February 28, 2011


Contextually Capacity refers to human character that is appropriate to support to human tradition and social development at a time .The primacy of human capacity cannot be underestimated in the general design of socioeconomic system appropriate to support living standard of the people .Its development determines the rate at which economy grows and the quality of human capacity has come to matter in modern times in addition to its primordial contribution to nation building and universal welfare as a whole .
However we need observe that its sustainability also more than determines its strategic impact to economic development and where capacity abuse is perpetrated or persistent there can be no development .This among other reason remains the catalyst for capital underdevelopment in most developing countries as a whole

Generally human capacity collectively supports social and economic development .Capacity remains the hardware and the changing climate of development the software vital but nature enthuses differently with capacity as the software and the climate and the human system -- the hardware that outlives the software during a round of mechanical operation or use .The value of human capacity cannot be demystified and a missing link that usually midwives underdevelopment .Appropriate capacity supports appropriate development at a time .Inadequacy of development at a time is caused by capacity inadequacies or the inability to reach optimum capacity needed to support highly demanded development needed at a time .
The appropriation of development cannot be attained unless capacity and appropriate standard needed are met and sustained before projected development can be met .HUMAN DEVELOPMENT begins by cultivation of required capacity vital to support a given human resource per capital which must supports itself first and foremost prior to general contribution to the development of the society .And effective human capacity follows tradition cycle thing with multiplier effect to transform a nation when collectively endorsed .Its quality by use and practice relative to institution and policy practice in an economy is indicated by the quality of information enterprise of a nation .
Since human capacity pioneers and authors human ,social , economic and political development , sustainability of the tradition flow cycle thing relative to collective social capital tends to nurture this capacity far better and consequently not only passes its effect to the socioeconomic system at large but also harbinger of much vaunted human civilization . We can contend that it is the circulation that matters which follows the tradition cycle flow [TCF ]- and such sustainable effect is vital to transform that jurisdiction from existing lethargy and the moribund nature of the socioeconomic system facing the hurdles and resolving the challenges of nation building .
To be precise sustainable human capacity promotes capacity building by aggregate contribution influences socioeconomic development and also sustainable capacity building through its collective wealth promotes social growth ,then sustainable social growth or development . This later snowballs social development in turn following the TCF completes or dovetails into sustainable social development until capital development is attained , harnessed and sustained .This indicates that capitalization of development in any clime can never be possible without appropriate human capacity which will midwives adequate appropriation of development demanded at a time ----
Capitalization of Development, Tradition Flow Cycle and Development Density

Capitalization of development is a central precedence in developed society The development critique school mainly the philosophers and scientists which provides diverse models put to mill to entrench development practice periodically undergo psychological reawakening and moral self-criticality-an inner audit process that reevaluates existing world models by every successive generation of modelers so that a model is not made inactive or left rigid in human tradition far too long .Such capitalization wrought by free will through intellectual freedom tends to restructure human belief system refocuses human tradition and development practice perspective scientifically using per capital competitive bias not only from the critique schools but also from the rest of civil society while evaluating our tradition .
This influences the policy makers in the same way as the modelers though to a lesser extent but most specifically the entire fabric of socioeconomic system that they superintend into growth and then into mass development .Their major responsibility is to shape the polity and the social psyche that supported it giving direction to mankind in general .This is passed from nation to nation ,generation to generation and from project to project .The quality of development equation at this consensus of psychological reawakening and modeling self criticality restructuring curve [ measured or tested at the birth of new models or those not accustomed to where development is traded for utility in the market place ] provided hurdles to learning are surmounted is the only competitive parameter and optimal leverage to grow development cycle from one stage successfully into order for true development to be actualized , sustained and benefits mutually spread to every class in the socioeconomic system .
Total reevaluation of this curve ordinarily insinuates successful market reforms in these territories to further consolidate on the previous gains of development-giving rebirth to elementary doctrine of development civilization .Those nations on the contrary where market had failed must be measured by this development deflator /inflator which addresses a review of previous strategies put in place to drive social capital so as to determine optimal result needed and accumulated .
However also at this stage man by nature highly culturally resistant to change exhibiting preferential bias in favor of the kind of change they desire to tolerate in contrast to following nature’s course which may be costly but the most effective . Inability to let go results into costly revolutions a washed in mortal antecedence .Controlling inexpedient futurity of this climate by practice tends to slow down the economy of development and also dampens sustainability of existing development antecedence . Nevertheless passion for works and strengthening of capacity building promotes and refines human arts with which further consolidation can be effected .Capacity building primarily to be precise is the subordinate institution of mass development[power triangle oriented ] and not just the basic art of development. It is the transit shed and the actualization framework of development materialism .The practice of this arts advocates development grows and matures mass development depending on the level of information adequacy existing in the society at a given period . With perpetual practice swinging from project to project and from activity to activity –a normal daily routine , cultivation of development is turned into arts and then into mass venture backed by sensitive political will and technology to become the very primogeniture of culture pass on from one culture age to the other .
Sensitive societies advocated this on a recyclical renewal basis transforming sustainable capacity building benefits into sustainable development .
To study the economy of development and development technology in a society one must first venture to unravel the open mystery of how traditional and scientific information flows freely or consumed by social capital and traded by it resting on culture .This culture popularly but unusually as repetitively emphasized is regarded as the economy of development nature , the foremost institution of nature and the foundation of the universe and life altogether .Man learning from this book of nature evolves the practice of development by domesticating relative capacity which is the author of development . And the ratio of development in a nation feeds from existing capacity .Consistent growth in this regard is not enough to measure sustainability but also the quality and the growth pace also contributed to it .
Development components includes growth , growth assets , growth regulation , growth criteria , accumulation of growth , sustainability of growth , attainment of development itself then, sustainability of development , and then the cycles of development until the last cycle of capital development which measures more of the spread , thickness and distribution of this development through the rapid gains of empiricism or using the gains of technology to circulate mutual benefit to all citizens. This procures development density in which all citizens are both socially and economically affected .Dividend here is usually regarded as civilization .
Development parameters such as tradition rigidity where necessary and incentive leveraging , regulatory standard , development forecast and benchmarking , trial and error processes , development remodeling and development auditing process , bridging learning gap [ critique schools outputs] , necessity and enlightenment demand , social capital and above all the interaction of information freedom over information asymmetry that distributes mass enlightenment which determines the nature of development economy in a society in which primordial goals are the same by observing the great charters of liberty .To ferry material development is to observe this social architecture and then stages can evolve using the political , economic and social power and will of a nation while mass enlightenment is leveraged to demand rigidly for mass development .
To devitalize on development is to deny extensively egalitarian access to cultural trinity and abuse this template and the consequence is to enter or embrace development dark ages and vice-versa .The entire development economy worldwide can be measured in this way which falls short of pass mark even if it were to be elementarily graded . Observance over time of this noted criteria automatically fuels development civilization which is made possible by reviewing the effect of these components and parameters in developing development and the extent to which the required sustainability is capitalized . .The basic law of development is already known which is mainly access to the use of cultural rights of man , observing the great charters and the affordable access to information democracy is a foremost starting point .That education especially social education matters a lot could no longer be doubted .
The institutionalization of affordable information access promotes capital development adequacy in the long run .The only challenge a nation has is how to maneuver power triangle [being the secondary institution of development and often by its structural defects tend to ridicule the primary institution of development ] into attainment of this capitalization which is why development is faster in one society than the other; irrespective of competitive self interest over time social interest in such economy always prevail –an exposition or a reflection of the quality of social capital in that jurisdiction . The societies that made themselves poor ate poor excreta fallen short when categorized using this simple indicator. A society must have attained certain level of this adequacy , democratic flow of information enterprise development and optimization before capital development can be cultivated or made possible .
It is to be noted or remembered that optimum use of information enterprise promotes by multiplier effect mass innovation .In the economy of nature art system market is nurtured by information free market which is the author of full blown cultural free market and also interchangeably and the latter still through artistic evolution It is also the author of capacity free market which in turn authors or cultivates development market economy as they spread over population free market .Nature moves along this cultural trap cycles which is embarrassingly obvious influencing humanity as the epicenter of development by projecting and planning traditionally following similar rules from the ancient until now. Unknowing to man scientific planning cannot be embarked effectively even if growth in technology advance sustain ably unless we first unravel the nature of development economy in the cultural market –in view of the growth and diminishing returns threat to human civilization .
This development pattern and standard is fixed but the capacity to maneuver the template consumed man ’s ateliery . No wonder Francis Bacon admitted man is an interpreter of nature learning from this book [nature] and development evolution in the family of man has followed this line of thoughts for the entire stretch of utilitarian culture and history .The challenge for developed societies which have observed the rudiments of development is to sustain civilization and avoid development boom and burst cycles . Given the glaring evidence of history and development antecedence that no civilized society in mortal history since ancient until now has been able to sustain her civilization . HENCE SUSTAINING CAPITAL DEVELOPMENT IS NOT ENOUGH EVERY CIVILISATION DID ATTAIN THIS CYCLE BUT SUSTAINING THE TORCH OF CIVILISATION and spread to adjoining races is the greatest challenge in the cultural free market and human history .

Development and Core Competence
Coming down to the developing history , certain parameters ,according to a study by Saleh Nsouli , once concluded that three most important and interrelated components vital to economic development : capacity building ; good governance ; and economic reform .Capacity building is defined as the development of skills and institutions as critical element to the attainment of sustainable economic growth and development .Without good governance full exploitation of acquired skills will be practically impossible and domestic institutions grossly underperformed . And to leverage on economic reforms effectively without a well functioning institutions could be exercise in futility or not operated properly .
The quality of the institution itself is a reflection of the extent of capacity building –a core resource for economic growth which uses the institutions as a framework through which corporations and people participates in economic development producing incentives for investment and the resources ’ allocative efficiency .The importance of institutions is somehow extremely underestimated in the developing history and to some extent advanced countries .No territory is immune and specifically citing the market downturns and meltdowns that plagued the united states was linked to poor quality of institutions and here is a region hitherto previously regarded as sacrosanct .
Africa ’s growth rates and potentials in the 60s was ranked ahead of East Asia ’s .Nsouli study consistent with Easterly and Levine [97] provided empirical evidence that lack of sustainability truncated this potential due to political and social factors , poor institution , political instability , bad governance and corruption and inadequate infrastructure .Rodrik [97] shares similar evidence with a view that quality of institution in the region exceeded in real terms contribution by classical economic variables such as technical progress , accumulation of capital and labor supply increases . Capital accumulation and the quality of the institutions according Hall and Jones [1999] in the study of 133 nations are complementary essential to long lasting growth .The two sets of institutions noted by Nsouli and Rodrik [1999] studies : both regulatory institutions and those that supports efficient functioning of the market are pivotal framework for long lasting growth .
NO wonder capacity building concept is the most popular phrase in the development discourse .According to Infocotonou , the European centre for Development Policy Management noted why aid is not generating sustainable impacts or policies fail to deliver . This was linked to capacity problems as admitted by foreign donors and government alike .In the world bank study for long term development prospects for the SSA region .From Crisis To Sustainable Growth [1989] capacity building is immensely shortchanged or under threat and grossly inadequate .That capacity for sound policy design and policy sustainability is in dire need or critical short supply in nearly every sector of African economies .
For instance in the Nigerian public sector serious capacity gaps [ ratio of derivation between required and actual workforce ] exist especially in most ministries and agencies .
The inadequacy in the quality of technical skills and the shortfall in the quantity of available man power posed serious problem to economic development .The inadequacy was also recognized in the national capacity assessment report [Nigeria/World Bank, 2002] affecting negatively in the way public resources are shared and coordinated .The report details were shocking . unequal staff structure , staff concentration in semi skilled and unskilled labour category while qualified staff were grossly lacking in critical areas [ i.e finance ,economics , policy analysis , general management and IT] .The civil service was said to be over staff at the lower levels and overworked at the higher levels ; ratio of trained workers to total staff strength was very low and very insignificance to some extent citing lack of funds as a major reason behind the shortfall ; more than 70 % of sampled institutions could not meet training needs . [Obadan 2003:Capacity Building For Development [1] . ] . In the private sector the problem of skills mismatch that do not correlate with industry needs abound . The virtual collapse of educational institutions since the 80s churned out half baked graduates that hardly finds jobs to compete in the economy and 70 percent of which hardly can defend their certificates ;though the workforce are better here than in public sector .Imagine , Lagos state- the richest state in Nigeria perhaps by IGR and the commercial capital controls more than 50 percent of entire skilled work force in Nigeria and two third of industrial sector . Unfortunately poverty level is as high as 70 percent-we mean 70 percent of Lagos are rural .That is Nigeria –the elusive giant of Africa .The same story is grimier in the rest of Africa the middle east and beyond
Obadan [2003] commenting these inadequacies and the challenges facing Africa affirmed that ‘ this among others …..informed the nature and pattern of external donors interventions .In spite of the efforts made the practice of capacity building so far leaves much to be desired and capacity building continues to pose challenges that may be addressed effectively in the long run ’ .
In the developed territories we have noted that poor institutions also abound and the capacity building predicaments there are more linked with poor models which further humiliates and degenerates the quantity and quality of development produced in the insensitive developing region . The institutions that supported development in this region were nurtured over the course of 400 years or so. Hence rigidity of tradition could also influence biblio maniasis and to avoid this dark age empiricism of past leprosy in development can easily be exhumed . To resolve these challenges facing humanity put together , we need a reminder or briefly re explore the economics of information democracy and the strategic impact governing affordable information access.

Successful capacity building rests squarely on the success of a nation ’s information enterprise which could add value to TCF If harnessed .The cost effectiveness of this market incentives promoted by its enterprise are hereby noted :
--promotes social , economic and political awareness
--ensures universal freedom such as freedom of information at least on a tolerable level inimical to preservation of human rights abuse
--Promotes mass innovation using the democracy of information freedom and ensure development in the longer term
--Without information freedom which is the sole feature of a democracy unknown to many subsidiaries such as freedom of thoughts , freedom of association , freedom of speech , security of life and property etc,among others democracy cannot be sustained.This indicates that democracy in the developing countries is living on borrowed times since the economic framework to support it is grossly lacking
--If the above is sustained the path of development cycles can also be sustained and completed until the last stage capital development or its density is sustained .These are indicators for sustainability .

World development ideologies change with time and to capitalize development successfully, the socioeconomic system model must be changed to go alongside robust formula as suitable in the third world in which we have noted democratic formula hardly succeeded or go along to contribute to meaningful development ..A socioeconomic system composed of political ,social to economic system in this region is highly inimical to growth-- a safeguard of growth abuse and the main contributor to capital underdevelopment .Every decade they recorded economic growth but are hardly sustained .This emphasizes the need for change which cannot be possible without self-determination to observe neomarxism and get off the yoke of western aggressors . Learning lessons from emerging markets could give inspiration and practice is another thorn in the flesh of indolent nations where development deputisation deposition colonialisation abound and bibliomaniasis is highly valued as the antiquities .THE NEED FOR CHANGE cannot be bargained for dregs otherwise perdition of these nation states is never far away
In a fast changing climate ordinarily development according to several school of thoughts is determined , quickened or hastened by several factors mainly policies and appropriate institutions put in place to midwive meaningful change that a society or an economy demands at its own trying time which must be supported as noted earlier by highly evolving developmental ideology of the nation to evoke requisite mass of capital development needed to maintain and sustain social life and access to universal wealth . The challenge in our world today we have noted repetitively: is how responsive and effective are the socioeconomic system as a whole and especially the existing macroeconomic models’ reaction and sensitivity to this changing climate ?

We affirmed that the study of economics from the antiquity until now has never been able resolve the evils of inflation which is the fundamental economic problem let alone its endless tiring theories being propounded by macroeconomists in modern times which has only proliferated in vain Since the days of Thomas Mun,s Mercantilists theory which pioneered modern doctrine of larger market and imperialism or among others earlier in the Neolithic to the Medieval if any of this mode down to classical economics and Keynesian period until this era of the Neoclassical and the monetarists and the like , the vicious indulgence circle riding on the heels of intellectual terrorism sorry to say has assumed a maniacal proportion and refused to abate .Consequently , development colonization development arbitraging and development holocaust respectively as components of development crisis have been legacies bequeathed to development market of the third world countries countering requisite density or mass of capital development that has often eluded these territories for a long stretch of human history.
Infact , insiders such as Robert Barro at Harvard Keynesian Paul krugman of Princeton University and New York Times Brad De Long of the University of California and William Buiter of London School of Economics [LSE] and a host of others have noted this gradual degeneration .They contended that economics is a dismal science. That the past 30 years of macroeconomics training at American and British Universities and the entire west were ‘a costly waste of time ’ The U. S meltdown greatly plummeted any notion of confidence or provoked crisis of confidence in the field and a glaring evidence of the dismal science .In the best PhD programmes based on the opinions of some economists , macroeconomics it is regarded often as the least most popular class . It is a misnomer to believe that it is a panacea nor even a relief to human and economic misery .
On June 10 , 2009 at a Lionel Robins lecture held at the LSE—London School Of Economics Krugman noted that most macroeconomics of the past 30 years was ‘spectacularly useless and positively harmful at worst ’ .That is particularly a scathing remark and can never be better than this especially when coming from the mouth of an insider-Is that a good halitosis ? Your guess is as good as mine .They failed to diagnose the causes of economic crisis during the melt down not to talk of proffering solutions for recovery uphill They were dormant hardly learnt new things and keep repeating the same mistakes over time
Of course these internal critics were against themselves too both the ‘ purists ‘ freshwater and the saltwater ‘ pragmatists ‘ The behavioral economists and the apologists of efficient market hypothesis raved against each other .Although Paul Krugman noted that ‘ we are living through a dark age of macroeconomics ‘ he was nevertheless criticized by some other macroeconomists such as De Long for falling back on antiquated Keynesian doctrines ‘ as if nothing had been learned over the last 70 years ’ After all many scientists the economists believed ‘ do not leaf through Newton ‘s world machine ‘ principia mathematical’ to solve basic problems in the study of physics .
For the upteempth time in this fast changing technology age existing macroeconomics models ordinarily must also change perhaps at the same pace in which today’s technology changes .The fact is clear: the poorest regions of the world mainly Africa and the middle east despite landslide GDP growth over the years which is measured by declining share of world trade and especially the growing flaccidity in the natural wealth or assets indicates that GDP in real terms precisely does not take into account .There is no need to re-emphasise what is known already –In a cursory analysis let us access challenges facing Africa as a leading case study in this episode .
Like elsewhere around the world the relevance of international financial architecture to Africa cannot be underestimated at this critical period of her history in view of vital demand for development practice in the continent . The quality of growth and development in this territory is heavily interrogated . Greater macroeconomic stability attained especially in the SSA region over the years unarguably grossly masked and shortchanged the quality of this practice and vastly underdeveloped its needed density and pedigree not translated into lasting growth in the continent in the long run . Unfortunately the vicious trap cycle continues without remorse and alternative recourse since the colonial era .

As usually emphasized demand for development in the continent is under perpetual siege. No wonder nominal and precisely real development is similarly under siege and close to zero . What can we do ? .Challenges facing the practice stems from seemingly insurmountable factors such as poor mass enlightenment ; inappropriate demand for development ; cultural inhibitive supply factor flaccidity ; and above all lack of homegrown ideology OR which we have analyzed or diagnosed under acquired immune deficiency DDDCH syndrome [DAIDS] OR SOCIO ECONOMIASIS . This can be regarded on aggregate as mental poverty or spiritual poverty which is the author of all poverty types be it income or economic form of poverty ; physical ;political and social forms of poverty .It is the world greatest plague behind social misery .Before we can resolve this problem we must tackle socioeconomic effect of Braindrain in the continent .
According to Daniel Cohen in the piece ‘Veils of Ignorance ’that two of three Americans sincerely believed that being black is synonymous to poverty and the rest did enthuse that blacks were probably unlucky . For the umpteenth time yet the pinnacle of their civilization was black by origin .It is a derogatory statement to be made especially for the ignoramuses around being deceived by their shortsighted philosophers and who failed to uncover the strategic importance of the mother of all races and her indelible place in mortal antecedence .Underestimating her unparalleled antecedence surely marked the path to perpetual economic decline
The concept of Braindrain particularly is more worrying which reduces the growth rate of available and effective human capital shrinks income level , reduces the existing size of income per capital and GDP capitalizing gross underdevelopment in the long run .That is why Africans need to take serious considerations on its economic impact and effect on labour and standard of living and international competitiveness [Hague and kim].It has greater impact on international trade and commerce and often occurs between nations states and communities and impact heavily on the climate of sustainable development [Uwaje,2001].
It is to be noted that the Braindrain scourge is one of the author of mass poverty and is synonymous to capital underdevelopment .According to international Organization for migration and the United Nations Economic commissions for Africa ; for many Africans who went abroad and returns with professional expertise and as skilled labour there are many more that never return . The scourge is particularly nauseating and steadily increasing .Between 1960-1975 about 27 ,000 exceptionally qualified professionals were estimated to have departed their home countries .And between 1985—90 another 60,000 also departed and since the continent has been loosing 20 ,000 professionals annually .This is particularly worrying because the figures do not include the student population that also departed to study abroad with no hope of likely return .Out of every 100 professionals departing annually only 35 do not return .About 64percnt of Nigerians between the age of 25 and older and 43 percent of all Africans living in U.S.have one bachelor ‘s degree at least .The Senegalese doctors in the U.S. CITY OF CHICAGO is more than in the whole of Senegal .Likewise if the Nigerian doctors at the general hospital in Kuwait should return home enmasse today that hospital will be closed down . There are many more Nigerian doctors and nurses in Saudi Arabia and the .U.S. THAN in the whole of Nigeria put together .
AS a matter of fact Nigeria has more than 21,000 doctors in the U.S. alone as opposed to over 30,000 local doctors . This figure for the U.S. is even more than real local estimates because not all Nigerian local doctors are active excluding those with periodically renewed licenses. . Imagine about 1.7 hospital beds and 0.2 doctors per 1000 people and infact one doctor serving about 15 -20 ,000 clients in the north ; this is not peculiar to Nigeria and the emigrated ones do not dream of coming back .Writing in the ‘Professionals And the Economy ’Prince Bola Ajibola the former attorney general and minister of justice while recalling his experience as a Nigerian envoy at the court of St .James and the alarming number of Nigerians that have left the shores of the country since 1999 once noted that : Frankly speaking a considerable number of those who ought to contribute to the revival of the economy are outside the country . Many of these migrants are professionals .They are currently devoting their talents in developing other people’s economies all over the globe .Sadly the many hundreds of thousands of naira it takes to produce a Nigerian graduate and professional right from primary school to the University would appear to be wasted when you find him or her doing menial jobs such as attendants in the London underground ’
He continued ; United Nations Conferences on Trade and Development [UNCTAD] estimates as at 1979 shows that each African professional between the age of 25—35 contributes $184 ,000 each year to the United States economy .Current estimates are that at least 100 ,000 Nigerian professionals are practicing in the U.S. .Thus conservatively , Nigerian professionals contribute about $18.4billion to the U.S.economy . If adjustments for inflation over 20 years are made the mount of money will be more astonishing .If you include Nigerian professionals living in Canada Europe Saudi Arabia and South Africa the amount will be $100billion [ more than twice of nation’s GDP during the period ].Whereas the 30 ,000 doctors Nigerian born medical doctors is a child play when we consider the enormity of capital flight crisis effect .I dare say if there is a sudden withdrawal of Nigerian medical professionals [doctors and nurses ] from the united kingdom the national health service [NHS] will face dire consequences .’[defunct National interest Aug.24,2001pg.27]
He believed Saudi Arabia will face similar ordeals with adverse effects on their healthcare system should Nigerian doctors and nurses be withdrawn . He was surprised Nigerians were everywhere even in new Zealand ‘way down on the end of the planet ’ believing due to sheer distance will hardly come across any Nigerian but ‘to my utmost …. pleasant surprise ’according to him ‘ a reception ’was ‘held for me the same evening of my arrival by Nigerian professionals gainfully employed and contributing to New Zealand economy ’. That Nigerians are every where around should no longer be disputed and should not be the problem and many will never return according to our lawyer unless social amenities are provided . Social amenities or not people are always on the move even in South Africa where the climate is conducive professionals are moving in droves but who is filling the remaining vacuum ? Any way as we noted the scourge is a phenomenon across Africa .
In Ghana during the 1980s 60 percent of her doctors left the country putting enormous pressure on the healthcare sector while an estimated number of only 400 doctors are still left behind in Zambia out of close to two thousand doctors it formerly had . In 2003 Christian Science monitor reported within a decade in South Africa an estimated 20 percent of skilled workforce have departed the country and within five years in Zimbabwe professional workforce shrank by two third ; this is a grave situation . Now it lamented to replace this missing gap Africa spends 4 billion dollars annually importing some 100 , 000 skilled expatriate to fill the missing link . no wonder development of science and technology is stagnant and fast eroding as scientists emigrated in search of greener pastures .Forget about genocide such as happened in Rwanda I tell you this intellectual genocide not physical genocide far worse and far degrading .
The result today is known to all no growth sustained , let alone development nothing moves and decline persists as population increases .Policy put in place like NEPAD etc lack leverage to take the continent to the promise land . We contended already that only enlightened people demand for development and can prevent social , political and economic instability from degenerating into continental bloody wars . Today Africa remains the most scientifically backward territory of the world and behind the middleast is the world poorest region . no wonder some researches link that [ two out of three Americans ]thought that black is synonymous poverty . I S there ANY WAY OUT ? The spillover effect of Braindrain was profound .
The UNESCO WORLD science lamented that the continent failed to make any impact on new materials and product development far lagging in the ICT sector despite marginal growth in recent times .A 1992 survey put the total population of African scientists and engineers at 20,000 which represents a mere 0.36 percent of world scientists and the continent is responsible for less than 1 percent [0.8 %] of world scientific publication .While its shares of patent is next to zero with no Nobel laureate for any scientific discipline yet .It is a very serious situation because patents , scientific publications innovations and technologies are the common yardstick of growing civilization .
According to the report at the basis of this declining growth is the deterioration of learning . Education is declining due to negligible output contributed by science , research and development .In the public institutions , Africa’s expenditure is said to be less than 1 percent of GNP in which a good chunk of these scanty spending say 47 percent are pumped into agricultural forestry and piscatorial business whereas value additive , agro allied and manufacturing services persistently lacked behind . As at 2001 UNESCO report summary by Catherine Mgendi , besides Seychelles and South Africa no nation in the entire continent spend close to or 1 percent of her GNP on research and development .or larger chunk devoted to sciences .
Enrollment in science has fallen drastically especially in advanced learning institutions a major reason behind decline of science on the continent . In most countries about 0.5 percent of scientists and technicians existed for every 10,000 people in 1995 .let ’s take a look at secondary and tertiary enrollment in selected African countries. In The nation article on African science Mgendi noted as observed below :
Selected African and Asian countries compared
Secondary and vocational school enrolment per 10, 000 people

 South Africa ……………………………………………….1,085
 Korea………………………………………………………..1,037
 Gabon…………………………………………………………474
 China …………………………………………………………457
 Kenya ……………………………………………………………224
Tertiary Enrolment in the selected countries: compared

 South Africa ………………………………………………………80
 Korea ……………………………………………………………..381
Though the eight African counties rated favorably with six fastest growing in east and south Asia but the low enrollment in science is the greatest undoing .
Before we close this chapter , consider this sad and deplorable facts .According to the magazine –The Newsweek , the U.N. and World bank intensive studies that over the last 20 years which ended in 2003 Arab world average per capital growth rate had been less than 1 percent lower than that of Sub Saharan African region ..Unemployment was in double digits even though they were underestimated and labour productivity hardly changed since 1970s down to 1990s. In terms of access to foreign literature and ideas and technological development and exports middle east is the weakest and persistently the decline never abated. Likewise in Africa , her peer basket case , per capital income in Egypt in 1950 was rated exactly at the same level in South Korea but presently it is 80 % far lower than in the former times .During the same period under review the population of Egypt some 70 million people filed only 77 patents in the U.S. compared to 50 MILLION South Koreans filing 16 , 328 patents works .Today non –oil exports of Hungary is much bigger than all of African countries put together . These are some of the grievous mistakes and Braindrain factor could not have been resolved and exterminated completely
Note :Braindrain like many of African challenges to sum it up is a capacity problem correcting this shortfall will no doubt be a contributor or a function of sustainable capacity building which can only be harnessed and resolved in the longer term .

With this scourge Africans seem to be contributing to growth elsewhere to the detriment of their motherland .It should noted Braindrain has three types or categories : first we have colonial Braindrain which is slave trade using forceful expulsion of people to foreign lands but now the rest is history ;what we have today is neocolonial Braindrain in which the lure of civilization and greener pastures lured Africans persuasively to serve to grow the superior homeland. This is modern slavery –but the most deceptive fighting against local development like jihad or shall we say second slavery ?
Africa : the Land of crisis and natural wealth
There is no doubt that Africa is the richest territory of the world and cannot afford to do less since it controls or has 40 percent of world total strategic minerals and the Congo basin harbors half of these with the Niger delta having the highest numbers of rivers and waterways worldwide .70 percent of 300 ,000 species of world total fauna and flora are located in Africa but Niger delta controls 60 percent of these . World largest gas deposits according U.S. GEOLOGICAL STATISTICS is located in Nigeria [ and not Russia or Iran ] probably around 600tr.scf [as opposed to official 200tr.scft .].The world largest bitumen deposit in Ondo State , probably lead and zinc in the north according to one mining experts were found in Nigeria .South Africa controls world gold reserves , diamond and next to Russia in platinum and a world leader in palladium .Every state in Africa is endowed with one resource or the other . Africa controls more than 30 percent of world gold reserves The gulf of guinea is one of the richest and leading hydrocarbon regions of the world
Unfortunately this good development had become a gory tales and in some African countries natural resources have become a curse and not a blessing . From the blood diamond fields of Sierra Leone to the democratic rep. of Congo warring fields where a group of countries are at loggerheads and fighting over solid minerals down to the Angolan terrorist enclave , natural capital have been a source of imprecation and social upheaval .Let’s take look at this known statistics in an historical reminder ;
 20 percent of Africans are under condition of conflicts
 From the mid-90s upward beginning from Rwandan genocide more than a dozen countries were sucked into armed conflict and crisis perpetuated in the battle to control natural capital .The great lakes region together with Sudan captured international attention and they constitute a massive region quite as large as western Europe .
 Sudan has been mired in conflict all but 10 years since independence in 1956. while African first world war is going in the Congo dr. where 6 countries battle it out over solid minerals .
 The effect is poor capacity building and average per capital income is lower than in 1960s
 Nearly 50percent of SSA region citizens live below poverty line , the figure is 90 should we use poverty profile . etc.
 Border disputes abound and challenges of divisive pluralism as noted by Emeka Anyaoku in the piece ‘South Africa and the challenge of divisive pluralism ’is becoming clearer and direr as burden of development increases which can only resolved by grass root empowerment .

The only condition for sustainable growth and development is peace and social stability which will also create a platform for good trade and the ability to cover her trade gap and development gap with the rest of the world .
Averting cultural Brain drain :A bigger scourge
As a result of this horror tales cultural brain drain also became the natural consequence
Of this traditional brain drain. IF we fail to revive and value our culture as the last asset for black man renaissance , we have nothing to gain in the near future .Although this drain is not peculiar to AFRICA but SHE IS THE most affected .For instance , half of world 6 ,000 languages are expected to go extinct in this millennium .Though skeptics may not believe but close to 10 languages or 9 are already extinct in Nigeria out of bout 526 local dialects .Similar gory tales loom large across the region .
By this time we need to realize that Malaria alone that kills a child in Africa every 30 seconds is not just taking more than 1% off African GDP together with other epidemics like tuberculosis sexually transmitted diseases, especially HIV/AIDS ,cancer of all types etc [that could be slicing between 10-20 % of potential growth ] but the slow nature of development and the existing unsustainability of previous development gave us utmost concern and a credible evidence of the long and tortuous road to development .The concern is: Should Africa fail to innovate as noted by Philip Emeagwali it will definitely perish .We noted that the traditional brain drain was long caused by cultural brain drain noted in the complacency of earlier civilization which can only be corrected by innovation to save the theft image that the word ‘dark age ’had bestowed on the continent especially in the post-colonial age.
General effect and International trade
It can be contended due to low capacity building , widespread economic , political crisis and large trade gap the continent is the most marginalized continent in the world .Blooms and Sachs [1988 ] noted that between 1980 –1996 it was the only continent to experience absolute trade decline whereas the volume of goods and services have grown over the years in other competing territories but in Africa has grown below the GDP .Between 1980—90 its share of world exports stood at 3percent but declined to 1.95 percent in the period between 1991—2001 .During similar period that of Asia grew from 11 percent to 18 percent in the latter period . The concentration on natural raw material commodities encouraged the decline .Dollar and kray [2001] also provided evidence that a group of developing countries that opened up their economy recorded astronomical growth . Uncompetitive economies like Africa would always stay behind due to loss of market share , unguarded trade liberalization , tariff barrier , marginalization from world markets with annual loses of more than 70billion dollars , lack of industrial goods and poor terms of trade or bad trade policies , protectionist policies , higher capital flight crisis .
To enumerate a bit , industrial goods are seriously lacking grossly from exports .The shares of manufactures in her exports since 1995 varied between 32-36 %. Whereas in south Asia the ratio stood at 78—79 % and for east Asia and the Pacific hovered around 78—83 percent with manufacturing accounting for one third of export .High transportation cost mainly affecting location of industrial activity and freight rates .Rodrik [99] commenting on the marginalization factor he observed unfavorable terms of trade , trade restriction practice of the trade policies , The GATT Uruguay Round of trade negotiation concluded in 1995 introduced new changes that led to WTO establishment .
The internal causes such as trade and exchange rate policies ; primary driven products haunted by price indetermination ; and uncompetitive nature of production. There is too much capital outflows .Collier , 1997 ]9. and Ajayi [ 1996 ]/[1997] argued a higher proportion of Africa’s wealth were stashed outside the continent in the form of capital flight and she integrated into global economy in a negative sense. They contended that capital flight varies between 24 to 134 % of GNP .This is also consistent with ECA study of 30 countries in the period of 1970—96 amounted to about 187 billion dollars .Infact it exceeds 200 percent for a group of eight countries in the ratio of capital stock to the GDP with weighted average of 172 percent for the group of Countries such as ANGOLA , Cameroon , Cote d ‘ivoire Congo [democratic] and Nigeria .In the last twelve years NIGERIA ALONE earned between 400—500billion dollars and every year 60 percent of this passive oil wealth were carted into western metropolis .Uneven flow of FDI is another challenge facing Africa over the last twenty years which ended at 2002 compared to the rest of the world .

AFRICA----------------------------------THE REST OF THE WORLD
Share % ? Share %
2000--------- 0.6 %-----------------------------------------$1.4trillion .
2002----------- $11b.----------------------------------------$651.2b.

------For the decade 1970s—80s , it reduced to half in Africa compared to the rest of the world
-----In 1980s the global FDI Stock as percentage of GDP was 5.3 percent as opposed Asia ‘s share of 28.1 percent and Latin America and Caribbean share of 8.1 percent by 2000 .And thereafter declined .
-----Therefore she failed woefully to tap the economic incentives provided by FDIs mainly bridging savings gap and the ability to transfer technology

With the benefits of globalization gone to the advanced countries the world has become more unequal over the last 200 years and despite being the most endowed continent is still the poorest [together with middle east ] region in the world controlling less than 1 percent of world trade .In the paper delivered at the 7th Ojetunji Aboyade memorial lecture professor AJayi observed that open trade regime though useful will not propel a country on its path to sustained growth .Those nations that have grown faster are those that invested a high share of GDP and maintained macroeconomic stability .The anchor or the main determinant for Africa ’s growth prospects he noted must be appropriate policy measures , human capital , institutions and infrastructure .Perhaps if noted emigrants could one day return .But this is hardly possible and may not happen in their lifetime due to recklessness of local leaders .


The principal problem associated with development is the issue of capacity .By building adequate capacity , development can not only be created but also sustained in the long run .Investing in capacity building is equivalent to nation building in the long run which depends on the enterprise of capacity to sustain polity and then nationhood by creating national wealth that is oriented to outlive its times as the legacy of posterity .A thorough adoption of this simple formula is a tested roadmap and a reliable transition towards the end of poverty in the society of man .Developing adequate capacity or sustainable capacity building is a foremost criteria to capital development .
As we earlier emphasized in the second chapter development is about people and development means people . Jeffrey Sachs in his famous book The End Of Poverty ……..how to make it happen in our time observed that poor countries lack six major kinds of capital :
1.Human capital :this includes health , skills and competence needed to make each citizen productive or influence economically productive .person ;
2. Business capital : facilities , machinery and transport infrastructure needed in agriculture services and industry ;
3. Infrastructure : Roads , rail water , power , telecom . , airports and seaports which are elementary outputs of basic development to promote mass development and business productivity ;
4 . knowledge capital :scientific and technological knowledge which can grow mass productivity is highly underdeveloped .This should be nurtured for the promotion of production , physical and natural capital ;
5. Public institutional capital : Bureaucratic bottleneck and distortion is a major bane . Commercial law , judicial systems , public sector services and effective control that could ensure peaceful and progressive division of labour must be put in place to promote mass development ;
6 . Natural capital : arable land, fertile ecosystems , rich soils and biodiversity. This provides ecological services needed by humanity for earthly sustainable living .
As we noted investment in people can take care of this responsibility and effectively manage these enormous assets for national development .That is the only challenge facing the under developing nations .The burden that this region has come to face is how to create wealth .In the World Bank report [‘where is the wealth of nations ? measuring capital for the 21st century ’] , it showed that intangible capital is near to zero in the major oil countries like Nigeria ,Algeria and Venezuela and often negative . The classic ‘resource curse ’as noted by Auty and Gylfason [2001] was also documented .
When Richard M. Auty first used the term resource curse in 1993 he used it to describe the recklessness of oil rich territories and their failure to use their resources to benefit their economies and boost wealth generation and counter-intuitively had lower growth rate than countries without abundance of natural assets or natural resources .Studies by Jeffrey Sachs , Mark Warner among numerous literature have shown link between natural resource abundance and poor economic growth .
Empirical evidences abound . In the Opec territory between 1965—98 per capital in this region decreased on average by 1.3 % whereas in the developing world grew by 2.2 percent on the average [Akinjide:2006] . The World bank further find out that ; What is the most important component of wealth creation across nations ? It also interrogates whether natural wealth increased or decreased as countries develop . O f course it does decrease as long as flaccidity matures or develops .Then it noted the top 10 wealthiest states such as Switzerland , Denmark –the food basket of Europe , Sweden , oil rich Norway , Luxembourg –Belgium , Austria ,France , United States and Germany .Except for Norway , none of this depended on natural capital or resource for national development since they utilized effectively the Sach’s golden formula [SGF/SAGOF] which has taken them half a millennium to nurture . Even for Norway where natural resources including oil and gas from the North Sea constitute negligible 12 % of total wealth , her mainstay is SAGOF .Whereas the bottom countries such as Chad Madagascar , Guinea –Bissau , Nepal, Niger , Congo , Burundi , ,Mozambique Ethiopia and Nigeria which scored second to the last with Congo the percentage was noted to be horrible . For instance in a monocultural nation like Nigeria crude oil accounts for over 70% of its earnings and 95 % of export receipts in a country in which 98 percent are poor
Likewise in his book The Origin Of Wealth Eric Beinhocker also admitted what is generally accepted by all economists that wealth is the product of human efforts and labour using the sweat from our brows and the knowledge in our brains for cultivation and accumulation .In other words it is not investment in natural resources, land , geography and building that is vital for national development per say but in people .This investment in strategy and technology that boost growth which can only be successful for the upteempth time by starting from the grass root empowering our people and opening up our communities for mass development . And that of all markets in the country human resource or labour market is the most maligned and abused market .

We have repeated this several times that it is somehow baffling that virtually everything that comes out from developed world are consumed and imbibed hook line and sinker without remorse and without reflection or shame by the developing world including its form of government we have adopted today which as claimed is symptomatic of development .Whereas democracy as they claimed being the best form of government is easily contended on the ground that it is not a foolproof or an arbiter that represent mass development in the longer term. These are the two poles entirely clashing each other .Normally democracy is meant to promote development if not it should be abrogated for a better alternative . How can we make democracy work ? Does it seem an alternative not workable or exist ? Let us first look briefly at the politics and antecedence of democracy in the developing world .
The Greek writer Aristotle in the 4th century B.C. , noticed these types of government :-- where power is held by one man is called monarchy ; where power is held by a few is called Aristocracy ;where power is held by the mass of the people ,this is democracy .These forms according to Martha Stewart in The British Approach To Politics are described as mere appearances rather than realities and these types in order of sequence could be fronted for by the following : tyranny ,oligarchy and ochlocracy . Infact oligarchy or ochlocracy brazenly fronts for democracy in virtually every developing society while the capital ‘word’ lives in limbo . Every form of government can be good and can be bad it all depends on the human system which will drive the governance system and chains . When the power belongs to the mass of the people they called it democracy but oligarchy in the same polity has conned the good aims of democracy if any and hence retards development that democracy is supposed to promote. Hence democracy in the 3rd world must scraped or revamped for it to be effective . If not a good alternative should be found . .

A media writer once argued the latter position that democracy retards development .I think the truth is the most profound around .Definitely it is . He argued the thesis that the developing region needed development rather than democracy was a brainchild of the post war period waxed strong in the 70s when the cold was at its peak .Samuel Huntington and a group of American political scientists argued volumes that democracy or undesirability of democracy for a country that have not reached a particular level of economic development .On the other hand they also argued what developing countries needed was good governance backing it up with appropriate data and historical instances . Writing in ‘Democracy and Development’ Sola Fasure at defunct Comet [now The Nation ] commented ‘ when the cold war ended the argument changed ’and the consensus was that democracy is good for every body .. But he bungled a good argument that ‘the lies and propaganda of the past will simply not go away ’ .Were they truly lies or propaganda because democracy did fail to promote absolute development in the hapless territories .
We assess democracy by global appeal , spread and impact . The growth of democratic institutions that started in mid-70s spreading wildly over the next two decades into Latin America former Soviet region and the SSA region in its third wave as coined by Huntington suddenly grounded to a halt .According to freedom house a democracy watchdog there were 118 electoral democracies in 1996 around the world .Almost a decade later they were 117 in relative proportions rated free , partly free or not free were static since the 90s
Usually in the 3rd world , the impact vs. development is close to zero because structure to make democracy effective if at all indeed vital to development is grossly missing .The democratic interest had persisted but development in this region had stalled and the grand hopes have not been realized .Four years ago , the former soviet had gone from frontier land of democracy to waste land within a decade The south American experiencing crisis of democracy, from weak state institutions to corrupted political elites .Some reports argued 15 -20 years after the gains of political freedom, personal security and economic well fare were not better than in the previous period .
Africa is still the basket case of democracy unworkability in which authoritarian democracies have failed . This is working perfectly in the former soviet block-mainly Russia and especially East Asia and including China , North Korea , Vietnam , Laos and Singapore . These are some of the world fastest growing economies . Majority of African countries have slumped further into poverty and gross underdevelopment in which every form of government has failed . The human system or institution is the major problem.
There is no doubt that western Democracy foisted on the developing region has grossly under-performed and heavily retarded development as they failed to invest in their people ballooning mass poverty .We need not be deceived . This is simple .In 1992 before an audience in Philippines .Singapore ’ s Lee kuan Yew remarked ‘I do not believe that western democracy leads to development . I believe that what a country needs to develop is discipline more than democracy ’ .And good governance is a function of the relative stability of political discipline that is mature enough to curb the excesses of democracy that disrupts the flow of development to the people .He observed ‘the exuberance of democracy leads to indiscipline and disorderly conduct which are inimical to development ’.
It is no longer news that this belief transformed Singapore preaching new ideology and consolidating this fact that each nation must determine the nature of development model and pattern that suits its economic climate and demographic institutions .The belief in the superiority of governance in the case of India –the world largest democracy and the Asian tigers .The three authoritarian democratic states between 1960---1987 , grew at astonishing rate of 6.4 % per capital whereas the liberal democracy in spite of its highly educated and committed leadership still recorded a paltry 1.9 percent per capital and western style democracy has dampened the possibility of radical changes in favour of the poor .
Radical changes in favour of the poor and efforts at land reforms were stressful and frustrated by powerful landed elites in Brazil and Venezuela prior to the election of left wing government in this region to effect reform in the new century. Development is a turbulent process which involves distribution of resources mobilizing every available resource to dominate forces of nature and ensure that every stakeholder in the society is affected .It should be noted that institutions that have supported and sustained western democracies were evolved over the last 400 years .The British parliamentary institutions the oldest was developed over the course of a millennium .
Political scientists and media scholars have contended this could be strenuous for late comers to development which need to adopt home grown institutions to quicken their pace of rapid development or else may not catch up with the rest of the world .
The decadence of democratic institutions permeates every part of the developing countries .We shall use the basket case of Nigeria as the case study at this point .The deputy editor at Business Day Charles Ike-Okoh and the fellow Journalist Badejo Ademuyiwa in the research report entitled ‘ National Assembly : World ’ s Biggest Democracy Cost Centre [ 2] ’[10 Tuesday 10 February 2009 ] .In the intro , they affirmed ‘ Since June 2007 the house of representatives has not passed 10 bills because most of their time is spent sharing money .’ According to a former legislator ‘‘It is hard to determine what the lawmakers take home monthly .Nobody knows it except an insider . It has been done in a way that nobody can discover it. Only the banks can tell the exact amount a federal legislator collects monthly ’’.He called for removal of secrecy through the order of the CBN and the backing of government . This he believed would not be possible and can even be politicized by CBN or the government .
The report shows that the national Assembly member ’s monthly salaries in the early part of Yaradua vs. Good luck regime earned 4.5million exactly the size of a local government allocation from federation accounts in 1999 while the speaker collects 33 million naira . From January 2008 onward each collects 10.7 million naira and Speaker collects between 75 million to 100million naira . The senator earned 44million naira monthly and 528million naira annually and 128 million naira annually for the reps ..
Every budget year they bring up several projects and then huge money allocated to recurrent expenditure is eventually shared among themselves after passage of fraudulent bills plus huge constituency funds, Which do not also reach the grass root .
To worsen the case nobody audits their accounts because the auditor general of the federation which ordinarily audits the National Assembly and public account committees with supervisory powers in both houses are easily being bought over .National Accounting Standard Board [NASB]is also being compromised and sanctioning for erring auditors and professional accountants are common .Selfless service is very hard to come by and corruption to borrow Stewart ’s ‘has turned a bad habit into a mortal disease’ .Every institution is consumed by this intrigue and moral decadence .Consequently less than a quarter of 1% of national population controls more than two-thirds or 80-90 % of national budget and wealth in a country in which more than 3 million join labour market every year [ILO:2002].And one can imagine the kind of impact that a house that is often divided itself will have and where fight , exchanging of blows and rancor had persisted among members like primary school pupils will have .
The question is : Is democracy promotive of development , decadence or corruption ?Are we at this stage fit for adoption ? The military had not helped either even though the best development and the worst corruption era were perpetrated through them .Our hands are tied . .What can we do ? It is the same story across AFRICA in which 150billon dollars is siphoned annually by corruption .It is a bitter truth to swallow that we do not need western style democracy that lee Kuan Yew believed is an abettor of indiscipline and corruption .We evolved Marsocracy as effective alternative . The solution proffered also takes care of new form of government that is responsive to developing territories like Nigeria .
Above all it preaches development and investment in people and first and foremost its peculiar financial system model must first evolve prior to its adoption using DUCAPOT rule to touch the grass root .Therefore the importance of microenterpreneurs and SMEs cannot be underestimated which is the arrow of development

Professor Alexander Geshenkron in a comparative study conducted
‘Economic Backwardness In Historical Perspective ; A Book Of Essays [1962] England ‘ . He noted the success of industrial revolution in England rested largely on the success of SMEs which requires little capital to operate in addition to founder’s specialized entrepreneurship . As an economy categorized as moderately developing , Germany also flourished during the period through them. And depended heavily on the Banking sector for their success .
Likewise , the quantum leap by Japanese economy during the similar period presented a more remarkable picture of the power of these wealth machines to support her phenomenal development prior to World war 11 .The secret behind this economic miracle according to Professor Yamamuva was simply cultivated by phenomenal growth in commercial lending to micro enterprises .This was made possible through the great Zaibatsu – an equivalent of modern development banking model .
Today, the world sole super power the United States followed similar universal pattern of mass development .For instance Banks in Louisiana were noted to have relied heavily on SMEs as engine of growth and so heavily financed them for purposes of economic welfare of the Nation ‘s citizens. It is the same logic everywhere .The developing countries also after independence have pursued and implemented similar policies to no avail owing to socio psychological self imposed barriers and the unceremonious truncation that came later through external aggression .We should not fail to remember that China and India are both 2nd and 5th largest economies on earth .Their strength rest largely on SMEs in addition to micro enterprises .
The American brutal civil war finally came to an end on April 9,1865 when General Robert E. Lee surrendered to the north country .The Americans came to discover the magnitude of the social and economic damage was far inestimable especially for a nation already in its glorious path to industrial stardom .They were confronted with the big question of how to rebuild the war-torn economy .Their challenge was to build , the world most powerful industrial superpower and building the largest economic powerhouse means unseating the British economy into distant obscurity .And so they turned to entrepreneurship as a sport in the reconstruction effort and took this challenge farther than any other nation in the mortal history .
There is no doubt that during the post war reconstruction effort some American entrepreneurs actually stood out with unmatched record and indelible profile in their generation for all time .These four barons can be regarded as the most ferocious players during the period charting away out of economic horrors with the most aggressive entrepreneurial and selfless disposition never seen in the world prior to the period . Andrew Carnegie did not waste time transforming the American steel industry into most competitive mass market worldwide while cutting down the monopolists .In the oil industry John D.Rockefeller was extensively felt and a phenomenon until this day with a stroke of master strategy transformed the under developing nature of the then industry into world behemoth today making America to consolidate its leading status as the world largest producer of crude .He not only displaced the monopolists but extended his distribution channels across the world mainly in China and Japan .
Particularly of note , John Pierpont Morgan holding history by the neck rewrote the pages of American entrepreneurship from the backwoods and backwaters of history into world leading economy .He shoved aside competition to become defacto world central banker and America central banker even before the coming of the Fed. .He was also a foremost venture capital single handedly acting as intermediary par excellence and midwiving crucial capital flows into American SMEs risking even his private capital to save his country from the gold panic of 1893—95 and the successive stock market panic of 1907 .Like his colleagues no deep seated patriotism can be better than this earning an unrivaled place for themselves in the annals of American antecedence .
Starting from the grass root, they rose beyond their borders to become the envy of the world giving back to the communities most of the wealth they had generated donating varsities, schools , charities , hospitals and libraries creating a conducive environment for new generation of SMEs to thrive .
America as a result of these barons was able to dominate the world using the economic power of SMEs to engineer her political power supremacy. .Microsoft ,Dell ,Wal-Mart , Compaq , Hp, Home Depot , Intel ,MacDonald’s , IBM , Gateway , Oracle , Apple and Cisco etc all started as SMEs before transcending borders to become household names all over the world .With one of the highest per capital income in the world it is also the major source of private workforce .
In the U.K. . as well as the European union SMEs contribute 99 percent and 98 percent of private workforce .A total of 3.7 million business in the former and controlling 65 % of business turnover in the latter . In most countries of the world according to ILO , SMEs accounted for over 60 percent of non formal sector employment .Most of the new jobs created over the last 10 or 20 years in Europe and America for example have come from SMEs .SMEs accounted for over 80 percent of enterprises in virtually all countries of the world .They also contributed 15—20 percent of the GDP in most countries . In the European union it comprised of 98 percent of all enterprises .
The 2001 ILO figures that over 150 million youths are employed and over 80 percent living below 1 and 2 dollar a day can easily be taken care as SMEs develop robustness vital to sustainable economic growth .
Coming down home to Nigeria , the federal bureau of statistics shows that 97 percent of businesses employed less than 50 people . It produces 60 percent of employment and output . They control the informal sector which in turn controls 70 percent of the economy . Unfortunately SMEs mortality ratio is said to be 80 percent in the first five years of operation . If indeed it is recognized that it accounts for 80 percent of entire workforce in most countries of the world , why then do the lips service continue in succession for 5o years since independence ..
Now ,we shall examine briefly the challenges facing SMEs and Micro entrepreneurs in Nigeria .
Nigeria as a nation quite unfortunate , quite uncharitable and quite lackadaisical and super--irrational has been struggling persistently to revive the fortune of SMEs since independence . Although we did a review of this later but here cursorily also or in a cameo we appraise the failure of industrial development centre established since 1962 among other similar initiatives is still a national stigma till date in a country where policy summersault and succession crisis is a way of life and effective organization hardly taken to consideration .
The first industrial development centre established during the period by the then eastern government in Owerri was taken over by federal government in 1970 .Subsequently ,other IDCs were founded in Zaria ,Uyo ,Kano Osogbo ,Benin city , Ikorodu, Bauchi , Maiduguri, Port Harcourt ,Akure and Ilorin .Just like the DFIs, the politicization that came later deceitfully truncated this good initiative. The merger that came also later in 2001 hardly survived and the bank of industry struggled to take off after years of wobbling and vain restructurings and even where money were disbursed with the coming of Good luck regime appropriate blueprint was lacking .
The SMEs bankers private sector initiative took off during the merger in 2001 at the instance of bankers committee to invest 10% of PBT according to the guidelines into SMEs .It also reminded us of similar or earlier ilk’s in the industry . The guidelines regulating the scheme were highly insensitive to the yearnings of industry .It defines SMEs as any enterprise with a maximum asset base of 500 million naira excluding land and working capital . We could be talking of total asset value at 1 billion naira . Imagine for a start up company ! Nevertheless the scheme was approved in 1999 .This sounds unbelievable .Is this way SMEs are classified in advanced countries ?
The investible fund is for equity investment annually in both ordinary and zero coupon non cumulative preference shares . It is the industry contribution to federal government attempt at stimulating the economy evolving local technology and employment generation .It also includes 10 percent minimum credit to the micro enterprises . The CBN empowered them to invest up to 200million in a viable enterprises through fund managers excluding trading and financial service business . This direct patronage should not exceed 40 percent of the equity structure of such emerging enterprises and has a duration in the form of venture capital .Whether by investment syndication or ;loan consortium participation in large projects should not exceed the benchmark .
To make matters worse in the following review besides interest rates put at 9 percent the amount investible in a project was increased from 200m to 500 million naira while the asset base rose to 1.5 billion naira from 500million naira . This puzzles industrialist entrepreneurs and needy businesses especially the inability to secure 70 % of funding not to talk of 100 percent financing .And upon dilution of ownership holdings still expect capital appreciation above money market rates annually .Institutional apathy was aggravated even in the post consolidation era .According to Nigeria export promotion council [NEPC] only blue chip companies still enjoyed unbridled access to credit lines with reduced interest rates and not SMEs despite increased liquidity in the system after consolidation .Going by this historical and technical background the scheme is an elitist one and not one for the masses and the interest rates for SMEs are in double digits as opposed to single digits for prime borrowers in the economy .
On a more serious note how do they classify or define SMEs in the OECD region . The Small Business Administration in the United States defines it as ‘independently owned ’entity and ‘operated for profit but is not dominant in its area of operation ’ . In the same vein companies in Britain are controlled by company act 1948-1981. The 1981 act stipulates and designates certain companies small and medium .The former having a turnover of more than 1million pounds or 1.4 million pounds p.a., asset less than 700,000 pounds with less than 50 people under employ .These companies are independently owned like in America and are mandated not to reveal turnover and profit to the public .
In the same way with the Medium companies which have turnover less than 5.75 million pounds ,assets less than 2.8 million pounds and employ less than 250 people . No outside interest is in involved .This liberal lending policy encourages their economy to grow .Today there are approximately 23 million of such businesses in America jointly employing more than 80 percent of national private workforce contributing more than half to the GDP . Infact according to Economist in 2006 , 99 percent of the 26 million businesses it reported employ not less than 500 workers and were guaranteed loans with no ownership dilution shareholding . This is what makes American economy thick rather than the bulge bracket companies that we do focus upon .SMEs are the secrets to her wealth as a dominant force in the international community.
It is a common knowledge that this policies lack grass root sensitivity . In the capital market the objectives of 2nd tier capital market could not be achieved and the 3rd tier capital market or exchange that came later followed similar fate .The launch of new alternative investment market [AIM/PRIPEX] with insensitive and inadequate structure in a bad system is bound to follow the same vomit .
This is also evident in another new initiative to revive the conduct of SMEs in the country . The federal government pumped 500billion to the Bank of INDUSTRY to develop real sector and 200billion naira to develop agriculture and manufacturing managed by elitist banks .Infact, like we earlier admitted the requirement is too stringent , majority of SMEs and the lower cadres will still be left behind and not catered .They do not have direction and the policies are not broad based reinforces the propensity of development arbitraging –that is only very few will be benefited , leaving majority of SMEs behind .
The requirement for accessing loans with NERFUND , BOI ,the capital market , the insurance sector or any DFIs are too elitist . The latest 200billion SME credit guarantee scheme [SMECGS] to promote credit access to SMEs and manufacturers which would be funded 100% and managed by CBN is to begin Nigeria ’s quest towards industrialization .The fund is 80 percent guaranteed by CBN .Good ! But what about the requirement ? The manufacturing and agricultural value chain and SMEs assets shall not exceed more than 300million naira employing between 11-300 persons . Good !That is too bad and not different from previous policies
Certainly, sustainability also , will be a great future challenge and the domestication of the initiative in the language of the grass root need to be considered .The investment conscious self centered parochialism of the local banks might stalled the beautiful initiative .Moreso , MFBs as the right institutions for the fund to be channeled are being bypassed .This could have been solely managed by them or in a separate financial system with ancillary grass root conscious institutions .
We STILL find it hard to apprehend that for every incentive provided by federal government to banks to lend to SMEs has often met brick wall . They not only demonstrated a discernible degree of reluctance against SMEs but also dubbed them as ‘HIGH RISK ’ . Hence a no go area . The CBN credit guidelines for banks as earlier emphasized to lend a given proportion of their loans and advances to SMEs especially agriculture started in 1979 .It was also 10 percent then and was subsequently raised to 16 % .Similarly in 1982 ,1983, 1984 and 1985 ,loans and advances to SMEs stood at 206.7million naira , 351.30 m, 345.3 million naira and 977.2 naira respectively in a percentage allocation of 2.0 , 3.1 and 7.9%.
Some of the problems faced by banks in advancing loans to SMEs include the high mortality rate in the sector . According to a research reports by industrial research unit of OAU revealed lack of integrity in operation of such loans and Since they are dubbed a high risk enterprise , loans to SMEs are accorded low priorities in the lending scheme . The problem of adequately trained personnel is another bone of contention . Inadequate skilled lab our and the owners are people with little specialized skill or expertise neither do they have capacity or finances to hire expert to manage the business either part time or full time .
The consequence is that they are used to producing faulty and insufficient records .About 50 % of SMEs keep profit and loss account and appropriate balance sheet on a regular basis ..The media research shows that these lack of records or inadequacy in record keeping ordinarily influences lack of financial assistance from banks .The inability to survive competition and the resultant low efficiency can be deduced as natural consequence of poor book keeping or inadequate record .keeping .
Although mismanagement is another problem the above factor can also be regarded as part of mismanagement since information is the livewire and blood system of an enterprise . Lack of adequate planning indicates in that case they are not mentally represented and poor administration are common management problems . Poor marketing policies with no adequate strategies and inadequate information can be waterloo to business continuity and especially at death of the original owner , perpetuation of business becomes practically impossible , due to lack of previous documentation that could be instrumental to business continuity .
Cash and stock are taken away at ease and for aggrandizement .These are not recorded if taken as loans not refunded .No transparency no accountability .Rather than paying themselves salaries from their businesses or return missing goods and cash the exuberance indulgence of the day truncates a potential business that could have changed their communities and touch many lives , it is a usual thing to mix their personal money with their business wealth and then in the long run the trade experiences liquidity problems . Funny enough most of these businesses are not registered business and doing business with unregistered businesses is illegal .
Besides the problem of loan misapplication common among SMEs the problem of loan repayment as a result of accumulation of arrears is another teething lending disincentive . Loans are sometimes not repaid at all even where business is generating sufficient funds to liquidate the amount borrowed or not repaid on a scheduled basis . The misuse and the misappropriation of funds and the failure to repay the principal let the alone the interest reduced the capacity of lenders to go round another classes of people reducing banks confidence for a prospective loans.
Most SMEs are highly undercapitalized and suffered from inadequacy of capital and unable to raise money from capital market due to inability to meet the stringent requirement of the exchange .
The loan recovery disability and inherent threats above all is the leading factor in the business hardship . Banks could hardly monitor loans let alone recover fund after lending .They are interested only in their money and hardly interested in personal advice to clients relegating SMEs welfare to the backburner .A banker is only interested in loan legal action when matters have degenerated . Without cooperation with the SMEs the safety of the loans may always be in doubt. Credit risk management expertise is grossly lacking in Nigerian banks and a major bane in this dilemma .There is no doubt lack of innovation is the central predicament in the Nigerian banking system and must apprehend this fact that the pace at which SMEs grow determines the pace at which the economy grows .
Unfortunately the outlook for the sector is bleak across the board .As the country prepares to join the top 20 biggest economies by 2020 and planning to grow by 13—15 percent SMEs sector is omitted and not factored in the project .Serious attention to it is recommended if we are to attain the perennially elusive development goals of SMEs project since 60s .MASAP projects resolved this hurdle as it does for micro enterprises .
Micro enterprises in most economies constitute the major plank of the informal productive sector and vital empowerment sources of a nation . When neglected most economies fail to grow . They operate in the urban areas and the rural communities at a very small scale [Drake and Otterro :1992] . Majority of the new workforce in the urban centers were consumed by micro enterprises . It is seen as the last line of defense in the economy the first and the last hedges of employment sources and ultimate bridge between the formal sector and the economy .
While micro enterprises accounted for half the labour force in Lagos alone ,it represented 30 % in Kenya in the 70s and the 80s ( Sethuraman :1981),it is as high as 50% in some African countries . It is generally proven that every morning 600 million people go to work for themselves . and often consist of a larger workforce in the developing countries [UNDP:1997; 2] . Most job losses in the informal sector were provided by this self propelling forces for sustainable economic growth .It was provided to have provided close to 14million jobs between 1992—2000 [Halverson Quevedo : 1992; 9 ] .As noted by Lubell and Zarour [1990:395] in the study of Senegalese formal sector that due to government harsh measures rose to become the saving grace indeed of the country ’s formal sector job losses .
Writing in the book, Microfinance and Economic Activity’ , Emeka Osuji concluded ‘many economies are not growing at all .At best ,they are static if not contracting .Various policy experiments in countries like Nigeria are taking toll on formal sector employment’ .What would have been the fate of this people loosing their jobs on a daily basis .To grow their activity is to grow the economic prosperity in the long run creating friendly marketing incentives to appropriately price development into sustainability . This corroborated Napoleon Bonaparte ’ s that the true worth of the state consists in the number of its inhabitants in their toils and lab our .and industry’.
In Nigeria today there are approximately 90 million micro entrepreneurs and being greatly marginalized by mainstream banks or financial institutions meant a dampener on economic growth . Moreover according to Okinmadewa [1997] and reappraised by Adeola [2001] in the schematic segmentation of poorer classes in the country classified them into three classes mainly : entrepreneurial poor ,Labouring poor , self employed poor and vulnerable poor . The first class and type include the upper low and the middle income earners who were forced to operate micro an small business due to harsh due to harsh economic climate ; mechanic shops hairdressing salons , displaced workers , artisans , and unemployed graduates .
The self employed poor are dependent on the first class for their survival or livelihood . They include street hawkers vendors , petty traders , shoe blackers or polishers and mechanics .The third class constitutes the largest category and population of the poor in the country including security men ,gardeners ,household workers , conductors and street hawkers . They are manual daily paid workers in the rural and urban areas .The least being the vulnerable poor who actually are those that demand social support programmes designated with safety nets . From the invalids to the women and children falls into this class .At this category the female headed household are a potential micro entrepreneurial resources and may demand for creditor loans like other classes for set up and for expansion .
The author affirmed in the piece Microfinance , Micro enterprises and the economy a postscript in National Mirror [Jan.11,2008 ] that apart from entrepreneurial poor, with a bit of attention ,none of the poorer classes are well catered and adequately represented …..especially even with the coming of microfinance banks in Nigeria. He concluded the lending policy being illiberal lacks grass root content .Again, ‘Micro enterprises’ according to Osuji [2006] ‘are often full time activities which provide the primary sources of employment and income for the operator and the dependents . These business units have been described as the economic activities of the poor because of the predominance of the poor in running them’ . And due to increasing retrenchment in the formal sector the people have now taken their fate in their hands finding relief on the other end of the spectrum most ignored by elitist policy makers and politicians ..This insensitivity is a major factor behind prevalence of poverty in the country .
Today approximately 15 million Nigerian graduates roamed the streets with no jobs no skills and no means of survival in a country in which 90 % are poor should we use UNDP poverty profile concept . This is no giant of Africa and funny enough according to one man is indeed a cockroach of Africa .The mainstream market is elitist they need to find their bearing with appropriate system .
As we earlier emphasized the development of small medium enterprises scheme popularly known as Small and Medium Industries Equity Investment Scheme [SMIEIS ] was a product launched in partnership with CBN in 2001 for acceleration of development in the sector .Each participating bank is expected to monitor, guide and nurture the enterprises and for ease of administration, each institution shall have small scale industries unit with responsibility to appraise and recommend relevant SSI proposal . To also monitor compliance other criteria required are :
1.Rendition of quarterly returns ;
2. Rendition of full particulars of acquisitions any SSI shareholdings in any SMEs .; [Note: the acquisition mentality here and non-liberal lending policies here was a major defect in the scheme contrary to free loans with no dilution attachment in developed region .]
3. This must be undertaken within 21 days of the acquisition .
In collaboration with United Nations Development Programme [UNDP] the national policy for the development of MSMEs took off in 2007 .subject to approval by federal executive council [FEC] on may 9 ,2007 . Prior to take off attempts at entrepreneurial development were haphazardly implemented and was meant to be a widely accepted policy document to develop the sector .What was earlier started as a scheme was later formed and transformed into an institution with the coming of SMEDAN to provide direction and fill existing institutional vacuum . The earlier scheme according to media reports by 2006 had created some 500,000 jobs and invested the sum of 18.1 billion naira or 47 .3 percent of the total amount of 40 billion naira that covered in 258 projects. This cut across 24 states of the federation including FCT with the real sector and tourism consuming larger chunk of the money .
Though this is worthwhile but nevertheless paled into insignificance the escalating demand for loan that financial standard -a local publication estimated at 438billion naira [March 1,2004 ] .More so as the stringent requirement during the period for accessing the loan or cheap finance had stalled the lofty goals behind the scheme which was meant to be temporary pending the maturity of microfinance banks .Only few fund managers distributed reasonable percentage to the needy sectors investing in trading and merchandising contrary to requirement ..
The coming of SMEDAN with its broad strategic policies touched key programmes’ issues .In the study by Obajaja [2008] this included land use planning ,contract enforcement ,property rights, tax administration and dispute resolution . While second area or sector touches research and development and technology the third covers extension services and support services .Infrastructure , marketing and finance fall in the last section .Micro food processing , arts and crafts in the cottage level ,textile and clothing , metal fabrication ,basic metal, electronic, InfoTech, leather and leather products , construction ,physically challenged people , HIV/AIDS, Furniture and solid minerals etc are classified as quick win situation under special target enterprises [STE] . These are the legal institutional and regulatory framework covered under the SMEDAN national policy document .
Policy analysts such as Obajaja among others have contended Inadequacies in the legal and regulatory framework persisted with the emergence of SMEDAN inhibiting the growth of this sector .inadequacy in property rights ,poor bankruptcy laws and leasing contracts, incompetence judicial system such as inadequate enforcement of prevailing laws and commercial contracts .This is regarded as legal instability common all over the world , increasing corruption and lack of commercial law , poor or lack of antitrust laws or with no periodical review . To redeem collateral may take one year or two .The challenges facing government at this stage include can be solved by tackling :
1. inadequate capacity building
2. poor coordination between various forms of government
3. World bank MSMEs efforts towards intergration of tax and business registration procedures reducing corporate registration, transaction costs , improvement of leasing regulatory framework and development of alternative dispute resolution mechanisms etc put together is grossly without a direction and a national financial system to complement mainstream market in redistributionist multiple financial system . The micro financial system should cater for the poor and the highly underserved grass root market and informal sector economy wits political legal social and economical complexes
4. Above all what started as a scheme later into an institution [SMEDAN] can now metamorphose with allied institutions and regulatory agencies and subsidiaries into a national micro financial system .One for the poor and the other elitist for the rich with different rules since their thinking nature and orientation are different which could also engage in cross border domestic investment for national development .
As a result of this unrealizable proportion, the inadequacies in the legal institutional and regulatory framework had persisted for a long time and not supportive of MSMEs and can never be supportive of the sector .. .There is no appropriate legal and regulatory frame work that can be created unless this challenge is surmounted .Laws regulation access to finance growth incentives, basic legal protection and investors confidence can easily be protected .
This is vital for Nigeria and the rest of developing territories when taken into consideration the peculiar characteristics and the kind of development impediment facing these territories in the global markets . Effective use of capital mobilized into SMEs will be based on the nature of unique development system . There is no need to replicate foreign regulatory environment in NIGERIA or an attempt to agree with international best practice . This system will determine the nature of laws and regulation s and institutions that will stimulate SMEs and Micro enterprises needy access to cheap finance .. The entire laws guiding the sector must be reviewed and introducing new ones tailored to the needs of the grassroots through which they were designed .The aims of the system includes;
1.Make every willing economically active Nigerian self sustain ant and a micro capitalist.
2. Abolish prevalence of mass poverty .
3. Make government activity felt in the grass root ;
4.Develop informal sector market economy with distinctive model;
5. Above all, ensure universal prosperity for the people and not capitalist prosperity for the few .
Smedan did recognize the importance of MSMEs in an economy especially its clime in which the marginalized MSMEs do not have access to finance even though it contributes 70 percent of working population and 50 percent of GDP .Given the fact that it has a better structure is still far inadequate to tackle myriad of challenges in the industry To make the matters worse ,definitely it does not have appropriate strategy to reach out to them ,even though it claimed to do so .According to the Director general Muhammad Nadada the strategy to touch the sector rested largely in its partnership with NERFUND and MFBs that are already near comatose and dead entities among others to execute the plan of going round these classes .Reorganizing Smedan with similar allied bodies and instutions into a coherent system is a panacea to the brewing storm . It will take care of 90million microenterpreneurs left unattended to by the latest SMECGS . A system that caters for all .
With this ideology and adoption of neo Marxist free market economy as the most inclusive free market model [new generation—dual band ] ever contrived by man with its peculiar Para --macroeconomic models is a foolproof for every willing Nigerian to become a capitalist and a salvation crusade especially for the developing region. The GDP can grow conservatively on the average 100 times to more than 20 trillion prior to maturity of Vision 2020 rather than the lethargic projection of 800—900 billion dollars [which already driven by oil and no productive activities included if persisted can notch 1 trillion dollars by 2020.How much more with the inclusion value added technological services] in a period in which China alone if adopted this model could grow or be far bigger than the present size of world GDP .Our leaders are blind .They can not see nor distinguish between black or white .That is their glory –a great ignorance and they cherish it shamefully fighting in the house.
This rough calculation does not include other markets noted in Nigeria nor even a full analysis of microfinance vs. population market but noted briefly the spread in government activities over the informal sector while allowing informal sector to retain its clumsy nature helping to refine and polish it and being guided with relevant rules suitable to development of the grass root and orientation of the poor .It means in a decade or within 20 years the nation can catch up with America .Economists and myopic policy makers may ask : Are you crazy ? But that is the gospel .It means in a decade based on the seriousness of political capital or state will the Nigeria could become a world leader but we are perpetually such an unserious nation .In a decade period the U. S. GDP can never be more than 30 trillion let alone 40 trillion based on the rate at which it is growing and the available macroeconomic model being used which is outdated or has outlived its model utility curve .
Moreso as it has reached a saturation level or its peak .In the next 50 years whether the model is adopted or not none of the advanced countries will be among the world leading economies even with their weapon of mass destruction .It will be worse should this solution be adopted .
Nigeria has potential to shoot even higher if we include all other identified markets and we carefully embrace local content and extremely domesticate local capital and nurture community and sovereign wealth funds around the world .Take a look at Lagos or Delta unarguably the richest states in the country , they should be able control GDP of say 15 or 10 trillion dollars . Lagos does not need an introduction again as a popular state with a GDP of less than 4 trillion naira .But the natural gas in Delta state alone over 40 trillion scf . is far richer than similar wealth in the U.S. in the United States put together .At least we can a feel how richer it could be if tapped or exploited . Unfortunately by 2006 it was reported Nigeria had lost over 100 billion dollars since commercial production started in Oloibiri in 1960s –more than 12trillion naira at conservative prices .Nigeria is loosing trillion of dollars [not naira-get it right ] due to ongoing capital flight crisis and highly retarded capacity building since independence .Such model can also make the nation sensitive to this missing link .
This is NIGERIA time to SHINE as late comers to development like elsewhere in the developing countries .Let us forget sentiment and adopt this model .We are building economy without tears or economy made easy for all irrespective of social status, tribes, races and diverse culture and nationalities is a unifier and especially explores the nation ’ s unique demography . It banishes social political and economic instability ,zeroing in on crisis eliminate armed robbery social inequality resolve every social disease and make the nation safer to live and secure to refuge or abode . What else again do we want ? or Are we waiting for ?