We will treat still treat Economic Growth and Development.
Today in our free tutorial series, we will focus on Economics, topic: ECONOMICS GROWTH AND DEVELOPMENT.
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ECONOMIC GROWTH AND DEVELOPMENT
This is a sustainable increase in country’s real Gross National Product (GNP) or real Net National Product (NNP) on either a total or per capita basis over a period of time.
It can also be referred to as steady process of increasing the country’s economic real output or income over time. The rate of expansion of the National Income or total volume of production of goods and services is known as economic growth. Economic growth is a pre-requisite for development.
FACTORS DETERMINING ECONOMIC GROWTH
The following factors are major determinants of the level of economic growth in a country.
- Quantity and quality of human resources
- quality and quantity of natural resources
- Accumulation of capital
- rate of technological progress
- specialization and scale of production
- Socio-economic environment factors.
This is a process by which a high degree of self-reliant economic growth in a given country is accompanied by reduction in poverty, unemployment and inequality over a long period of time. Development simply means growth plus change.
Economic development is a positive transformation in all sectors of the economy in order to improve the well being of the people. It is growth accompanied by qualitative change in living standards and overall welfare of the citizens.
FACTORS DETERMINING ECONOMIC DEVELOPMENT
- Political stability 2. High level of infrastructural development 3. Increase in employment level 4. Increase in the level of production 5. Self-reliant economy 6. Increase in the level of technology 7. Reduction in the level of illiteracy 8. Reduction in income inequality 9. Increase in per capital income
DIFFERENCE BETWEEN GROWTH AND DEVELOPMENT
|1.||Economic growth emphasis increase in output of goods and services||Development emphasises improvement in the economy well being or welfare of the people.|
|2.||It is a spontaneous change||Development is a guided change|
|3.||Growth can exist without development||Growth is a pre-requisite to development|
|4.||It involves quantitative change||It involves qualitative and quantitative change|
|5.||Primarly concerned with growth of income||Concerned with growth in all sphere of economic activities|
|6.||Growth can take place under condition of unemployment eg. Labour saving machine||It reduces the level of unemployment|
RELATIONSHIP BETWEEN ECONOMIC GROWTH & ECONOMIC DEVELOPMENT
The two terms are related. It has been established that growth is a steady increase in the real output of a country. On the other hand, development is taken to mean growth plus change. Growth is a major step to development. Increased growth in the long run leads to developments. Economic growth is a qualitative change in the economy and development includes both qualitative and quantitative change. Both are affected by factors such as technological progress and level of infrastructural facilities.
UNDERDEVELOPMENT: It simply means a situation whereby a country is poor, backward and has no potentials of developments. Underdeveloped countries are referred to as third world countries e.g. some west Africa countries.
FEATURES OF UNDERDEVELOPMENT
- Low standard of living 2. Low level of productivity 3. High rate of population growth 4. High level of unemployment and underemployment 5. Insufficient capital 6. Technological backwardness 7. Lack of infrastructural facilities 8. Low level of industrialisation 9. Low level of growth rate 10. High level of illiteracy 11. High level of poverty 12. High level of importation of goods 13. External dependence 14. Predominance of primary agricultural produce 15. Mono-product economy 16. Widespread inequality 17. Problems of religion, social & cultural beliefs.
MAJOR CONSTRAINTS TO ECONOMIC DEVELOPMENT IN NIGERIA
- High debt profile 2. Political instability 3. High level of corruption and mismanagement 4. High level of unemployment 5. Lack of necessary infrastructural facilities 6. Low level of technology 7. Lack of skilled manpower 8. Low per capital income 9. Low level of literacy 10. Rapid population growth 11. Inadequate financial instiutions 12. Poor economic planning 13. Absence of large market 14. Inefficient use of resources 15. Mono-economy 16. Shortage of capital 17. Bad leadership 18. Underdevelopment of agricultural sector.
MEASURES THAT ENCOURAGES ECONOMIC DEVELOPMENT
1. Investment in infrastructural facilities 2. Industrialisation 3. Establishment of financial institutions 4. Establishmemt of educational institutions 5. Direct investment by the government 6. Creating enabling environment 7. Availability of organised market 8. Diversification of the economy 9. Provision of goods and sound development plan 10. Political stability 11. Population control 12. Manpower development 13. Encouragement of saving and investment 14. Technological development 15. Proper allocation of resources.
WAYS OF FINANCING DEVELOPMENT
- Internal borrowing 2. External borrowing 3. Aids and grants 4. Surplus budget 5. Revenue from government investments 6. From reserves 7. Privatisation and commercialisation.
DEVELOPMENT PLANNING: This is a deliberate and conscious effort on the part of the government to give meaningful direction to the economy by guilding and coordinating public process toward efficient allocation of resources in order to ensure growth and development.
REASON FOR PLANNING
- Allocation of resource 2. To promote growth and development 3. To remove under spread unemployment 4. To mobilize international support 5. To give direction to the economy 6. To create national awareness 7. To reduce income inequality 8. To achieve economic self sufficiency 9. To prevent foreign dominance of the economy 10. Diversification of the economy 11. To ensure a balanced growth of the various sectors 12. To improve standard of living 13. To ensure price stability 14. To strengthen market mechanism 15. To improve the balance of payment 16. To increase productivity 17. To reduce rural-urban migration.
PROBLEMS ASSOCIATED WITH DEVELOPMENT PLANNING
- Political instability 2. Lack of reliable and adequate data 3. Resources constraint 4. Over-reliance or foreign aids 5. Corruption and nepotism 6. Unexpected increase in cost of projects 7. Wrong planning due to misplace priorities 8. Inadequate skilled 9. Rapid population growth 10. Irrelevance of projects exchange earning 13. Burden of national debt 14. Poor implementation of plan.
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