PLATINUM ESSAYS IN THE PHILOSOPHY OF APPLIED ECONOMICS OF DEVELOPMENT: Theories, Techniques and Practice

by Herbert Onye Orji

Overview

This book, Platinum Essays In The Philosophy Of Applied Economics Of Development, is a collection of interrelated and interconnected essays on applied economics of development with underlying philosophy contents. The topic and areas of coverage were carefully chosen to comprehensively reflect a mandatory range of issues, germane to the understanding, teaching, research, publication and practice of applied economics of development, particularly in medium-to low income emerging markets.

There are twenty one chapters each with a topic of major developmental significance in applied economics. Based on the clear and lucid underlying philosophical statements, the broad scope of the applied definitions, analytical and descriptive review of relevant modern and dated literatures, germane to the discourse, observations, recommendations, conclusions and range of ease or otherwise of policy implementations, the key objectives of the book have been achieved.

 

Product Details

ISBN-13:	9781463443702
Publisher:	AuthorHouse
Publication date:	09/19/2011
Sold by:	Barnes & Noble
Format:	eBook
Pages:	452
File size:	8 MB

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PLATINUM ESSAYS IN THE PHILOSOPHY OF APPLIED ECONOMICS OF DEVELOPMENT

Theories, Techniques and Practice

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By Herbert Onye Orji

AuthorHouse

Copyright © 2011 Herbert Onye Orji
All right reserved.
ISBN: 978-1-4634-4368-9

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Chapter One

MILLENNIUM DEVELOPMENT GOALS, THE NIGERIAN CAPITAL MARKET AND STOCK EXCHANGE

We may not get to the moon but we can certainly get to the clouds above. This includes rising above the tallest trees. The Millennium Development Goals are achievable targets and the Nigerian Stock Exchange (NSE) with its numerous constituencies, one of which is the long-term investor, will be amply rewarded. Capital formation in a developing economy is the responsibility of both the private and the public sectors. All goals and targets must have wholesome credibility.

Introduction

A cursory look at the twin concepts of the Millennium Development Goals (MDGs) and the Nigerian Stock Exchange (NSE) may throw up two seemingly disparate issues. The former borders on a socialist/ public welfare orientation whereas the latter is the vanguard of a modern capitalist economy. However, profound thoughts on this subject will reveal an intricately woven relationship that is result-based and necessary for sustainable national development.

This study will shed more light on the nature of MDGs, the level of compliance to their requirements in Nigeria, the activities of key stakeholders, the challenges of MDGs and the regulatory imperatives and challenges of the Nigerian Stock Exchange (NSE). The study will also examine the prospects of the MDGs and proffer recommendations. Finally, the role of the business community in achieving sustainable national development will be discussed.

Definition of terms

A stock exchange is a centralized market for buying and selling stocks where the price is determined through supply—demand mechanisms; individuals and institutions buy and sell stocks in an auction-like forum. The goal of the participants is primarily wealth creation. The Nigerian Stock Exchange is therefore, an organized market place, approved and regulated by the Securities and Exchange Commission (SEC) where members gather to trade securities. Members may act either as agents for customers or as principals of their own.

Millennium Development Goals on the other hand were developed out of the eight chapters of the United Nations Millennium Declaration adopted by 189 nations and signed by 147 Heads of States and Governments in September 2000. MDGs are eight goals and twenty-one targets that will be achieved by 2015 in response to the world's main development challenges. The goals include the following:

1. Eradication of Extreme Poverty and Hunger

· Halve between 1990 and 2015, the proportion of people whose income is less than one dollar a day

· Achieve full and productive employment and decent work for all, including women and young people

· Halve between 1990 and 2015, the proportion of people who suffer from hunger

2. Achievement of Universal Primary Education

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

3. Promotion of Gender Equality and Empowerment of Women

· Eliminate gender disparity in primary and secondary education preferably by 2015, and at all levels by 2015

4. Reduction of Child Mortality

· Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

5. Improvement of Maternal Health

· Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio

· Achieve by 2015, universal access to reproductive health

6. Combating HIV/AIDS, Malaria and Other Diseases

· Must have halted by 2015 and begun to reverse the spread of HIV/AIDS

· Achieve by 2010, universal access to treatment for HIV/AIDS for all those who need it

· Must have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

7. Ensuring Environmental Sustainability

· Integrate the principles of sustainable development into countries' policies and programmes and reverse loss of environmental resources

· Reduce biodiversity loss, achieving by 2010, a significant reduction in the rate of loss

· Halve by 2015, the proportion of people without sustainable access to safe-drinking water and basic sanitation

· By 2010, to have achieved a significant improvement in the lives of at least 100 million slum dwellers

8. Creation and Maintenance of Global Partnership for Development

· Develop further, an open trading and financial system that is rule-based, predictable and non-discriminatory including a commitment to good governance, development and poverty reduction, nationally and internationally

· Address the special needs of the least-developed countries. This includes tariff and quota-free access of their exports; enhanced program of debt relief for heavily indebted poor countries; and cancellation of official bilateral debt; and more generous official development assistance for countries committed to poverty reduction

· Address the special needs of landlocked and Small Island developing states

· Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the longer term.

· In co-operation with developing countries, develop and implement strategies for decent and productive work for youths

· In co-operation with pharmaceutical companies, provide access to affordable essential drugs in developing countries

· In co-operation with the private sector, make available the benefits of new technologies, especially information and communications

The MDGs synthesize, in a single package, many of the important commitments made separately at the international conferences and summits of the 1990s; and recognize the interdependence between growth, poverty reduction and sustainable development. MDGs also acknowledge that development depends on democratic governance, the rule of law, respect for human rights, peace and security.

The Nigerian Experience

MDGs have become key tools in monitoring human progress across nations. The United Nations Development Program (UNDP) has been given the role of Global MDG Monitor for the UN System, a role that UNDP Nigeria takes very seriously. The UNDP has transformed the MDGs into an actionable instrument of development management by turning the eight goals into 18 targets and 48 indicators that can be used to monitor human progress. Nigeria amongst other nations had signed up to these goals, targets and indicators. Below is a summary of the UNDP's recent reports on MDGs' compliance in Nigeria:

Goal 1: Eradicate Extreme Poverty and Hunger

People living in relative poverty declined from 65.6% to 54.4% in 2004 while 35 out of 100 people live in extreme poverty and 30 out of 100 children are underweight. Poverty incidence has been consistently Platinum Essays in the Philosophy of Applied Economics of Development higher in rural areas than urban areas while wide disparity occurs in poverty trend in the zones. The prospect of reducing poverty in Nigeria is bright in view of the macro-economic stability and progressive economic growth in the last six years. Government policies at the three tiers should be focused on increased productivity in the agricultural sector. Investment in infrastructure, especially in the rural areas should be scaled up.

Goal 2: Achieve Universal Primary Education

Performance on this goal is on course. About 84 out of 100 school-age children attend school and an increasing number stays there through to primary six. Net enrolment ratio in primary school education was 84.26% in 2005 as against 81.1% in 2004. The literacy rate among 15 to 24-year olds improved from 76.2% in 2004 to 80.2% in 2005. The success was bolstered by the implementation of the Universal Basic Education (UBE), improved policy environment and better intergovernmental co-ordination in the sector. Concerted efforts are needed to reduce the cost of primary and junior secondary schools, improve the quality of teaching and schooling, and sustain political commitment to the implementation of UBE.

Goal 3: Promote Gender Equality and Empower Women

The ratio of boys to girls in primary schools improved from 79% in 2003 to 81% in 2005 while the proportion of women in non-agricultural wage employment stood at 79% in 2005. The proportion of women in the national parliament was 5.76% as against 30% target. Secondary school enrolment has increased for both males and females at the tertiary level. There is need to mainstream gender issues into local, state and federal governments' development strategies.

Goal 4: Reduce Child Mortality

Reduction of child mortality remains a key challenge. Nigeria has the third highest child mortality rate in the world. As against the global target of 30/1000 live births in 2005, Nigeria had 110/1000 live births. Low maternal education, low coverage of immunization, weak primary health care system, high incidence of poverty and inequality, and poor household practices, accounted for the high mortality rate. Percentage of one-year olds fully immunized against measles rose from 31.4% in 2003 to 50% in 2004. However, wide disparities subsist between rural and urban centers and among geographical zones. There is need for improved co-ordination among the three tiers of government in the provision of health services. Better decentralization of immunization management, strong advocacy on better household practices, access to drinking water and adequate sanitation are needed for success.

Goal 5: Improve Maternal Health

Maternal mortality remains a daunting challenge to Nigeria. Against a global target of less than 75/100,000 Living Births (LB) in 2015, Nigeria had 800/100,000 LB in 2004—the second highest maternal mortality rate in the world. Rural areas and the northern regions are worse than the national average. The various factors contributing to such high rates are unsafe abortions, inadequate post-abortion care, early and child marriages, early pregnancies, high fertility rates, inadequate family planning services, and the low rate of contraceptive usage. Other factors include high cost of treatment and some socio-cultural practices that discouraged patronage of health infrastructure.

Goal 6: Combat HIV/AIDS, Malaria and Other Diseases

The HIV prevalence rate fell from 5.8% in 2001 through 2005 to 4.4%. Prevalence across the states, however, varied significantly. Although AIDS orphans remain on the increase, the percentage of people reporting the use of condom during sexual intercourse with non-regular partners increased. Malaria and tuberculosis (TB) still remain major public health problems. Malaria accounted for 60% of all outpatient attendance, 30% of all hospital admissions and 300,000 deaths annually. Blood transmission, unsafe injection and sexual practices are key drivers of HIV and AIDS while stigmatization and discrimination against people living with AIDS remain rife. Poor sanitation and high cost of treatment accounted for the prevalence of malaria while poor reporting network and weak public education are responsible for the spread of TB.

Goal 7: Ensure Environmental Sustainability

Nigeria's rich environmental resource base is being undermined by deforestation (3.5% per annum), erosion, desertification, gas flaring and oil production. Access to safe drinkingwater is improving but access to sanitation is still low while housing has reached a crisis point with only 31% having secured tenure. Environment programs need to be mainstreamed into the development agenda of the three tiers of government while resources for environmental management should be increased appreciably. Strong collaboration among key stakeholders is also needed.

Goal 8: Develop a Global Partnership for Development

Nigeria has enjoyed the benefits of progressive partnership with the international community. The decision to exit the Paris Club creditors was finalized in 2005 while FDI has increased significantly. However, accessing Nigeria's agricultural and semi-processed goods to industrial countries remains weak.

Challenges of MDGs in Nigeria

A critical barrier to planning for the achievement of the MDGs continues to be the non—availability of up to date data on most of the indicators. This is compounded by the limited funding available for data generation and management. Constitutional responsibility for implementation on almost all the goals, rests with the states and local governments in Nigeria's federal structure. In spite of remarkable strides at the federal level, appreciation of the requirements for meeting these goals, as well as institutional capacity, remains relatively low at the lower levels of government. Poor governance, changes in policy thrusts of successive administrations and integration of the MDGs in the national development strategies, have also been a challenge while other challenges include a weak monitoring mechanism for the MDGs and low stakeholder involvement of the civil society organizations, private sector, the business community and specifically the Nigerian Stock Exchange which is in a vantage position to harness private sector funds and support.

The Regulatory Imperatives and Challenges of the NSE

The Nigerian Stock Exchange (NSE) experienced an unprecedented growth in the eight years' democratic rule of 1999-2007 when world class financial professionals were engaged in rebuilding an economy ravaged by several years of military misrule. Appointment of the right crop of leaders to key positions in national finance and economic management ushered in a wave of good ideas and effective regulatory policies.

Landmark financial reforms led to robust economic growth and buoyant investor confidence. The unleashing of the private sector created demand for services such as project finance, debt/equity capital-raising to fund expansion ventures, corporate advisory as well as new capital market products like exchange traded funds and derivative products linked to real estate investment.

The banking system consolidation between 2004-2006, became a catalyst for dynamic reforms in pensions, the bond market and the insurance sector, thus impacting the wider economy. To that extent, the newly-enlarged banks were instrumental in the financial market revolution which opened up domestic stock and debt markets, and expanded liquidity. This in turn, fuelled the boom in non-oil sectors, pressurizing the capital market to fund infrastructure projects, especially in power, water transportation and communications (which are key MDGs indicators).

High oil revenues driven primarily by the conflict in the Middle East generated double-digit growth figures in nominal gross domestic product (GDP) between 2003 and 2006, with the economy doubling in size over the period to US$115.46bn. Annual real GDP growth averaged 7.3% during 2003-2006, exceeding the regional average of 5.3%. By contrast, the economy grew by just 2.7% per year in 1997-2001, according to the International Monetary Fund.

Financial developments further enhanced the nation's prosperity and a 2007 IMF report showed that in 2006, the non-oil economy (where fur-fifths of the workforce are employed), expanded by 7% for the

fourth straight year, led by financial services, information technology, retail and wholesale trade, as well as agriculture where cocoa production and exportation grew by over 15% and inland fish production grew by 33% within eight years.

The private sector and specifically the Nigerian Stock Exchange, came to the fore in the march towards sustainable national development. Foreign direct investment (FDI) reached a record high of about US$7—US$9.1bn in 2006, of which almost a half or US$4.1 went in non-oil sectors. The bulk of FDI was channeled through the NSE into the oil and gas industry, with beverages, telecoms and banking also attracting large amounts.

European and US firms have traditionally been the major investors. However, Chinese firms were now making big inroads. The country enjoyed surpluses on both its fiscal and external trade accounts whilst forex reserves surged to over US$43bn in 2006 (the highest in sub-Saharan Africa), compared to only US$5.5bn in 1999.

(Continues...)

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Excerpted from PLATINUM ESSAYS IN THE PHILOSOPHY OF APPLIED ECONOMICS OF DEVELOPMENT by Herbert Onye Orji Copyright © 2011 by Herbert Onye Orji. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents

Contents

1 Millennium Development Goals and the Nigerian Stock Market Exchange: Regulatory Imperatives, Challenges and Prospects....................1
2 Sovereign Credit Rating: The Experience of Sub-Saharan African Countries with Special Emphasis on Nigeria....................24
3 Cross-border Investor Protection and Global Capital Market Integrity....................58
4 Harmonization of Regulatory Framework towards Enhancing Reliability of Financial Reports....................68
5 Foreign Direct and Portfolio Investments in Africa: The Supply and Demand Environment in Nigeria and Selected African Countries....................81
6 Overview of the National Economy....................104
7 Dynamics of the Nigerian Financial System....................115
8 Review of the Law and Practice of Commercial Banking in Nigeria....................138
9 Regional Banking and Economic Development in Africa and Asia....................159
10 Project Financing and Management of Plantation Agriculture in Nigeria: The Prospect and Problems of Sustaining an Optimal Production Level for Cash Crops....................177
11 Project Financing: Emphasis on Aircraft and Ocean-going Vessels....................212
12 Financing Marine Resources and Management in Africa....................251
13 Reviews and Evaluation of the Programmes and Procedures Leading to Quotation of Shares of a Company on the Nigerian Stock Exchange....................275
14 Accessing the Capital Market for Infrastructural Development....................288
15 Building Effecting PPPs for Infrastructure Services in Nigeria....................305
16 Effective and Reliable Rating of Quoted Stocks: Issues, Challenges and Prospects....................326
17 The African Union: Challenges, Prospects and Benefits of Integrating African Capital Markets....................340
18 The USA SEC: Powering the World's Most Influential Economy....................351
19 IMF—Supported Adjustment Programme in Africa: Success or Failure?....................367
20 Developing the Real Sector: Challenges and Prospects of Applying the techniques and Practice of Derivatives....................373
21 George Soros Reflexivity: New Paradigm Shifts in the applied economics of Money and Capital Markets & the Crash of 2007/2008....................384