.

COMPONENTS OF BALANCE OF PAYMENT

CURRENT ACCOUNT: - This account shows the total of a country receipts and payments on visible and invisible trades.

The visible Trade Account (Balance of Trade): It includes visible items like cocoa, palm oil.

Invisible Trade Account): It covers services such as transportation, insurance and banking. Other things included are travel
expenditure (tourism), income from investments such as interests, profits and dividends, private gifts, government services,
and other services.

CAPITAL ACCOUNT: It comprises short and long term capital movement. Capital account shows changes in the volume of
a country’s foreign assets and liabilities through capital movement and investments. The capital account of balance of
payment includes inward and outward foreign securities. It involves the actual flow of money from one county to another.
The balance of payment on capital account is the difference between receipts and payments on capital expenditure with the
rest of the world. It consists of loans and investment.

MONETARY MOVEMENTS OR GOLD MOVEMENTS ACCOUNT: It shows a country balances in its current and capital
accounts. This is the balancing account. Official settlement account shows how surplus or deficit in current account and capital
account are finally settled.BALANCE OF PAYMENT EQUILIBRUM
Balance of payment is in equilibrium when total receipts are equal to total payments. A country is experiencing equilibrium in its
balance of payment when total inflow is equal to total outflow.

BALANCE OF PAYMENT DISEQUILIBRIUM

This occurs when a nation’s receipts do not equal its payments i.e. total receipts on the capital and current are not equal to
payments within a year. Disequilibrium is either a surplus or deficit. Deficit occurs when total payments of a country exceed total
receipts in a given year whereas a surplus occurs when total receipts are greater than total payments in a given year.

Balance of payment Surplus /Favorable: A country is experiencing surplus in its balance of payment when total
receipts (inflow) from a country’s export are greater than the total payments (outflow) on imports of country in a
given year. Surplus= Receipt > Payment

EFFECTS OF BALANCE OF PAYMENT SURPLUS

Inflationary trend

Settlement of debt

Increase in inflow

Increase in foreign investment

Balance of payment deficit/ Unfavourable: This is a situation where the total payments on import is greater than
the total receipt of a country’s export in a given year or vice versa i.e. the country’s receipts are less than its
payments in a particular year. The likely effects of deficit are accumulation of foreign debts and reduction in
investments abroad.

CAUSES OF BALANCE OF PAYMENT DEFICIT

Low level of technology

Low level of foreign direct investment

High debts service payment

Poor performance of non-oil sector

Low level of agricultural production

MEASURES TO CORRECT BALANCE OF PAYMENT DEFICIT

Devaluation: Devaluation cheapens export and make import expensive thereby improving the balance of
payment

Reduction of import: The government can restrict imports by the use of tariffs, quotas and outright embargo
on import.

Export promotion measures: Government can encourage the production of exportable goods in large scale

Borrowing from international financial institution: - A country can borrow money from IMF or other richer
nations in order to correct her balance of payment deficit.

Foreign exchange control: This involves the rationing of foreign exchange in order to reduce balance of
payment deficit.

Promotion of import substitution industries: This is done to replace the commodities that were previously
brought from foreign countries.

Drawing from foreign reserves: Drawing on the value of the country’s foreign reserves to pay the creditors.

MEANS OF FINANCING BALANCE OF PAYMENT DEFICITS

Counter trade: This is exchange of goods for goods in international market.

 Running down external reserve

Borrowing from international financial institution

Short term credit

Grants and aids

Increase of export of goods

EVALUATION:

Explain the term balance of payment deficit

Under what conditions will devaluation improve a BOP of a country?

(3) What is balance of payments?

(4) State three components of balance of payment

Commercial policy in international trade

Commercial policy in international trade involves the use of certain instrument either to protect the economy or to promote
external trade. These instruments of protection such as the use of quotas, bans, etc

Tools or instruments of trade restriction are:

Import duties or tariff

Devaluation

Foreign exchange control

Embargo: an embargo is a ban on the importation of a particular product, or on all imports from a particular
country.

Import quota: a quota is a limit on the number of imports allowed into a country each month or year

Import license

Excise duty reduction

Preferential duties

Import monopoly

Subsidies- these are grants paid to domestic producers to help reduce their production costs and sell their products
at lower prices than imported products.

TARIFF OR RESTRICTION ON TRADE

Tariffs are taxes or duties imposed on import and export by the government of a country. The idea behind tariff is to restrict
the volume of trade or improve the international term of trade.

REASONS FOR THE IMPOSITION OF TARIFFS

To protect infant industries

 Generation of revenue

To prevent dumping

To improve balance of payment deficit

To prevent importation of dangerous goods

Retaliatory measures

Employment generation

Political motive

To promote self-sufficiency

To check consumption pattern

To protect strategic industries.

MEANING OF EXCHANGE RATE

Exchange rate is the rate at which countries exchange their currencies or the rate at which a country decides to buy or sell
her currency in relation to other currencies of the world.

DEVALUATION

Devaluation can be defined as the reduction in the value of the country’s currency in terms of other currencies of the world.
It can also be defined as the fall in exchange value of a country’s currency in relation to the currency of other countries.

Effects of devaluation on currency

Exports becomes cheaper

Import becomes expensive

Reduction in import

Increase in export

Balance of payment improvement

Employment opportunities

Increase in numbers of industries.

Conditions in which devaluation can improve a country’s balance of payment.

The elasticity of demand must be elastic

The country’s export must have elastic demand in other country

Other countries must not devalue their own currencies.

There must be no increase in wages and other incomes.

Mathematical approach in currency devaluation and exchange rate.

Example 1: Assuming that Nigeria is willing to buy or sell cocoa at #400 per tone and the USA is willing to buy or sell at
$50, then the value of the two currencies can be fixed at #400 = $50, the ratio then will be #8=$1. The exchange rate is
therefore #8:$1.
Example 2:

Let us assume the initial exchange rate of the Naira and US dollar is #1=$5

A Nigerian importer is to purchase 60 computer systems at a cost of $40 each from the USA

Total amount required to purchase the computer system is 60 x $40= $2400

Since the exchange rate is #1 = $5, total amount of naira required is:

2400 = #480 this means a Nigeria importer will spend #480 to

5 import the 60 computer system to Nigeria.

If Nigeria devalues her currency by 100%, the new exchange rate will be #2 = $5, or #1 = $2.5

The amount of money a Nigeria importer will have to spend will now be = ₦960.00

₦960 would be required to import the same 60 computer system

Example 3

In a year A, 80 naira exchange for a dollar and later in year B, 130 naira exchanged for a dollar through the forces of
demand and supply

State the effect of the above on the value of the dollar

How much naira would be needed to purchase 50,000-dollar worth of generator from U.S.A in year A

How much in naira would be needed for the same purpose in year B

(i)calculate the percentage change in the value of the naira between year A and B

(ii) From your calculation, state the effect on the value of the naira

SOLUTION

The value of the dollar appreciated

In year A

#80 x $50,000 = 4,000,000

4,000,000 would be needed

In year B,

#130 x$50,000 = #6,500,000

#6,500,000 would be needed

(d)(i) Percentage change in the value of naira

#130 - #80 x 100

#80

(ii)The value of the naira has depreciated

ECONOMIC INTEGRATION IN WEST AFRICA

Economic integration can be defined as a form of international co-operation among nations to foster their economic interests. It is
the deliberate act of government to pool their economic resources together in order to achieve a greater efficiency in the production
of goods and services for the social and economic welfare of their countries. Countries with common interests form themselves
into an organization whose major objectives are to remove trade barriers and other obstacles that reduce the free flow of goods and
services. A good example of economic integrations in Africa is Economic Community of West African States (ECOWAS)

TYPES OF REGIONAL ECONOMIC INTEGRATION

Free trade area: this is a type of integration in which member countries agree to remove all restriction to trade
among them. Tariffs ,quotas, bans etc are not imposed on goods coming from or going to member nations

Common market: This is also known as Economic Community in which there is a common internal and external
tariff policy. There is free mobility of labour and capital between member States. Example is European Economic
Community(EEC)

Economic Union: This type of integration which take the form of total integration of the members’ countries. It is
aimed at harmonizing the social, economic, industrial, commercial and technological policies of member States; it
also involves the unification of monetary and fiscal policy of member nations. Example is ECOWAS.

Custom union: this is an agreement among nations to eliminate trade barriers such as tariffs, quota etc among
member states and to adopt common barriers to imports from non member countries.

Characteristics of customs union

Tariffs are abolished

Each member country is given free hand to maintain its custom duties tariff against non member s countries.

All track restriction are abolished

The members may agree on common custom duties and tariffs against any non member country.

Benefits or advantages of Economic integration

Encourage large scale production resulting in an enlarged market.

Promote efficiency.

Greater resources mobility is achieved.

Countries benefit from specialization

creation of job opportunity

Promote wide range of economic activities.

Stimulation of faster economic growth

Effective participation in world market

Problems or disadvantages of economic integration

Fear and suspect ion of domination

Differences in economic and political ideology

Divided loyalty to former colonial masters

Physical and monetary differences

Inadequate infrastructural facilities

Absence of large and developed market.

 Political instability

Reluctance to surrender economic independence

Inadequate capital

Language barrier.

EVALUATION:

Practice Questions.

The table below shows an extract from balance of payments for country A. Use the table to answer the questions that follow:

Balance of payments Items

S/N Items of transaction Receipts($) Payments ($)

1 Merchandise (Visible trade) 52,000.00 40,000.00

2 Shipping, other transport and travel 40,000.00 8,000.00

3 Investment income 20,000.00 5,000.00

4 Other services 2,500.00 7,500.00

5 Unrequited transfers 22,800.00 7,000.00

6 Direct investment 50,000.00 26,000.00

7 Other long – term capital 254,000.00 289,000.00

8 Short – term capital 221,000.00 238,000.00

Calculate the:

Balance of trade

Balance on current account

Balance on capital account

Balance of payment.

WEEK 6/7

SUBJECT: ECONOMICS

CLASS: SS 3
TOPIC: Economic growth and Development

CONTENT:

What is economic development

Distinguish between economic growth and development

Characteristics of underdeveloped economy

Factors which influence economic development

Problems of economic development in Nigeria

Element of Development Planning

Nigeria’s Personal Experience

Importance of Economic Planning in National Development.

SUBTOPIC 1: What is economic development?

Definition

Economic development may be defined as the process whereby the level of national production i.e. national income
or per capita income increases over a period of time. Economic development is not the same thing as
industrialization and national development. With economic development, there are structural transformations in the
different sectors of the economy as well as general improvements in various areas of economic activity leading to
increased economic welfare of the citizens.

ECONOMIC GROWTH

Definition

Economic growth is the process by which national income or output is increased. An economy is said to be growing
if there is a sustained increase in the actual output of goods and services per head. Economic growth implies more
output per head as a result of more input and more efficiency. Economic growth is a stepping stone to economic
development. Without economic growth it will be difficult for a country to attain economic development.

Sub-topic:

Distinguish between economic growth and development

There is a greater emphasis on the increase in output and less emphasis on economic welfare in the case of
economic growth while economic development laid more emphasis on improvements in the general welfare
as a result of more equitable distribution of the increased output of goods and services among individuals.

Economic growth is mainly concerned with the growth of income, while economic development level as all spheres
of economic activity and emphases a more even distribution of facilities between various areas.

Economic growth can take place under conditions of mass unemployment while economic development implies a
reduction in the level of unemployment.

There must be a meaningful increase in real income before we can talk of economic growth, whereas economic
development can be achieved by a fairer distribution of existing goods, services and amenities, even if there is no
substantial increase in output.

Economic growth lays more emphasis on meaningful increase in real income whereas economic development pays
more attention on a fairer distribution of the real income

SUBTOPIC 3:

Characteristics or features of under developed economy

 Low per capita income: - The low level of income per head of the population is due to the generally low
level of productivity which results in low national income or low gross domestic product.

Use of crude technology: - The use of crude technology give rises to low productivity. The extent of
industrialization is still limited. The use of modern implements in agriculture such as tractors and
harvesters is limited.

There is high level of unemployment and underdevelopment: In underdeveloped countries many factors of
production are either idle or not fully engaged in production. So many people are left unemployed. The
available job opportunities are insufficient for all those who wish to work.

High level of illiteracy: - The high level of illiteracy is partly due to widespread poverty. Many parents
cannot afford the cost of education for themselves or their children.

Low standard of living: - There is low standard of living in under developed economy. Ther is great
disparity in income levels among the population. There are few people who are very rich while the masses
are poor.

Sub-Topic 4:

Factors which Influence Economic Development

Technological development: The level of technology should be developed in order to increase economic
development.

Encouragement of savings and investments: Both individuals and firms should be encouraged to invest
and save in the economy. Capital or fund, provision of some infrastructural facilities can encourage savings
and investments.

Promotion of industrialization: There should be concrete plan to promote rapid industrialization as this
form the bedrock for any economic development.

Provision of capital: The provision of capital through the establishment of financial institutions.
Agricultural Development Bank could be encouraged to make loans to investors.

Political stability: Political stability will lead to the direction of efforts towards projects which will help to
stimulate economic development.

(6) Infrastructural facilities: Provision of economic and social infrastructural facilities such as electricity,
transportation network and water supply.

Sub-Topic: 5

Problems of economic development in Nigeria

Lack of industrialization leads to low economic development of any nation

Inadequate capital base: There is inadequate capital to execute the various development projects which
would lead to structural transformations within the economy.

Shortage of skilled and technologically trained manpower: There is tendency for deficiency in technical
knowhow in many West African countries. The relative scarcity of indigenous skilled labour is due to the
high level of illiteracy which exists.

Inadequate economic planning and management: Most of the developing countries do not have adequate
development plan and this hinders economic development. In some cases, the full costs and implications of
economic projects have not been fully weighed before they are embarked upon. At times, projects are
started only to be abandoned.

Administrative bottlenecks: Certain government policies tend to hinder economic development projects in
economically unviable areas and delays in giving approval to prospective businessmen for the
establishment of manufacturing industries.
 Sub-Topic 6: Elements of Development Planning

Development planning is a deliberate effort of government in formulating economic policies on the equitable allocation and
efficient utilization of resources to all sectors of the economy towards achieving rapid economic growth and development. It
involves activities by government to influence, direct and control over the long run the level and growth of a nation’s economy.

Sub-Topic 2: Nigeria’s Planning Experience

Pre-independence Development Planning

Development planning started with the Colonial era in Nigeria. The first was the Ten-year development and Welfare Plan (1946 –
1955). This was followed by the second development plan titled “The Economic Program of the Government and the Federation of
Nigeria, 1955 – 1960. The plans were broken into five for each of the four regional governments, Southern Cameroun and the
Federal Territory. These plans were reviewed in 1958 and extended to 1962 when the first National Development Plan was
launched.

Post-independence Development Plans

Development plans after Nigeria’s independence were four. These are summarized in the table below.

Nigeria’s Development Plans

Projected Growth
National Development Plan Period Estimated Capital Expenditure Rate

****
First Plan 1962 – 1968 4.4%

Second Plan 1970 – 1974 **** 6.6%

Initially N30b
Third Plan 1975 – 1980 11%
1977 reviewed: N43.3b

Fourth Plan 1981 – 1985 N82b 7%

Sub-Topic 3: Importance of Economic Planning in National Development

Importance / Objectives /Reasons for Economic Planning

To ensure the mobilization and allocation of physical and human resources (i.e. equitable distribution to all the
sectors of the economy).

To promote sustained growth and accelerated development.

To diversify a nation’s economy to many sectors.

To achieve economic self-sufficiency.

To increase the Gross National Product.

 To increase per-capita-income hence, improve people’s standard of living.

To create more employment opportunities.

To reduce foreign control of the economy.

To stabilize prices and prevent inflation and deflation.

10. To bridge the gap between the rich and the poor.

11. To promote international trade in a way that will enhance surplus balance of payment. This is possible through
increased production for exports and reduction of imports.

12. To mobilize scarce resources for increased productivity.

13. To reduce rural – urban imbalances through projects aimed at developing rural areas.

14. In all, development planning gives direction to the economy as a whole.

EVALUATION;

Essential Economics for SSS

ESSAY TEST

1.Why are West African countries said to be under-developed?

2.Carefully distinguish between economic growth and economic development.

3.Examine the problems which slow down the pace of economic development in west African

4.What measures are presently taking to develop the rural areas of your country

5.Discuss the alternative explanation of economic development

PRE-READING ASSIGNMENT

Read about the elements of developing planning

WEEK 8

SUBJECT: ECONOMICS

CLASS: SS 3

TOPIC: INTERNATIONAL ECONOMIC ORGANIZATION

CONTENT: 1. Historical development, Aims, Objectives and roles of the organizations

2. ECOWAS, ECA, IMF, IBRD, ADB, OPEC, WACH, UNCTAD, GATT

Sup-Topic 1: Economic Organization

Several international organizations exist to encourage trade, economic co-operation and development among nations of the world.
Some of these organizations have almost all the independent countries of the world as members. They include International
Monetary Fund (IMF), International Bank for Reconstruction and Development (IBRD), African Development Bank (ADB),
European Economic Community (EEC), Organization of Petroleum Exporting Countries (OPEC), United Nations Conference on
trade and Development (UNCTAD), Economic Commission of Africa (ECA), West African Clearing House (WACH), etc.

ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS)

Formation: The economic community of West African States (ECOWAS) was founded on 28th May 1975 in Lagos, Nigeria. It
comprised all the 16 independent nation of West Africa. Abuja is the administrative headquarters of the community and Lome is
the fund headquarters. Nigeria under the leadership of general Yakubu Gowon and Togo under President Eyadema initiated the
formation of the sub-regional economic grouping. Nigeria, Ghana, The Gambia, Serria Leone and Liberia and the English speaking
or Anglophone countries. Senegal, Guinea, Togo, Mali, Benin Republic, Burkinafaso, Cote de I’voire, Mauritania, and Nigeran
Republic are French speaking or Francophone countries while Cape Verde and Guinea Bissau are Busophone or Portugese
speaking countries.

AIMS AND OBJECTIVES OF ECOWAS

Co-operation and development: to promote co-operation in all field of economic activities. E.g. energy, agriculture, etc.

Trade liberalization: to establish a common market with the aim of liberalizing trade within the region

To ensure economic stability: they are also to increase and maintain economic stability with the economic

To abolish trade barriers and restriction: one of the aim of ECOWAS was to abolish trade barriers among the member nations

To foster closer relation: this could be achieved by encouraging free movement of citizens, goods and services

To increase production: it was formed with the hope of ensuring faster regional industrialization to promote increased production of
goods.

Integration of both fiscal and monetary policies: it ensures fiscal and monetary integration of West Africa states

Development of African continent: it is aimed at encouraging the progress and development of the Africa continent

To raise the standard of living: it was designed to raise and promote the standard of living of the people through co-operation
within the sub-regional

Establishment of common fund: this fund is for compensation, co-operation and development between the sub-regions.

Poverty reduction: to reduce poverty in West Africa by working towards having viable economies.

ORGANS OF ECOWAS

The Authority of Heads of state and Governments

The council of Ministers

The executive Secretariat

The Tribunal of The Community

Technical and Specialized Commissions

ADVANTAGES TO BE DERIVED FROM ECOWAS

Wider market: The elimination of tariffs walls and other restrictions to trade will allow an expansion of trade in the
sub-region, leading to wider market.

Improved Standard of Living: They will be able to import goods and services at relatively low prices from member
countries instead of importing costlier goods from other areas.

A base for social and economic development: The amount of capital available for development will be greater due
to the pooling of resources. This will lead to economic and social transformation.

A reduction in unemployment: The increased employment will be brought about by the free mobility of labour and
capital within the sub-region.
 A higher level of output of goods and services: This will be achieved through higher degree of specialization.

Effective bargaining power of member states: The member countries will stand as one entity and be in the position
to have a more effective bargaining power in world trade.

Conservation of foreign exchange by eradicating smuggling in the area.

It leads to increase in foreign investment: This is due to wider market available, increased mobility of factors of
production, great prospects for political stability, etc.

INTERNATIONAL MONETARY FUND (IMF)

The IMF is one of the most well-known international economic organizations. Its headquarters is in Washington DC, United states
of America. It was set up immediately after the Second World War in 1944.

AIMS AND OBJECTIVES OF IMF

To make all currencies freely convertible thereby encouraging international trade

To provide some means of assisting member nations having temporary balance of payments difficulties

To keep exchange rates of international trading nations stable

To provide stand-by credit facilities for nations in need of assistance

To promote international monetary co-operation

ADVANTAGES/ BENEFITS OF IMF TO WEST AFRICA

Some West African countries have obtained from IMF to solve their balance of payment problems.

Technical and financial advice has been given to West African countries to overcome their economic problems.

It has helped many West African countries to obtain vital statistics required for planning through conducting
country surveys.

THE INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT

(THE WORLD BANK)

The International Bank for Reconstruction and Development (IBRD) otherwise known as the World Bank was established
in 1944 with its headquarters in Washington D.C.

AIMS AND OBJECTIVES OF IBRD

To provide private foreign investment for economic development in less developed nations of the world

To provide loans for the reconstruction of ruined economies caused by the Second World War or natural disasters
such as floods, earthquakes, etc.

To encourage infrastructure developments particularly in less developed countries

Promotion of foreign private investment by guaranteeing such investment and by going into partnership with the
foreign investors.

To provide technical assistance especially to the developing countries that requires such assistance.

GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)

In 1974, representatives from twenty-three countries signed a general agreement in Geneva, with the aim of maintaining
trade by removing trade barriers among themselves. Since that time, many countries have joined the agreement. The
following, among others are the primary aims of the agreement
 To reduce or remove trade barriers between member countries

To improve the possible unfavorable situation in any member country

To promote international confidence in tariff policies through consultation between member nations

PERFORMANCE OF THE AGREEMENT

The meetings of member countries are held yearly. Since its inception, many tariffs have been reduced. In 1963, President
Kennedy agreed to reduce America’s tariffs. Other countries have done so, particularly among the developed countries. The
most important criticism of GATT is that it has benefited the wealthier members than the poor member nations. This is
because most tariff reductions have been for industrial goods from the already industrialized countries, rather than for
primary products coming from the less industrialized countries. As a result of this, most less developed countries feel that
they have more to gain in other organizations that from GATT.

WEST AFRICAN CLEARING HOUSE (WACH)

A West African Clearing House was established on 14 March 1975 in Lagos on the signing of an agreement by Governors
of Central Banks of Gambia, Ghana, Liberia, Nigeria and Sierra Leone, and ratified by their governments. The agreement
came into force after it was ratified by five West African Central Banks. One of the primary aims of WACH is to promote
cooperation among the member countries, particularly in the area of international monetary transactions. It serves as a
clearing house for the region. Twelve countries, i.e. Benin, Burkina Faso (Upper Volta), Cote d’Ivoire, Gambia, Ghana,
Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo are current members of the association.

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD)

This association was established on 30 December 1964 as a permanent organization of the General Assembly of the U.N.O.
by resolution 1995

The Aims and Objectives of UNCTAD

Help structure traditional patterns of international trade in order to enable developing countries play their part in
World commerce

Increase trade, both with the industrialization countries and among the developing countries.

Promote international trade, especially with a view to accelerating economic development

Formulate principles and policies on international trade and related problems of economic development

ECONOMIC COMMISSION FOR AFRICA (ECA)

The Economic Commission for Africa (ECA) was formed in April, 1985 following the implementation of a resolution of the
United Nations. The organization has fifty two members, Nigeria inclusive. While the ECA functions as a subcommittee of
the UNO, its main duty centers on economic matters having to do with the continent of Africa.

The Objectives of ECA

Promoting economic and social development in Africa

Strengthening the economic relations of the African countries whether among themselves or with other countries

Conducting studies on economic, technical and development problems as they relate to the African countries.

AFRICAN DEVELOPMENT BANK (ADB)

The African Development Bank (ADB) was established in September in 1964 and it commenced operation in July 1966. It
was initially established with twenty three members and it presently boasts of more and a very large membership. The
organization has its headquarters in Abidjan, Cote d’Ivoire and its aims include:

The promotion of investment in African countries

 The provision of assistance for development projects and programmes in the member nations

Embarking on activities that will improve the general well-being of the people in African countries

Enhancing the development of African continent in general

The bank has been noticed to be placing special emphasis on the development of social infrastructures, agriculture and
industry

ORGANISATION OF PETROLEUM EXPORTING COUNTRIES (OPEC)

The Organization of Petroleum Exporting Countries (OPEC) was established in 1960 in Baghdad, the capital of Iraq by
five Arab countries which are Iraq, Saudi Arabia, Iran, Kuwait and Venezuela. The organization now has more members
from almost all the continents and Nigeria joined it in 1971.

OBJECTIVES OF OPEC

Unifying the petroleum prices of the member nations

Working towards the stabilization of oil prices in the international market

Maintaining a steady income for the member countries

WEEK 9

SUBJECT: ECONOMICS

CLASS: SS 3

TOPIC: CURRENT ECONOMIC PLANS

CONTENT: 1. Meanings and objectives of NEEDS, MDGs AND VISION 2020

Economic development challenges

Sub-topic 1: Meaning and Objectives of NEEDS, MDGS and Vision 20:2020

Nigeria, like other developing nations, has faced several development challenges. In an attempt to overcome such
challenges, Nigeria has over the years embarked on a number of economic programmes and long term development
strategies. Among these are Millennium Development Goals (MDGs), National Economic Empowerment and
Development Strategies (NEEDS), and Vision 20:2020

Sub-topic 2: National Economic Empowerment and Development Strategy (NEEDS)

NEEDS is a reform agenda instituted by the Nigerian government in March 2004 as a working framework for the
reform of the Nigerian socio-political and economic structure. It aims to promote macroeconomic stability through
transparent rule-based and sound fiscal, monetary and foreign exchange policies, improve efficiency and
transparency in the public sector and promote private sector investment through improvements in infrastructure,
privatization and financial sector reforms. While the federal government operates under NEEDS, state governments
operate under SEEDS (State Economic Empowerment and Development Strategy)

Objectives National Economic Empowerment and Development Strategy (NEEDS)

Wealth creation

Employment generation
 Poverty reduction

Value reorientation

MILLENIUM DEVELOPMENT GOALS (MDGs)

The Millennium Development Goals are a UN initiative. The Millennium Development Goals (MDGs )

are the eight international development goals that were established following the Millennium Summit of the United
Nations in 2000,following the adoption of the United Nations Millennium Declaration . All 189 United Nations
member states at the time (there are 193currently), and at least 23 international organizations, committed to help
achieve the following Millennium Development Goals by2015:

1. To eradicate extreme poverty and hunger

2. To achieve universal primary education

3. To promote gender equality

4. To reduce child mortality

5. To improve maternal health

6. To combat HIV/AIDS, malaria, and other diseases

7. To ensure environmental sustainability

8. To develop a global partnership for development

Each goal has specific targets, and dates for achieving those targets. To accelerate progress, the G8 finance ministers
agreed in June 2005 to provide enough funds to the World Bank, the International Monetary Fund (IMF) and the
African Development Bank (ADB) to cancel $40 to $55 billion in debt owed by members of the heavily indebted
poor countries (HIPC) to allow them to redirect resources to programs for improving health and education and for
alleviating poverty.

Relevance of MDGs

They serve as guidelines for policy making. For example, the Yaradua’s Seven-Point Agenda.

Targets to be achieved by government to reduce poverty are set by MDGs.

MDGs programmes touch on the daily lives of all and are meant for their benefit.

There are targets against 2015 for each of the eight goals.

VISION: 20:2020

This is a long term economic transformation blue-print. A ten year development plan, for restructuring Nigeria’s
economic growth to enable the country become one of the world’s twenty (20) leading economies by 2020. It is to
be implemented by using series of medium-term plans.

Objectives of Vision 20:2020

The main objectives are to:

Eradicate extreme poverty

Enhance access to quality health-care

Provide accessible and affordable housing

Build human capacity for national development

 Improve gender equality and empower women

Foster a culture of recreation and entertainment for enhanced productivity.

Sub-topic 3: ECONOMIC DEVELOPMENT CHALLENGES

Economic development challenges refer to some problems or challenges which the economy is experiencing that tends to
draw back the growth and development of the country. Example of such economic development challenges are poverty, debt
burden and debt relief, HIV/AID eradication, power and energy supply, resource and corruption.

Poverty

1. Poverty

Poverty is an abstract word which can be associated with many things. It means a lack of material possessions belonging to a
person. It is typically measured in monetary term. It also equates to a lack of some of the most basic and important material goods
such as shelter, clothing, gender equality, health facilities, education, jobs and increases in diseases and sickness.

Effects of Poverty

High incidence of diseases

Low standard of living

Low level of productivity of the work force

High incidence of social vices

Inadequate level of education

Frequent social crises

Low life span

Agencies for Poverty Alleviation

Some agencies have been set up in order to eradicate poverty in Nigeria, some of them are: The National Poverty Eradication
Programme (NAPEP), the National Poverty Eradication Council, the National Directorate of Employment (NDE), etc.

Methods of Poverty Alleviation and Eradication

Skill acquisition programmes: People are made to acquire skills required to create wealth as self-employed or in
wage-employment, either as semi-skilled or skilled workers. E.g. NAPEP youth empowerment scheme (YES) with
its Capacity Acquisition Programme (CAP) give short-term training to unskilled and unemployed youths while
Mandatory Attachment Programme (MAP) trains youths who have completed their NYSC by attaching them to
construction firms, manufacturing and financial institutions.

Provision of Credit Facilities: Soft loans are provided to those who have acquired skills in the Youth
Empowerment Programmes.

Direct loans: This could be given to farmers or other producers at cheap interest rates to enable them expand
production.

Rural Infrastructural Development: Development of infrastructures especially in rural areas helps to improve the
standard of living of the people. Provision of water, electricity, good roads, etc would reduce the level of poverty.
Rural Infrastructures Development Scheme (RIDS)

Provision of Social Welfare Services: Welfare services will touch directly on the lives of the less privileged would
help to reduce the level of poverty. The Social Welfare Services Scheme (SOWESS) of NAPEP is in charge.
 Reduction of youth restiveness and social vices: - Youth restiveness and some social vices could be reduced by
engaging the youth in meaningful activities. Community Skill Development Centres (CSDC) is set up to provide
skills in areas of youth restiveness.

HIV/AIDS and the Economy

HIV means Human Immuno-deficiency Virus; a virus that weakens the immune system, ultimately causing AIDS. AIDS
refers to Acquired Immune Deficiency Syndrome, a cluster of medical conditions, often referred to as opportunistic infections and
cancers and for which, to date, there is no cure.

Challenges of HIV to Economic Development

It imposes suffering on individuals and their families: It weakens the immune system of the victims and makes
open to any disease.

It has effect on efficiency of labour: It weakens the victims and makes them to be less efficient in their work places.

It affects fundamental rights at work with respect to discrimination and stigmatization: People try to avoid the
carrier of HIV/AIDS and this really affects them socially and psychologically.

It reduces the supply of labour: Those who are victims cannot fit in into their jobs because of its weakening effects
on them.

High cost of labour: Reduction in the number of labour force as a result of this disease makes the labour cost to be
very high.

High expenditure by government and medical research organizations: Government spends so much on research to
curb the problem and to sustain those who are infected already.

Evaluation

1(a). List the Millennium Development Goals.

(b) Examine the extent to which your country has achieved these goals

2(a) List the main objectives of vision 20:2020

(b) To what extent have these objectives been attained?

3(a)What is meant by poverty?

(b) How has poverty affected the economic development of your country?
 WEEK 10

SUBJECT: ECONOMICS

CLASS: SS 3

TOPIC: ECONOMIC REFORM PROGRAM

CONTENT: 1. Consolidation of Financial Institutions

2. Privatization and Commercialization

3. EFCC and ICPC, NAFDAC, SON.

Sub-Topic 1: Privatization and Commercialization

Privatization: This can be defined as the deliberate policy and action of government in transferring the ownership, control and
management of government owned enterprises to private individuals. Privatization goes beyond restructuring and re-organization
of public sectors. It also deals with the wholly or partly transferring of public enterprises to private sectors.

Objectives of Privatization: There are some reasons for privatizing public enterprises in a country.

Free Market Economy: Privatization is meant to embark on systematic conversion of public enterprises to private
sectors to permit free market economy.

Restructuring: Privatization restructures the public sectors in a country in order to identify and also reduce the
dominated number of unproductive investments and firms in the public sector.

Employment Opportunities: Like commercialization, privatization creates employment opportunity and avenue
for acquiring new knowledge and technique in the production and distribution of essential commodities in the
country.

Elimination of Losses: the policy is to ensure constant making of profit by private firms and eliminate losses in
the economy.

Efficiency in the use of resources: the policy is implemented to ensure efficiency in the use of resources by the
economic sectors.

COMMERCIALIZATION

Definition: Commercialization can be defined as a deliberate action and policy of the government to make state or public
enterprises more efficient and profit oriented. In other words, commercialization entails restructuring, re-organizing or re-
activating of public enterprises to make them more productive, profit-oriented and self-sufficient without depending or relying on
government aids. Commercialization of public enterprises can be in form of full commercialized business or partly
commercialized enterprises. These enterprises are re-organized and re-structured public corporation that are expected to operate in
the same manner as private enterprises with the primary motive of profit maximization without government support.

Objectives of Commercialization

Growth: One of the reasons for commercialization of public enterprises is to ensure quick growth and expansion of
business enterprises that belong to the government.

Employment Opportunities: It is also to create employment opportunities for the citizens as a result of business
expansion and profit generation.

Reduction of Embezzlement and Corruption: commercialization of public enterprises was established to reduce
embezzlement, corruption and misappropriation of public funds.

Funds Raising: Another objective of commercialization is freedom of public corporations to raise funds and
maintain some business affairs without government interference.
 Profit Making: commercialization enables public corporations to be diverted from non-profit ventures to profit-
making enterprises.

Sub Topic 3 : EFCC and ICPC, NAFDAC, SON.

EFCC and ICPC

EFCC- ECONOMIC AND FINANCIAL CRIMES COMMISSION

EFCC was established in 2003 as a law enforcement agency to investigate cases of financial crimes. The commission investigates
people in all sectors who appear to be living above their means.

Its main Objectives are:

To investigate financial crimes such as advance fee fraud (419) and money laundering.

To investigate people who appear to be living above their means.

To prosecute cases of financial crimes.

Achievement of EFCC

Investigation of corruption cases: In September 2006, 31 of the 36 state governors were under investigation for
corruption.

Prosecution and Conviction of High Profile corrupt individuals in Nigeria.

Independent Corrupt Practices Commission and other related Offences (ICPC)

ICPC is an agency inaugurated on 29th September 2000. It was given the mandate to prohibit and prescribe
punishment for corrupt practices and other related offences

Its Objectives are:

To receive and investigate reports of corruption and in appropriate cases prosecute offenders.

To examine, review and enforce the correction of corruption prone systems and procedures of public
bodies, with a view to eliminating corruption in public life.

To eradicate and enlighten the public on and against corruption and related offences with a view to
enlisting and fostering public support for the fight against corruption.

To examine documents, which include share certificate, bank books and other accounting documents

To search, arrest, seize and summon persons for examination and information gathering on corruption and
related offences.

Empowered to carry out any other functions as may be prescribed by ICPC Act2000.

Achievements of ICPC

It receives petitions relating to corruption in the public sector: - Within three years of existence, 942
petitions were received and by August 2003, 400 of the petitions were being investigated.

It has prosecuted some prominent Nigerians. These include Ghali Umar Na’Abba, former speaker of the
House of Representatives: Fabian Osuji, former Minister of Education, and Cornelius Adebayo, former
Minister of Communication and Transport.

It has raised public awareness on corruption through public enlightenment campaign: More people are
aware of the dangers posed by the stealing of public money and are therefore willing to co-operate to report
cases of corruption.
 Anti-corruption units have been established in Federal Ministries and parastatals, private and public
educational institutions, etc.

Standard Organization of Nigeria (SON)

The highest decision-making body of the SON is the Nigerian Standards Council (NSC). Its main functions are;

Advising the Federal Government on the national policy on standards, standards specifications, quality control and
metrology.

Determining the overall financial, operational and administrative policy of the organization.

Determining appointments, remuneration and other conditions of service.

ROLES OF SON

To organize test and do everything necessary to ensure compliance with standards designated and approved by the
council.

To undertake investigations as necessary into the quality of facilities, materials and products in Nigeria, and to
establish a quality assurance system including certification of factories, products and laboratories.

To ensure reference standards for calibration and verification of measures and measuring instrument.

To compile an inventory of products requiring standardization

To compile Nigeria Industrial Standards.

The Statutory Functions of the SON are as follows:

To investigate the quality of facilities, materials and products in Nigeria, and establish a quality assurance system,
including certification of factories, products and laboratories.

To ensure reference standards for calibration and verification of measures and measuring instruments

To compile an inventory of products requiring standardization

To foster interest in the recommendation and maintenance of acceptable standards by industry and the general
public.

To develop methods for testing materials, supplies and equipment, including items purchased for use by State and
Federal departments and private establishment

To register and regulate standard marks and specifications

To undertake preparation and distribution of standard samples

To establish and maintain laboratories or other institutions, as may be necessary for the performance of its functions.

To advise State and Federal departments of Government on specific problems relating to standards.

To sponsor appropriate national and international conferences

 To undertake research as may be necessary for the performance of its functions.

To use research facilities, whether public or private, according to terms and conditions agreed upon between the
organization and the institutions concerned.

NAFDAC: The National Agency for Food and Drug Administration Commission

The National Agency for Food and Drug Administration Commission (NAFDAC) was established by Decree No 15 of 1993 as
amended. It is an agency of the Federal Ministry of Health. It has the mandate to regulate and control quality standards of foods,
drugs, cosmetics, medical devices, chemicals, detergents and packaged water imported or manufactured locally and distributed in
Nigeria.

Functions of NAFDAC: The agency is to among other things do the following:

Regulate and control the manufacture, advertisement, importation, exportation, sale and use of drugs, foods,
cosmetics, medical devices, chemicals, detergents and packaged water.

Establish quality assurance system on production premises, raw materials and packaging of the regulated products.

Give standard specifications and guidelines on the production, importation, exportation, sale and distribution of the
regulated products.

Undertake the certification of production sites and the registration of foods, drugs and other regulated products.

Take measures that will put in check the use of narcotic drugs, psychotropic and other health impairing substances.

Establish and maintain relevant laboratories or other institutions necessary for the performance of its functions in
strategic areas of Nigeria

Undertake measures to ensure that the use of narcotic drugs and psychotropic substances are limited to medical and
scientific purposes

Sponsoring of relevant national and internal conferences as it deems appropriate.

Liaise with relevant bodies and establishment within and outside Nigeria in the performance of its functions

Complete standard specification, regulations and guidelines for production, importation, exportation, sale and
distribution of food, drugs. Etc

Compile and publish relevant data resulting from the performance of the functions of the Agency or from other
sources.

Achievements of NAFDAC

Six (6) zonal and thirty six (36) state offices have been created and equipped for easier accessibility and for
carrying out its mandate.

Organisation of workshops to enlighten various stakeholders such as “pure water” manufacturers, National Union
of Road Transport Workers, Patent and Proprietary medicine dealers Association, etc.

Holding meetings, in conjunction with the House Committee on health, with Ambassadors of countries identified
as exporting fake drugs to Nigeria, in order to stop the trend.

Increasing the awareness of Nigerians and source of import of drugs to the issue of sub-standard and fake drugs to
Nigeria, in order to stop the trend.

Achieving excellent results in the fight against fake drugs to Nigeria. In order to stop the trend

Launch of anti-counterfeiting technologies

EVALUATION

1.Define privatization.
 2.Write the full names of EFCC, ICPC, NAFDAC, SON

3.Enumerate five products regulated by NAFDAC

WEEKEND ASSIGNMENT

1.What is commercialization?

2.Distinguish between privatization and commercialization.

3.State three objectives each of privatization and commercialization.

4.Write short notes on the following: i. EFCC ii. ICPC iii. NAFDAC iv. SON

WEEK 11---Revision

WEEK 12-- EXAMINATION