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Central development banking and industrial development in Nigeria : the role of NIDB in a regional development… Akintola-Arikawe, Joseph Olafioye 1982

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CENTRAL DEVELOPMENT BANKING AND INDUSTRIAL DEVELOPMENT IN NIGERIA: THE ROLE OF NIDB IN A REGIONAL DEVELOPMENT PERSPECTIVE by JOSEPH OLAFIOYE AKINTOLA-ARIKAWE B.A. Hons., University of Windsor, 1968 M.A., York Uni v e r s i t y , 1969 Ph.D., Boston Un i v e r s i t y , 1975 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n THE FACULTY OF GRADUATE STUDIES (School of Community and Regional Planning) We accept t h i s thesis as conforming to the required standard. THE UNIVERSITY OF BRITISH COLUMBIA September 1982 f^c} Joseph Olafioye Akintola-Arikawe, 1982 I n p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f t h e r e q u i r e m e n t s f o r an advanced degree a t t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I agree t h a t t h e L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y purposes may be g r a n t e d by t h e head o f my department o r by h i s o r h e r r e p r e s e n t a t i v e s . I t i s un d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Department o f COMMUNITY & REGIONAL PLANNING The U n i v e r s i t y o f B r i t i s h Columbia 1956 Main Mall Vancouver, Canada V6T 1Y3 A p r i l 2 5 , 1983 Date i-6 (3/81) i i ABSTRACT The objectives of the study r e f l e c t some of the problems and po l i c y objectives of Nigeria's i n d u s t r i a l development planning since the early 1970's, e s p e c i a l l y the concern to evolve a more balanced i n d u s t r i a l output structure and more important, the objective of evolving a more balanced regional pattern of development amongst the country's 19 state u n i t s . The study assesses, f o r the 1964-1980 period, the degree to which the financing patterns of the country's most important i n d u s t r i a l finance i n s t i t u t i o n , the Nigerian I n d u s t r i a l Development Bank (NIDB), have been consistent with these natio n a l i n d u s t r i a l development objectives. The relevant data was assembled i n Nigeria p r i m a r i l y within the f i r s t nine months of 1981 and have been analyzed p a r t i c u l a r l y f o r two points i n time, 1974 and 1980, i n order to i d e n t i f y relevant trends or changes. • • There are two basic dimensions and l e v e l s to the analyses, a temporal and s t r u c t u r a l dimension at the nationa l l e v e l and a r e g i o n a l / s p a t i a l dimension at the state l e v e l . In general, the s p e c i f i c analyses feature c o r r e l a t i o n and concentration in d i c e s . Such conceptual notions as divergence/convergence, c i r c u l a r and cumulative causation processes as well as the c a p i t a l - shortage i l l u s i o n theses provide the t h e o r e t i c a l frame of reference at appropriate stages. The r e l a t i o n s h i p s and conclusions e l i c i t e d from the n a t i o n a l -l e v e l analyses r e f l e c t the dimensions involved. The temporal analysis i i i reveals that: (a) the proportion of Nigerian manufacturing establishments which received NIDB financing increased unsteadily from'5.7 per cent i n 1965 to 13.0 per cent i n 1980; (b) the employment i n the NIDB-financed enterprises or e s t a b l i s h -ments s i m i l a r l y increased from 12.6 per cent of t o t a l n a t i o n a l manufactural employment i n 1965 to 30.2 per cent i n 1980; and (c) the proportion of paid-up c a p i t a l i n manufacturing constituted by NIDB t o t a l financing rose from 4 . 5 to 18.8 per cent. The highly s i g n i f i c a n t temporal c o r r e l a t i o n of 0.906 between paid-up c a p i t a l i n manufacturing and NIDB financing was therefore not s u r p r i s i n g . This and other indices warranted the conclusion that national manufac-turing has been increasing as the bank's financing increased over the study period. The s t r u c t u r a l analyses revealed that Nigerian i n d u s t r i a l output structure s t i l l remained unbalanced by 1980. However, NIDB's financing patterns, e s p e c i a l l y i n the in-between period ( 1975-1980 ) showed a clear tendency to favour industry-type groups which were r e l a t i v e l y depressed i n the early 1970's. Thus, the c o r r e l a t i o n c o e f f i c i e n t s for the in-between period were either negative or very low. Thus, the bank's financing patterns reveal an e f f o r t i n the d i r e c t i o n of balancing indus-t r i a l output structure. The regional ( s t a t e - l e v e l ) analyses reveal an i n c i p i e n t trend towards convergence between 1974 and 1980 for manufacturing generally. The i v . r egional d i s t r i b u t i o n of the bank's funds shows an even clearer pattern towards inducing convergence by favouring regional units ranking r e l a -t i v e l y low on n a t i o n a l manufacturing i n the 1974-1980 period. Neverthe-l e s s , the rank-difference analysis of the 1974 and 1980 patterns of Nigerian manufacturing reveals that p o l a r i z a t i o n s t i l l continued as the r e s u l t i n g c o e f f i c i e n t i s not s i g n i f i c a n t and the corresponding n u l l hypothesis of "no d i f f e r e n c e " has to be upheld. The importance of p r i v a t e -sector i n d u s t r i a l investment i n d i l u t i n g NIDB's convergence-prone e f f o r t s i s pointed out and the need f o r incentive measures i s indicated. A divergent pattern i s revealed by the analysis of NIDB's " f a v o u r i -tism" to r e g i o n a l state units and not a l l states needing "favoured" treatment ( those ranking least on shares of nat i o n a l manufacturing) perform well on a l l three c r i t e r i a used. Apparently, NIDB's consistent adherence to i t s convergence-prone stance i n t o the future, coupled with incentive-based changes i n the pattern of private-sector investment would be needed i f the regional pattern ( which s t i l l remains e s s e n t i a l l y polar-ized) i s to change s i g n i f i c a n t l y towards balance. Internal regional e f f o r t s would also be important. The establishment by NIDB of "area administration" and l i a i s o n o f f i c e s a l l over the country between the early 1970's and 1980 further suggests the bank's continuing commitment to f u r t h e r i n g , i n the i n d u s t r i a l sector, the national objective of even development. TABLE OF CONTENTS CHAPTER ONE: THE PROBLEM, ITS CONTENTS, AND OBJECTIVES 1 1.1: The Issue of Investment-Capital Shortage 2 1.2: Aims and Objectives 5 1.3: The More General Context 5 1.3.1: Marxist Analysis and Relevant Planning Issues 11 1.4: The Policy/Environment of NIDB 24 1.4.1: An Overview of Public Development Planning i n Nigeria 25 1.4.2: Evolution of the S p a t i a l Framework f o r Planning 30 1.4.3: : The Objectives of Planning 35 1.4.4: The Economy: An Overview 40 1.4.5: I n d u s t r i a l Development P o l i c y and Tools 45 1.5: The Status of Research on Nigerian Manufacturing and Regional Development 48 1.6: Restatement of Objectives and Data Considerations 53 1.6.1: Restatement of Objectives 53 1.6.2: Data Considerations.......................... v. .................. 56 I. 6.3: I n i t i a l Opera'ti'onalization of the Conceptual and A n a l y t i c a l Frameworks 59 CHAPTER TWO: CONCEPTUAL PERSPECTIVES ON DEVELOPMENT BANKING AND BACKGROUND r 1 _.T TO NIDB OPERATIONS 63 I I . 1: Perspectives on Development Banking 65 I I . 1.1: Widespread Incidence and D i v e r s i t y 68 I I . 1.2: Ownership 74 I I . 1.3: Sources of Finance 76 I I . 1.4: Promotion 81 II.1.5: Project Selection, Form of Financing, and Degree of Involvement 85 I I . 2: The Background and Operating Framework of NIDB 91 II.2.1: Establishment and Temporal Dynamics i n Operating P o l i c i e s 91 II.2.2: Conditions and Processes of F i n a n c i a l Involvement 101 v i . CHAPTER THREE: NIGERIAN MANUFACTURING AND NIDB FINANCING: THE AGGREGATE PATTERNS AT THE NATIONAL LEVEL 104 I I I . l : Preliminary Remarks and Data 104 I I I . 1.1: Data on Manufacturing and Measurement C r i t e r i a 105 II I . 1.2: Data on NIDB Financing 112 III.1.3: Contemporary Nigerian Manufacturing and Its Dynamics 119 III.2: Nigerian Manufacturing and NIDB Financing: The Temporal and S t r u c t u r a l Relationships 128 III.2.1: The Temporal Relationships Between I n d u s t r i a l Development and NIDB Financing at the National Level 130 III.2.2: National I n d u s t r i a l Output Structure and NIDB Financing... 133 III.2.3: Cumulative NIDB Financing and the Structure of Nigerian Manufacturing, 1974 135 III.2.4: The Structure of Manufacturing i n 1980 and Cumulative NIDB Financing 140 II I . 2.5: S t r u c t u r a l Relations of Manufacturing and NIDB Financing i n the 1975-1980 Period 145 CHAPTER FOUR: NIGERIAN MANUFACTURING AND NIDB FINANCING: PATTERNS AND RELATIONSHIPS AT THE REGIONAL (STATE) LEVEL .151 IV. 1: Preliminary Remarks 151 IV.1.1: Operationalizing the P o l i c y and Conceptual Frameworks 151 IV. 1.2: Date Years and Measurement C r i t e r i a 155 IV.2: Regional Pattern of Manufacturing Patterns 155 IV.2.1: I n i t i a l Examination of Regional Manufactural Patterns 155 IV.2.2: I n i t i a l Examination of the.Regional Pattern 6 f NIDB . Financing. .. . .159 IV.2.3: Relationships Between the Regional Patterns of Manufacturing and NIDB Financing, 1974 and 1980 162 IV.3: Divergence/Convergence i n Regional Manufacturing Patterns and NIDB Financing: D i r e c t i o n and Extent? 165 IV. 3.1: Analysis of Regional Configurations 166 IV.3.2: A Re-examination of the Regional Pattern of Change 173 IV.4: The Mechanics of NIDB " F a v o u r i t i s " and Internal Regional E f f o r t 186 IV.4.1: Analysis of NIDB "Favouritism" 186 IV. 4. 2 Internal Regional E f f o r t and NIDB Favouritism 198 v i i . CHAPTER FIVE: THE ANALYSES IN RETROSPECT AND CONCLUDING REMARKS .205 • V . l : Preliminary Remarks and the Study's Objectives 205 V.2: Temporal and S t r u c t u r a l Relationships Between NIDB Financing Patterns and Manufacturing: The National Level of Analysis 207 V.2.1: Sjmthesis and Conclusion on the Temporal Analysis ..207 V. 2.2: Manufacturing Output Structure and NIDB Financing 209 V.3: The Regional Patterns of Manufacturing, NIDB Financing, and the Balanced Development P o l i c y 214 V.3.1 Analysis of Regional Configurations 216 V.3.2: Re-examination of the Regional Pattern of Change 218 V.3.3: NIDB "Favouritism" and Internal Regional E f f o r t s 220 V.4: Concluding Remarks 222 BIBLIOGRAPHY 229 APPENDIX I: :' NIDB Sanctions and Disbursements, 1964-1968 238 APPENDIX I I : NIDB-Assisted Industries and NIDB Net Financing Cumulated to Match To t a l Manufacturing Data, 1965-1980 239 APPENDIX I I I : NIDB Net Financing ( Sanctions): Annual T o t a l s , 1964-1980...240 APPENDIX IV: NIDB Net Sanctions by Sectors, 1964-1974 241 APPENDIX V: NIDB Net Sanctions by Sectors, 1964-1980 242 APPENDIX VIA: NIDB Net Sanctions by States, 1964- 1974 243 APPENDIX V1B: NIDB Net Sanctions by States, 1964-1980 244 APPENDIX VIC: Net Sanctions by States, 1975-1980 (Cumulated) 245 v i i i . LIST OF TABLES Table 1: Nigerian Regions and States (1963-1976): Relationships and Population Sizes..., 33 Table 2: Growth of the Nigerian GDP and Manufacturing ( at Current Factor Cost) 1960/61 to 1975/76 41 Table 3: Categories of Federal I n d u s t r i a l Projects i n the Third Plan 46 Table 4: L i s t of DFCs Associated with the World Bank (as of June 30, 1975) 70 Table 5: Sources of Funds for Sample Banks Ranked by Percentage Originating i n Domestic Public Sector 78 Table 6A: Nigerian Manufacturing, 1964-1980 108 Table 6B: Correlation Matrix of Measures of Nigerian Manufacturing, 1964-1980 110 Table 7: NIDB Sanction Withdrawals, 1964-1980: D i s t r i b u t i o n by Sectors 112 Table 8: NIDB Sanction Withdrawals, 1964-1980: D i s t r i b u t i o n by States 115 Table 9: Correlation Matrix Indicating Relationships Between NIDB Sanctions and Disbursements, 1964-1978 118 Table 10: Nigerian Manufacturing Establishments i n 1980 by Employment Size Ranges 120 Table 11: Nigerian Manufacturing i n 1974: Sectoral D i s t r i b u t i o n by Establishments, Employment and Paid-up C a p i t a l "'. :m Investment 122 Table 12A: Nigerian Manufacturing Establishments i n 1980: D i s t r i b u t i o n by States and Known Years of Inception 126 Table 12B: T o t a l Manufacturing and NIDB Net Financing (Cumulated to Match'Manufacturing Data) 1965-1980 129 Table 13: Correlation Matrix Indicating Relationships of National Manufacturing ( to X„) and Variables Associated With NIDB Financing (X, through X^  ".) , 1965 - 1980 7 TT 132 Table 14: Nigerian Manufacturing and NIDB Cumulative Net Financing, 1974: Sectoral D i s t r i b u t i o n 136 Table 15: Correlation Matrix Relating Nigerian Manufacturing , - - . -i i n 1974 to NIDB Financing Cumulated to 1974 138 i x . Table 16: Nigerian Manufacturing and NIDB Financing, 1980: Sectoral D i s t r i b u t i o n 142 Table 17: Correlation Matrix For Nigerian Manufacturing i n 1980 and NIDB Financing Cumulated from 1964 to 1980 Table 18: The Structure of Nigerian Manufacturing i n 1974 and Cumulative NIDB Financing i n the 1975-1980 Period .146!) Table 19A: Cor r e l a t i o n Matrix f o r the S t r u c t u r a l Relations Between Nigerian Manufacturing i n 1974 and NIDB Financing Cumulated from 1975-1980 148 Table 19B: Correlation Matrix f o r the S t r u c t u r a l Relations Between Nigerian Manufacturing i n 1980 and NIDB Financing Cumulated from 1975 to 1980 148 Table 20: The Regional Pattern of Nigerian Manufacturing: Absolute Values f o r 1974 and 1980 157 Table 21: Percentage D i s t r i b u t i o n of Nigerian Manufacturing (by States), 1974 and 1980 158 Table 22: NIDB's Tot a l Net Financing, 1964-1974 and 1964-1980: D i s t r i b u t i o n by States. 160 Table 23: Relationships Between the Regional (State) Patterns of Manufacturing and NIDB Financing, 1974 and 1980 163 Table 24A: Ranks of Regional (State) Units on Relevant Variables 167 Table 24B: Number of Regional (State) Units Accounting f o r 80 per cent of Manufacturing and NIDB Financing, 1974 and 1980 168 Table 25: Regional (State) Pattern of Additions to Manufacturing (Employment) i n the 1975-1980 Period 176 Table 26: Regional (State) Ranks on Manufacturing (Employment) E x i s t i n g i n 1974 , and Additions i n the 1975-1980 Period 177 Table 27: Rank-difference Correlation Analyses of Manufacturing and NIDB Tot a l Financing Patterns i n a Regional Context and at Di f f e r e n t Points i n Time: Results 184 Table 28: Concentration Indices Based oh NIDB Financed Establishments and T o t a l Manufacturing Establishments by States, 1980 192 Table 29: Concentration Indices Based on NIDB Equity Financing and Tota l Equity Cost of C l i e n t Projects by States, 1980.'.';'.'.' 193 Table 30: Concentration Indices Based on NIDB T o t a l Financing and T o t a l Project Cost by States, 1980 194 Table 31: Summary of "Favouritism" Appraised i n Relation to NIDB Financing by States, 1980 197 Table 32: Mean Lending Rates of Commercial Banks i n Niger i a , 1975-1979 198 X . Table 33: Grouping States by Internal Regional Effort-Making Categories i n Relation to A t t r a c t i n g NIDB Financing 200 Table 34: The State Patterns of NIDB Gross Sanctions and Withdrawals, 1964-1980 203 Table 35: NIDB/s Area Administrations and L i a i s o n O f f i c e s , 1980 226 x i . LIST OF FIGURES Figure 1: Nigeria's 19 State Units 32 Figure 2: Growth Rates of Nigerian GDP and the Manufacturing Sector, 1960/61 to 1975/76...' 42 Figure 3: Nigerian GDP: Percentage Contribution of Most Important Five Sectors... 43 Figure 4: Nigerian Manufacturing Establishments i n 1980: Cumulative Percentage Growth by Known Years of Inception 127 Figure 5: Paid-up C a p i t a l i n Manufacturing i n 1974 and NIDB Cumulative Financing to 1974: Scattergram and Regression Analysis of Sectoral D i s t r i b u t i o n s 141 Figure 6: Sectoral D i s t r i b u t i o n of Nigerian Manufacturing, 1975-1980 (%) 150 Figure 7: Cumulative Percentage Curve of Regional (State) Shares of Manufacturing and NIDB T o t a l Financing, 1974 169 Figure 8: Cumulative Percentage Curve of Regional (State) Shares of Manufacturing and NIDB T o t a l Financing, 1980 170 V x i i . ACKNOWLEDGEMENT My g r a t i t u d e and a p p r e c i a t i o n go to more people than could be mentioned here f o r i n v a l u a b l e c o n t r i b u t i o n s , d i r e c t , and i n d i r e c t , i n the process of c a r r y i n g out t h i s study. My sponsoring i n s t i t u t i o n , the U n i v e r s i t y of Lagos, N i g e r i a , made p o s s i b l e the study-leave p e r i o d during which t h i s study was conducted and l a r g e l y financed t h i s programme which the study complements. My a p p r e c i a t i o n a l s o goes to the o f f i c i a l s at the F e d e r a l O f f i c e of S t a t i s t i c s arid the N i g e r i a n I n d u s t r i a l Development Bank L i m i t e d ( both i n Lagos) f o r t h e i r cooperation i n making the b a s i c data of the study a v a i l a b l e . At the U n i v e r s i t y of B r i t i s h Columbia, s e v e r a l people have been immensely h e l p f u l . Both Pro-f e s s o r s Clyde Weaver and Terry McGee, my a d v i s o r s , and r e s p e c t i v e l y of the School of Community and Regional Planning and the Department of- Geography, U.B.C, have been immensely h e l p f u l ; t h e i r support, both s u b s t a n t i v e and emotional, saw me through an almost impossible time schedule. The same i s t r u e f o r the f a c u l t y and s t a f f of the Planning School, e s p e c i a l l y f o r p r o v i d i n g ready access to needed f a c i l i t i e s , not the l e a s t of which were the s e r v i c e s of U.B.C.'s Computing Centre. Above a l l , my unending g r a t i t u d e goes to my mother-in-law i n N i g e r i a , who took care of my three-month o l d daughter, Olawunmi, during the p e r i o d of absence f o r the programme to which t h i s study i s r e l a t e d . The encouragement of my w i f e , Mosunmola Arikawe, as w e l l as her t i m e l y a s s i s t a n c e w i t h the i l l u s t r a t i o n s w i l l a l s o be remembered f o r a long time. I CHAPTER ONE THE PROBLEM, ITS CONTEXTS, AND OBJECTIVES Although the domain of investment-capital supply i s j u s t one of the several areas i n which developing (and some developed) countries experience developmental and/or growth problems, i t i s the one p a r t i c u l a r dimension with which t h i s study i s most c l o s e l y associated. More s p e c i f i -c a l l y , the basic intent here i s to e l i c i t the impact which Nigeria's most important development bank, the Nigerian I n d u s t r i a l Development Bank Limited (NIDB), has had on the extent and pattern of Nigerian indus-t r i a l i z a t i o n since i t s inception i n 1964 up to 1980. As discussed below, the use of development banking as a t o o l for nurturing c a p i t a l formation and economic development i s pr i m a r i l y a phenomenon of the period since World War I I . Further, elaborate diagnoses and analyses of the nature of economic development (n a t i o n a l l y and regionally) and the variables and r e l a t i o n s h i p s which have made develop-ment d i f f i c u l t and slow i n less developed countries (LDCs) ..were, a c t i v i -t i e s that engaged much i n t e l l e c t u a l a ttention and talent e s p e c i a l l y i n the 1950s and the 1960s.^ It i s therefore not surp r i s i n g that the innova-t i o n of development banking went through i t s most rapid d i f f u s i o n phase i n those two decades. Also, while the "engineering" of development i n LDCs has involved the use of diverse tools of public p o l i c y and innovative See the extended review i n Joseph 0. Akintola, The Pattern of Growth i n  Manufacturing i n Southwestern Nigeria 1956-1971 and the Role of Direct  Public P o l i c y i n that Growth, (Boston: Ph.D. Di s s e r t a t i o n , Boston University Graduate School, 1975), pp. 4-45. 2 adaptations and strategies s t i l l continue, the i d e n t i f i c a t i o n of the basic issue of c a p i t a l funds for investment and the recognition of the p o t e n t i a l r o l e of development banks i n that problem area remain part of the most s i g n i f i c a n t i n s i g h t s provided by the f l u r r y of development-oriented i n t e l l e c t u a l a c t i v i t i e s of the 1960s. It i s thus rather natural that the general r a t i o n a l e and j u s t i f i c a t i o n f o r development banking f i n d the most eloquent expression during the period i n which most development banks got established, and even beyond into the 1970s. This r a t i o n a l e or j u s t i f i c a t i o n could be b r i e f l y summarized at t h i s i n i -t i a l stage. I.1: The Issue of Investment-Capital Shortage The lack of i n s u f f i c i e n t funds for entrepreneural investment which has been widely recognized for LDCs since the 1950s and 1960s a f f e c t s public (government) development projects as well as private ventures. In f a c t , the low l e v e l of investment-capital a v a i l a b i l i t y i n most LDCs was t y p i c a l l y viewed i n the 1960s as so pervasive that i t formed one of the main components of the "Vicious C i r c l e of Poverty" which Mountjoy 2 i d e n t i f i e d as a basic feature of developing lands. In view of the p r e v a i l i n g c i r c u l a r r e l a t i o n s h i p between low income, low buying power and low savings, low rate of c a p i t a l formation or investment and low productivity, Nurkse has s i m i l a r l y observed that a developing country i s 3 poor because i t i s poor. Thus, notwithstanding the argument by Schatz, Alan B. Mountjoy, I n d u s t r i a l i z a t i o n and Underdeveloped Countries. (Chicago: Aldine Publishing Company, 1967), pp. 319-324 . ^Ragnar Nurkse, "Some International Aspects of the Problem of Economic Development", i n The Economics of Underdevelopment edited by Argawala and Singh, (London: Oxford Un i v e r s i t y Press, 1963, Third Reprint, 1973), pp. 257-271. 3 i n h i s "Capital Shortage I l l u s i o n " t h e s i s , that the problem i n many LDC's i s not sc much the lack of c a p i t a l but the absence or fewness of 4 v i a b l e projects i n which to invest a v a i l a b l e c a p i t a l (which may be true i n c e r t a i n circumstances^), i t i s commonly agreed that LDC's are c a p i t a l - d e f i c i t areas. As one of the responses to problems associated with c a p i t a l shortage, governments often resort to external borrowing. Even i n economies where unexpected mineral wealth (with i t s periodic i n s t a b i l i -t i e s ) has generally ameliorated the s i t u a t i o n , arrangements s t i l l have to be made to create or increase such entrepreneural a c t i v i t i e s as could s u b s t a n t i a l l y boost employment, the basic mechanism for d i s t r i -buting the wealth i n a society. Further, since government cannot exploit a l l the latent entrepreneural opportunities (at least) i n an e s s e n t i a l l y free-enterprise economy, and since, as the body charged with the public i n t e r e s t , government cannot (and i s usually not allowed to) observe with i n d i f f e r e n c e the agony of c a p i t a l shortage for pr i v a t e enterprise, i t has become conventional i n developing and many developed countries to e s t a b l i s h public or quasi-public f i n a n c i a l i n s t i t u t i o n s Sayre P. Schatz, Development Bank Lending i n Nig e r i a : The Federal  Loans Board. (London: Oxford Un i v e r s i t y Press, 1974), pp. 89-101. Joseph A. Kane, Development Banking, (Lexington, Massachusetts: D.C. Heath and Company, 1975), pp. 74-76 & 187-188. 'See, for example (on the one hand), the 31 sample development banks l i s t e d by Joseph A. Kane, Development Banking, Lexington, Mass: D.C. Heath and Company (Lexington Books), 1975, p. xv; and (on the other hand), the 1980 Annual Report of the Canadian Federal Business  Development Bank which, u n t i l 1975 was known as the I n d u s t r i a l Development Bank. 4 p r i m a r i l y for the purpose of providing c r e d i t s ( i n the form of equity and loans) to private (and often, public) enterprises. Technically c a l l e d development banks, such i n s t i t u t i o n s could be all-embracing i n t h e i r operations, being l e g a l l y required to grant c r e d i t s to enterprises i n any sector of the economy: a g r i c u l t u r e , housing, industry or manufacturing, d i s t r i b u t i v e trade and the l i k e . A more common practi c e i n recent times, however, i s to set up such i n s t i t u t i o n s sepa-r a t e l y for s p e c i f i e d sectors so that each functions, for instance, as an a g r i c u l t u r a l c r e d i t i n s t i t u t i o n , a mortgage bank, an i n d u s t r i a l finance i n s t i t u t i o n , and so on. Further, i n federal states such as Nigeria, the various l e v e l s of government, p a r t i c u l a r l y the state and federal governments, own and operate t h e i r own s p e c i f i c or s p e c i a l i z e d development finance i n s t i t u t i o n s for the benefit of entrepreneurs within t h e i r respective areas of j u r i s -d i c t i o n . In the discharge of t h e i r duties, such development or c r e d i t i n s t i t u t i o n s operate within the framework of s o c i a l p o l i c i e s or guide-l i n e s s p e c i f i e d i n the l e g a l instruments for t h e i r establishment as well as within the broad (and hopefully consistent) p o l i c y framework of national planning exercises. In Nigeria, for example, the p o l i c y of equity or d i s t r i b u t i o n of public investment funds among component s p a t i a l u nits so as to induce convergence ( i . e . reduce d i s p a r i t y ) i n the l e v e l s of development, has become almost a nati o n a l creed i n o f f i c i a l n a t i o n a l planning c i r c l e s i n recent times. Thus, the two c e n t r a l or federal government-owned i n d u s t r i a l c r e d i t i n s t i t u t i o n s — the Nigerian Indus-t r i a l Development Bank Limited (NIDB, since 1964) and the Nigerian Bank for Commerce and Industry (NBCI, since 1972) — have, as part of t h e i r 5 guidelines, the need to r e f l e c t s p a t i a l equity (among the states) i n the sanctions they make. 1.2: Aims and Objectives The aim i n t h i s work i s to study the older of the two c e n t r a l development-finance i n s t i t u t i o n s — the Nigerian I n d u s t r i a l Development Bank (NIDB) — which operates fundamentally i n the f i e l d of industry or manufacturing i n Nigeria, primarily to ascertain: (a) how much i t s c r e d i t a c t i v i t i e s have contributed to Nigerian i n d u s t r i a l development generally; (b) the extent to which i t s c r e d i t a c t i v i t i e s have contributed to or mitigated the e s s e n t i a l l y polarized pattern of indus-t r i a l development among the component states of the country; and (c) to e l i c i t , from the analysis, appropriate p o l i c y implica-tions f or centrally-induced balanced i n d u s t r i a l develop-ment i n Nig e r i a . 1.3: The More General Context The l a s t two decades have witnessed an unprecedented degree of i n t r a n a t i o n a l and i n t e r n a t i o n a l concerns and discussions regarding the issue of economic growth and development, p a r t i c u l a r l y i n the LDC's. Since the mid-1970s, these concerns and discussions have continued to emphasize not so much the need for growth (although that i s never absent) but more emphatically the urgent necessity f or genuine development i n -volving widespread and deep improvements i n the welfare of the masses i n LDC's through an induced system of d i f f u s e d income-generating employment 6 that enables the general masses, rather than minority e l i t e s alone, to share i n the benefits of economic growth.^ One r e s u l t of the observation of gl a r i n g and growing d i s p a r i t i e s i n welfare at the same time that aggregate nationa l income (GDP or GNP) figures have been showing at l e a s t s a t i s f a c t o r y growth rates i n many developing countries has been to bring into focus for more e x p l i c i t conceptualization what seemed a point of mere academic i n t e r e s t i n the early 1960's: the d i s t i n c t i o n between economic growth and economic development. Thus, although economists and other s o c i a l s c i e n t i s t s have had differences of opinion as to the exact d e t a i l s of what the d e f i n i -t i o n of economic growth and development should be, they d e f i n i t e l y agree that i t involves processes by which a nation's aggregate or per capita output i s increased on a sustained basis, thereby r a i s i n g the l e v e l of income and generating improvements i n the standard of l i v i n g . But fin d i n g i t convenient to consider economic development and economic growth as b a s i c a l l y synonymous and having e s s e n t i a l l y s i m i l a r goals, Meier and Baldwin were s t i l l able to conceive economic development as "the process whereby an economy's r e a l national income increases over a long period of time.^ Ozay Mehmet, Economic Planning and S o c i a l J u s t i c e i n Developing  Countries. (London: Groom Helm Ltd., 1978). Gerald M. Meier and Robert E. Baldwin, Economic Development: Theory, History, P o l i c y , (New York: John Wiley & Sons, Inc., 1963), p. 2. Real nation a l income denotes the value of a country's output of f i n a l goods and services with allowances made for depreciation or wastage of machinery and other c a p i t a l goods used i n producing them. Some . economists f e e l that the increase i n nation a l income should be at rates higher than those of population growth i n order that per capita income would r i s e . I f t h i s happens, economic development would r e s u l t i n economic progress: Ibid, pp. 3-4. 7 Even during the mid-1960's, however, some scholars had begun to make unambiguous conceptual d i s t i n c t i o n s between economic development (as embracing both increased output as well as changes i n the structure of the economy, e s p e c i a l l y the i n s t i t u t i o n a l and te c h n i c a l apparatuses of production) and economic growth as simply involving increase i n aggregate or per capita product. Kindleberger i n fact contends that there could be growth without development ( c i t i n g Kuwait as an example), 9 but not v i c e versa. S i m i l a r l y , while John Friedmann views growth as merely "an expansion of the (economic) system i n one or more dimensions without a change i n i t s structure", he regards development as "an innovative pro-cess leading to the s t r u c t u r a l transformation of s o c i a l systems ...; (and as referring) to the unfolding of the cre a t i v e p o s s i b i l i t i e s inher-ent i n society. But t h i s can occur only i f growth i s allowed to pass through a series of successive s t r u c t u r a l t r a n s f o r m a t i o n s " . ^ Perhaps the most persistent and compelling advocate of t h i s d i s t i n c t i o n i n more contemporary times i s one of the Third World writers who, probably be-cause of his greater nearness to the scene and the o r i e n t a t i o n of h i s theme, finds i t necessary to argue anew that "growth" i s a narrower idea Charles P. Kindleberger, Economic Development, New York: McGraw-Hill Book Company, 1965, pp. 3, 4 and 15; also, Sherman Robinson, "Theories of Economic Growth and Development: Methodology and Content", Economic  Development and C u l t u r a l Change, v o l . 21, October 1972, pp. 54-67, esp. p. 54. ^John Friedmann, Urbanization, Planning, and National Development, Beverly H i l l s : Sage Publications, 1973, p. 45; John Friedmann, "A General Theory of Polarized Development" i n N i l e s M. Hanson (ed.), Growth Centers i n Regional Development, New York: The Free Press, 1972, pp. 84-87; see also Henry L. Hunker, I n d u s t r i a l Development, Lexington: Lexington Books, 1974, p. 11. 8 which refe r s to the expansion of national income or production u s u a l l y measured i n terms of GNP or GDP, r e s u l t i n g from increased c a p i t a l forma-t i o n and input u t i l i z a t i o n . On the other hand, the broader concept of development i s c o n s i s t e n t l y viewed as r e f e r r i n g to improvement i n the material and s o c i a l well-being of the whole society, not only incorpo-rating increased per capita income but also requiring "reforms i n the i n s t i t u t i o n a l or quasi-economic framework such as wider a c c e s s i b i l i t y to educational, health and welfare f a c i l i t i e s , greater p o l i t i c a l p a r t i -c i p a t i o n i n the national decision-making process, and a more equitable d i s t r i b u t i o n of the benefits of progress, achieved through.economic planning. These conceptions and p a r t i c u l a r l y the d i s t i n c t i o n s which have grown sharper with time r e f l e c t the growth i n awareness of, and experi-ence with dealing with a by-now well-established c h a r a c t e r i s t i c of most 12 countries of the world including (perhaps i n more pronounced forms) the less developed countries: the widespread incidence of i n t r a -n ational d i s p a r i t i e s i n economic development or well-being both among Ozay Mehmet, Economic Planning and S o c i a l J u s t i c e i n Developing  Countries, London: Croom Helm Ltd., 1978, p. 175; also, Gunnar Myrdal, "What i s Development?" Journal of Economic Issues, Vol. 8, No. 4, December 1964. See, for example, i n connection with Canada, Regional D i s p a r i t i e s (Issues for the Seventies) edited by Hugh Innis, Toronto: McGraw-H i l l Ryerson Ltd., 1972; i n r e l a t i o n to the 24-member Organization for Economic Cooperation and Development, OECD (including a l l of Western Europe and Anglo-America as well as A u s t r a l i a and Japan), A. Emanuel, Issues of Regional P o l i c i e s , P a r i s : OECD, 1973; and i n r e l a t i o n to the developing countries (covering case studies i n A f r i c a , Asia and t a t i n America), Ozay Mehmet, 0p_. C i t , 1978; and Antoni K u k l i n s k i , editor, Regional P o l i c i e s i n Nigeria, India and  B r a z i l , The Hague: The U.N. Research I n s t i t u t e for S o c i a l Develop-ment (Geneva), Mouton Publishers, 1978. 9 i n d i v i d u a l s i n the population as well as among component regions of i n d i v i d u a l countries. However, i t i s the l a t t e r aspect, i n t e r r e g i o n a l d i s p a r i t y which has more immediate relevance to t h i s context, although the issue of interpersonal d i s p a r i t y could s t i l l be regarded as i n t e r -dependently present since e f f o r t s at reducing i n t e r r e g i o n a l divergence can be meaningfully conceived only i n r e l a t i o n to people i n the sub-national units i n question. The regional issue or the phenomenon of regional d i s p a r i t y with-i n nations a r i s e s because of the remarkable r e g u l a r i t y with which economic development has tended to get concentrated at r e l a t i v e l y few points (usually urban centres) within n a t i o n a l t e r r i t o r i e s and the i n c a p a b i l i t y of growth to f r e e l y (autonomously) d i f f u s e outward on any s i g n i f i c a n t scale to the less developed or d e c l i n i n g regions of the country at any s p a t i a l l y s i g n i f i c a n t rates. The consequence has been the emergence of a s p a t i a l structure which Friedmann and others have 13 generalized i n terms of a centre-periphery dichotomy. The phenomenon of growing (urban) centres coupled with lagging or d e c l i n i n g peripheries and the desire to ameliorate the s i t u a t i o n gave r i s e to the growth pole concept which, a f t e r the rather confused 14 i n t e r p r e t a t i o n s which followed i t s o r i g i n a l formulation by Perroux, came to be generally viewed as "an urban centre of economic a c t i v i t y which can achieve s e l f - s u s t a i n i n g growth to the point that growth i s John Friedman, Regional Development P o l i c y : A Case Study of  Venezuela, Cambridge: The M.I.T. Press, 1966, p. 7 . Francois Perroux, "Economic Space: Theory and A p p l i c a t i o n s " Quarterly Journal of Economics, v o l . 64, Feb. 1950, reprinted i n J. Friedmann and W. Alonso (eds.), Regional Development and Planning: A Reader, Cambridge: The M.I.T. Press, 1964, pp. 2 1 - 3 6 ; D.F. Darwent, "Growth Poles and Growth Centers i n Regional Planning" Environment  and Planning, v o l . 1 , Aug. 1969, pp. 5 - 3 2 . 10 d i f f u s e d outward into the pole region and eventually beyond into the less developed region of the n a t i o n . " ^ Attempts to incorporate the growth pole concept into regional planning schemes by concentrating investment i n chosen centres i n lagging regions with the hope not only of reaping scale and agglomeration econo-mies but also of d i v e r t i n g migrants from large congested urban areas gained currency as regional planning strategies i n many countries of the world. Such p o l i c y - i n s p i r e d attempts have not, however, been known to meet with any remarkable success mainly because of the highly complex d i f f i c u l t y of simulating i n lagging regions the varied and complex circumstances (including time) on which the apparently sustained growth of large urban areas depend.^ In f a c t , t r a d i t i o n a l concepts have come under such recent attacks i n a number of respects, e s p e c i a l l y from Marxian analysts who question e x p l i c i t s p a t i a l / r e g i o n a l concerns, the r o l e of the state as well as the appropriateness of the conventional top-down approach to development planning matters that the issues raised could not be ignored. These relevant l i n e s of development should there-fore be examined b r i e f l y . V i d a l Nichols, "Growth Poles: An Evaluation of t h e i r Propulsive E f f e c t s " , Environment and Planning, Vol. 1, Aug. 1969, pp. 95-122. 'Niles M. Hansen, " C r i t e r i a f o r a Growth Centre P o l i c y " i n Growth  Poles and Growth Centres i n Regional Planning edited by Antoni K u k l i n s k i , The Hague: Mouton Publishers, 1972, pp. 103-124; see also the review i n Jeremy Alden and Robert Morgan, Regional Planning: A Comprehensive View, New York: John Wiley and Sons, 1974, esp. pp. 72-73. 11 1.3.1: Marxist Analysis and Relevant Planning Issues The s p a t i a l issue i s discussed f i r s t . In t h e i r conern to give primacy to the analysis of s o c i a l - c l a s s c o n f l i c t s i n the process of c a p i t a l i s t development, Marxist scholars have been evolving a r i g i d i f y -ing orthodoxy which views s p a t i a l i t y i n a l l i t s connotations and denota-tions as mere epiphenomenal fetishism that attempts to use "place prosperity" as proxy for "people p r o s p e r i t y " . ^ On the other hand, i t has been cogently argued that both i n i t s urban and regional dimensions, the s p a t i a l problematic, while not a substitute for class a n a l y s i s , could be "an i n t e g r a l and increasingly s a l i e n t element i n c l a s s consciousness 18 and c l a s s struggle within contemporary c a p i t a l i s m . " The problem i s the i d e o l o g i c a l reluctance among Marxist analysts to give e x p l i c i t recognition to the seemingly obvious idea which i s evident even i n t h e i r own analyses: that s o c i a l and s p a t i a l processes generate mutually r e f l e x i v e structures. Soja's elaborate review and synthesis of the relevant l i t e r a t u r e has i d e n t i f i e d three i n t e r n a l l y c o n f l i c t i n g and s e l f - d e f e a t i n g positions regarding s p a t i a l i t y among Marxian analysts, some of whom "maintain See the review of t h i s issue i n the context of regional development i n Gordon L. Clark, Equity, J u s t i c e and Regional Impact of National  P o l i c y : Three Evaluative C r i t e r i a , (Cambridge: Department of C i t y and Regional Planning, Harvard University, May 1979), pp. 5-10; see also Clyde Weaver, "Development Theory and the Regional Question: A C r i t i q u e of S p a t i a l Planning and I t s Detractors" i n Development  from Above or Below? edited by Walter B. Stohr and Fraser Taylor, (Chichester: John Wiley & Sons, 1981), pp. 85-86. Edward W. Soja, "The Socio-Spatial D i a l e c t i c " , Annals of the Association of American Geographers, V o l . 70, No. 2, June 1980, p. 207. 12 the preeminence of .aspatial s o c i a l class d e f i n i t i o n s ... to the point of tortuously t r y i n g to r e s i s t the implications of t h e i r own observations, 19 emphasis, and a n a l y s i s . " Here, " s p a t i a l i t y " i s not used i n the abstract, externalized sense but i n that i n which i t i s o r d i n a r i l y used i n planning and related contexts as "the s o c i a l l y produced organization of space ... (including) the form, content, and d i s t r i b u t i o n a l pattern of the b u i l t environment, the r e l a t i v e l o c a t i o n of centres of production and consumption, the p o l i t i c a l organization of space into t e r r i t o r i a l j u r i s -d i c t i o n s , the uneven geographical d i s t r i b u t i o n of income and employment, and the i d e o l o g i c a l attachments to l o c a t i o n a l symbols and images, ... ( a l l 20 of which are) rooted i n a s o c i a l o r i g i n and f i l l e d with s o c i a l meaning." The asserted empirical point i s that s o c i a l and s p a t i a l r e l a t i o n s h i p s are d i a l e c t i c a l l y i n t e r - r e a c t i v e , interdependent; that the s o c i a l r e l a t i o n s of production are both space-forming and space contingent (insofar as we maintain a view of organized space as s o c i a l l y constructed).21 Thus, i n the context of geographically uneven development and i n response to the related a s p a t i a l stance of Marxist analyses on socio-s p a t i a l c a p i t a l i s t formations, the point i s not simply that c a p i t a l i s t development i s geographically uneven, for some geographical unevenness i s the r e s u l t of every s o c i a l process, but that the c a p i t a l i s t mode of production a c t i v e l y creates, i n t e n s i f i e s , and seeks to maintain regional or, more broadly, s p a t i a l i n e q u a l i t i e s as a means for i t s own s u r v i v a l . At the same time, the Edward W, Soja, Ibid ., p. 211. Edward W. Soja, Op. C i t . , p, 210, Edward W,. Soja, Op, C i t . , p. 211 (parenthesis i n the o r i g i n a l ) . 13 continuing expansion of c a p i t a l i s m i s accompanied by countervailing tendencies toward increasing homogeni-zation and reduction of geographical d i f f e r e n c e s . This d i a l e c t i c a l tension between d i f f e r e n t i a t i o n and equalization i s the underlying dynamic of the uneven development process. To ignore the inherent horizon-t a l i t y of unequal development — to see only the ver-t i c a l d i f f e r e n t i a t i o n of sectors, branches, firms — i s to remain i n an incomplete, overly abstracted, and n o n d i a l e c t i c a l Marxism, incapable of f u l l y com-prehending (and changing) the h i s t o r y of the c a p i t a l i s t mode of production."22 It has, however, been contended that while regional d i s p a r i t y i s an em p i r i c a l l y observable c h a r a c t e r i s t i c of c a p i t a l i s t economies, i t s existence " i s not a necessary requirement for the perpetuation of 23 c a p i t a l i s m . " Nevertheless, i t could be added that the d i a l e c t i c a l process r e f l e c t e d i n spatio-temporal d i f f e r e n t i a t i o n s which subsequently y i e l d place ( a l b e i t grudgingly) to increased homogenization has been conventionally (over the l a s t three decades) i d e n t i f i e d as the f o r t u i t o u s 24 r e s o l u t i o n of backwash/polarization and spread/trickle-down e f f e c t s . In view of the p r i v a t e entrepreneural and i n d i v i d u a l s e l f - i n t e r e s t which underlies the accumulative reproduction of c a p i t a l and the r e l a t i o n s of 22 E.W. Soja, Op. C i t . , p. 221. 2 3 G o rdon L. Clark, "Capitalism and Regional Inequality", Annals of the Association of American Geographers, V o l . 70, No. 2, June 1980, p. 226. z q M y r d a l , Gunnar, Rich Lands and Poor: The Road to World Prosperity, (New York: Harper and Brothers, Publishers, 1957), pp. 16-31; Myrdal, Gunnar, Asian Drama: An Inquiry into the Poverty of Nations, An Abridgement by Seth S. King of the Twentieth Century Fund Study, (New York: Pantheon Books); Hirschman, Albert 0. The Strategy of  Economic Development (New Haven: Yale U n i v e r s i t y Press, 1958), Chapter 4; see p a r t i c u a r l y the review/synthesis of these ideas by Keeble, D.E. "Models of Economic Development" i n Models i n Geography edited by R.J. Chorley and Peter Haggett (London: Methuen & Co. Ltd., 1967), pp. 258-266. production, the f o r t u i t o u s n e s s and i n d e f i n i t e time horizon w i t h (and in) which the s o c i o - s p a t i a l . process (guided by f a i l u r e - r i d d e n , "free-market" 25 f o r c e s ) res o l v e s i t s e l f have been major reasons f o r t h e o r e t i c a l l y n e u t r a l and purposeful p u b l i c i n t e r v e n t i o n or planning aimed at making the d i r e c t i o n and pace of development more p r e d i c t a b l e . As has been remarked, " I f our past- has been one of coincidence and accident mixed w i t h r a t i o n a l thought, our f u t u r e must be one of r a t i o n a l thought pre-2 6 v a i l i n g over coincidence and a c c i d e n t . " Apart from the general e m p i r i c a l developmental processes from which the r e f u t a t i o n of Marxian a s p a t i a l p r e d i s p o s i t i o n s (with a l l i t s ambivalence) deri v e s i t s s t r e n g t h , i t i s even more immediately p e r t i n e n t to note that i n such a d i v e r s e country as N i g e r i a where patte r n s of unequal p o l i t i c a l p a r t i c i p a t i o n , e d ucational and t e c h n i c a l development, employment and income c h a r a c t e r i s t i c s , and general socio-economic development l a r g e l y c o r r e l a t e w i t h d i s t i n g u i s h a b l e e t h n o - s o c i a l areas, a t t e n t i o n to s p a t i a l i t y or r e g i o n a l d i f f e r e n t i a t i o n d e r i v e s p r e c i s e l y from the coincidence of problems and issues which are simultaneously s o c i a l and r e g i o n a l i n t h e i r broad c o n f i g u r a t i o n s . Perhaps the point i s more simply s t a t e d by i n d i c a t i n g that the ba s i c i n t e r e s t i n r e g i o n a l ( s p a t i a l ) a n a l y s i s i s i n the people that occupy the va r i o u s areas and that given the d i f f e r e n t i a l s p a t i a l m o b i l i t y made f e a s i b l e by v a r y i n g personal s k i l l s and "rooted" p r e f e r -ences, those areas command i n t e r e s t because of the enth n o - s o c i a l groups See the review by Gordon L. C l a r k , Op. C i t . (1980), p. 226. 'Richard S. Thoman and Peter B. Corbin, The Geography of Economic  A c t i v i t y , T h i r d E d i t i o n , (New York: McGraw-Hill Book Company, 1974), p. 14. 15 which give them relevance i n the n a t i o n a l scheme of things. Iii that con-text, development (or lack of i t ) has s o c i a l manifestations and corres-ponding s p a t i a l / r e g i o n a l expressions. And, as indicated below, Nigerian national planning a u t h o r i t i e s as well as regional/state populations and t h e i r p o l i t i c a l spokesmen are s i g n i f i c a n t l y conscious of, and desirous 27 to e f f e c t improvements i n , p r e v a i l i n g s o c i o - s p a t i a l r e l a t i v e standings. The other relevant aspect of Marxian analysis concerns the r o l e of the state i n a c a p i t a l i s t society. This i s a subject that needs no belabouring. The Marxist p o s i t i o n i s c l e a r enough: that while state p o l i c y i s t h e o r e t i c a l l y expected to be neutral (not favouring a p a r t i c u l a r i n t e r e s t group over another) i n respect of the temporal f l u c t u a t i o n s and s o c i o - s p a t i a l d i s p a r i t i e s which accompany the process of growth and development, the hegemonic class f r a c t i o n s that manage the c a p i t a l i s t state are t y p i c a l l y influenced such that t h e i r p o l i c i e s aid c a p i t a l i s t accumulation. Thus, the r o l e of the government ( i n the Canadian context and i n r e l a t i o n to both domestic and foreign entrepreneurs, for instance) has been characterized as that, of the "organizer of the hegemony of the bourgeoisie". The r e s u l t i n g s o c i o - s p a t i a l pattern of uneven reward structures and opportunities are blamed on the unequal structure of representation between society's subordinate forces ( l a r g e l y analogous to the l a b o u r - s e l l i n g and wage-earning working c l a s s , including i t s 28 reserve army ) and i t s hegemonic class f r a c t i o n s (constituted by the See, for example, J . Ola. Akintola-Arikawe, "The Equity P r i n c i p l e and Central Plan A l l o c a t i o n i n the Manufacturing Sector: The Nigerian Third National Development Plan", The Nigerian Journal of Economic and  S o c i a l Studies, V o l . 22, No. 1, March 1980 ( s t i l l forthcoming). Gordon L. Clark, Op. C i t . , (1980). 16 "unholy a l l i a n c e " of government and c a p i t a l i s t business i n t e r e s t s ) . This, i n general, i s a systemic problem. To the extent that wage-earning labour and the surplus-value extracting entrepreneur are mutually interdependent i n a c a p i t a l i s t economy, public p o l i c y i n i t i a t i v e s for coordinating the space economy would be directed at maintaining or ( i n a recession) restoring conditions which are conducive to the con-tinuance of roles played by the interdependent actors. The ostensible presumption i s that each group of actors (labour on the one hand and accumulating entrepreneural i n t e r e s t s on the other) would, acting i n i t s own s e l f - i n t e r e s t , keep production conditions and r e l a t i o n s a c t i v e and accept the r e s u l t i n g i n e q u a l i t y i n reward structures as normal. It i s not s u r p r i s i n g , therefore, that Marxist analysis t y p i c a l l y advocates the s o c i a l i z a t i o n of the means of production. The problem i s that even a s o c i a l i s t i c system o f f e r s no guarantee against the emergence of a d i r e c t i n g hegemonic class f r a c t i o n which, i n one way or the other, would be unequally rewarded to i t s advantage. The f i n a l relevant l i n e of development i s the concept of bottom-up development, an idea which i n contrast views the growth pole notion i n i t s a pplications as a top-down strategy since such applications require some higher body or authority, normally government, to provide the enormous investments required to transform selected nodes into function-ing growth points. R. Mahon, "Canadian Public P o l i c y : The Unequal Structure of Represen-t a t i o n " , i n The Canadian State: P o l i t i c a l Economy and P o l i t i c a l Power edited by Leo Penitch, (Toronto: U n i v e r s i t y of Toronto Press, 1977), pp. 165-198; see also P a t r i c i a Marchak, In Whose Interest: An Essay  on Multi-National Corporations i n a Canadian Context, (Toronto: McClelland and Stewart, 1979), esp. pp. 96-128. 17 Although casual references to bottom-up development (or develop- ment-from-below paradigm) may sometimes appear to amount to mere d i f f e r -ences i n emphasis and although p r a c t i c a l a p p l i c a t i o n i n any s p e c i f i c s i t u a t i o n might amount to both d i f f e r e n t i a l emphasis and pragmatic blending with top-down st r a t e g i e s , i t i s nevertheless c l e a r that the thrust of the bottom-up paradigm has a recognizably d i s t i n c t conceptual di f f e r e n c e . It does not simply involve only the l e v e l at which decisions for development are made. Proponents regard a change i n the decision-making l e v e l as a necessary but not s u f f i c i e n t condition for bottom-up development. In contrast to the older and increasingly c r i t i c i z e d ( e s p e c i a l l y f o r reasons of widening d i s p a r i t i e s i n income l e v e l s and well-being) top-down strategy, the bottom-up approach i s conceived as implying a l t e r n a t i v e c r i t e r i a f o r factor a l l o c a t i o n ; maximizing i n t e g r a l rather than s e c t o r a l resource mobilization; d i f f e r e n t c r i t e r i a f o r commodity exchange (with emphasis on equalizing benefits from trade); s p e c i f i c forms of s o c i a l and economic 30 organization (emphasizing t e r r i t o r i a l rather than fu n c t i o n a l organization) and a change i n the basic concepts of development such that p a r t i c u l a r 31 emphases are placed on c o l l a b o r a t i v e behaviour and endogenous motivation. 30 John Friedmann and Clyde Weaver, T e r r i t o r y and Function: The Evolution  of Regional Planning (Berkeley: U n i v e r s i t y of C a l i f o r n i a Press, 1979). 31 Walter B. Stohr, "Development from Below: The Bottom-Up and Periphery-Inward Development Paradigm" i n Development from Above or Below? edited by Walter B. Stohr and Fraser Taylor, (Chichester: John Wiley & Sons, 1981), pp. 39-72, r e f . i s to p. 39. 18 Thus, bottom-up development reconsiders the concept of development i n a way that d i s s o c i a t e s i t from narrow s e c t o r a l notions t i e d to mea-surable economic c r i t e r i a determined by the "World System". On the con-tr a r y , development from below reconsiders development as "an i n t e g r a l process of widening opportunities f o r i n d i v i d u a l s , s o c i a l groups, and t e r r i t o r i a l l y organized communities at small and intermediate scales, and mobilizing the full;.-"range of t h e i r c a p a b i l i t i e s and resources for the common benefit i n s o c i a l , economic, and p o l i t i c a l terms. Stohr's r e n d i t i o n of the development-from-below concept, drawing on e a r l i e r works by Friedmann and Weaver as well as others, emphasizes the two requirements c o n t r o l l i n g backwash e f f e c t s by creating dynamic developmental impulses within less developed areas. Doing these requires a l t e r i n g i n t e r a c t i o n between d i f f e r e n t regions and countries as well as creating i n t e r n a l factors of change to induce equity and developmental dynamics. It follows that the basic objective of bottom-up development i s : the f u l l development of a region's natural resources and human s k i l l s . . . i n i t i a l l y for s a t i s f a c t i o n i n equal measure of the basic needs of a l l s t r a t a of the regional or nationa l population, and subsequently f o r developmental objectives beyond t h i s . Most basic-needs services are t e r r i t o r i a l l y organized, and manifest themselves most intensely at the l e v e l of small-scale s o c i a l groups and l o c a l or regional communities... (Therefore), the greater part of any surplus (over l o c a l needs) should be invested r e g i o n a l l y for the d i v e r s i f i c a t i o n of the regional economy; ("region" here meaning) the smallest t e r r i t o r i a l unit above the r u r a l v i l l a g e where such a c t i v i t i e s are s t i l l f e a s i b l e . . . and which comprise commuting and servic e - p r o v i s i o n areas of acceptable i n t e r n a l a c c e s s i b i l i t y . This process i s then envisaged to occur at successively higher scales. Through retention of at least part of the regional surplus, i n t e -grated economic c i r c u i t s within less-developed regions would be promoted.... and development impulses would be expected to successively pass 'upward' from the l o c a l through regional to the national l e v e l . P o l i c y emphasis 19 therefore w i l l need to be oriented towards: t e r r i t o r i a l l y organized basic-needs services; r u r a l and v i l l a g e develop-ment; labor-intensive a c t i v i t i e s ; small and medium-sized projects; technology permitting the f u l l employment of regional, human, nat u r a l , and i n s t i t u t i o n a l resources on a t e r r i t o r i a l l y integrated basis; ...(and the probable requirement of) a c e r t a i n degree of 's e l e c t i v e s p a t i a l closure' ... to i n h i b i t transfers to and from regions and countries which reduce t h e i r p o t e n t i a l for s e l f - r e l i a n t development.32 While the implied thrust of p o l i c y action i s thus inwards and primed to the lowest i n t e r n a l l e v e l s of s p a t i a l organization, the concept of development from below also suggests the need to implement f e a s i b l e l e v e l s of disengagement from the i n t e r n a t i o n a l system at the national l e v e l i f the endogenous arrangements at lower l e v e l s are to be meaningful. A l l the same, the r e l a t i v e l y insecure basis and ambivalence of bottom-up development i s apparent from the recognition that i t does not seem to be a well-structured theory to serve as an a l t e r n a t i v e to the paradigm of development from above and that there i s therefore a pressing need f o r a coherently systematic framework for an a l t e r n a t i v e . Further, i t i s recognized that there may not be one strategy of bottom-up development and that "beyond some basic common features, d i f f e r e n t c u l t u r a l areas w i l l need to construct t h e i r own (appropriate)... „33 s t r a t e g i e s . I t i s thus not s u r p r i s i n g that the suggestions f o r a bottom-up or s e l f - r e l i a n t development strategy are ne c e s s a r i l y varied and wide-ranging. As Dudley Seers (1977:5-7) has speculated, s e l f - r e l i a n c e could, among other things, 3 2 W a l t e r B. Stohr, Ibid., pp. 43-45. 33 Walter B. Stohr, Op. C i t . , p. 40. 20 involve increasing national ownership and c o n t r o l . . . , and improving national capacity for negotiating with transnational corporations... The c r u c i a l targets would be ( i ) ownership as well as output i n the leading economic sectors; ( i i ) consumption patterns that economized on foreign exchange...; ( i i i ) i n s t i t u -t i o n a l capacity for research and negotiation... The key...is not to break a l l l i n k s (with other co u n t r i e s ) , which would almost anywhere be s o c i a l l y damaging and p o l i t i c a l l y unworkable, but to adopt a s e l e c t i v e approach to external influence of a l l t y p e s . ^ These remarks not only r e f l e c t the general ferment of ideas i n contemporary development planning thought; they represent, more s p e c i f i c a l l y , a p r e s c r i p t i o n for the challenges posed by the under-35 development/dependency theory, e s s e n t i a l l y another dimension of Marxist analysis with p a r t i c u l a r relevance for development planning i n LDCs at both the na t i o n a l and regional l e v e l s . The dependency notion has t r i e d to turn growth pole and polarized development ideas upside down since the early 1970s and varied enthusiastic pessimists jumped u . j 36 on the band wagon. The apparent conceptual l i n k between regional development problems and the underdevelopment/dependency thesis i s that the " f r e e " powers of transnational investors transform r e c i p i e n t host economies into Quoted by W.B. Stohr, Op. C i t . , p. 47. For a businesslike review of dependency theory, see Omotunde E.G. Johnson, "Economic Dependency Theory: An Interpretation", The  Nigerian J o u r n a l of Economic and S o c i a l Studies" Vol. 19, No. 2, J u l y 1977, pp. 63-80. 'See the review by Clyde Weaver, "Development Theory and the Regional Question: A C r i t i q u e of S p a t i a l Planning and Its Detractors", i n Development from Above or Below? edited by Walter B. Stohr and Fraser Taylor, (Chichester: John Wiley and Sons, 1981), pp. 73-105. 21 s a t e l l i t e s of the home economies of transnational corporations which benefit more from the unequal exchange involved; and that subnational economic units (regions) within dependent LDCs were merely lower l e v e l s i n the t e r r i t o r i a l (global) hierarchy of subordinate r e l a t i o n s h i p s from which LDCs stood to lose and MDCs gained through the instrumentality of transnational corporations. The idea of mixing the dependency notion with regional planning/ development issues now (early 1980s) seems s i g n i f i c a n t l y i n v a l i d i n at l e a s t one important respect: the fundamental inference of dependency i s drawn from regarding the p r o l i f e r a t i o n of foreign investment ( e s p e c i a l l y i n the 1960s and early 1970s) as a confirmation of the helpless power-lessness of so-called peripheral economies to do anything about inward foreign investment. The experience of foreign investment c o n t r o l codes/ measures i n a vast and increasing number of countries (including some MDCs) — a long-emerging trend which dependencists seem l a r g e l y to have chosen to ignore and f o r whatever reason, l e f t out of t h e i r analyses — as well as s e l f - r e l i a n t s t r a t e g i e s , has been/is blunting into i n s i g n i f i -37 cance whatever force the dependency notion might have had. The important r e s u l t of that i n t h i s context i s that genuine debates about regional development/planning issues could hopefully continue i n the arena to which they fundamentally belong: subnational, supra urban units and frameworks. See, for example, United Nations Economic and S o c i a l Council, Commission on Transnational Corporations, Transnational Corporations i n World  Development: A Re-examination, (New York: Commission on Transnational Corporations, 20 March 1978), E/C. 10/38, O r i g i n a l : English. 22 As far as d i r e c t regional planning issues are concerned and i n view of the d i v e r s i t y of t h e o r e t i c a l and other opinions, the conclusion seems j u s t i f i e d , that "the world i s our own representation, a matter of w i l l . . . 38 regional development i s above a l l an e t h i c a l / p o l i t i c a l question. Thus, proponents of bottom-up development reason that " i f development i s to occur, what i s needed i s a doctrine of t e r r i t o r i a l development: negating the bonds of unequal exchange by an e x p l i c i t theory of w i l f u l community action, s e l e c t i v e regional closure and s t r a t e g i c regional advantage...; (emphasizing regional culture, p o l i t i c a l power and economic resources; r e j e c t i n g the notion of comparative advantage and refusing to play the developmental game by rules favoured to beat the 'closed' l o c a l community; and fundamentally) using the new f e e l i n g of purpose and unity as the basis for bold i n i t i a t i v e s and act i o n . . . (to do) as many as possible of the things necessary to meet a region's needs within the area i t s e l f , and taking whatever p o l i t i c a l measures are necessary and f e a s i b l e to see 39 that t h i s i s accomplished". What i s not clear but c r u c i a l i s how and at what l e v e l ( s ) t h i s would be done. As has been observed, apart from whatever common features might emerge from i t s p r a c t i c e i n s p e c i f i c c u l t u r a l areas, there may be 40 no one strategy of bottom-up development. Further, unless devolution-inducing revolution i s what i s i m p l i c i t l y contemplated, the idea of s e l e c t i v e closure f o r subnational units raises issues of organizational arrangements within units that would be "closed" and of eff e c t u a t i o n i n 38 39 ' Clyde Weaver, Op. C i t . , (1981), pp. 93-94 (parentheses are my para-phrase) . 40 Walter B. Stohr, Op. C i t . (1981), p. 40. 23 r e l a t i o n to the la r g e r , sovereign n a t i o n a l unit of which they are parts. Perhaps the r e l a t i v e l y new concept of enterprise zones i n MDCs would be the only p a r a l l e l experiment that could be compared, although the l e g a l and s o c i o - p o l i t i c a l a r t i f i c i a l i t y and incentive-based character of the pure conception of enterprise zones as v i r t u a l l y lawless islands "of 41 shameless free enterprise" d i f f e r s from the pre-existence of s o c i a l -c u l t u r a l and politico-economic groups coincident with t e r r i t o r i a l l y 42 i d e n t i f i a b l e units assumed i n the development-from-below concept. Even then, the shaky and highly d i l u t e d form i n which that close p a r a l l e l has been introduced i n B r i t a i n since the Thatcher years ( p r a c t i c a l l y as 43, conventional, temporary "subsidy i s l a n d s " J demonstrates the extra-regional problems that .closure r a i s e s , problems which have led to predic-tions of f a i l u r e f o r , and disillusionment with the enterprise zone con-cept and which have t h e i r roots i n the meagerness of concessionary incen-44 t i v e s that n a t i o n a l a u t h o r i t i e s could r e a l i s t i c a l l y allow. Fundamentally, the issue could be seen as one of tools (both old and new) which governments employ for implementing regional development Peter H a l l , The Enterprise Zone: B r i t i s h Origins, American Adaptations, (Berkeley: I n s t i t u t e of Urban and Regional Planning, U n i v e r s i t y of C a l i f o r n i a ) A C o l l e c t i o n of three public l e c t u r e s , June 15, 1977 to February 1981), p. 19. John Friedmann and Clyde Weaver, Op. C i t . (1979), pp. 186-207. Madsen P i r i e , "A Short History of Enterprise Zones", National Review, Vol. 33, No. 1, pp. 26-29: r e f . i s to p. 28. Madsen P i r i e , I b i d . , p. 28. 24 p o l i c y . It could therefore be said that theorizing about regional development might need, at l e a s t p r o v i s i o n a l l y , to evolve p r a c t i c a l suggestions for a l l e v i a t i n g urgent issues of poverty and g a i n f u l employ-ment. It also follows that "A thorough empirical examination of s p e c i f i c cases i s required not only to make the assumptions of development theory more r e a l i s t i c , but also to provide guidance for p o l i c i e s that w i l l i n fact create s i g n i f i c a n t l y greater economic opportunities ( e s p e c i a l l y ) 46 for the developing countries' poor majority". The analysis of a major development bank's impact i n r e l a t i o n to i t s socio-economic p o l i c y environment could be a contribution towards t h i s end. 1.4': The P o l i c y Environment of NIDB A study of the impact of a major nationa l finance i n s t i t u t i o n such as NIDB requires a b r i e f review of relevant dimensions of the country's socio-economic development/planning p o l i c i e s , the bank's immediate functional environment. For convenience, the review could be structured George Sternlieb and David L i s t o k i n , e d i t o r s . New Tools for Economic  Development: The Enterprise Zone, Development Bank, and RFC,("New Brunswick, New Jersey: Center for Urban P o l i c y Research, the State U n i v e r s i t y of New Jersey, Rutgers, 1981). 'Niles M. Hansen, "Development from Above: The Centre-Down Development Paradigm" i n Development from Above or Below? edited by Walter B. Stohr and Fraser Taylor, (Chichester: John Wiley & Sons, 1981) , pp. 15-38: r e f . i s to p. 36; with a subtle hint of impatience with generalized t h e o r i z i n g , Hansen's pragmatic suggestions for meeting urgent needs encompass elements of both the bottom-up and top-down paradigms: (a) more attention to human resource development; (b) greater e f f o r t s to curb population growth; (c) wider and more rapid d i f f u s i o n of a g r i c u l t u r a l innovations; (d) planning i n terms of f u n c t i o n a l economic areas; and (e) the l i n k i n g of f u n c t i o n a l economic areas by a transportation and communications p o l i c y that encourages not only more general s p a t i a l d i f f u s i o n of innovations but also f a c i l i t a t e s the movement of a g r i -c u l t u r a l and l i g h t inudstry outputs from r u r a l areas to large urban markets (same page). 25 i n the following sequence: an overview, a consideration of the s p a t i a l planning framework, the objectives of n a t i o n a l planning, the economy i n general, the r e l a t i v e s i g n i f i c a n c e of the sector of i n t e r e s t (manufactur-ing) , and related tools of public p o l i c y . Having been drawn into B r i t i s h c o l o n i a l empire-building from 1861 and a t t a i n i n g i t s present areal s i z e of nearly one m i l l i o n square kilometres by the amalgamation of the Northern and Southern parts i n 1914, Nigeria has grown into one of the s i g n i f i c a n t politico-economic units of contemporary times. The abundant resource base i s almost as diverse as the i n t e r n a l physical and s o c i o - c u l t u r a l c h a r a c t e r i s t i c s . And the attainment of i n t e r n a l self-government i n the 1950s, formal independence i n 1960 and a three-year long c i v i l war i n the l a t e 1960s are major turning points the country's twentieth h i s t o r y of p o l i t i c a l development. With a population which grew from about 56 m i l l i o n i n the early 1960s to 86 m i l l i o n i n 1980 (the world's tenth largest i n the mid-47 1970s ), the country has evolved an increasingly complex economy i n which conscious planning continues to play an important r o l e . 1.4.1: An Overview of Public Development Planning i n Nigeria It should f i r s t be indicated that conscious public planning for development i n Nigeria has been t r a d i t i o n a l l y coordinated at the n a t i o n a l l e v e l . I t i s true that numerous i n d i v i d u a l l o c a l or urban planning a u t h o r i t i e s e x i s t f or major towns and c i t i e s . And although regional or state governments have t h e i r diverse development programme a c t i v i t i e s See J.P. Cole, The Development Gap (Chichester: John Wiley & Sons, 1981), p. 102. 26 during the medium-term (four- or five-year) development plan periods, i t i s nevertheless the case that such programmes have t r a d i t i o n a l l y been coordinated within the framework of an o v e r a l l n a t i o n a l development plan. Thus, regional/development planning i n Nigeria has not only been synony-mous with national planning; i t has also been p r i m a r i l y a top-down a f f a i r at least i n the sense that the coordination process i s directed from the fe d e r a l l e v e l downwards. Further, conscious public planning for development i n Nigeria has been c a r r i e d on under d i f f e r e n t regimes for almost four decades now. This experience could be conveniently viewed as f a l l i n g into two temporal categories: the i n i t i a l attempt at planning towards the end of the c o l o n i a l period (1946-1960), and the post-independence planning experi-ence since 1960. The f i r s t i n i t i a t i v e during the c o l o n i a l period followed the ( B r i t i s h ) C o l o n i a l Development and Welfare Act of 1945 and i n N i g e r i a , i t resulted i n the preparation of what was t i t l e d A Ten-year Plan of  Development and Welfare for Nigeria, 1946. The plan's programme covered projects related to export-crop development for feeding B r i t i s h industries, as well as i n f r a s t r u c t u r a l f a c i l i t i e s (roads, communication l i n e s and ports, e s p e c i a l l y the ports of Lagos and Port Harcourt) to f a c i l i t a t e the export of commodities. The few i n d u s t r i a l establishments i n the country were either f i r s t - s t a g e , bulk-reducing processes or small and medium-scale f i n i s h i n g establishments (print-shops and bakeries) and they were a l l geared towards c o l o n i a l needs. The ten-year plan ended prematurely i n 1954 as c o n s t i t u t i o n a l arrangements for self-government advanced and a revised plan c a l l e d the Economic Development Plan 1955-1960 ( l a t e r extended byth.e first-independent 27 parliament to 1962) replaced i t . Both the f i r s t and second c o l o n i a l plans had no goals or objectives that could be construed as national ( i n t • W , v 48 r e l a t i o n to N i g e r i a ) . For one thing, the main strategies employed i n r e l a t i o n to export promotion, raw material v a l o r i z a t i o n and (later) import s u b s t i t u t i o n of manufactured consumer goods as well as transport development were c h a r a c t e r i s t i c a l l y e x p l o i t a t i v e as they were implemented at minimal cost to the c o l o n i a l administration. And for another thing, the negative e f f e c t s of the s p a t i a l order that became superimposed on the e x i s t i n g settlement and i n t e r a c t i o n patterns have been profoundly s i g n i f i c a n t for subsequent developments. For instance, the capital-cum port c i t i e s of the era 'had the largest and most s k i l l e d populations, the best i n f r a s t r u c t u r e s , the biggest concentration of the r u l i n g e l i t e and the highest p o t e n t i a l for l o c a l entrepreneurship'. As i n d u s t r i a l i z a t i o n i n the c i t i e s progressed, the _ s p a t i a l contrasts of the dual economies became more prominent. This i s p a r t i c u l a r l y so because....the a g r i c u l t u r a l population received l i t t l e or no benefits i n the form of Hirschman's ' t r i c k l e down e f f e c t s ' . Instead, contrasts between r u r a l incomes and l e v e l of services and those of the c i t i e s were magnified. Also the spread of education (began to draw) many young and able-bodied c i t i z e n s off the land to urban c e n t r e s . ^ Federal Republic of Nigeria, The Second National Development Plan 1970-74, (Lagos: 1970); Eniola 0. Adeniyi "Regional Planning" i n A Geography of Nigerian Development edited by J.S. Oguntoyinbo, et a l . , (Ibadan: Heinemann Educational Books, 1978), pp. 401-415; Michael Olanrewaju F i l a n i , "Nigeria! The Need to Modify Centre-Down Develop-ment Planning" i n Development from Above or Below? edited by Walter B. Stohr and D.R. Fraser Taylor, (Chichester: John Wiley & Sons, 1981), pp. 283-304. Quoted by M.O. F i l a n i , I b i d . , p. 288. 28 Development planning by Nigerians themselves since the 1960s has gone through three complete cycles (or development plan periods) now and the fourth cycle started i n 1981. By way of contrast to the apparent lack of national objectives and meaningful coordination which character-ized planning during B r i t i s h colonialism, the successive plans i n post-independence Nigeria are o f f i c i a l l y referred to as the National Develop-ment Plans. The F i r s t National Development Plan, 1962-68 was projected to cover a six-year period. However, i t was halted and subsequently t e r -minated by the p o l i t i c a l upheavals that began i n 1966 and p r e c i p i t a t e d the "Nigerian War of Unity""^ or C i v i l War from 1977 to mid-January 1970. The Second National Development Plan, 1970-74 was therefore l a r g e l y a reconstruction plan. As a r e s u l t , vast resources were con-sc i o u s l y directed to those areas where war-induced damages were most extensive. This s i t u a t i o n affected the nature of plan p r o j e c t s . For instance, of the 150 projects i n the i n d u s t r i a l programme, only 55 were new manufacturing projects. The vast majority of them consisted of r e h a b i l i t a t i o n projects, blanket projects (stated as investment i n new industries and f e a s i b i l i t y s t u d i es), cash disbursement projects to states and statutory corporations, i n d u s t r i a l estate development projects and the l i k e . Akin L. Mabogunje, "Geographical Perspective on Nigerian Development" in A Geography of Nigerian Development edited by J.S. Oguntoyinbo et a l . , (Ibadan: Heinemann Educational Books, 1978), p. 3. Central Planning O f f i c e , Second Progress Report on the Second National  Development Plan 1970-74, (Lagos: 1974), p. 62. 29 Further, as a r e s u l t of the immediate p o s t - c i v i l war atmosphere i n which the plan was prepared and launched, many of the new projects were admitted only as project ideas that were subsequently dropped and, rather c o n s i s t e n t l y , the plan featured numerous cases of no n - s p e c i f i c a t i o n of 52 project l o c a t i o n (even by state) f o r Federal i n d u s t r i a l p r o j e c t s . As a r e s u l t of these circumstances, the second progress report which covered the f i r s t three years of the plan (1970-73) but was not completed u n t i l the end of the plan i n 1974, had to admit that most of the genuine (new) projects were, by then, j u s t "approaching the stage at which they normally . 53 should have entered the Development Plan". A large number of them, were, i n f a c t , l a t e r pushed forwards into the Third Plan. The Third Plan covered the period 1975-80 and i t i s so far the one plan that has been implemented under what could be c a l l e d the most " i d e a l " conditions. Even i t s review (monitoring) went through three complete phases, y i e l d i n g a f a t document each time. It was launched i n March 1975 and i n i t i a l l y provided for a public sector expenditure of M 30 b i l l i o n (about US$49.5 b i l l i o n ) , several times the cost of the two pre-vious plans and (with administrative reorganizations i n 1976 — discussed below), t h i s was subsequently revised to N 43.3 b i l l i o n (or about US$71.5 b i l l i o n ) . The i n d u s t r i a l sector projects alone, for instance, covered 78 investment projects d i s t r i b u t e d unevenly throughout the 19 states of the country and ( i n the case of three) some other West A f r i c a n countries. Federal Republic of Nigeria, Second National Development Plan 1970-74, (Lagos: 1970), pp. 146-151. Central Planning O f f i c e , Op. C i t . , (1974), p. 63. 30 Along with other major sectors which apparently had s i g n i f i c a n t regional planning/development implications ( a g r i c u l t u r e , l i v e s t o c k , f o r e s t r y , f i s h e r y , mining and quarrying, manufacturing and c r a f t s , power, commerce and finance, transport, communications, education, health, information, labour, s o c i a l development and sports, water, sewerage, housing, coopera-ti v e s and community development, defence and security and general adminis-tration) , s p e c i f i c a l l o c a t i o n s and programmes were also designed and implemented for regional development. The Fourth National Development Plan, 1981-85 i s c u r r e n t l y i n i t s second year and i t has the same general structure as the Third Plan although the t o t a l projected public c a p i t a l expenditure has r i s e n to N 70.5 b i l l i o n . 5 4 Apart from the planning programmes within the context of the development plans, another l i n e of development which bears c l o s e l y on the emerging a r t i c u l a t i o n of the s o c i o - s p a t i a l 'structure i n Nigeria has been the evolution of the planning u n i t s , t y p i c a l l y the state units but also involving some other u n i t s . The evolution of these units could also be reviewed b r i e f l y . 1.4.2: Evolution of the S p a t i a l Framework for Planning Nigeria operates a f e d e r a l system of government and the component regions/states have t r a d i t i o n a l l y been the p r i n c i p a l subnational units for regional/development planning purposes. I n i t i a l l y (from 1946), there were three highly unequal regions, excluding the Federal T e r r i t o r y Federal Republic of N i g e r i a , Outline of the Fourth National Development  Plan 1981-85, (Lagos: 1981?), p. 18. 31 of Lagos. Apart from wide d i s p a r i t i e s ( i n both areal and population s i z e s ) , each of the three regions represented a d u a l i t y based on ethnic dominance and sub-dominance and the pattern of development turned out to be such that areas occupied by the dominant groups attracted the largest volumes of i n f r a s t r u c t u r a l and other investments. Not s u r p r i s i n g l y , minority protests had started as far back as 1947 and progressively grew louder i n the 1950s. The minority pressure for some measure of autonomy was, however, r e s i s t e d by the dominant groups for as long as p o s s i b l e . This pressure was an important remote cause of the C i v i l War (1967-70), the experience of which has demonstrated that true unity could exist only when most of the country's constituent ethnic units f e e l that they have a voice i n the country's administration and a stake i n i t s continued existence as a p o l i t y . Thus, a process of more state creation was grudgingly started i n 1963 by the creation of the mid-West to r a i s e the number of r e g i o n a l / state units to four. But serious-minded r e s t r u c t u r i n g of i n t e r n a l u n i t s a c t u a l l y began i n 1967 when the number of states was raised to 12, and continued i n 1976 when the number rose to the present 19. Even now, pressures for more states continues and although i t i s often thought that two or three more states might s t i l l be created, the true u s e f u l -ness of the state-creation exercise has come close to i t s saturation p o i n t . S e e Figure 1 and Table 1. Akin L. Mabogunje, Op. C i t . , (1978), p. 3; Brian Smith, "Federal-State Relations i n Nigeria", A f r i c a n A f f a i r s , V o l . 80, No. 320, July 1981, pp. 355-378; David Ruddel, " F u l l Stream Ahead?" West  A f r i c a , No. 3380, 17 May 1982, pp. 1312-1313. 32 33 TABLE 1: Nigerian regions and states (1963-76): r e l a t i o n s h i p s and population s i z e s . Estimated Regions, 1966 States, 1967 States, 1976 Population ('000) Northern North East Borno 2,990 Bauchi 2,193 Gongola 3,002 North West Niger 1,271 Sokoto 4,538 Benue-Plateau Benue 3,041 Plateau 2,026 Kano Kano 5,774 Kwara Kwara 2,309 North Central Kaduna 4,098 Western West Ogun 1,557 Ondo 2,272 Oyo 5,158 Lagos Lagos 1,443 Mid-West Mid-West Bendel 2,435 Eastern South East Cross River 3,600 Rivers Rivers 1,800 East Central Imo 3,280 Anambra 2,943 Source: Federal M i n i s t r y of Information, Federal M i l i t a r y Government  Views on the Report of the Panel on the Creation of States (Lagos, 1976). 34 The s i g n i f i c a n c e of the administrative reorganizations i s not only that they have provided a firm basis for s t a b i l i t y i n the country (since no s i n g l e unit i s now large or strong enough to cause s i g n i f i c a n t unrest alone and since greater f e e l i n g s of p a r t i c i p a t o r y belonging have thus emerged) but also that i t has created far-reaching implications f o r the s p a t i a l structure of development by (1) making the state c a p i t a l s new regional f o c i of growth and developmental investment spread rather evenly across the nationa l t e r r i t o r y and thus becoming a l t e r n a t i v e centres of a t t r a c t i o n for the endless process of rural-urban migration; and (2) rather by default, making the state units themselves the incr e a s i n g l y competitive u n i t s which function as the framework for nationa l development planning. In f a c t , i t could be said that the greatest s i n g l e event which has affected the pattern of urban development i n the country more than any others has been the creation of states. Below the basic structure of the states and t h e i r c a p i t a l s i s also the lower stratum of medium- and small-sized urban centres which, as headquarters of the 320 l o c a l government units i n the country perform l o c a l - a d m i n i s t r a t i v e and other functions, while the l o c a l government units themselves form the s p a t i a l framework for programming development/planning investments at the state l e v e l , another layer of the centre-down planning o r i e n t a t i o n . The t h i r d and f i n a l form of s p a t i a l planning units i n the country consists of the 11 r i v e r basin development a u t h o r i t i e s established i n mid-1976, with boundaries overlapping the a d m i n i s t r a t i v e - s p a t i a l s t r u c -ture and performing functions connected with various aspects of water resources development and management (flood and erosion, i r r i g a t i o n for l i v e s t o c k and crop production, construction and maintenance of dams, dykes 35 as well as wells and boreholes for r u r a l and urban water supply, p o l l u -56 t l o n , and resettlement of persons affected by these). In view of the nature of t h i s study, however, i t i s more meaningful to use only the 19-state structure of the country as s p a t i a l framework at appropriate points. 1.4.3: The Objectives of Planning Since the 1960s, Nigeria has adopted the Keynesian type of macro-economic planning strategy, the four- or five-year plans being one of the manifestations and the major c h a r a c t e r i s t i c being s i g n i f i c a n t r e l i a n c e on "monetary and f i s c a l p o l i c i e s to generate the appropriate stream of t o t a l spending so as to assure steady growth with f u l l employ-ment and no i n f l a t i o n " . " ^ Each of the National Development Plans (NDP) has had s p e c i f i c objectives i n terms of stated targets of growth i n Gross Domestic Pro-duct, savings and reinvestment, and the expansion of diverse s o c i a l s ervices. These s p e c i f i c objectives have been u s u a l l y juxtaposed with some more fundamental and p h i l o s o p h i c a l objectives as to how the socio-economic system should evolve, both i n t e r p e r s o n a l l y and s p a t i a l l y ; that i s , r a i s i n g the issues of e f f i c i e n c y on the one hand and equity on the other. P r i o r to the 1970s, the process of planning which was dominantly s e c t o r a l tended to favour the e f f i c i e n c y perspective, regardless of what 'J.O. Ayoade and B.L. Oyebande, "Water Resources" i n A Geography of  Nigerian Development edited by J.S. Oguntoyinbo, ;et a l . , (Ibadan: Heinemann Educational Books, 1978), pp. 53-55. Akin L. Mabogunje, 1977, quoted by M.O. F i l a n i , (1981), p. 289. 36 the stated p h i l o s o p h i c a l objectives of the plans were. For one thing, attempts at development planning and the functioning of related i n s t i t u -tions i n c o l o n i a l Nigeria were concerned, not s i g n i f i c a n t l y with c o n s i -derations of equity or d i s t r i b u t i v e j u s t i v e but rather with getting growth started at any point i n space where current perceptions indicated that development could most r e a d i l y occur by the a p p l i c a t i o n of whatever public resources were a v a i l a b l e . That a t t i t u d e , with i t s underlying p r i n c i p l e of e f f i c i e n c y , favoured r e l a t i v e l y a t t r a c t i v e areas. A good i l l u s t r a t i o n i s provided by the Federal Loans Board (FLB), a c e n t r a l i n d u s t r i a l finance i n s t i t u t i o n created during the "Economic Development Plan" of 1955-60-62 whose j u r i s d i c t i o n was l e g a l l y r e s t r i c t e d i n space mainly to areas i n , and within a ten-mile radius of the boundaries of, the Federal T e r r i t o r y of Lagos for the f i r s t f i v e years of i t s eight-year period of existence, 1956-1964. The enactment of an Act removing the s p a t i a l l y r e s t r i c t i n g clause from the laws governing FLB i n 1961 and the expressed government desire for the "achievement of a more equitable d i s t r i b u t i o n of income both 58 among people and among regions", a year l a t e r , r e f l e c t e d the i n c i p i e n t emergence of the equity p r i n c i p l e i n o f f i c i a l public thinking. However, the enunciation and a p p l i c a t i o n of the p r i n c i p l e was s t i l l so r e l a t i v e l y weak that government l o c a t i o n a l p o l i c y i n i n d u s t r i a l matters, for instance, continued to be fundamentally e f f i c i e n c y - o r i e n t e d , s t r e s s i n g Federal M i n i s t r y of Economic Development, F i r s t National Development  Plan, 1962-68, (Lagos: 1962), p. 23; see also the review i n J. Ola. Akintola-Arikawe, "The Equity P r i n c i p l e and Central Plan A l l o c a t i o n i n the Manufacturing Sector: The Nigerian Third National Development Plan", The Nigerian Journal of Economic and S o c i a l Studies, V o l . 22, No. 1, March 1980 ( s t i l l forthcoming). 37 that federal and state-government sponsored industries should be located purely on the basis of economic considerations, less developed areas 59 receiving only marginal concerns i n the provision of incentives. However, the p o l i t i c a l upheavals of the mid-1960s and the sub-sequent C i v i l War produced a d i v e r s i t y of experiences which have trans-formed the equity p r i n c i p l e into the more dominant s o c i a l philosophy of public action i n N i g e r i a . The second NDP which immediately followed the C i v i l War provided a rethinking which a r t i c u l a t e l y i n s t a l l e d a number of ultimate objectives f or planning i n the country. These ultimate objec-60 ti v e s are the firm establishment of Nigeria as: (1) a united, strong and s e l f - r e l i a n t nation; ( i i ) a great and dynamic economy; ( i i i ) a j u s t and e g a l i t a r i a n society; (iv) a land of bright and f u l l opportunities f or a l l c i t i z e n s ; and (v) a free and democratic society. The Second NDP elaborated the equity p r i n c i p l e underlying these objectives with a touch of moralizing and sober solemnity. It was observed, for instance, t h a t : ^ An important element of s o c i a l j u s t i c e for nation a l i n t e g r a t i o n i s the worthy objective of balanced development as between d i f f e r e n t geographical areas of the country. The reduction of e x i s t i n g d i s p a r i t i e s must be pursued openly, although t h i s cannot be accomplished at the cost of stagnation i n areas which ^ F e d e r a l M i n i s t r y of Information, I n d u s t r i a l Directory, 6th E d i t i o n , (Lagos: 1971), p. 80. ^ F e d e r a l Republic of Nigeria, The Second National Development Plan  1970-74, (Lagos: 1970), p. 32. ^ F e d e r a l Republic of Nigeria, I b i d . , p. 34. 38 are presumed to be r e l a t i v e l y more developed... The objective i s to move r a p i d l y to the achievement of a minimum economic and s o c i a l standard for every part of the country. Again, at the beginning of the Third National Development Plan (1975-80), the nation was strongly and almost threateningly reminded that "A s i t u a t i o n where some parts of the country are experiencing rapid economic growth while other parts are lagging behind can no longer be 62 t o l e r a t e d " . And the i n c l u s i o n , among the "overriding aim" of develop-ment e f f o r t i n the fourth NDP, of the objective of achieving "better balance i n the development of the d i f f e r e n t sectors of the economy and 63 the various geographical areas of the country" indicates the continued 62 Federal Republic of N i g e r i a , Third National Development Plan 1975-80, (Lagos: 1975), V o l . 1, p. 30. 63 Other objectives i n t h i s "reworking: of "overriding aim" are: (a) Increase i n the r e a l income of the average c i t i z e n ; (b) More even d i s t r i b u t i o n of income among i n d i v i d u a l s and socio-economic groups; (c) Reduction i n the l e v e l of unemployment and under-employment; (d) Increase i n the supply of s k i l l e d manpower; (e) Reduction of the dependence of the economy on a narrow range of a c t i v i t i e s ; (f) Increased p a r t i c i p a t i o n by c i t i z e n s i n the ownership and manage-ment of productive enterprises; (g) Greater s e l f - r e l i a n c e , that i s , increased dependence on our own resources i n seeking to achieve the various objectives of society. This also implies increased e f f o r t s to achieve optimum u t i l i s a -t i o n of our human and material resources; (h) Development of technology; ( i ) Increased p r o d u c t i v i t y ; (j) The promotion of a new national o r i e n t a t i o n conducive to greater d i s c i p l i n e , better a t t i t u d e to work and cleaner environment: Federal Republic of N i g e r i a , Outline of the Fourth National  Development Plan 1981-85, (Lagos: Federal M i n i s t r y of Planning, •1981?), p. 5. 39 preservation of the equity p r i n c i p l e i n the philosophy of Nigerian public planning. It could be added that, i n the Nigerian context, the i d e a l concep-t i o n of the equity p r i n c i p l e i s comprehensive, involving l e s s uneven d i s t r i b u t i o n of investments (to the extent possible) among a l l h i e r a r c h i -c a l l y structured l e v e l s of s p a t i a l organization. That i s , investment l o c a t i o n by the c e n t r a l or f e d e r a l government i s expected to r e f l e c t equitable d i s t r i b u t i o n among the states; and investment l o c a t i o n by state governments within t h e i r areas of j u r i s d i c t i o n should s i m i l a r l y r e f l e c t equity considerations i n r e l a t i o n to the component l o c a l government areas. Further, i n view of the range of concerns encapsulated i n the statement of overriding objectives i n the fourth (most recent and current) plan, 1981-85, i t would seem that the p h i l o s o p h i c a l basis of Nigerian planning remains incrementally dynamic, changing to accommodate or con-front more s e r i o u s l y a d d i t i o n a l or s p e c i f i c aspects of e x i s t i n g issues (such as r e a l income of the average c i t i z e n s , interpersonal and i n t e r -group income, s e c t o r a l d i v e r s i f i c a t i o n , s e l f - r e l i a n c e , i n t e r n a l technology and p r o d u c t i v i t y promotion, s o c i e t a l d i s c i p l i n e and environmental (clean-l i n e s s ) as they emerge. F i n a l l y , mere statement of objectives does not mean r e a l i z a t i o n of those objectives. However, problem so l u t i o n begins with i t s recogni-t i o n and assessment. In any event, i t would require numerous studies to v e r i f y how much actual regional/development planning achievements c o i n -cide with desired accomplishments i n Nigeria (as elsewhere). One of the Federal Republic of N i g e r i a , Federal M i l i t a r y Government Views on the  Report of the Panel on Creation of States, (Lagos: 1976), p. 19. 40 objectives for t h i s study, as e a r l i e r stated, i s to examine how much the objective of s p a t i a l l y balanced development i s r e f l e c t e d in the opera-tions of a major public i n s t i t u t i o n functioning i n the i n d u s t r i a l sector of the economy. 1.4.4: The Economy: An Overview Nigeria's per capita GDP i n 1980 current prices has been estimated at N 5.68 ( U S $ 9 3 7 ) . N o t only does t h i s r e l a t i v e l y low f i g u r e conceal wide v a r i a t i o n s ; i t does not, i n any event, t e l l much about the economy. However, an examination of the components of the country's GDP and the r e l a t i v e contributions and changes i n the performance of the major sectors (including manufacturing) would be more revealing. Generally, the o v e r a l l GDP has grown from N 2,247 .4 m i l l i o n i n the 1960/61 f i n a n c i a l year to N 14,655.0 m i l l i o n i n 1975/76 (Table 2). Although the e f f e c t of the C i v i l War i s noticeable i n the negative growth rates i n the l a s t two years of the 1960s, the growth rates of t o t a l GDP i n the:"'16-year period for which there are data has been s t e a d i l y upwards and became s t r i k i n g l y impressive from 1970 onwards (Figure 2 ) . The o v e r a l l upward surge i n GDP at the beginning of the 1970s i s a t t r i b u t a b l e to the r i s e of petroleum to prominence i n the Nigerian economy. T r a d i t i o n a l l y , a g r i c u l t u r e and a l l i e d primary a c t i v i t i e s had accounted for the bulk of Nigeria's GDP but the r e l a t i v e contribution of the a g r i c u l t u r a l sector had declined s t e a d i l y from about 63 per cent i n 1960 to about 28 per cent i n 1976 (Figure 3). On the other hand, the Federal Republic of N i g e r i a , Outline of the Fourth National Development  Plan 1981-85, (Lagos: 1981?). 41 TABLE 2: Growth of the Nigerian GDP and manufacturing (at current factor cost) 1960/61 to 1975/76. GDP Contribution of Manufacturing Year Amount Change Amount As % of Change N m i l l i o n % M m i l l i o n GDP % 1960/61 2,247.4 107.6 4.8 1961/62 2,359.6 +5.0 123.4 5.2 +0.4 1962/63 2,597.1 +10.1 146.4 5.6 +0.4 1963/64 2,745.8 ' +5.7 163.0 5.9 +0.3 1964/65 2,894.4 +5.4 173.6 6.0 +0.1 1965/66 3,110.0 +7.4 214.6 6.9 +0.9 1966/67 3,374.8 +8.5 233.0 6.9 0.0 1967/68 2,752.6 -18.4 194.2 7.1 +0.2 1968/69 2,656.2 -3.5 198.6 7.5 +0.4 1969/70 3,549.3 +33.6 281.8 7.9 +0.4 1970/71 5,205.1 +46.7 378.4 7.3 -0.6 1971/72 6,570.7 +26.2 415.8 6.3 -1.0 1972/73 7,208.3 +9.7 511.5 7.1 +1.2 1973/74 8,482.6 +17.7 662.4 7.8 +0.7 1974/75 13,915.1 +64.0 911.2 6.6 -1.2 1975/76 14,655.0 :+5.3 1,168.7 8.0 +1.4 Notes: (1) F i n a n c i a l years to which data pertain s t a r t on the 1st of A p r i l of the one year and end on March 31st the following year. Source: Federal O f f i c e of S t a t i s t i c s , Federal Republic of Ni g e r i a : National Accounts of Nigeria 1960-61 to 1975-76, (Lagos: 1978), pp. 3-6. Source: Table 2 44 contribution of the petroleum/mining sector exceeded that of a g r i c u l t u r e for the f i r s t time i n the 1974/75 year and has maintained i t s lead since then. Apart from the petroleum and a g r i c u l t u r a l sectors, the other three of the f i v e largest contributors to GDP ( d i s t r i b u t i v e trade, manufacturing and b u i l d i n g and construction, i n that order) have maintained a slow and even unsteady growth (Figure 3). The sector of immediate attention i n t h i s study, manufacturing, has been p a r t i c u l a r l y sluggish i n the growth of i t s contribution to GDP (Table 1 and Figure 1). While i t s contribution has ranged between about 5 to 8 per cent and has generally increased with GDP, i t s annual rate of increase (change) has been generally below 1 per cent. The swamping e f f e c t of the petroleum sector on the annual growth rate of the sector's contribution i s r e f l e c t e d i n the negative growth/change rates i n 1971, 1972 and 1975, years i n which the absolute money values of industry's contributions continued to increase. And although the o v e r a l l c o n t r i -bution of the sector to GDP reached 11.7 per cent i n the 1976/77 year, i t s e r r a t i c and swamped r o l e had been depressed to an estimated 9 per cent l e v e l i n 1981 (again, despite a continued increase i n absolute s 66 The manufacturing sector has simply been unable to c o n t r i b u t i o n ) . keep up with the "domineering" petroleum sector. However, despite i t s contextually unimpressive r o l e , the manufac-turing sector has always received s p e c i a l encouragement i n Nigeria's development planning p o l i c y and that encouragement i s l i k e l y to con-tinue for a long time to come. 6 6 Central Planning O f f i c e , Second Progress Report on the Third National  Development Plan 1975-80, (Lagos: 1979?), pp. 17-18; Federal Republic of N i g e r i a , Outline of the Fourth National Development Plan 1981-85, (Lagos: 1981?), p. 11. 45 1.4.5: I n d u s t r i a l Development P o l i c y and Tools There i s hardly any other sector of the economy which Nigerian developmental p o l i c y has promoted as conscientiously as manufacturing. Among the twelve sub-sectors i n the "economic sector" of the Third Plan, for instance, manufacturing accounted for the second highest a l l o c a t i o n of 22.3 per cent (a f t e r transportation's 35 per cent, a r e f l e c t i o n of the bottleneck which i t s d e f i c i e n c i e s constituted for i n d u s t r i a l and other a c t i v i t i e s ) . Thus, the Third Plan not only indicated "govern-ment's determination (to create) a sound i n d u s t r i a l base for the long-term growth of the economy"\^ i t also elaborated various adjustments i n e x i s t i n g i n s t i t u t i o n a l , administrative and l e g a l arrangements to 68 give e f f e c t to "A New I n d u s t r i a l Charter". Table 3 summarizes the programme of i n d u s t r i a l projects d i r e c t l y undertaken by the Central Government during the plan period. S i m i l a r l y , noting that "Manufacturing i s one of the high p r i o r i t y sectors to which great e f f o r t w i l l be devoted (and reasoning that) manufacturing o f f e r s the greatest prospect for a rapid development and transformation of the economy", government's i n d u s t r i a l p o l i c y i n the Fourth Plan continues to emphasize encouragement of "the maximum growth 69 of investment and output...". Federal Republic of Nigeria, Third National Development Plan 1975-80, (Lagos: Central Planning O f f i c e , 1975), p. 147. Federal Republic of Niger i a , Ibid., pp. 153-156. Federal Republic of Nigeria, Outline of the Fourth National Develop- ment Plan 1981-85, (Lagos: Federal M i n i s t r y of Planning, 1981?), p. 35. 46 TABLE 3: Categories of Federal I n d u s t r i a l Projects i n the Third Plan. Category Number Category Description No. of Proj ects A l l o c a t i o n s Amount (M m i l l i o n ) Percen-tage I.".. Genuine I n d u s t r i a l Pro-j e c t s for Federal Govt. Execution 61 5,532.614 91.14 I I . Projects f o r which Federal Govt, provides funds but l e f t to states for imple-mentation 2 80.000 1.32 I I I . Projects r e l a t e d to I n d u s t r i a l development i n s t i t u t i o n s , f a c i l i t i e s and i n f r a s t r u c t u r e 9 400.960 6.60 IV. Study Projects 3 10.000 0.16 V. International Projects sponsored by Nigeria but not located i n Nigeria 3 47,200 0.78 TOTAL 78 6,070.774 100.00 Note: The t o t a l a l l o c a t i o n of 86,070.774 m i l l i o n on t h i s table d i f f e r s from the t o t a l federal i n i t i a l a l l o c a t i o n to manufacturing and c r a f t s (N5,055.5 m i l l i o n ) because of plan d i s t o r t i o n s (en route addition of p r o j e c t s ) : See Central Planning O f f i c e , Second  Progress Report on the Third National Development Plan 1975-80 (Lagos: 1978?), p. 226. Sources: Computed from Central Planning O f f i c e , Third National Develop- ment Plan 1975-80 Revised Volume I I , (Lagos: 1976?, pp. 222-226; Third Progress Report on the Third National Development Plan  1975-80 (Lagos: 1979), d r a f t . 47 It i s appropriate to r e c a l l that the basic developmental p o l i c y since the 1950s has been to gradually reduce dependence on foreign manufactures and to encourage domestic processing, notably along the l i n e s of import s u b s t i t u t i o n . And although the tendency ( p a r t i c u l a r l y ) since the Third Plan has been increasingly towards p a r t i c i p a t o r y public involvement, the fundamental approach remains that of providing a con-genial and supportive s e t t i n g for private enterprise, mixed with govern-mental p a r t i c i p a t i o n i n the d i r e c t l y productive sector of the economy.^ The term "Nurture-capitalism" has been used to describe t h i s approach " i n which private enterprise i s expected to provide the development thrust i n the d i r e c t l y productive sector..., i n which i t i s considered necessary for government to strengthen development by nurturing the c a p i t a l i s t sector generally, and i n which government... (now) favours , j. . . . .•• „ 71 indigenous enterprise i n p a r t i c u l a r . . . . The diverse tools for implementing t h i s p o l i c y i n the i n d u s t r i a l sector could be grouped into two broad classes, i n d i r e c t and d i r e c t . The i n d i r e c t p o l i c y programmes or instruments include the incentive l e g i s l a t i o n s of the l a t e 1950s (and t h e i r modifications since then) which provide for tax and import duty r e l i e f as well as for t a r i f f protection. They also include t e c h n i c a l and commercial advice and government purchase 72 programmes. ^ P e t e r K i l b y , I n d u s t r i a l i z a t i o n i n an Open Economy: Ni g e r i a 1945-66, (London: Cambridge University Press, 1969), pp. 53-154. ^ S a y r e P. Schatz, Nigerian Capitalism,.(Berkeley: University of C a l i f o r n i a Press, 1977), p. i x . 72 Federal M i n i s t r y of Information, I n d u s t r i a l Directory, 6th e d i t i o n , (Lagos: 1971), pp. 79-81; Nigerian Investment Information and Promotion Centre, Federal Ministry of Industries, I n d u s t r i a l Directory, 8th e d i t i o n , (Lagos: 1980), pp. 238-239; Manfred Berger, I n d u s t r i a l i z a t i o n P o l i c i e s  i n N i g e r i a , (Munchen: Weltforum Verlag, 1975). 48 On the other hand, the d i r e c t p o l i c y involvements are those which have necessitated the creation of public development i n s t i t u t i o n s whose reason for existence i s to make loans a v a i l a b l e to entrepreneural bodies (companies and i n d i v i d u a l s ) and to invest funds d i r e c t l y i n appropriate 73 projects. The creation of i n d u s t r i a l estates (parks) designed to circumvent the problems of f i n d i n g s u i t a b l e plots of land on which to locate production units or establishments could also be included i n the category of d i r e c t public p o l i c y . It would be apparent that the i n s t i t u t i o n concerned herein (NIDB) constitutes part of the d i r e c t p o l i c y instruments for i n d u s t r i a l develop-ment i n the country. It should also be said that research work on Nigerian i n d u s t r i a l i -zation and regional development matters have so far not been s i g n i f i c a n t l y concerned with the basic issues addressed i n t h i s study. This i s borne out by the b r i e f review which now follows. 1.5: The Status of Research on Nigerian Manufacturing and Regional  Development The r e l a t i v e l y few s i g n i f i c a n t works on Nigeria which have some relevance to the subject here could be viewed as f a l l i n g into three categories: general works on i n d u s t r i a l i z a t i o n or manufacturing, studies related to elements of i n d i r e c t public p o l i c y , and those which, i n some way, deal with d i r e c t p o l i c y instruments. See for example, Federal Republic of N i g e r i a , Second National Develop- ment Plan 1970-74, (Lagos: Federal Government P r i n t e r , 1970), pp. 15-16. 49 Major works dealing e x p l i c i t l y with manufacturing i n Nigeria have been few. Sokolski published h i s book on Nigerian manufacturing i n 1965. As an economic study, Sokolski's work has considerable s t r u c t u r a l d e t a i l but attention to s p a t i a l / r e g i o n a l development issues i s highly l i m i t e d . Further, although Sokolski properly i d e n t i f i e s the providers of finance for manufacturing as foreign investors, private Nigerian investors and Nigerian (Federal and State) governments or the p u b l i c , he makes no attempt to i n d i c a t e the s i g n i f i c a n c e of any of these, the i n s t i t u t i o n a l mechanisms for t h e i r involvement or t h e i r d i f f e r e n t i a l impacts i n terms of regional and human welfare. One study which has consciously attempted to provide analysis of the magnitude and, to some extent, the s p a t i a l pattern of manufacturing 75 r e s u l t i n g from a c l a s s of investors i s that by Hakam. Even then, Hakam's study was based on a sample survey of 68 firms and while i t c l e a r l y revealed the motivations of foreign private investors, i t was not concerned with regional development issues nor the r e l a t e d issues of public p o l i c y . Further, although Aboyade's Foundations of an A f r i c a n Economy^ deals with investments, i t s coverage i s all-encompassing: i t includes a l l types of investment (not j u s t i n manufacturing alone) and other 'Alan Sokolski, The Establishment of Manufacturing i n N i g e r i a , (New York: Frederick A. Praeger, Publishers, 1965). A.N. Hakam, "The Motivation to Invest and the Locational Pattern of Foreign Private I n d u s t r i a l Investment i n N i g e r i a , " Nigerian Journal  of Social and Economic Studies, 8(1966):49-65. 'o. Aboyade, Foundations of an A f r i c a n Economy, (New York: Frederick Praeger, Publishers, 1966). 50 aspects of national economy. In f a c t , one basic feature of the various studies c a r r i e d out by economists on Nigerian manufacturing i s the fact that they deal with Nigeria as a single u n i t ; they are not p r i m a r i l y concerned with i n t e r r e g i o n a l v a r i a t i o n s and the regional development implications of the quantities they describe. These remarks also apply 77 78 to the works of K i l b y and H e l l e i n e r . Mabogunje's 1971 a r t i c l e enumerates four factors accounting for the impressive growth rate (15-17 per cent per annum) of the manufac-turing sector i n N i g e r i a at the time: the large s i z e of the country and i t s population; the d i v e r s i t y and abundance of natural resources; the existence of a r e l a t i v e l y well developed i n f r a s t r u c t u r e ; and public 79 p o l i c i e s and programs. However, although Mabogunje mentioned governmental p o l i c y as one of the important factors i n e x p l i c a t i n g i n d u s t r i a l growth i n N i g e r i a , the focus of his a r t i c l e was not directed at that point at a l l . There are three other s i g n i f i c a n t works on Nigerian manufacturing i n general. Schatzl's 1973 study of Nigerian i n d u s t r i a l i z a t i o n c l e a r l y has a s p a t i a l perspective (as i t s t i t l e suggests) and although i t makes mention of relevant p u b l i c - p o l i c y instruments, i t does not attempt to e s t a b l i s h / t r a c e l i n k s between any of the p o l i c i e s , the i n d u s t r i a l i z a t i o n Peter Kil b y , I n d u s t r i a l i z a t i o n i n an Open Economy: Nigeria 1945-66, (London: Cambridge University Press, 1969). ^Gerald K. H e l l e i n e r , Peasant A g r i c u l t u r e , Government and Economic  Growth i n Ni g e r i a , (Homewood, I l l i n o i s : Richard.D. Irwin, Inc., 1966). ^Akin L. Mabogunje, "Changes i n Socio-Economic and C u l t u r a l Patterns Caused by the I n d u s t r i a l i z a t i o n of N i g e r i a : A Regional D i f f e r e n t i a t i o n . " Department of Geography, Un i v e r s i t y of Ibadan, N i g e r i a , 1971 (Mimeographed). 51 80 process, or issues of d i f f e r e n t i a l regional development. The same i s 81 true of the more recent work edited by Teriba and Kayode which, i n any event and i n s p i t e of i n t e g r a t i v e " i n - f i l l i n g " by the e d i t o r s , i s a c o l l e c t i o n of d i f f e r e n t a r t i c l e s reprinted l a r g e l y from The Nigerian Journal of Economic and S o c i a l Studies. The l a s t general study by D.B. 82 Thomas deals with important issues i n i t s own sphere ( c a p i t a l accumula-t i o n and technology t r a n s f e r ) , but i t i s b a s i c a l l y a s t r u c t u r a l study whose implications for regional development are at best latent and c e r t a i n l y not e x p l i c i t . 83 Both Aluko and Asiodu c a r r i e d out studies on " i n d i r e c t " public p o l i c y i n 1967. The two studies are i d e n t i c a l i n purpose, focussing e s s e n t i a l l y on incentive l e g i s l a t i o n s . However, t h e i r conclusions are contradictory: while Aluko's more thorough work indicates that i n d i r e c t public p o l i c y has not been s i g n i f i c a n t l y important i n promoting manufac-turing i n N i g e r i a , Asiodu's paper claims the reverse. As puzzling as t h i s may be, the point of i n t e r e s t here i s that they were not concerned with any d i r e c t p o l i c y instrument or issues with d i r e c t implications for regional development. The same i s true for Berger's book-length study 80 L. Schatzl, I n d u s t r i a l i z a t i o n i n N i g e r i a : A S p a t i a l A n a l y s i s , (Munchen: Weltforum Verlag, 1973)." 81 0. Teriba and M.O. Kayode, e d i t o r s , I n d u s t r i a l Development i n N i g e r i a , (Ibadan: Ibadan University Press, 1977). 82 D. Babatunde Thomas, Ca p i t a l Accumulation and Technology Transfer: A Comparative Analysis of Nigerian Manufacturing Industries, (New York: Praeger Publishers, Inc., 1975). 83 S.A. Aluko, F i s c a l Incentives for I n d u s t r i a l Development i n N i g e r i a , (Dept. of Economics, Uni v e r s i t y of Ife, May 1967); P.C. Asiodu, " I n d u s t r i a l P o l i c y and Incentives i n N i g e r i a . " The Nigerian Journal  of S o c i a l and Economic Studies IX (No. 2 1967), 161-174. 52 of 1975. 8 4 Schatz's book, Development Bank Lending i n Nige r i a , should be mentioned here, i f for no other reason than that i t deals with one of the e a r l i e r public lending i n s t i t u t i o n s i n Nig e r i a , namely, the Federal Loans 85 Board (FLB) . The book i s b a s i c a l l y an i n s t i t u t i o n a l study with almost the whole of i t s 119 textual pages devoted to h i s t o r i c a l comments and a p p l i c a t i o n appraisal procedures. L i k e Schatz's other book dealing with 8 6 other public lending i n s t i t u t i o n s i n N i g e r i a , i t i s not calculated to reveal the kinds of r e l a t i o n s h i p involved i n t h i s project although i t contains u s e f u l information of a (now) h i s t o r i c a l or perspective-setting nature. In fact the only study which has l a r g e l y shared the o r i e n t a t i o n taken i n t h i s study ( e s s e n t i a l l y e s t a b l i s h i n g some l i n k s between i n s t i t u -t i o n a l instruments of d i r e c t public p o l i c y and regional development structures) i s an e a r l i e r work dealing only with the southwestern portion of N i g e r i a and the c o l l e c t i v e r o l e of the FLB., NIDB, the Western N i g e r i a 87 Development Corporation and the Western Nigeria Finance Corporation. Manfred Berger, I n d u s t r i a l i z a t i o n P o l i c i e s i n Nig e r i a , (Munchen: Weltforum Verlag, 1975). 'S.P. Schatz, Development Bank Lending i n N i g e r i a : The Federal Loans  Board (Ibadan: Oxford University Press, 1964). S.P. Schatz, Economics, P o l i t i c s and Administration i n Government Lending (Ibadan: Oxford University Press, 1970). J.O. A k i n t o l a , "Direct Public I n d u s t r i a l Investment and the Goal of Even Development: The Southwestern Nigerian Experience (1956-1971)", The Nigerian Geographical Journal, Vol. 21, No. 2, 1978, pp. 133-151, see also, J. Ola. Akintola-Arikawe, Manufacturing and Direct Public  P o l i c y i n Southwestern Nigeria (1956-1971): A Spatio-Temporal A n a l y s i s , Ibadan: Nigerian I n s t i t u t e of Social and Economic Research, 1979 (yet forthcoming). 53 Apart from t h i s , there has been, to my knowledge, no concerted study of NIDB i n any form and whatever impact i t s a c t i v i t i e s might have had on Nigerian i n d u s t r i a l development, either n a t i o n a l l y i n a generalized framework or r e g i o n a l l y i n respect of the country's component socio-p o l i t i c a l u n i t s . And that i s i n sp i t e of the wide recognition of NIDB as the most s i g n i f i c a n t development i n s t i t u t i o n N igeria has ever had. In f a c t , the r a t i o n a l e of the endeavour here has a sequential l o g i c related to the perceived gaps i n e x i s t i n g s c h o l a r l y works. Plan-ning i s e s s e n t i a l l y a delib e r a t e action directed at influencing a system i n a desired d i r e c t i o n even when i t i s r e a l i z e d that the hoped-for r e s u l t s may take some time to m a t e r i a l i z e . Influencing change i n a system such as an economic system or a broad sector of i t may require many p o l i c y tools being applied simultaneously or i n d i f f e r e n t combinations and with some time horizons considered appropriate to a given context, as well as with a s t r a t e g i c preparedness to vary the t o o l combinations and/or timing of t h e i r a p p l i c a t i o n as the need i s perceived e'iv route. Whatever t o o l i s involved, i t s i n t e l l i g e n t a p p l i c a t i o n requires an understanding of the associated processes i n order to d i r e c t i t s use more e f f e c t i v e l y towards the desired ends. It i s t h i s r a t i o n a l e which provides the impetus f o r t h i s study involving the impact of NIDB's financing a c t i v i t y on the pattern of Nigerian i n d u s t r i a l development, e s p e c i a l l y i n respect of i t s regional development implications and the related p o l i c y environ-ment . 1.6: Restatement of Objectives and Data Considerations 1.6.1: Restatement of Objectives As indicated e a r l i e r , the aim of t h i s study i s to analyze the cr e d i t a c t i v i t i e s of NIDB, a ce n t r a l public development-finance i n s t i t u t i o n 54 which operates p r i m a r i l y i n the f i e l d of industry or manufacturing i n Nige r i a , over the period 1964 to 1980 with two primary objectives: (a) ascertaining the degree to which NIDB's c r e d i t a c t i v i t i e s have contributed to Nigerian i n d u s t r i a l development generally; and (b) e l i c i t i n g the extent to which i t s c r e d i t a c t i v i t i e s have contributed to or (hopefully) mitigated the e s s e n t i a l l y polarized pattern of i n d u s t r i a l development i n N i g e r i a . Of course, i t i s hoped that from the analyses i t would be possible to e l i c i t appropriate p o l i c y implications and suggestions for improving centrally-induced i n d u s t r i a l development strategies i n N i g e r i a . While the f i r s t objective i s r e l a t i v e l y straightforward, the second objective concerned with reducing d i s p a r i t i e s i n the regional/ s p a t i a l pattern of i n d u s t r i a l development c a l l s for c l a r i f y i n g remarks i n three respects. F i r s t , expressions of concern to reduce d i s p a r i t y i n the s p a t i a l incidence of development i s commonplace but despite public-led 'efforts to induce convergence, s p a t i a l divergence or d i s p a r i t y s t i l l remains the normal pattern i n p r a c t i c a l l y every country. The implica-t i o n i s that although e f f o r t s at inducing convergence need not there-fore be abandoned, the inducement of convergence could only be a slow process and r e s u l t s achieved would vary with each country's circumstances. Secondly, there i s no agreement i n the t h e o r e t i c a l l i t e r a t u r e e s p e c i a l l y as to the timing of e g a l i t a r i a n p o l i c i e s aimed at reducing developmental imbalance. For example, Lefeber has concluded i n r e l a t i o n - t , 88 to India that: D. Lefeber, "Regional A l l o c a t i o n of Resources i n India" i n Regional  Development and Planning: A Reader edited by John Friedmann and W. Alonso, (Cambridge: The M.I.T. Press, 1964), pp--652-653. 55 the process of economic development i n i t s geographical s e t t i n g requires growth at d i f f e r e n t rates i n d i f f e r e n t areas, (and) attempts to i n d u s t r i a l i z e retarded regions ahead of time and at the cost of slowing down the growth of more vigorous areas must ne c e s s a r i l y put o f f the date of bringing r e l i e f to the former. Hirschman seems to take the same view i n his observation that con-centration i s t y p i c a l i n the take-off stage of development and that 89 equalization p o l i c i e s could be i n i t i a t e d as an economy a t t a i n s maturity. On the other hand, Alonso has noted that whatever the argument for the e f f i c i e n c y (optimizing) goal and the r e s u l t i n g s p a t i a l p o l a r i z a t i o n or concentration of development, such a p o l i c y might not be advisable for a developing country because of "the r e a l i t i e s of p o l i t i c a l pressures 90 and the equally r e a l a l t r u i s t i c desire among many for early e q u a l i z a t i o n . It i s not f e a s i b l e to r e c a l l the i n d i v i d u a l conceptual views of the various other writers that have considered the subject of s p a t i a l imbal-91 ance i n investment-location planning. It i s s u f f i c i e n t to i n d i c a t e that 89 A l b e r t 0. Hirschman, The Strategy of Economic Development, (New Haven: Yale U n i v e r s i t y Press, 1958), p. 75. 90 W. Alonso, "Urban and Regional Imbalances i n Economic Development" Economic Development and C u l t u r a l Change, V o l . 17, No. 1, 1968, pp. 1-14. 9 1Gunnar Myrdal, Op. C i t . , (1971), pp. 36-43; P.E. Lloyd and P. Dicken, Location i n Space: A Theoretical Approach to Economic Geography, New York: Harper & Row Publishers, 1972), pp. 262-263; Josephine 0. Abiodun, "Regional Inequalities and the D i s t r i b u t i o n of Socio-Economic A c t i v i t i e s : A Graph Theoretic Approach", S p a t i a l Perspectives  in National Development, (Benin C i t y : Proceedings, 22nd Annual General Conference of the Nigerian Geographical Association, U n i v e r s i t y of Benin, March 28-April 1, 1979), pp. 264-278. 56 i t i s a persistent issue on which there i s no consensus. The appropriate-ness of a convergence-inducing p o l i c y would therefore depend not only on timing but also the p a r t i c u l a r p o l i t i c a l and p o l i c y contexts of each country. F i n a l l y , there i s , i n the p a r t i c u l a r case of Nigeria, the problem of n o n - s p e c i f i c i t y as to how far the convergence e f f o r t i s to go. Perhaps i t s p o l i c y statement could not be otherwise. As indicated e a r l i e r i n the review of the balanced-development p r i n c i p l e and i t s emergence i n Nigeria's developmental philosophy ( e s p e c i a l l y ) since the early 1970s, the hoped-for p r a c t i c a l r e s u l t i s apparently some perceptible measure of change (with time) i n the d i r e c t i o n of reduced imbalance, not n e c e s s a r i l y an equal-sharing p r i n c i p l e i n respect of any one s p e c i f i c sector, including manu-fac t u r i n g . This would be so since regional resource endowments and related production c a p a b i l i t i e s could only be expected to have s i g n i f i c a n t influences on the development of regional production structures. In any event, the challenge to the analyst i n respect of the balanced develop-ment issue i n a sector such as manufacturing i s p r i m a r i l y the s e l e c t i o n of a n a l y t i c a l approaches which could be s u f f i c i e n t l y e f f e c t i v e to e l i c i t both the d i r e c t i o n and amount of change i n the s p a t i o - s o c i a l system. That, i n turn depends on the q u a l i t y of data that could be acquired. Matters of data a c q u i s i t i o n for t h i s p a r t i c u l a r study are discussed next. 1.6.2: Data Considerations F i e l d work for data a c q u i s i t i o n for the study was conducted i n Nigeria from A p r i l to August, 1981. The main types of data considered relevant and at whose a c q u i s i -t i o n e f f o r t s were directed could be structured as follows: 57 (a) Data on S i g n i f i c a n t Nigerian Manufacturing Establishments The basic r a t i o n a l e that underlay the decisions as to data require-ments are c l o s e l y related to the objectives of the study. In the f i r s t place, i t i s desirable to have data for at l e a s t two points i n time i n order to be able to examine r e l a t i v e changes i n the proportions of national manufacturing shared by each of the 19 states, and i n respect of which the d i s t r i b u t i o n of NIDB investments could also be analyzed. Secondly, i t i s necessary for data for each such data point to include information uniformly for variables such as employment, invest-ment values and the number of production units or establishments. F i n a l l y , i t i s also r a t i o n a l that the most recent set of data should be as close to the present as possible. In view of these considerations, data have been acquired for 1974 (to e l i c i t conditions i n the early 1970's when the equity issue began to gain ascendency) and 1980 (the most recent year for which country-wide data covering the same variables as i n 1974 are a v a i l a b l e from the Federal O f f i c e of S t a t i s t i c s , the o f f i c i a l body that conducts annual surveys of manufacturing i n N i g e r i a ) . The I n d u s t r i a l Survey D i v i s i o n of the Federal O f f i c e of S t a t i s t i c s (FOS) conducts surveys of i n d u s t r i a l establishments employing ten or more people annually but i t has f a l l e n behind i n t h i s annual exercise for some time now. In addition, i t s annual returns are usually less than 100 per cent of the establishments expected to respond and therefore contacted. Nevertheless, FOS surveys are the most comprehensive source of data on Nigerian manufacturing, e s p e c i a l l y i n terms of the categories of information or c h a r a c t e r i s t i c s required. 58 However, another useful source of data on Nigerian manufacturing used i n t h i s study i s the 1980 i n d u s t r i a l d i r e c t o r y for the country which, while covering v i r t u a l l y a l l establishments employing ten or more people, also has information available i n the FOS-derived data except some consistent measure of output (either i n the form of value added or gross production value). However, i t s u t i l i t y i n this study consists i n i t s c a p a b i l i t y to convey what the "present" (1980) l e v e l of manufacturing i s across the country. Thus, information for the two data-point years (1974 and 1980) i s used at appropriate points to e l i c i t r e l a t i o n s h i p s relevant to the study's objectives. The data used have been obtained on an establishment-by-establishment basis from both the actual "raw" returns of FOS and the 1980 i n d u s t r i a l d i r e c t o r y to cover the following c h a r a c t e r i s t i c s : 1 2 3 4 ISIC Code Location of Employment Equity Investment (or type) enterprise or No. (paid-up Capital) establishment (b) Data on the Credit I n s t i t u t i o n Being Studied (NIDB) Information obtained for NIDB could be c l a s s i f i e d into two groups: general and s p e c i f i c . The general information r e l a t e s to the i n s t i t u t i o n ' s operational guidelines and consists of basic handbooks (booklets) and i t s annual reports from 1964-1980. The s p e c i f i c type of information consists of actual data on NIDB's 59 f i n a n c i a l operations involving the values of cr e d i t s to each of i t s c l i e n t es tablishments for each year from 1964-1980, thus: 1 2 3 4 5 6 ISIC Loca-t i o n Employ-ment (Client) Project Cost NIDB P a r t i c i p a t i o n Year of NIDB involve-ment Equity Loan Tot a l i Equity Loan Tot a l The data c o l l e c t e d are e s s e n t i a l l y sanctions data which are r e l i a b l e r e f l e c t o r s of the i n s t i t u t i o n ' s c r e d i t a c t i v i t i e s . (c) General Population Data and Other Information I t was also considered necessary to acquire t o t a l population data for each of the 19 states. There has been no population census i n Nigeria since 1963 and extrapolations and projections have t h e i r own problems. The acquired population data therefore derive from public documents based on the 1963 census, the same set of data used f o r constituency d e l i m i t a t i o n i n the 1979 general elections and the various National Development Plans. As the e a r l i e r parts of th i s chapter thoroughly r e f l e c t , i t has also been necessary to c o l l e c t and s c r u t i n i z e the country's development plan documents pr i m a r i l y to gain insi g h t s into Nigeria's natio n a l reg-i o n a l development p o l i c y i n respect of i n d u s t r i a l and other economic a c t i v i t i e s . I. .6.3: I n i t i a l Operationalization of the Conceptual and A n a l y t i c a l  Frameworks For this study, therefore, the conceptual and p o l i c y issues 60 addressed could be stated as hypotheses or propositions f o r the two l e v e l s of analysis which the study assumes: A. For the na t i o n a l l e v e l of analysis: (i ) that apart from the presumable temporal contribution of NIDB financing to manufacturing generally, the s t r u c t u r a l pattern of NIDB financing has been such as to a l t e r the character of Nigerian manufacturing, i n the d i r e c t i o n of increased s t r u c t u r a l balance; B. For the regional l e v e l of analysis: ( i i ) that the regional pattern of NIDB investments (financing) has been such that there has emerged an inverse r e l a t i o n s h i p between e x i s t i n g l e v e l s of manufacturing and NIDB's financing a c t i v i t i e s , e s p e c i a l l y since the early 1970's; and ( i i i ) that accordingly, the regional pattern of manufacturing has been undergoing progressive convergence, e s p e c i a l l y (again) since the early 1970's. Incid e n t a l l y , the capital-shortage i l l u s i o n u t h e s i s (by which i t i s held that the problem i n many LDCs i s not so much the shortage of c a p i t a l for investment as i t i s the shortage of v i a b l e projects i n which to invest c a p i t a l ) i n e v i t a b l y arises and i t i s addressed at the appropriate point to the extent necessary and made possible by a v a i l a b l e data. So also i s the concept of c i r c u l a r and cumulative causation: the tendency for areas with i n i t i a l advantages to gain cumulatively over time. The a n a l y t i c a l methods employed are, as necessary, b r i e f l y described i n the s p e c i f i c contexts to which they r e l a t e , that i s , at relevant stages of the analyses. In general, however, i t could be said 61 that extensive use has been made of c o r r e l a t i o n analyses, rank-difference procedures and, to some extent, concentration i n d i c e s . In the meantime, i t i s desirable to precede the basic analyses with two relevant matters of perspective: a depiction of the conceptual character of development banking i n general; a discussion of background issues s p e c i f i c to NIDB, e s p e c i a l l y i t s establishment and general operating p o l i c i e s within the context of the dynamics of Nigeria's o v e r a l l development planning p o l i c i e s . These basic matters of perspec-t i v e constitute the essence of the next chapter. Using relevant data for the two selected points i n time (1974 and 1980), the basic a n a l y t i c a l tasks i n the study ( e s p e c i a l l y chapters III and IV) could therefore be generally stated thus: A. At the nationa l l e v e l of analysis (Chapter I I I ) : ( i ) employing appropriate measures and techniques to e l i c i t whatever temporal r e l a t i o n s h i p s exist between Nigerian manufacturing and NIDB financing; ( I i ) e l i c i t i n g with appropriate methods the re l a t i o n s h i p s between r e l a t i v e changes i n Nigeria's i n d u s t r i a l ^ s t r u c t u r e and NIDB financing; B. At the regional l e v e l of analysis (Chapter IV): ( i i i ) using appropriate methods to e l i c i t how much the balanced development philosophy i s r e f l e c t e d i n the regional patterns of Nigerian manufacturing and NIDB financing; (iv) e l i c i t i n g , for the time span between the adopted points i n time (1974-1980), what d i s c e r n i b l e degree of convergence has occurred i n the emergent regional pattern of 62 manufacturing v i s - a - v i s NIDB financing; and v) e l i c i t i n g from the relevant data, indices directed at showing the patterns of NIDB "favouritism" and corresponding i n t e r n a l regional e f f o r t s i n pursuit of the balanced-development objective. 63 CHAPTER TWO CONCEPTUAL PERSPECTIVES ON DEVELOPMENT BANKING AND BACKGROUND TO NIDB OPERATIONS A basic proposition underlying economic development e f f o r t s (including the establishment and operation of development banks) i s that economic development i n general and i n d u s t r i a l development i n p a r t i c u l a r i s not an in e v i t a b l e process but one which could be created and energeti-c a l l y advanced. By planned strategies of investment, innovation, supports and controls, aggressive p o l i c i e s of economic development are considered capable of transforming the socio-economic processes and character ( p a r t i c u l a r l y ) of developing countries.^" The issue of c a p i t a l supply for c a p i t a l formation i n the desired sector i n adequate quantities and at the appropriate time ( a l l determined on the basis of s t r u c t u r a l c h a r a c t e r i s t i c s within the economy concerned) i s one of the c r u c i a l factors for advancing the process. That supply of investment c a p i t a l i s l a r g e l y the product of an economy's f i n a n c i a l structure and the f i n a n c i a l intermediaries that function within that structure. In t h i s context, a country's f i n a n c i a l structure (the channels through which savings become a v a i l a b l e for investment) could be viewed as exhibiting three facets: government's financing from i t s own savings/ funds, s e l f - f i n a n c i n g from enterprises' own p r o f i t s , and voluntary 2 savings. Of necessity, r e a l i s t i c public p o l i c y should appreciate the Mountjoy, Op. C i t . , p. 28. See, Organization f o r Economic Cooperation and Development, The Financing  of I n d u s t r i a l Development (Barcelona: 16th - 20th May, 1967), Part. I. 64 interdependence of these sources of investment capital."' Direct government financing of industry, involving the behaviour of government as an i n d u s t r i a l investor could be j u s t i f i e d on such grounds as the i n a b i l i t y or reluctance of private enterprise to invest adequately i n p a r t i c u l a r sectors, the need to eliminate monopolies, and other reasons. It i s also desirable that i n a market economy, government should, i n such cases, use the orthodox method of financing i t s invest-ments through i t s own savings (the surplus of current revenue over 4 current expenditures), or by f l o a t i n g loans on the f i n a n c i a l market. However, the method and promptitude of government's response to such si t u a t i o n s depend on the actual circumstances of the country concerned. The second source of investment finance, reinvestment or s e l f -financing from p r o f i t s involves ploughing back some p r o f i t s rather than d i s s i p a t i n g a l l i n dividends. While s e l f - f i n a n c i n g i s most desirable i n that i t forms the motive force of a s e l f - s u s t a i n i n g economy and makes enterprises l e s s dependent on f i n a n c i e r s , i t i s well known that the rate This interdependence derives from the inverse r e l a t i o n s h i p which ex i s t s among the three sources. I f , for example, taxes are increased to create s u r p l u s - y i e l d i n g revenue for government, p r o f i t s from which s e l f -financing could be done as well as voluntary savings a v a i l a b l e for transmission to the f i n a n c i a l intermediaries would both be correspond-in g l y reduced; and i f taxes are reduced, the opposite e f f e c t could, c e t e r i s paribus, be expected. Arguments as to whether or not government should be involved i n industry (and other areas of economic development) are now dead issues and need not be r e c a l l e d here. The empirical f a c t i s that government p o l i c i e s and related a c t i v i t i e s are now c l e a r l y recognized as v i t a l forces i n the development process, and perhaps more so i n developing countries. 65 of s e l f - f i n a n c i n g i s lower i n developing than i n developed countries. At any rate, developing countries t y p i c a l l y have fewer enterprises which could engage i n s e l f - f i n a n c i n g to s t a r t with. Investment funds are therefore needed from other sources on a more s i g n i f i c a n t basis, at least for some i n i t i a l period. The t h i r d category of savings from which i n d u s t r i a l investments can o r i g i n a t e i s voluntary savings through the channel of the f i n a n c i a l intermediaries which consist of the banks, savings banks, insurance com-panies, contractual savings schemes and even i n d i v i d u a l s . F i n a n c i a l i n t e r -mediaries work t y p i c a l l y i n ways that concentrate f i n a n c i a l resources i n commercial banks which are not very well disposed to the provision of long-term c a p i t a l for investment. The fact that commercial banks t y p i c a l l y favour only short-term lending creates d e f i c i e n c i e s regarding long-term f i n a n c i a l resources and represents a s i t u a t i o n not stimulating to indus-t r i a l investment. In order to f a c i l i t a t e long-term investment funding, . governments and other i n t e r e s t s ( e s p e c i a l l y i n developing countries) have therefore found i t necessary or p r o f i t a b l e to create the sp e c i a l f i n a n c i a l c r e d i t i n s t i t u t i o n s known as development finance companies (DFC) or development banks. In view of the nature of t h i s study dealing with the impact of one such i n s t i t u t i o n i n the i n d u s t r i a l development sphere, i t i s appropriate to examine, even i f b r i e f l y , the general character of t h i s type of f i n a n c i a l i n s t i t u t i o n . II.1: Perspectives on Development Banking William Diamond i s perhaps the e a r l i e s t and best known student of development banking. He has conceived a development bank as "an 66 i n s t i t u t i o n (designed) to promote and finance enterprises i n the private s e c t o r " . 5 For purposes of general conception, however, i t i s important to indicate while promotion and financing (and e s p e c i a l l y financing) are core functions of development banks, t h e i r a c t i v i t i e s are, quite often, not confined to the private sector. For at least t h i s reason, Kane's characterization seems more comprehensive: a development bank could be better viewed "as a f i n a n c i a l intermediary supplying medium- and long-term funds to bankable economic development projects and providing related services..., the main consideration i n s e l e c t i n g projects for financing (being) that the bank (should) be able to revolve i t s funds without . • . «. .,6 impairment. Since most conventional and s p e c i a l i z e d banks and f i n a n c i a l i n s t i -tutions (central banks, commercial banks, short-term c r e d i t i n s t i t u t i o n s , insurance companies, marketing boards and others) are not development banks, the development bank i s only one type of f i n a n c i a l intermediary. Also, since a l l these other f i n a n c i a l intermediaries are active p a r t i c i -pants i n the development process generally and the i d e a l development bank i s involved i n both financing and promotional/developmental a c t i v i t i e s , the various i n s t i t u t i o n a l p a r t i c i p a n t s could be ranked as occupying d i f f e r e n t points on a broad spectrum. At one end of the spectrum would be found those i n s t i t u t i o n s which play marginal or i n d i r e c t roles i n development but as progress i s made towards the other end, financing William Diamond, Development Banks. (Baltimore: The John Hopkins Press, 1957), pp. 4 - 5 . Joseph A. Kane, Development Banking. (Lexington, Mass.: D.C. Heath and Company, 1 9 7 5 ) , p. 14-15 (parentheses mine). 67 progressively becomes a more important aspect of the i n s t i t u t i o n ' s functions. The development bank should be found around the broad centre of such a spectrum of f i n a n c i a l institutions.'' This broad-centre p o s i t i o n i s consistent with the r o l e of the development bank as an active agent (rather than a passive ca t a l y s t ) of economic change which, while contributing to change, i s i t s e l f undergoing g constant responsive change. In turn, the a c t i v i s t r o l e assigned to the development bank r e f l e c t s i t s basic purpose, that of functioning "as a substitute i n s t i t u t i o n i n stimulating the growth of the factors which evolved somewhat more spontaneously over a longer time span i n the experience of (more) developed economies.... (that i s , such missing or inadequate ingredients necessary for development i n a developing economy as) c a p i t a l , entrepreneurship, technological and managerial c a p a b i l i t i e s , 9 c a p i t a l market a c t i v i t y and a v a i l a b i l i t y of foreign exchange." Despite the length of the l i s t of developmental ingredients which the development bank i s expected to stimulate,financing or the provision of investment c a p i t a l remains i t s hard-core function. The other items could be subsumed under i t s other major function: promotion. However, while financing, usually i n the form of loan and/or equity p a r t i c i p a t i o n Kane, Op. C i t . , 1975, pp. 16-17. Max-Okpugo, "Development Finance Company and National Development Objectives i n Developing Countries", NIDB B u l l e t i n , V o l. 2, No. 6, July-December, 1978, p. 8. Kane, Op. C i t . , 1975, p. 15. 68 i s r e l a t i v e l y s t r a i g h t f o r w a r d , i U the question of the extent to which the development bank could get involved i n promotional a c t i v i t i e s i s not so clea r - c u t . And while financing a c t i v i t y ( i n r e l a t i o n to NIDB) i s the focus of analysis i n t h i s study, i t would be h e l p f u l , both for purposes of exposition and sharpening attention towards that focus, to structure the rest of t h i s perspective-setting discussion under the three subheadings of (a) widespread incidence and d i v e r s i t y (of development banks), (b) the nature of promotion, and (c) the nature of financing a c t i v i t y and degree of involvement i n projects. II.1.1: Widespread Incidence and D i v e r s i t y Development banks are of r e l a t i v e l y recent o r i g i n , most of them dating from the period since World War I I . For example, the global d i r e c t o r y of development banks published by the Development Centre of the OECD i n 1967 i d e n t i f i e d at t o t a l of 340 such finance i n s t i t u t i o n s i n developing countries, the vast majority dating from the post-1945 Terminological inconsistencies sometimes occur i n the l i t e r a t u r e on development-finance i n s t i t u t i o n s . Thus, d i s t i n c t i o n s are sometimes made such that development banks are viewed as i n s t i t u t i o n s "providing long-term loan to domestic enterprises", development/finance corpora-tions as those providing long-term equity c a p i t a l , and development finance companies as i n s t i t u t i o n s providing intermediate loans and equity c a p i t a l to industry. While the "development finance company" seems to cover a l l , the d i s t i n c t i o n s are nevertheless tenuous and usually ignored because the "development bank" most often provides both loan and equity c a p i t a l on long- and medium-term bases. This i s p a r t i c u l a r l y true of the i n s t i t u t i o n concerned i n t h i s study, the Nigerian I n d u s t r i a l Development Bank Limited. As a r e s u l t , "develop-ment bank" and "development finance company" could, and often are, used interchangeably i n t h i s and other studies. See, for example, R.W. Adler and R.F. M i k e s e l l , Public External Financing of Development  Banks i n Developing Countries, (Eugene, Oregon: Bureau of Business and Economic Research, University of Oregon, 1966), p. 1; Joseph A. Kane, 0p_. C i t . , 1975; World Bank, Development Finance Companies, Sector Paper (Washington, D.C.: World Bank, 1976). 69 period. I n c i d e n t a l l y , 55 of these were l i s t e d for the 30 A f r i c a n countries covered by the d i r e c t o r y , including 6 i n Ni g e r i a . These numbers have probably increased since t h e n . ^ The more important development banks are associated with the World 12 Bank which acts, at various times and i n varying degrees, as a f i n a n c i e r of these s p e c i a l f i n a n c i a l i n s t i t u t i o n s . Thus, the temporal growth i n the number of development banks associated with the World Bank r e f l e c t s the o v e r a l l numerical growth of development-banking/finance i n s t i t u t i o n s around the world from j u s t 2 i n 1950-54 to 68 i n 1975. 1 3 Although development banks are more c l o s e l y associated with develop-ing countries, they also occur i n s i g n i f i c a n t numbers i n developed countries (see Table 4) and i n recent times, e s p e c i a l l y since Jimmy Carter's presidency, the appreciation of the potentials of development banking as well as the p r e s c r i p t i o n f or i t s use i n the United States to meet the challenges of Ca p i t a l Shortage ( p a r t i c u l a r l y ) i n d e c l i n i n g / 14 distressed areas has been popularized. The fact i s , i n any event, that J.D. Nyhart and E.F. Janssens ( E d i t o r s ) , A Global Directory of Develop- ment Finance I n s t i t u t i o n s i n Developing Countries (Paris: The Develop-ment Centre of the Organization for Economic Cooperation and Development, 1967). The "World Bank" .is a general designation for the International Bank for Reconstruction and Develoopment (IBRD). The World Bank and i t s a f f l i a t e s , the International Development Association (IDA) and the Inter-national Finance Corporation (IFC) form the World Bank Group. lWorld Bank, Development Finance Companies: Sector P o l i c y Paper. (Washington, 'D.C.: World Bank, 1976), p. 11. George Richard Meadows and John M i t r i s i n , "A National Development Bank: Survey and Discussion of the L i t e r a t u r e on C a p i t a l Shortages and Employment Changes i n Distressed Areas" i n New Tools for Economic  Development: The Enterprise Zone, Development Band, and RFC, edited by George Sternlieb and David L i s t o k i n , (New Brunswick, N.J.: Centre for Urban Policy'Research, Rutgers, The State Un i v e r s i t y of New Jersey, 1981), pp. 84-143. 70 TABLE 4: L i s t of DFCs Associated with the World Bank (as of June 30, 1975) Country , Name Acronym EASTERN & WESTERN AFRICA (14) 1. Botswana Botswana Development Corporation Ltd. BDC 2. Ethiopia A g r i c u l t u r a l and I n d u s t r i a l Development Bank AIDB 3. Ivory Coast Banque Ivoirienne de Developpement I n d u s t r i e l BIDI 4. Ivory Coast Credit de l a Cote d ' l v o i r e CCI 5. Kenya I n d u s t r i a l Development Bank IDB 6. L i b e r i a The L i b e r i a n Bank for Development and Investment LBDI 7. Mauritius Development Bank of Mauritius DBM 8. Nigeria Nigerian I n d u s t r i a l Development Bank Ltd. NIDB 9. Senegal Societe Financiere Senegalaise pour l e Developpement I n d u s t r i e l et Touristique SOFISED 10. Sudan I n d u s t r i a l Bank of Sudan IBS 11. Tanzania Tanzania Investment Bank TIB 12. Zaire Societe Financiere de Developpement SOFIDE 13. South A f r i c a SIFlDA Investment Co. of S.A. SIFIDA 14. Regional East A f r i c a n Development Bank EADB NORTH AFRICA (5) 15. A l g e r i a Banque Algerienne de Developpement BAD 16. Egypt Bank of Alexandria BOA 17. Morocco Banque Nationale pour l e Developpement Economique BNDE 18. Morocco Credit Immobilier et H o t e l i e r CIH 19. Tunisia Banque de Developpement Economique de Tunisie BDET (former! SNI) EAST ASIA & PACIFIC (10) 20. China, Rep. of China Development Corporation CDC 21. Indonesia Bank Pembangunan Indonesia BAPINDO 22. Indonesia P.T. Private Development Finance Company of Indonesia PDFCI 23. Korea, Rep. of Korea Development Bank KDB 24. Korea, Rep. of Korea Development Finance Corporation KDFC 25. Malaysia Malaysian I n d u s t r i a l Development Finance Berhad MIDF 26. P h i l i p p i n e s Development Bank of the Ph i l i p p i n e s DBP 27. Ph i l i p p i n e s Private Development Corporation of the Ph i l i p p i n e s PDCP 28. Singapore Development Bank of Singapore Ltd. DBS 29. Thailand The I n d u s t r i a l Finance Corporation of Thailand IFCT 71 TABLE 4 (cont'd) Country Name Acronym SOUTH ASIA (6) 30. India 31. India 32. Pakistan 33. Pakistan 34. Pakistan 35. S r i Lanka MIDDLE EAST (6) 36. Afghanistan 37. Iran 38. Iran 39. I s r a e l 40. Turkey 41. Turkey EUROPE (10) I n d u s t r i a l Credit and Investment Corporation of India Ltd. ICICI I n d u s t r i a l Development Bank of India IDBI I n d u s t r i a l Development Bank of Pakistan IDBP National Development Finance Corporation NDFC Pakistan I n d u s t r i a l Credit and Investment Corporation Ltd. PICIC Development Finance Corporation of Ceylon DFCC In d u s t r i a l Development Bank of Afghanistan IDBA I n d u s t r i a l Credit Bank ICB I n d u s t r i a l and Mining Development Bank of Iran IMDBI In d u s t r i a l Development Bank of I s r a e l Ltd. IDBI State Investment Bank (Devlet Katirim Bankasi) SIB (DYB) Turkiye S i n a i Kalkinma Bankasi, A.S. TSKB 42. A u s t r i a 43. Cyprus 44. Finland 45. Greece 46. Ireland 47. Spain 48. Yugoslavia 49. Yugoslavia 50. Yugoslavia 51. Yugoslavia Oesterreichische I n v e s t i t i o n s k r e d i t Aktiengesellschaft IVK Cyprus Development Bank Ltd. CDB T i o l l i s t a m i s r a h a s t o Oy ( I n d u s t r i a l i z a -t i o n Fund of Finland Limited) IFF National Investment Bank for I n d u s t r i a l Development, S.A. NIBID The I n d u s t r i a l Credit Co., Ltd. ICC Banco del Desarrollo Economico Espanol, S.A. BANDESCO Privredna Banka Sarajevo PBS Investiciona Banka Titograd IBT Stopanska Banka Skopje SBS Kosovska Banka P r i s t i n a KBP LATIN AMERICA & THE CARIBBEAN (13) 52. B o l i v i a 53. B r a z i l 54. Colombia 55. Colombia 56. Colombia 57. Colombia 58. Colombia 59. Colombia Banco I n d u s t r i a l , S.A. Banco do Nordeste do B r a s i l , S.A. Corporacidn Financiera de Caldas Corporacion Financiera Colombiana Corporacidn Financiera Nacional Corporacion Financiera del Norte Corporacion Financiera del V a l l e Corporacion Financiera Popular BISA BNB Caldas Colombiana Nacional Norte V a l l e CFP 72 TABLE 4 (cont'd) Country Name Acronym 60. Ecuador 61. Ecuador 62. Mexico 63. T r i n i d a d and Tobago 64. Regional Comision de Valores - Corporacion F i n a n c i e r a Nacional Ecuatoriana de D e s a r r o l l o S.A. -Compania F i n a n c i e r a Fondo de Equipamiento I n d u s t r i a l T r i n i d a d and Tobago Development Finance Company Lim i t e d ADELA Investment Company S.A. CV-CFN C0FIEC FONEI TTDFC ADELA Source: Adapted from World Bank, Development Finance Companies: Sector  P o l i c y Paper, (Washington, D.C.: World Bank, 1976), pp. 64-65 (Annex 7 ) . 73 "the l a r g e s t , most a c t i v e , and most prosperous development finance companies are located i n New York, London, and P a r i s , where they play a v i t a l r o l e i n arranging mergers, a t t r a c t i n g i n t e r n a t i o n a l investment, financing, reorganization or modernization of e x i s t i n g enterprises and underwriting."^ 5 Nevertheless, development finance i n s t i t u t i o n s i n developing and the immediate peripheries of more developed countries have become more numerous and attracted more attention in the l a s t two decades or so. It i s therefore not sur p r i s i n g that of the 64 development finance companies associated with the World Bank by mid-1975, 54 (84 per cent) were in A f r i c a , Asia (including the Middle East and the P a c i f i c ) and L a t i n America while the remaining 10 (16 per cent) were i n Europe (Table 4). Remembering that there are numerous other national and internal-area development banks throughout the world which are not associated with the World Bank, development banking could thus be appropriately seen as a universally-used t o o l for development at various l e v e l s . Development banks are diverse i n several important respects, e s p e c i a l l y the sector of operation, ownership, and sources of fund. As the names of the sample i n s t i t u t i o n s on Table 4 suggest, development banks vary i n t h e i r range of involvements. For example, the Etibank of Turkey was formed for the l i m i t e d purposes of e x p l o i t i n g mineral resources and constructing power l i n e s on government's behalf, and India's ICICI was established to provide long-term finance to pr i v a t e industry. On the other hand, the Corporacion de Formento de l a Production of C h i l e was established E.T. Kuiper, "The Promotional Role of a Development Finance Company" i n Development Finance Companies: Aspects of P o l i c y and Operation edited by William Diamond, (Baltimore: The John Hopkins Press, 1968), p. 11. 74 for the wide-ranging purpose of preparing and executing "a general plan to promote production i n a l l sectors of the economy"^ and to obtain c r e d i t from external sources. T y p i c a l l y , however, a development bank's area of operation i s r e s t r i c t e d to a few sectors which have been determined as needing s p e c i a l attention, industry as well as a g r i c u l t u r e being commonly among such sectors. II.1.2: Ownership Another l i n e of generic d i f f e r e n t i a t i o n among development banks i s ownership, an important factor which has implications f o r the development bank's operations and p o t e n t i a l o v e r a l l effectiveness i n the economy and sector i n which i t operates. For one thing (as indicated above) a devel-opment bank i s i d e a l l y expected to be responsive to national development p o l i c i e s and p r i o r i t i e s as these change with time. Its ownership structure could a f f e c t t h i s responsiveness. And for another thing, the issue of ownership was, for a long time, one which influenced the World Bank's choice of development finance i n s t i t u t i o n s i t would fund, i t s preference being for private or private-leaning development banks.^ It was not u n t i l 1969 that the World Bank Group "reviewed the p o l i c i e s and procedures of lending to development finance companies...and agreed that the bank should not be debarred from lending to p u b l i c l y owned, as well as to William Diamond, Op. C i t . , (1957), p.1. Paul E. Roberts, J r . , "Development Banking: The Issue of Public and Private Development Banking", Economic Development and C u l t u r a l Change, 19, 1971, pp. 424-437. 75 18 private development finance companies", a decision which was r e f l e c t e d i n the provision of f i n a n c i a l and t e c h n i c a l assistance to fourteen national development banks and three regional development financing i n s t i t u t i o n s (for the f i r s t time for the i n s t i t u t i o n s concerned) i n the 1971-72 period. It would seem clear then that three generic ownership categories could be distinguished for development banks. These are: (a) private development banks whose c a p i t a l stocks are completely owned by private-sector i n t e r e s t s and whose operating p o l i c i e s are accordingly private-sector c o n t r o l l e d ; (b) public development banks whose capital; .stock and operating p o l i c i e s are, re s p e c t i v e l y , generated and co n t r o l l e d by the public sector or government, and (c) mixed development banks whose sources of c a p i t a l stocks and operating p o l i c i e s represent a blend of p r i v a t e - and p u b l i c -sector i n t e r e s t s . Depending on the preponderance of contributions to c a p i t a l stock and the r e s u l t i n g influence over operating p o l i c i e s , mixed development banks could be sub-categorized as mixed private-leaning or mixed p u b l i c -leaning . Perhaps the most important implication of ownership type f or a development bank i s the r e s u l t i n g a t t i t u d e towards profit-making. This derives from the fact that private banks place r e l a t i v e l y greater emphasis on i n t e r e s t - r a t e considerations (profit-making), regardless of whether or World Bank, Annual Report, (Washington, D.C., 1969), p. 18, quoted by Joseph A. Kane, Op. C i t . , (1975), p. 107. 76 not the projects they support maximize development impact or marginal s o c i a l b e n e f i t . On the other hand, public development banks are not motivated s o l e l y by profit-making. They therefore put greater emphasis on the development impact c r i t e r i o n . As a r e s u l t , public development banks support projects not so much from considerations of marginal monetary return as from the perspective of marginal s o c i a l benefit or development impact. F i n a l l y , banks of mixed ownership lean towards one or the other emphasis (monetary return or developmental impact) depending on whether private or public ownership i s dominant. While the issue of i n t e r e s t - r a t e setting and i t s r e l a t i o n to the p o t e n t i a l impact of a development bank i s not completely explained by simple reference to owner-ship, the o v e r a l l implication s t i l l follows that public development banks are l i k e l y , a l l things being equal, to make more s i g n i f i c a n t contributions • j 1 19 to economic development. II.1.3: Sources of Finance Development banks also d i f f e r considerably at least i n the propor-t i o n a l mix of the sources from which they get the funds which form the basis of t h e i r operations. The source(s) of c a p i t a l funds for the development bank i s also ( i n addition to ownership-type influences) another important determinant of i t s p o t e n t i a l effectiveness because i t bears importantly on the terms and costs (to the development bank) of the funds i t operates. For any bank (regardless of the ownership category), the c a p i t a l funds operated could (and do) come, i n varying proportions, from private profit-seeking sources, the public sector and i n t e r n a t i o n a l or foreign sources. 19 Joseph A. Kane, Op. C i t . , 1975, p. 24. 77 The ways i n which the d i f f e r e n t sources as well as the terms and costs attached to them could influence a development banks operations and ultimate impact on development could be i l l u s t r a t e d by reference to Kane's 1975 (general-operations) study of 31 development banks i n A f r i c a , Asia, L a t i n America and Southern Europe. The sources of the funds operated by the 31 "Sample" banks (chosen on the basis of data a v a i l -a b i l i t y from the World Bank up to 1972 and not at random) were grouped as domestic private, domestic pu b l i c , external public and external private (Table 5). On the whole, the external public source was most important for the "sample" banks, followed i n order by the public domestic, private domestic and the private external source, although these o v e r a l l (weighted) proportions varied widely for each i n d i v i d u a l bank. The important point i s that each source of the banks' t o t a l resources (equity and debt/loan c a p i t a l ) had i t s own set of implications, e s p e c i a l l y i n view of the necessity to avoid c a p i t a l impairment, that i s , to operate such that a bank generates enough revenue (at least) to cover i t s three basic costs: the cost of i t s funds or i n t e r e s t paid to f i n a n c i e r s , administrative costs, and r i s k premiums which vary from project to project. Funds could be raised from the domestic private source by the issue of bonds, debentures and c a p i t a l shares subscribed to by domestic (com-mercial) banks, insurance companies and other i n s t i t u t i o n s as well as i n d i v i d u a l s . An i l l u s t r a t i o n of the influence which complicating factors such as the market and other conditions could have on the i n t e r e s t rate at which development banks obtain t h e i r funds i s provided by the s i t u a t i o n of Pakistan's PICIC when i t raised funds from the private sector i n 1971 and 1972. After r a i s i n g 20 m i l l i o n rupees at 1\ per cent i n 1971, PICIC's attempt to r a i s e a d d i t i o n a l funds i n 1972 came at a time when market 78 TABLE 5: Sources of Funds for Sample Banks Ranked by Percentage Originating i n Domestic Public Sector (Data up to 1972) Country/Bank Public Domestic % Private Domestic % Public External % Private External % 1. Indonesia (BAPINDO) 89.2 8.2 a 2.6 0.0 2. Malaysia (MIDFL) 74.1 7.1a 7.5 11.3 3. Mauritius (DBM) 67 .7 26.5a 5.8 0.0 4. Ceylon (DFC) 67.4 15.9a 16.7 0.0 5. Ethiopia (DBE) 66.5 13.6a 19.9 0.0 6. Singapore (DBS) 66.5 16.5a 8.5 8.5 7. Nigeria (NIDB) 49.6 0.3 a 30.5 19.6 8. Zaire (SOFIDE) 47.3 11.9 a 30.4 10.4 9. Cyprus (CDB) 45.1 46.9 a 8.0 0.0 10. Iran (IMDBI) 44.8 7 .2 a 43.3 4.7 11. I s r a e l (IDBI) 40.1 23.0 a 33.0 3.9 12. L i b e r i a (LBIDI) 35.1 .5.0 40.6 18.9° 13. Thailand (IFCT) 32.9 12.0 45.5 9.4c 14. Greece (NIB) 30.9 41.2a 27.0 0.9 15. Ivory Coast (BIDI) 28.7 20.8 43.7 6.8c 16. Tunisia (SNI) 27.6 • 8.7 61.0 2.7C 17. India (ICICI) 26.7 14.6 56.7 2.0 C 18. Pakistan (IDBP) 24.4 15.1 60.5 0.0 C 19. Morocco (BNDE) 22.2 5.3 70.3 2.2 C 20. Columbia (Bogota) 13.3 35.2 35.1 16.4 C 21. Pakistan (PICIC) 12.5 19.2 62.3 6.0c 22. Venezuela (CAVENDES) 10.6 28.0 31.8 29.6c 23. Korea (KDFC) 10.5 12.4 71.9 5.2 C 24. Colombia (Caldas) 9.5 62.5 a> b 28.0 0.0 25. China (Taiwan:CDC) 7.0 12.8 78.3 1.9C 26. Colombia (Valle) 6.7 37.3 56.0 0.0C 27. Colombia (Norte) 5.5 29.5 65.0 0 . 0 C 28. Turkey (TSKB) 4.6 11.1 84.3 0 . 0 C 29. Colombia (Medellin) 3.1 30.9 57.8 8.2 C 30. Ecuador (COFIEC) 0.0 19.6 63.6 16.8c 31. P h i l i p p i n e s (PDCP) 0.0 11.5 83.9 4.6 C WEIGHTED AVERAGE (%)* 31.2 17.0 46.8 5.0 Percentages weighted by d o l l a r equivalent of each bank's "supply of funds". aBank whose t o t a l supply of funds from domestic sources i s approximately 50% or more. bBank whose t o t a l supply of funds from the private domestic sourc approximately 50% or more. e i s cBank whose t o t a l supply of funds from external sources (primarily public external) i s approximately 50% or more. Source: Adapted from Kane's 1975 study based on World Bank data up to 1972; Joseph A. Kane, Development Banking, (Lexington, Massachusetts: D.C. Heath and Company, 1975), p. 98. 79 i n t e r e s t rates had r i s e n to the l e v e l of the bank's own rate of lending to i t s c l i e n t companies: 9 per cent. It could not, without some adjust-ment or help/subsidy, lend out money at the same rate for which i t was to obtain i t s funds. It therefore sought and obtained a government in t e r e s t subsidy of 2 per cent which enabled i t to market a debenture series for 75 m i l l i o n rupees at 8% per cent, and was thus able to maintain a 2ig per cent gross spread. The unpleasant circumstance could a r i s e i n which government, without neces s a r i l y implying disapproval of a bank's p o l i c i e s , would not be i n a p o s i t i o n to help the bank out of such a s i t u a t i o n . The point i s that the development bank's rate i s conditioned by the rate at which i t obtains funds (from the private sector i n t h i s instance) which, i n turn, i s subject to market conditions at p a r t i c u l a r times; and extraordinary measures ( i n t e r e s t subsidy i n t h i s i l l u s t r a -tion) are sometimes necessary to enable the bank to obtain funds for financing projects at rates compatible with the bank's function as a development bank. The external sector as a source of funds f o r development banks functions p r i m a r i l y through l i n e s of c r e d i t t i e d to purchases of c a p i t a l equipment i n the c a p i t a l - i s s u i n g countries, d i r e c t economic assistance funds forming parts of economic assistance programmes from foreign governments and often requiring matching (counterpart) funds from the receiving i n s t i t u t i o n ; multinational agencies involving, on the one hand, such i n t e r n a t i o n a l agencies as the World Bank Group and, on the other hand, regional agencies such as the European Investment Bank or The i l l u s t r a t i o n here has r e l i e d on Kane, Op. C i t . , 1975, pp. 91-115. 80 the Inter-American Development Bank; and the external private sector co n s i s t i n g of banks, insurance companies and i n t e r n a t i o n a l corporations whose contributions (usually i n equity funds) are t y p i c a l l y of r e l a t i v e quantitative i n s i g n i f i c a n c e . Among other things, the i n t e r e s t rates and repayment terms attaching to each of these external sources ( e s p e c i a l l y the three foreign public-sector sources, which are quite important) vary widely with time and for d i f f e r e n t development banks even when the funds come from the same foreign source. Such v a r i a t i o n s a f f e c t the rates charged by development banks i n respect of t h e i r c l i e n t companies as well as t h e i r ultimate impact on economic development within t h e i r respective economies. Domestic public-sector funds coming in the forms of both equity and debt (loan) c a p i t a l are most conducive to the development bank's developmental o r i e n t a t i o n . This i s because such funds are us u a l l y made ava i l a b l e under the most favourable terms, even to private and p r i v a t e -leaning mixed banks. This i s i n addition to the (periodic) issue of public-sponsored i n t e r e s t subsidy discussed above. In f a c t , the r o l e of the domestic government i n the a f f a i r s of i t s development bank(s) goes far beyond actual f i n a n c i a l involvement by way of a l l o c a t i o n s and subsidies which, i n any case, are often not inconsiderable. The important point i s better stated as a generalization: that a p i v o t a l determinant of the actual flow of funds to the development bank i s the government of the... country (concerned)...government cooperation with i n t e r -n a t i o n a l fund suppliers and government intermediation on behalf of development banks i s a necessary dimension of the...operations of (development)banks. Although i n t e r -national agencies and foreign governments may have funds a v a i l a b l e for development banks, these external sources of funds or d i n a i n l y require e x p l i c i t approval and co-operation i n numerous ways of the domestic government before a c t u a l l y advancing funds to the banks. It can be said, therefore, that appropriate public p o l i c y of 81 domestic government with respect to development banks i s a necessary condition f o r the a c q u i s i t i o n of most foreign sector funds by (development) banks.21 However, i t should be mentioned that (as the discussion of Nigeria's NIDB below shows) changes i n government p o l i c i e s could d r a s t i c a l l y reduce the readiness with which i n d i v i d u a l development banks seek to use external funds, e s p e c i a l l y equity funds, even when such funds could be r e a d i l y forthcoming. It should also be r e c a l l e d that the development bank's a c t i v i t y and effectiveness i s not measured by i t s f i n a n c i a l operations alone. II.1.4: Promotion The i d e a l development bank i s also expected to supply and/or s t i -mulate a wide range of developmental ingredients. The bank's a c t i v i t i e s directed at supplying/stimulating such ingredients are conveniently subsumed under the term "promotion". In fact i t could be said that a f t e r financing, promotion i s the next c r i t i c a l function which a develop-ment bank ex i s t s to perform; but while financing (usually i n the form of loan and/or equity p a r t i c i p a t i o n ) i s r e l a t i v e l y straightforward, the nature of promotional a c t i v i t i e s has a considerable p o t e n t i a l f o r generating divergent views. The r e a l protaganist of promotion would hold that while the con-ventional bank must be concerned with s e c u r i t y and in t e r e s t margins and behave true to i t s conservative t r a d i t i o n by maintaining the suspicious a t t i t u d e that avoids untried ideas, the development bank should, on the contrary, create for i t s e l f the image and r e a l essences of "an a c t i v i s t 21 Joseph A. Kane, Op. C i t . , 1975, p. I l l (Parentheses are mine). 82 i n s t i t u t i o n interested i n development and unafraid of change and f u l l y 22 aware that there can be no development without new ideas". Fundamentally, promotion i n t h i s context involves the idea of the development bank getting involved i n the formulation, i n i t i a t i o n and organization of i n d u s t r i a l investment proposals, behaving l i k e an entrepreneur who, perceiving or seeking out p r o f i t a b l e investment opportunities, a c t u a l l y takes the i n i t i a t i v e and leadership to conceive, fashion proposals and organize finance for new enterprises and a c t u a l l y execute them. B r i e f l y put, i t involves the entrepreneural a c t i v i t y of taking the i n i t i a t i v e of shaping up a business and getting i t started. Thus, promotion covers a wide spectrum. It ranges at one end from the minimal exercise of assessing a project submitted-to the development bank (for financing) and suggesting improvements i n i t , to the other extreme s i t u a t i o n i n which the development bank gets involved i n a project's conception such that i t "originates the idea, translates i t into a financeable project (using consultants and other experts as necessary i n the process), arranges the financing, organizes the company 23 and, i f only for a time, manages the new enterprise." Between the extreme promotional roles l i e s a wide range of p o s s i b i l i t i e s . These , 24 include: 'E.T. Kuiper, "The Promotional Role of a Development Finance Company" in Development Finance Companies: Aspects of P o l i c y and Operation edited by William Diamond, (Baltimore: The John Hopkins Un Press, 1968), p. 7. E.T. Kuiper, I b i d . , p. 7. See e s p e c i a l l y , Max-Okpugo, "Development Finance Company and National Development Objectives i n Developing Countries" i n NIDB B u l l e t i n , v o l . 2, No. 6, July-December, 1978, pp. 7-8; E.T. Kuiper, Op. C i t . , pp. 5-8; see also J.A. Kane, Op. C i t . , 1975, pp. 41-50. 83 (a) organizing general i n d u s t r i a l surveys and carrying out f e a s i b i l i t y studies for s p e c i f i c projects; (b) evolving proposals for new enterprises; (c) helping to f i n d t e c h n ical and entrepreneural partners for l o c a l c l i e n t s or investors; (d) taking equity shares and underwriting s e c u r i t i e s i n order to a t t r a c t other investors; (e) organizing mergers i n order to evolve more e f f i c i e n t i n dustrial/production u n i t s ; (f) nurturing a c a p i t a l market by broadening ownership and by other methods; (g) encouraging the adoption of innovations i n the economic sector; (h) providing management and consultancy services to both c l i e n t and non-client enterprises; (i ) t r a i n i n g and development of manpower to meet the needs for highly s k i l l e d s t a f f with a broad professional o r i e n t a t i o n ; (j) taking the i n i t i a t i v e to i d e n t i f y and develop projects of c r i t i c a l importance to the economy or sector of involvement. In p r i n c i p l e , the necessity for promotion a r i s e s u l t i m a t e l y from the need to create conditions (entrepreneurs) that would generate demands for c a p i t a l which the development bank may then undertake to provide. But since promotion has such vast dimensions, i t could be very d i f f i c u l t to measure and evaluate the impact of a bank's promotional a c t i v i t i e s . 84 In any event, i n functioning as a promotor, a development bank goes through a succession of project development a c t i v i t i e s which can be summarized as project i d e n t i f i c a t i o n , project i n i t i a t i o n and project execution. In f a c t , any i n d i v i d u a l , organization or i n s t i t u t i o n that engages i n these a c t i v i t i e s would also q u a l i f y to be c a l l e d promotors. Obviously then, the development bank i s one of many promotors i n an economy and i t s a c t i v i t i e s are j u s t an important part of a huge and complex mechanism involved i n the economy's transformation. It could further be noted that, i n r e a l i t y , only a th i n l i n e separates pure financing from promotion since financing must be preceded by thorough appraisal and e f f e c t i v e appraisal requires a c a r e f u l scrutiny of a l l the factors associated with promotion. In the process, the development bank could turn an otherwise badly conceived project into a v i a b l e and financeable one. However, i t thus becomes sometimes d i f f i c u l t to know when a bank i s involved i n promotion and when i t i s not. A general r u l e of thumb has therefore been suggested: a develop-ment bank i s involved i n promotion when i t goes beyond stimulating others 25 by assumption, by i t s e l f , of entrepreneural functions. In view of the challenges presented by promotion, the general a t t i t u d e of many development bankers i n the mid-1960s was that of avoidance but the varied experiences of development finance i n s t i t u t i o n s i n both developed and developing countries have since indicated that, on the whole, the need for promotion depends on the l e v e l of economic development i n the country concerned. In a developed country or the more developed of the developing countries where a large and experienced E.T. Kuiper, Op. C i t . , p. 10. 85 entrepreneural c l a s s has emerged, promotion might not be of the highly demanding brand. On the other hand, i n a developing country with no i n d u s t r i a l experience and with such l i t t l e entrepreneural c l a s s as e x i s t s interested only i n such quick-returns a c t i v i t i e s as commerce and r e a l estate, a development bank could appropriately become the propulsive agent that would develop projects, finance them wholly or p a r t i a l l y and i f necessary, manage them for some time. Even then, a general p r i n c i p l e i s that promotion i n t h i s s t r i c t or f u l l sense "should be undertaken only i n industries which are of n a t i o n a l importance and should involve operations which are large enough to make considerable r i s k s worthwhile." II.1.5: Project Selection^Form of Financing and Degree of Involvement The development bank's financing goes into bankable development projects i n the form of loan and/or equity p a r t i c i p a t i o n . On the one hand, various c o n f l i c t - r i d d e n considerations underly the choice of pro-j e c t s the bank would finance as well as i n what form (loan or equity) i t would finance those i t s e l e c t s . The s e l e c t i o n dilemma revolves around the s i g n i f i c a n c e of the word "bankable". A bankable project i s one which i s (or could be) p r o f i t a b l y s e l f - f i n a n c i n g , that i s capable of generating enough income within a reasonable time to cover i t s costs of operation, repay the p r i n c i p a l of bank loans, meet interest-charge payments and leave enough p r o f i t for i t s promotors as an inducement to remain i n operation. A non-bankable project i s one which i s not p r o f i t a b l y s e l f ^ -financing i n the same sense. This poses c o n f l i c t s for the development bank. As a E.T. Kuiper, Op. C i t . , p. 6. 86 bank, i t i s expected to get involved only i n bankable projects. However, some non-bankable projects from which i t s funds would thereby be i d e a l l y precluded (e.g. investment i n sewage, water supply and other projects which.increase s o c i a l consumption) may be c r u c i a l for economic develop-ment, the bank's fundamental raison d'etre. As has been observed, " A l l bankable projects are not economically important (and) every economically 27 important project ( i s not) necess a r i l y bankable." However, t h i s r e s t r i c t i v e n e s s could be eased by recognizing that even commercial banks do finance projects (even of the consumption type) as long as there i s a reasonable assurance or b e l i e f that both p r i n c i p a l and i n t e r e s t s could be repaid according to a pre-arranged schedule, regardless of where the income for such loan amortization i s derived. Therefore a bankable project could be more r e a l i s t i c a l l y viewed as one for which the p r i n c i p a l and i n t e r e s t can (reasonably) be expected to be repaid according to a pre-determined schedule. (Therefore) bankable projects for development banks are not necess a r i l y r e s t r i c t e d to those which are s e l f - l i q u i d a t i n g . Any project with a s i g n i f i c a n t (pro-spective) impact on development should p o t e n t i a l l y f a l l within the scope of development bank financing (provided) only that i t can reasonably be expected that the borrower w i l l be able to repay the loan. The bank may not, i n f a c t , obtain f u l l repayment of p r i n c i p a l on each i n d i v i d u a l project but should attempt to do so over a range of pro-j e c t s . . . (such that the bank would be able) to recoup a l l i t s outlays over an acceptable period of time, allowing that bad-debt losses on some projects w i l l be o f f s e t by higher returns from others. z8 S h i r l e y Boskey, Problems and Practices of Development Banks, ( B a l t i -more: The John Hopkins Press, 1959), p. 50; J.A. Kane, Op. C i t . , p.17. J.A. Kane, Op. C i t . , pp. 18-19, (parentheses are mine or my paraphrase). 87 One implication of t h i s i s that the development bank, i n s e l e c t i n g projects for financing during a one-year period, for instance (and to remain v i a b l e ) , s t i l l has to blend i t s needs for profit-making with i t s r o l e as a development-oriented a c t i v i s t . The c o n f l i c t i n the s e l e c t i o n decision i s strongest e s p e c i a l l y when the number of applications for the banks funds exceeds i t s current resources and decision has to be made on which projects to finance on the ranked bases of two scales: a develop-ment impact scale r e f l e c t i n g the bank's assessment of each p r o j e c t ' s , p o t e n t i a l developmental impact; and an i n t e r e s t - r a t e scale r e f l e c t i n g the p o t e n t i a l monetary return associated with each project. Projects ranking high on both scales would have excellent chances of being financed. Those ranking low on both scales would also c l e a r l y have poor chances, while i n the case of those ranking low on one scale and high on the other, some judgement would have to be made u n t i l a l l funds have been allocated, the cases of projects at the margin being decided on the basis of a b i l i t y . . . 29 to sustain a minimum in t e r e s t rate. Intimately t i e d to project s e l e c t i o n i s the d e c i s i o n as to how much, i f any, of the bank's financing for a project should be (respectively) i n the form of loan or equity. Some considerations of general p r i n c i p l e apply i n the d e c i s i o n . C l e a r l y , a l l projects are not of equal interest-paying a b i l i t i e s . While a major a t t r a c t i o n of the development bank to i t s c l i e n t companies i s that even i t s highest i n t e r e s t rate i s below the current market rate, i t i s also the p r a c t i c e that projects financed even within the same time period are charged d i f f e r e n t rates on the basis of a b i l i t y to sustain such i n t e r e s t rates and the spread which the bank could maintain i n view of i t s own costs. I t implies that a bank could "subsidize" one project at the expense of another! 88 The form of financing i n which a development bank could engage i s usually s p e c i f i e d i n the charter, by-law, law or other instrument esta b l i s h i n g the finance company. However, the bank exercises prudence, i n i n d i v i d u a l cases, i n how i t applies i t s provisions. Apart from con-f e r r i n g part-ownership and voting or non-voting r i g h t s (depending on agreed terms), taking equity shares i n an enterprise/project involves the a n t i c i p a t i o n which may or may not be r e a l i s e d , that the enterprise w i l l begin (at some future time) to y i e l d p r o f i t s from which share-holders (including the bank) could derive dividends. In the i n d e f i n i t e waiting period before the dividend-yielding p r o f i t s begin to be r e a l i s e d , no returns come to the shareholder for the shareholding outlay involved, a s i t u a t i o n of fundamental r i s k i n business ventures. On the other hand, the loan f i n a n c i e r of an enterprise does not have to wait f o r the business to s t a r t making p r o f i t s before repayment (of p r i n c i p a l and/or interest) begins. Only the pre-arranged schedule of repayment i s of r e a l essence and, although not wishing i t , i t does not matter to the loan-granting i n s t i t u t i o n i f the enterprise never makes a p r o f i t as long as the f i n a n c i e r could recover i t s loans on the pre-arranged bases. In a l l , each type of financing has i t s a t t r a c t i o n s and r i s k s . The development bank's choice of financing mode and i t s mix (as equity and/or loan) depends very much on both the c h a r a c t e r i s t i c s of the bank i t s e l f and those of the c l i e n t enterprise. The most r i s k y period f o r the bank to finance an enterprise by equity p a r t i c i p a t i o n i s also the period when the c l i e n t enterprise pro-bably needs i t most: the early years of the enterprise when no individends could be expected f o r some years. Rather s i m i l a r l y , at the beginning of the bank's operations when i t i s concerned with b u i l d i n g up reserves and 89 meeting various costs (administrative, i n t e r e s t and dividend payments res p e c t i v e l y on loan and equity c a p i t a l ) , i t s preference i s generally for loan financing which would y i e l d quicker and more regular returns, not equity investment and i t s u n c e r t a i n t i e s . When the bank has become fi r m l y established, however, the a t t r a c t i o n s of equity financing would be sought: sharing i n the p r o f i t a b i l i t y of successful c l i e n t companies, spreading ownership i n t e r e s t s and developing a c a p i t a l market, and r e f l e c t i n g how a t t r a c t i v e investment financing could be. However, these preferences of the bank have to be weighted against the i n c l i n a t i o n s of the c l i e n t enterprise. For various reasons ( d i s -i n c l i n a t i o n to share business secrets and p r o f i t s , p o s s i b i l i t y of future sale of allowed shares to "wrong" p a r t i e s , avoidance of government interference i n the case of a public bank, and other reasons), businesses (and e s p e c i a l l y foreign investors) are frequently wary about allowing equity shares to be taken up i n t h e i r enterprises and usually bargain f o r arrangements which preserve t h e i r c o n t r o l as much as possible. Apart from the preferences of the bank and the c l i e n t company, other factors which influence the form of financing include the sources of the bank's financing and the economic environment i n which the bank functions. On the one hand, banks generally prefer the prudent p r a c t i c e of l i m i t i n g t h e i r equity p a r t i c i p a t i o n to the equity portion of t h e i r own resources, with the more conservative banks l i m i t i n g t h e i r equity p o r t f o l i o to only some f r a c t i o n of that portion. On the other hand, i f a bank operates i n an i n f l a t i o n - r i d d e n environment, for instance, the r a t i o n a l emphasis would be on equity financing rather than loan because that would enable the bank to share i n dividends swollen by upward pres-sure on p r i c e s . But i f loan financing must be done, then the bank t r i e s 90 to protect i t s c a p i t a l against i n f l a t i o n by various devices: securing conversion rights (to equity) over loans made, securing p r o f i t p a r t i c i -pation r i g h t s when c l i e n t company's sales exceed c e r t a i n l e v e l s ; i n s e r t -ing an escalator clause t i e d to a s p e c i f i e d p r i c e index, the p r i c e of 30 d o l l a r or the c o s t - o f - l i v i n g index. F i n a l l y , when the form of financing has been decided, a range of such other arrangements as in t e r e s t rate determination (discussed e a r l i e r ) , issues of security to be pledged, foreign-exchange r i s k a l l o c a -t i o n ( i f applicable) and disbursement schedules and terms ( i n the case of loans) as well as issues of voting r i g h t s and board representation ( i n the case of equity) would also have to be resolved and incorporated into the f i n a l financing agreement. With the above as a conceptual background as to general p r i n c i p l e s , the s p e c i f i c operating contexts of NIDB could now be examined. The above discussion has been mainly i n d i c a t i v e . Varied subtle con-siderations apply i n s p e c i f i c empirical cases. Extended discussions r e f l e c t i n g the varied applicable considerations are contained e s p e c i a l l y i n Douglas Gufstafson, " F i n a n c i a l P o l i c y Problems of Development Finance Companies" i n Development Finance Companies:  Aspects of P o l i c y and Operation edited by William Diamond, (Baltimore: The John Hopkins Press, 1968) , pp. 5 9 - 9 0 ; S h i r l e y Boskey, Problems  and Practices of Development Banks, (Baltimore: The John Hopkins Press, 1959) , pp. 7 0 - 9 0 . 9.1 II.2: The Background and Operating Framework of NIDB II.2.1: Establishment and Temporal Dynamics In Operating P o l i c i e s The Nigerian I n d u s t r i a l Development Bank Limited (NIDB) i s Nigeria's i n d u s t r i a l finance i n s t i t u t i o n per excellence. It was established on January 22, 1964 by reconstructing and renaming a pre-existing i n d u s t r i a l development finance company, the Investment Company of N i g e r i a Limited (ICON) which had been incorporated i n October 1959. The operating p o l i c i e s of NIDB has changed gradually with i t s experience and n a t i o n a l development p o l i c i e s since the early 1960s. Its i n i t i a l memorandum of association described i t s objective (with d e t a i l s spanning about f i v e pages) generally as that "of a s s i s t i n g enterprises engaged i n industry, commerce, a g r i c u l t u r e and the e x p l o i t a t i o n of 31 natural resources i n Nigeria". From the beginning (1964), however, NIDB has functioned i n the r o l e of providing medium- and long-term (that i s , f i v e to about 15 years) finance to both indigenous and f o r e i g n -owned i n d u s t r i a l enterprises (including non-petroleum mining) i n N i g e r i a . Its early guidelines emphasized involvement only i n promoting pr i v a t e enterprises or, at worst, enterprises i n which government di d not hold 32 a c o n t r o l l i n g i n t e r e s t . This was consistent with the a t t i t u d e of at l e a s t one of the bank's f i n a n c i e r s for about a decade, the World Bank Federal Republic of Nigeria, The Companies Act. Memorandum and New  A r t i c l e s of Association of Nigerian I n d u s t r i a l Development Bank Limited, (Lagos), Adopted by Special Resolution passed on the 6th day of January 1964 and confirmed on the 22nd day of January, 1964, p. i . •Nigerian I n d u s t r i a l Development Bank Limited, Explanatory Memorandum and Guide to Applicants (Revised July 1969; Lagos: 1969), p. 3; NIDB, Annual Reports and Accounts (Lagos: 1970), p. 8; E. Hart, "Spotlight of NIDB: Kaduna Area O f f i c e , " Daily Times (Lagos), December 3, 1971, p. 15. 92 which, for a long time, would not finance public-owned development banks. The bank's i n i t i a l a r t i c l e of association has a wide range of flexibly-worded provisions which enabled i t s Board of Directors to respond to changes i n both the external and immediate economic environ-ments. For one thing, the World Bank had done away with i t s bias against 34 public development banks i n 1969. And for another thing, NIDB's r o l e as a development bank has predisposed i t to responsive changes (without com promising operating c r i t e r i a ) along the l i n e s suggested by national economic development p o l i c i e s and other c h a r a c t e r i s t i c s of the Nigerian economic environment as these have evolved with time. Thus, on July 1, 1970, the Bank's Board of Directors extended NIDB's "scope to include financing of projects sponsored and co n t r o l l e d by Government, provided 35 they are operated as independent enterprises on a commercial b a s i s . " Apart from the accommodation of compatible public projects, however the main changes which have occurred i n the bank's operating p o l i c i e s could be viewed as f a l l i n g into three categories: ownership and basic source(s) of operating funds, incorporation of national developmental objectives and others. 33 See, for example, Paul E. Roberts, J r . "Development Banking: The Issue of Public and Private Development Banking" Economic Development  and C u l t u r a l Change, Vol. 19, No. 3, A p r i l 1971, p. 425. 34 Joseph A. Kane, Op. C i t . , p. 107. -^NIDB, Explanatory Memorandum and Guide to Applicants, (Lagos: Revised December 1971), p. 3. 93 I n i t i a l l y , almost 75 per cent of NIDB's operating funds come from external sources (see below), including such of the World Bank's a f f i l i a t e s as the International Finance Corporation. I t ' s ownership, though diffused,, was therefore c l e a r l y foreign dominated. Even by 1972, 3 6 foreign sources s t i l l accounted for 50 per cent of i t s funds. At i t s inception i n 1964, the bank had an authorized share c a p i t a l of M10 37 m i l l i o n out of which M4 m i l l i o n was issued and f u l l y paid as ordinary shares. A further NO.5 m i l l i o n was held by the o r i g i n a l shareholders of ICON as p a r t i c i p a t i n g preference shares. The holders of the N4.0 38 m i l l i o n ordinary shares were as follows: Shareholders Amount (N) Percentage Central Bank of Nigeria 999,656 25.0 International Finance Corporation (IFC) 999,654 25.0 Privat e Nigerian i n s t i t u t i o n s and i n d i v i d u a l s 40,690 1.0 Private foreign i n s t i t u t i o n s 1,960,000 49.0 Total Ordinary Shares 4,000,000 100.0 'Joseph A. Kane, Op. C i t . , pp. 92-115. r The basic Nigerian monetary unit i s the Naira (N). Although exchange rates vary from time to time, in mid-1982, Nl i s equivalent to about $1.50 (U.S.) or about $1.80 (Canadian). NIDB, "Changes i n the Structure of Ownership of NIDB Limited", (Lagos: Mimeographed, 1979?), p. 1. 94 The authorized share c a p i t a l of the bank has been successively increased, to N40 m i l l i o n i n A p r i l 1977 and then to N100 m i l l i o n i n October 1978. In the meantime, however, the Federal Government of Nigeria had enacted an indigenization (Nigerianization) law, f i r s t i n 39 1972 and broadened further i n 1977. Its purpose and e f f e c t have been to make Nigerian ownership and control of productive enterprises i n the country as dominant as p r a c t i c a b l e . NIDB has been very much affected: at an Extra Ordinary General Meeting of the bank held on A p r i l 26, 1976, the paid-up share c a p i t a l was restructured such that the foreign share-holders were almost completely bought out. Further r e s t r u c t i n g took place i n 1977 (at which time no f o r e i g n ownership was l e f t ) and 1978. The l a s t (known) structure of paid-up share c a p i t a l of the bank (as of March 22, 1979) i s as f o l l o w s ; 4 0 Shareholders Amount (N) Percentage Federal M i l i t a r y Government (FMG) 59,000,000 97.9 Central Bank of Nigeria 999,656 1.7 Private Nigerians 268,890 0.4 Total 74,344,010 100.0 Federal Republic of Nigeria, "Nigerian Enterprises Promotion Decree 1972", Supplement to O f f i c i a l Gazette, No. 10, Vol. 59, 28th February 1972, Part A, pp. A11-A21; Federal Republic of Nigeria, "Nigerian Enterprises Promotion Decree 1977", Laws of the Federal Republic of  Ni g e r i a , 1977, (Lagos: Federal M i n i s t r y of Information, P r i n t i n g D i v i s i o n ) , pp. A17-A34. 'NIDB, "Changes i n the Structure of Ownership of NIDB Limited", (Lagos: Mimeographed, 1979?), p. 2. 95 Thus, within a period of less than a decade, NIDB has r a p i d l y be-come not only a wholly Nigerian-owned development bank but also a development finance i n s t i t u t i o n whose ownership i s v i r t u a l l y monopolized by the Central Government. Although not of d i r e c t i n t e r e s t to the focus of t h i s study, one other implication of N i g e r i a n i z a t i o n for NIDB 1s operating p o l i c i e s has been c l e a r l y summed up i n one of the banks publications: U n t i l 1970,... the bulk of NIDB sanctions went to f o r e i g n -controlled enterprises. Only 27 per cent of the value of 1969 sanctions (for instance) went to indigenous projects. The reason for t h i s i s that when NIDB was set up, i t s d i r e c t i v e was to finance "enterprises operating i n N i g e r i a " . No d i s t i n c t i o n was made between foreign-controlled and Nigerian-controlled enterprises. Moreover, u n t i l July 1970 the Bank was expressly forbidden to invest i n projects i n which Government had c o n t r o l l i n g i n t e r e s t . This picture has changed since 1970 when Nigerian-controlled ventures accounted for 58 per cent of the value of sanctions. This proportion has grown r a p i d l y i n recent years - being well over 90 per cent in 1976 and 1977. Secondly and presumably as a r e s u l t of the changes which have occurred i n the structure of ownership, NIDB has shown increased a b i l i t y , e s p e c i a l l y since the early 1970s, to i d e n t i f y more c l o s e l y with other national development p o l i c i e s and objectives. One such p o l i c y which i s p a r t i c u l a r l y relevant to Nigerian i n d u s t r i a l development (NIDB's raison d'etre) and a subject of s i g n i f i c a n t i n t e r e s t i n t h i s study i s the issue NIDB, "Financing I n d u s t r i a l Development" NIDB B u l l e t i n , Vol. 3, No. 2, Jan.-June, 1978, p. 12; see also, Chief Henry Fajemirokun (President, Lagos Chamber of Commerce & Industry, and President, Federation of West A f r i c a n Chambers of Commerce), "NIDB and the Challenge of Indigenisation" NIDB B u l l e t i n , Vol. 1, No. 5, January-June 1973, pp. 18-20. 96 of equity or balance i n the s p a t i a l incidence of development-inducing investments. As indicated e a r l i e r , the issue of s p a t i a l l y balanced development has permeated Nigeria's development-planning philosophy, notably since the early 1970s. NIDB's id e a t i o n a l acceptance of, and i d e n t i f i c a t i o n with t h i s p r i n c i p l e could be documented extensively. It i s true that i n the immediate post c i v i l - w a r period of the early 1970s, much of NIDB's energies i n t h i s regard were absorbed by the prob-42 lems of i n d u s t r i a l r e h a b i l i t a t i o n i n the war-affected Eastern States. Even then, the bank had had i t a s " i t s declared p o l i c y (to a c t i v e l y 43 encourage) further ( i n d u s t r i a l ) d i s p e r s a l " , e s p e c i a l l y to areas which had previously not f e l t the impact of i t s investment a c t i v i t i e s . It has subsequently become a normal feature of the "Chairman's Statement" i n the bank's Annual Report to include such expressions as the i n t e n s i f i c a t i o n of "promotional e f f o r t s e s p e c i a l l y i n those areas of the country where (the bank's) impact has not been much f e l t " (1978); "the Bank's p o l i c y of a more even geographical d i s t r i b u t i o n of i t s investment" (1979); "the Bank's p o l i c y of a f a i r geographical spread of i t s p r o j e c t s . . . . ( e s p e c i a l l y i n respect of) states where the Bank's impact has hitherto not been very strong" (1980); and " f u l l - s c a l e reorganization with a view to making i t s (the Bank's) impact f e l t throughout the country i n keeping A. Salako, "NIDB and Problems of R e h a b i l i t a t i o n i n the Three! Eastern States", NIDB B u l l e t i n , Vol. 1, No. 5, Jan.-June 1973, pp. 9-11; Henry C. Omo, "Our Modest Achievements i n the Eastern States", NIDB  B u l l e t i n . Vol. 1, No. 5, Jan.-June, 1973, pp. 11-12. B.U. Ekanam, "Significance of the Eastern Area O f f i c e " NIDB B u l l e t i n , Vol. 1, No. 5, Jan.- June, 1973, pp. 4 and 6. 97 with the national objective of balanced development... (and) to f a c i l i t a t e 44 further the much desired i n d u s t r i a l d i s p e r s a l " (1981). Thus, from the standpoint of the equity p r i n c i p l e and other areas of public p o l i c y , NIDB a c t i v e l y seeks, at least i n p r i n c i p l e , to r e f l e c t i t s p o l i c y environment 45 i n i t s a l l o t e d sphere of a c t i v i t y . Two other i d e n t i f i a b l e respects i n which the bank r e f l e c t s relevant dimensions of national development p o l i c y r e l a t e to the pr a c t i c e of a dividend^restraint p o l i c y since the l a t e 1970s, and modifications i n the nature and scale of enterprises a s s i s t e d . The former, reduction i n the proportion of p r o f i t s d i s t r i b u t e d annually i n dividends, a f f e c t s a l l companies including NIDB and, presumably, i t i s intended to encourage the bu i l d i n g up of reserves and/or s e l f - f i n a n c i n g v i a p r o f i t re-investment On the other hand, the bank's records show that for the i n i t i a l s i x years of i t s operations, NIDB subscribed to the r o l e of an i n s t i t u t i o n e x i s t i n g for the primary purpose of providing medium- and long-term finance to both indigenous and foreign-owned enterprises i n Nige r i a . 46: 44 NIDB, Annual Report 1977, (Lagos: 1978) p. 9; NIDB, Annual Report 1978, (Lagos: 1979), p. 7; NIDB, NIDB B u l l e t i n , V o l. 3, No. 2, Jan.-June, 1978, p. 12; NIDB, 1979 Annual Report & Accounts, (Lagos: 1980), p. 7; NIDB, 1980 Annual Report & Accounts, (Lagos: 1981), pp. 9-10. ^ F o r a purposeful synthesis of the bank's responsive d i s p o s i t i o n to relevant nat i o n a l development p o l i c i e s , see NIDB, "How the Development of the I n d u s t r i a l Sector Necessitates Changes i n the Objectives of Development Banks", (Lagos: 1979?), mimeographed; see also Max-Okpugo, "Development Finance Company and National Development Objectives i n Developing Countries", NIDB B u l l e t i n , V o l. 2, No. 6, July-December 1978, pp. 7-8 & 15. ^S e e , f o r example, the "Chairman's Statement" i n NIDB's Annual Reports for 1977, 1978, 1979 and 1980, pp. 8, 5, 5 and 5 re s p e c t i v e l y . 98 However, apart from the re-orientations r e l a t i n g to ind i g e n i z a t i o n d i s -dussed above, NIDB has, since 1970, also extended i t s sphere of a c t i v i t i e s 47 to include hotels and projects connected with tourism. The r a t i o n a l e for t h i s , e s p e c i a l l y i n respect of the hotel industry, derives from the bank's recognition of hot e l f a c i l i t i e s rather as an i n f r a s t r u c t u r e for f a c i l i t a t i n g the tra v e l s which i n e v i t a b l y characterize the f i n a n c i a l and other arrangements which accompany the processes of investment-making and i n d u s t r i a l a c t i v i t y . In view of the large s i z e of the country and the need (as the bank aspires to make i t s impact f e l t i n every part) for the bank's o f f i c i a l s and businessmen a l i k e to t r a v e l for varying periods of time, the inadequacies of such support f a c i l i t i e s as hotels came to be recognized as part of the " i n f r a s t r u c t u r a l " constraints needing attention, 48 e s p e c i a l l y " i n the less i n d u s t r i a l l y developed parts of the country". Further, while NIDB has co n s i s t e n t l y adhered to the idea of a s s i s t i n g medium- and large-scale enterprises and has t r a d i t i o n a l l y 49 maintained (even up to 1980) that "small-scale industries are excluded" NIDB, Annual Report and Accounts, (Lagos: 1970), p. 6. NIDB, Annual Report 1978, (Lagos: 1979), p. 7. See, for example, NIDB, Focus on NIDB, (Lagos: 1977?), p. 5; NIDB, General P o l i c i e s , (Lagos: 1980?), p. 3. 99 from i t s operations, i t has very recently (and i n e x p l i c a b l y J W ) included small-scale enterprises among those i t could a s s i s t . However, the general exclusion of service industries from the bank's financing a c t i v i t i e s ("except where there i s the prospect of manufacturing i n the short-term" 5*) s t i l l holds. In any event, NIDB's responsiveness to relevant elements of public p o l i c y occasions no surprise. Among other things, the p o l i c y environ-ment constantly reminds the bank of i t s assigned r o l e s . For instance, the Third Plan made the reminder that "The Nigerian Industrian Develop-ment Bank and the Nigerian Bank for Commerce and Industry are expected to play a more stimulating r o l e i n the manufacturing a c t i v i t i e s of the private sector, operating more as i n d u s t r i a l promoters than as banks. The government w i l l support them f i n a n c i a l l y and the l i m i t to the funds which w i l l be made a v a i l a b l e to these i n s t i t u t i o n s w i l l depend only on 'The i n e x p l i c a b i l i t y a r i s e s , among other things, from the various separate public programmes which exist for small-scale industries and the com-plete lack of domestic p u b l i c i t y given to t h i s seemingly l i g h t change which, i n f a c t , c a r r i e s s i g n i f i c a n t p o t e n t i a l implications. For one thing, i t renders the bank's funds open to rapid depletion by including myriads of small-scale enterprises i n i t s constituency of p o t e n t i a l c l i e n t s , enterprises which are t y p i c a l l y of proprietary i n t e r e s t s (as opposed to l i m i t e d l i a b i l i t y companies) and which, i n any case, have no b a r r i e r s to autonomous self-improvement to "graduate" to the status of at least normal "medium-scale" enterprise. There are also possible p o l i t i c a l implications since t h i s fundamental change comes i n j u s t , about the second year of the newly resuscitated c i v i l i a n administration. However, whatever the prospective implications, they would not be r e f l e c t e d here since the change occurred early i n 1981 while the data used here cover the 1964-1980 period. The implications could be c l e a r only i n the future. The change i s contained i n the statement: "NIDB provides f i n a n c i a l assistance to small-, mdeium-, and large-scale enterprises...": see NIDB, General P o l i c i e s , (Lagos: 1981?), p. 1. NIDB, General P o l i c i e s , (Lagos: 1980? & 1981?), pp. 3 & 1 r e s p e c t i v e l y . 100 t h e i r a b i l i t y to develop and invest i n good pr o j e c t s . " S i m i l a r l y , the Fourth Plan not only renewed the commitment that the NIDB and NBCI " w i l l continue to be supported f i n a n c i a l l y to enable them to discharge t h e i r functions e f f e c t i v e l y to government and the business community i n general" but also made the imposition that "Both banks apart from promoting and financing private investment w i l l i n the future be expected to act as 53 lenders to government-owned companies." Thus, as the 1980s begin, NIDB could, on the whole, be described as a public finance i n s t i t u t i o n which, with a keen eye on encouraging i n d u s t r i a l d i s p e r s a l from the r e l a t i v e l y more i n d u s t r i a l i z e d centres, provides medium- and long-term finance ( i n the form of loans and equity investments) to both new and expanding medium- and large-scale enterprises registered i n Nigeria as l i m i t e d l i a b i l i t y companies, are wholly Nigerian owned or have substantial Nigerian equity contents, and are involved i n manufacturing, non-petroleum mining or tourism ( e s s e n t i a l l y "hotels of 54 i n t e r n a t i o n a l standard"). Federal Republic of Nigeria, Third National Development Plan 1975-80, (Lagos: Central Planning O f f i c e , 1975), p. 154. Federal Republic of Nigeria, Outline of the Fourth National Development  Plan 1981-85, (Lagos: Federal M i n i s t r y of Planning, 1981?), p. 39. NIDB, General P o l i c i e s , (Lagos: 1980?), p. 3. 101 I I . 2 . 2 : Conditions and Processes of F i n a n c i a l Involvement NIDB's involvement i n the p r o j e c t s i t finances takes place w i t h i n c e r t a i n g u i d e l i n e s which have changed somewhat w i t h time. The f o l l o w i n g i s a synthesis of such g u i d e l i n e s . The bank's minimum loan investment i n a p r o j e c t i t finances i s N50,000 (N20,000 i n the e a r l y 1970s) and the maximum investment of M15 m i l l i o n (N660,000 i n the e a r l y 1970s) r e q u i r e s a number of c o n d i t i o n s to be s a t i s f i e d : that NIDB's t o t a l f i n a n c i a l investment ( l o a n and equity) should not exceed 60 per cent ( r a i s e d to 75 per cent i n 1981) "of the p r o j e c t ' s t o t a l c a p i t a l cost or 15 per cent of the bank's own paid-up 55 share c a p i t a l and f r e e reserves^ whichever i s lower"; and that NIDB's equity investment, whenever i t i s made, should be between 11 and 26 per cent of the c l i e n t e n t e r p r i s e ' s paid-up c a p i t a l ( a l b e i t w i t h p o s s i b l e exceptions i n some cases). The bank's i n t e r e s t r a t e s have ranged between 10% to 11 per cent per annum (s i n c e the l a t e 1970s) and t o t a l amortiza-t i o n or repayment time ranges from about f i v e to f i f t e e n years. When an e n t e r p r i s e has convinced i t s e l f that i t needs NIDB f i n a n c i n g , i t i n i t i a t e s p r e l i m i n a r y contacts w i t h the bank i n w r i t i n g or i n person, p r e f e r a b l y armed w i t h some bas i c data on the would-be c l i e n t e n t e r p r i s e . The bank, through i t s Promotion and Development Department, could provide a s s i s t a n c e to up-grade the q u a l i t y of the f i n a l a p p l i c a t i o n which i s required to i n c l u d e a d e t a i l e d f e a s i b i l i t y study covering d e t a i l s r e l a t i n g to the e x i s t i n g resources of the c l i e n t f i r m's promoters, the c a p i t a l s t r u c t u r e of the f i r m , i t s expected or current ( i n the case of e x i s t i n g NIDB, General P o l i c i e s , (Lagos: 1981?), p. 2. 102 establishments) costs and processes of production, market(s) for products, the q u a l i t y of management, and other d e t a i l s . When an a p p l i c a t i o n (with the f e a s i b i l i t y study) has been d e f i n i t e l y submitted, NIDB's Appraisal Department thoroughly investigates the project, including v i s i t s to the project s i t e . In other words, the bank requires, and goes to considerable lengths to get s a t i s f i e d that the project for i t s investments i s economically desirable (providing employment, con-serving foreign exchange or, at l e a s t , not using s i g n i f i c a n t quantities of foreign exchange); t e c h n i c a l l y f e a s i b l e , and commercially v i a b l e (capa-ble of s e l f - l i q u i d a t i o n and s e l f - r e l i a n t growth within a reasonable time span). After appraisal, the Investment Committee reviews the proposal and i f considered s a t i s f a c t o r y , i t i s recommended to the bank's Board of Directors which o r d i n a r i l y meets bi-monthly. The Board does the sanction-ing which i s then conveyed to the promoter by l e t t e r . Subsequently, the promoter formally accepts (or refuses) the o f f e r . After acceptance, security arrangements are made. A Loan and Mortgage Agreement i s then concluded with the Legal Department and disbursement schedules are worked out with the Finance and Investment Supervision departments. NIDB maintains a continuing i n t e r e s t i n the c l i e n t firm's operations and usually requires a seat on the company's Board of Directors for as ' . 56 long as i t s investments remain outstanding. For more comprehensive characterizations of NIDB operations i n t h i s regard, see NIDB, Explanatory Memorandum and Guide to Applicants, (Lagos: 1971), pp. 1-10; NIDB, General P o l i c i e s , (Lagos: 1980?), pp. 4-9; NIDB, General P o l i c i e s , (Lagos: 1981?), pp. 2-7. 103 In the following analyses of NIDB's financing a c t i v i t i e s , attempts have been made not only to e l i c i t how much NIDB has contributed to Nigerian i n d u s t r i a l growth generally and to the extent that that c o n t r i -bution could reasonably be inferred from financing data, but also how much the bank's avowed i d e n t i f i c a t i o n with the national objective of balanced development has i n fact been borne out by the pattern of i t s f i n a n c i a l investments i n the 1964-80 period. CHAPTER THREE NIGERIAN MANUFACTURING AND NIDB FINANCING: THE AGGREGATE PATTERNS AT THE NATIONAL LEVEL The more demanding tasks of t h i s study are those r e l a t i n g to th regional (state) patterns of manufacturing v i s - a - v i s the financing a c t i v i t i e s of NIDB and the issue of regional imbalance/balance during the study period. However, the main part of t h i s chapter i s devoted to analyzing the temporal and s t r u c t u r a l r e l a t i o n s h i p s between manufac turing and NIDB financing at the o v e r a l l national l e v e l i n the same 1964-1980 period, leaving the analysis of regional patterns to the next chapter. However, i t i s conducive to c l a r i t y to precede the analyses with some remarks which r e l a t e to the data and measurement c r i t e r i a used ( e s p e c i a l l y i n respect of manufacturing) and which have relevance for the analyses at both the national and regional l e v e l s . I l l . 1 : Preliminary Remarks and the Data It may be r e c a l l e d again that t h i s study adopts a framework which features e s s e n t i a l l y two unequal time segments, 1964-1974, and 1975-1980. Since the basic analyses are for two points i n time, 1974 and 1980, t h i s time segmentation i s often i m p l i c i t . In connection with NIDB financing data, for instance, the 1974 data set i s derived by cumulating (summing) the relevant data for the period 1964 to 1974 ( i n c l u s i v e ) . On the other hand, the 1974 data set i n respect of manufacturing represents the cumulative aggregate for previous time periods up to that point i n time: no cumulation i s therefore required S i m i l a r l y f o r the 1980 data sets f or the two fundamental elements of 105 the study. The point about time segmentation i s not p a r t i c u l a r l y important f o r analyzing the temporal r e l a t i o n s h i p s of manufacturing and NIDB financing at the national l e v e l since a v a i l a b l e time seri e s data v. on nation a l manufacturing and the highly complete time seri e s data on NIDB financing could be e a s i l y f i t t e d together for the purpose. How-ever, the regional l e v e l - a n a l y s i s r e q u i r i n g more s p a t i a l d e t a i l s also requires at le a s t two points i n time i f i t i s to be possible to v e r i f y how much there has been a change i n the d i r e c t i o n of (or away from) regional balance i n Nigerian manufacturing and NIDB financing e s p e c i a l l y since the issue of balanced development came into promi-nence i n the early 1970's. The same consideration applies to the analysis of s t r u c t u r a l changes (at the nationa l l e v e l ) . B r i e f attention should now be drawn d i r e c t l y to c e r t a i n charac-t e r i s t i c s of and considerations r e l a t i n g to the two primary data sets employed, data r e l a t i n g to manufacturing on the one hand and to NIDB financing on the other. The manufacturing data set i s considered f i r s t . III.1.1: Data on Manufacturing and Measurement C r i t e r i a The most r e l i a b l e data on Nigerian manufacturing are those from the annual surveys of the I n d u s t r i a l Survey Unit of the Federal O f f i c e of S t a t i s t i c s (FOS). However, not only have FOS surveys f a l l e n s l i g h t l y behind schedule for some years but more importantly, i t has never been able to obtain a 100 per cent response rate with the manu-facturing enterprises or establishments which fu r n i s h information f o r the annual surveys (those employing ten or more people). The response rates of between 65.9 and 91.8 per cent achieved by FOS for some 106 years between 1968 and 1978 i l l u s t r a t e this point. Nevertheless, there i s no s a t i s f a c t o r i l y f e a s i b l e a l t e r n a t i v e to the otherwise invaluable records at this s t a t i s t i c a l agency e s p e c i a l l y i n respect of studies with a nation-wide perspective on Nigerian manufacturing. The overwhelming proportion of such studies have therefore c o n s i s t e n t l y r e l i e d on the FOS as a basic data source. The other major source of data on Nigerian manufacturing, the I n d u s t r i a l Directory, i s published at much longer i n t e r v a l s . While i t tends to cover more establishments i n i t s l i s t i n g s , i t s information i s less precise (partly for reasons of c o n f i d e n t i a l i t y ) , and fewer cate-gories of information or c h a r a c t e r i s t i c s are covered for each e s t a b l i s h -ment. For instance, the 1980 e d i t i o n of the dire c t o r y from which one The response rates for the years 1968-1970 and 1978 are, for instance, as follows: Year T o t a l Number of Number of Establishments Response Establishments Expected Ac t u a l l y Responding Rate to Respond . Acceptably (%) ( i . e . contacted) 1968 1969 1970 1978 681 799 852 1615 625 639 703 1064 91.8 80.0 82.5 65.9 Source: FOS, I n d u s t r i a l Surveys, 1968-1970 (Lagos: 1972); and Enquiries at FOS Headquarters, Lagos. of the data sets for t h i s study derives ( e s p e c i a l l y because i t contains the most recent information) does not record values on some va r i a b l e s for varying numbers of establishments l i s t e d . The variables on which i t c onsistently provides information are establishment and employment numbers. While the incidence of missing values for a few e s t a b l i s h -ments may not s i g n i f i c a n t l y a f f e c t analyses t r e a t i n g the whole country as a unit (as i n the main part of t h i s chapter which includes paid-up c a p i t a l investment as measure), i t could generate misleading i n t e r -pretations i n respect of regional ( s t a t e ) d i s t r i b u t i o n s which have potentials for a t t r a c t i n g i n t e r n a l p o l i t i c a l attention more r e a d i l y . And for states.with very, few manufacturing establishments, for instance the incidence of missing values/cases f o r c r u c i a l v a r i a b l e s could create serious problems. One of the most basic decisions that must be made i n studies dealing with manufacturing i s that concerning the choice of measure-ment c r i t e r i a . The use of numerous measures could create divergent problems of i n t e r p r e t a t i o n . And although the various measures— establishments or number of plants, value added, value of paid-up c a p i t a l , employment t o t a l s , energy consumption and the l i k e — a r e generally known to i n t e r c o r r e l a t e such that any of them could t h e o r e t i c a l l y be employed, the adoption of any of them has i t s short-comings. Besides, i t i s safer to v e r i f y such generally-known i n t e r -r e l a t i o n s h i p s for s p e c i f i c study contexts i n order to v a l i d a t e the contextual a p p l i c a b i l i t y of such general r e l a t i o n s h i p s . This has been done here, using a v a i l a b l e aggregate data on Nigerian manufacturing from 1964 to 1980 (Table 6A). The r e s u l t i n g i n t e r c o r r e l a t i o n s 108 TABLE 6A: Nigerian Manufacturing, 1964-1980 Year Number of Es tablishments Value Added (N'000) Number Employed Gross Prod. Value (N'000) Paid-up C a p i t a l Investment (N'000) X l X2 X 3 X4 X 5 1964 687 137,466 76,342 358,778 1965 776 172,596 95,614 444,872 134,934 1968 625 207,672 86,728 503,038 128,464 1969 639 290,228 102,532 636,036 160,868 1970 703 392,718 127,162 844,638 191,694 1972 1,052 494,571 167,480 1,045,951 381,962 1973 1,008 579,985 166,820 1,233,199 328,782 1974 1,036 683,671 ' 175,287 1,476,524 373,171 1975 1,290 1,185,334 244,243 2,611,091 — 1976 1,310 1,565,042 274,738 3,583,621 — 1978 1,064 1,989,465 300,397 4,826,820 648,941 1980 2,930 — 291,874 — 2,030,393 Sources: Federal O f f i c e of S t a t i s t i c s , I n d u s t r i a l Survey, Nigeria, 1964 and I n d u s t r i a l Survey, Nigeria, 1965 (Lagos)-, summary repro-duced by Babatunde Thomas, C a p i t a l Accumulation and Technology.  Transfer: A Comparative Analysis of Nigerian Manufacturing  Industries (New York: Praeger Publishers, 1975), Appendix 2, pp. 125-128, for 1964 and 1965; Federal O f f i c e of S t a t i s t i c s , I n d u s t r i a l Survey, Nigeria, 1968-1970 (Lagos: 1976); also I n d u s t r i a l Survey publications and returns by FOS for 1972, 1973, and 1974, as w e l l as for 1975 to 1978; FOS, Economic  Indicators (Lagos: March 1975); Nigerian Investment Informa-t i o n and Promotion Centre, Federal M i n i s t r y of Industries, I n d u s t r i a l Directory, 8th E d i t i o n (Lagos: March 1980). Notes: (1) The 1968 and 1969 i n d u s t r i a l surveys did not cover the three eastern states at the time because of the C i v i l War. (2) The surveys covered establishments employing ten or more people. (3) Paid-up c a p i t a l value shown for 1978 i s for the 578 e s t a b l i s h -ments with that information. (4) Money values for years before and including 1971 have been m u l t i p l i e d by 2 to convert to Naira (N) values, the Nigerian monetary unit. 109 (Table 6B) reveal, as expected, highly s i g n i f i c a n t i n t e r r e l a t i o n s h i p s between each p a i r of the measures used. In any event, while most s o c i a l studies favour the employment c r i t e r i o n , decisions on measurement s e l e c -t i o n most often r e f l e c t the nature and purpose of p a r t i c u l a r studies and p r a c t i c a l considerations r e l a t i n g to data a v a i l a b i l i t y . It i s p a r t i c u l a r l y desirable here, too, that data on the measures used i n the basic analyses should be uniformly a v a i l a b l e f or chosen data years of the study, at least for each l e v e l of the analyses involved (the natio n a l and the re g i o n a l ) . As already mentioned, lack of information on a few establishments i n respect of p a r t i c u l a r variables (measures) may not be as c r i t i c a l for analysis at the national l e v e l (treating the nation as one unit) as i t would be for analysis at the regional l e v e l . For this reason, the paid-up c a p i t a l investment measure which would have been i d e a l f o r analysis at both lev e l s ( i n a study which emphasizes the investment or financing a c t i v i -t i e s of an i n s t i t u t i o n ) , i s used only at the natio n a l l e v e l . Two other measures used i n the basic analyses are establishment and employment numbers. Establishments are not only the basic produc-t i o n u n i t s ; they are also the active e n t i t i e s whose promoters represent i n making financing arrangements with NIDB. While the establishment measure enters i n t o the analyses at the national l e v e l only to the extent necessary to ind i c a t e the number of production units associated * Because what i s being used i s a mammoth "sample" which i s almost the same as the population but t h i s may not be wise e s p e c i a l l y for states with few t o t a l establishments i n the f i r s t place. TABLE 6B: Corr e l a t i o n Matrix of Measures of Nigerian Manufacturing, 1964-1980 X l X2 X 3 X4 X 5 ESTABS VALADDED EMPLOYMT GPV PAIDUPCA x l ESTABS 1.000 0.770* 0.710* 0.734* 0.989** X2 VALADDED 1.000 0.975** 0.998** 0.934** X 3 EMPLOYMT 1.000 0.960** 0.782* X4 GPV 1.00 0.916** X 5 PAIDUPCA 1.000 S i g n i f i c a n t even at .01 l e v e l . ** S i g n i f i c a n t at more than .01 l e v e l . Note: The va r i a b l e s , through X,., have been i d e n t i f i e d i n column headings i n Table 6A. Shortened forms of the v a r i a b l e names (as used i n computer processing) have also been used as column headings here for convenience, a device also used i n s i m i l a r tables below. I l l with the values concerned, i t forms one of the two primary measures of manufacturing i n the basic r e g i o n a l - l e v e l analyses. On the other hand, the employment measure used at both the national and regional l e v e l s hardly needs j u s t i f i c a t i o n . Employment i s the basic mechanism for d i s t r i b u t i n g a society's wealth and a balanced development p o l i c y would hardly be meaningful i f i t does not t r a n s l a t e into enhanced income-generating employment. In summary, the variables used for the basic analyses at the two l e v e l s of i n v e s t i g a t i o n could be r e c a l l e d thus: (a) paid-up c a p i t a l investment and employment at the n a t i o n a l l e v e l of analysis; and (b) establishment (or number of plants) and employment at the regional (state) l e v e l . These measures have been used at the respective l e v e l s to r e l a t e manufacturing to NIDB financing patterns. Of the two measures indicated for the r e g i o n a l - l e v e l analyses, the employment c r i t e r i o n (which correlates highly s i g n i f i c a n t l y with the establishment c r i t e r i o n anyway) has been employed to explore how much the emergent i n d u s t r i a l - a c t i v i t y patterns have (or have not) been progressing i n the d i r e c t i o n of increased regional balance. F i n a l l y , on manufactural data, the analysis of s e c t o r a l (industry-type) or s t r u c t u r a l c h a r a c t e r i s t i c s i n r e l a t i o n to NIDB financing ( f e a s i b l e and worthwhile at the national level) has been executed within a framework which uses the International Standard I n d u s t r i a l C l a s s i f i c a t i o n (ISIC) system at the two-digit l e v e l (see Table 7, for instance).^ The other major set of data, that r e l a t i n g to NIDB, also requires some c l a r i f y i n g remarks. III.1.2: Data on NIDB Financing As indicated e a r l i e r (section 1.6.2), NIDB financing involvement i s measured by the money value of the sanctions i t has made to i t s various c l i e n t establishments (companies or enterprises) from 1964 to 1980. A sanction i n this context i s a formal commitment by the bank to provide financing i n the form of equity, loan or both to an enterprise i n accordance with terms s p e c i f i e d i n the eventual financing agreement, an agreement which i s binding on both the c l i e n t enterprise and the bank. A sanction thus represents the formal favourable conclusion of the ap p l i c a t i o n - f o r - f i n a n c i n g process i n i t i a t e d by a would-be c l i e n t enter-p r i s e at some previous point i n time: i t i s formalized approval f o r financing. I f no sanction withdrawal or c a n c e l l a t i o n takes place, the value of a development bank's sanctions would, over time, equal i t s cumulative stream of disbursements, the l a t t e r (disbursement) being e s s e n t i a l l y the actual scheduled paying out of the financing funds according to terms i n the financing agreement. There are two fundamental conditions which could render a sanction inoperative and lead to c a n c e l l a t i o n or withdrawal: shortage of funds on the part of the bank to a point where i t cannot honour i t s financing commitments; and i n a b i l i t y on the part of the promoters of an enterprise to meet conditions i n the financing agreement, often See also, International Labour O f f i c e , Yearbook of Labour S t a t i s t i c s , (Geneva: 1971), p. 758. the s e c u r i t y requirements. NIDB has never experienced f i n a n c i a l d i f f i c u l t i e s to the point of being unable to meet i t s sanction commit-ments. On the contrary, the bank has enjoyed such large infusions of public funds since the early 1970s (section II.2.1 above) that i t s problem might w e l l be how to get enough bankable projects ( c l i e n t enterprises i t could finance i n ways consistent with i t s operating c r i t e r i a ) to take advantage of i t s financing c a p a b i l i t i e s . And the bank's investment a c t i v i t i e s have consistently yielded p r o f i t s year a f t e r year, i t s net (after-tax) p r o f i t s f or 1976, 1977, 1978, 1979 and 1980 being Ml.3 m i l l i o n , N1.4 m i l l i o n , N1.4 m i l l i o n , M3.4 m i l l i o n 3 and N4.3 m i l l i o n respectively, for instance. On the other hand, there has been a number of cases of sanction c a n c e l l a t i o n or withdrawal a r i s i n g from the demonstrated i n a b i l i t y of some c l i e n t enterprises to f u l f i l one part or the other of the financing agreement, either by default a f t e r an allowed time span has elapsed or by e x p l i c i t representations (such as an i n d i c a t i o n of lack of further i n t e r e s t i n the financing arrangement). A c r i t i c a l part of the enquiries for t h i s study, therefore, concerned the issue of sanction c a n c e l l a t i o n or withdrawal. I t was revealed that there were fo r t y cases of sanction withdrawal during the study period. Since there were 421 sanctions altogether ( i n the main, one to each i n d i v i d u a l c l i e n t e n terprise), the withdrawals (which occurred p r i m a r i l y i n the 1972-1978 period) constitute 9.5 per cent of a l l sanctions made during the study period (Tables 7 and 8). The NIDB, Annual Reports & Accounts, for 1977, 1978, 1979 and 1980. TABLE 7: NIDB SANCTION WITHDRAWALS, 1964 - 1980: DISTRIBUTION BY SECTORS ISIC CODE (2-Digit Level) -SECTOR DESCRIPTION No. of Esta-blish-ments „ NIDB PARTICIPATION WITHDRAWN («' 000) Time of Sanctio Time of l With-drawal Equity Loan Total % : Hotel and Tourism 2 1250 1250 9.7 19738^ 1975 1 9 7 5 ^ 1977 31 Food, Beverages, and Tobacco 10 450 2429 2879 22.5 1964-76 1972-78 32 Textiles, Wearing Apparel, and Leather Industries 8 330 3339 3669 28.7 1979-74 1973-78 33 Wood and Wood Products, Including Furniture 3 176 176 1.4 1970-72 1974 34 Paper and Paper Products, Printing and Publishing 2 40 370 410 3.2 1970-71 1973-74 35 Chemicals, Petroleum, Coal, Rubber, and Plastic Products 5 1936 1936 15.1 1968-74 1972-78 36 Non-Metallic Mineral Products, except Petroleum and Coal 1 800 800 6.2 1970 ? 37 Basic Metal Industries 1 600 600 . 4.9 1976 1978 38 Fabricated Metai Products, Machinery, including Electrical,Communication Equi P 7 50 936 986 7.7 1969-73 1972-76 39 Other Manufacturing Industries 1 100 100 0.8 1975 1978 Total 40 870 11936 12806 100.0* 1964-7! 6 1972-7 3 ^Percentage total does not add up to exactly- 100, because of rounding. Notes: (1) #1 is equivalent to.$1.52 U.S. on $1.94 Canadian in mid-1982. (2) The temporal pattern of NIDB withdrawals suggests that the bank allows a minimum of two years after sanctions have been made before invoking, i n appropriate cases, the relevant cri t e r i a for sanction withdrawal. Apparently, cases of sanction withdrawal are relatively few and do not occur for every year. (3) The number of establish--ments is the same as the number of sanctions, since each client establishment involved with sanction withdrawal received financing sanction only once. Source: Computation based on f i e l d enquiries at NIDB headquarters, Lagos, early 1981. TABLE 8: NIDB Sanction Withdrawals, 1964-1980: D i s t r i b u t i o n by States 2 State No. of Est-ablishments NIDB P a r t i c i p a t i o n Withdrawn (N'000) Equity Loan '. T o t a l % Time of Sanction '-Time of Withdrawal 1. Anambra 2. Bauchi 3. Bendel 4. Benue 5. Borno 6. Crossriver 7. Gongola 8. Imo 9. Kaduna 10. Kano 11. Kwara 12. Lagos 13. Niger 14. Ogun 15. Ondo 16. Oyo 17. Plateau 18. Rivers 19. Sokoto T o t a l (1964-1980) 6 2 3 1 1 2 2 1 19 1 1 40 0 500 0 0 0 1904 608 1990 250 600 1904 1108 1990 250 600 No withdrawals No withdrawals No withdrawals No withdrawals No withdrawals 0 0 20 300 No withdrawals 650 20 300 5 650 No withdrawals 870 11936 14.9 8.7 15.5 2.0 4.7 0 1640 1640 12.8 80 1020 1100 8.6 0 440 440 3.4 290 2514 2804 21.9 12806 0.2 2.3 5.1 100.0* 1970- 74 1969-71 1971- 74 1973 1976 1970&75 1970&71 1971 1964-75 1970 1970 1976 1964-76 1972-78 1975 1978 1975 1978 19??&77 1973&74 1973 7-1978 1 1974 1978 1973-78 * Percentage values add up to 100.1 because of rounding. Notes: See bottom of Table 7. Source: Same as for Table 7. 116 withdrawals occurred unevenly v i r t u a l l y i n a l l sectors of industry, the proportions of the t o t a l money value involved (M12,806,000) ranging from 0.8 per cent for the category of miscellaneous (other) manufactur-ers to 28.7 per cent for t e x t i l e s , wearing apparel and leather i n d u s t r i e s (Table 7). Regionally, seven of the nineteen states did not have c l i e n t enterprises whose sanctions were withdrawn while of the remaining twelve most did; the proportions of the t o t a l values withdrawn were lowest for Ondo state (0.2 per cent) and highest for Lagos state (21.9 per cent). (See Table 8.) Of course, the s i g n i f i c a n c e of sanction withdrawal from a sector (industry group) or a region (state) depends on the t o t a l value of sanctions before withdrawals occur, that i s , the net sanctions l e f t a f t e r withdrawal has taken place. This point i s further addressed l a t e r . The s p e c i f i c questionnaired enquiry i n t h i s regard revealed two basic reasons for sanction withdrawal: promoter's request (three cases or 7.5 per cent); and time lag or delay i n project implementation (37 or 92.5 per cent of the 40 withdrawal cases). While "promoter's request" amounts to e x p l i c i t formal r e j e c t i o n of the bank's o f f e r of financing services, the problem of delay or time lag i n project implementation arises from the i n a b i l i t y of the promoters concerned, even a f t e r a period averaging two to three years a f t e r obtaining sanctions, to f u l f i l t h e i r parts of the financing agreement, e s p e c i a l l y 4 the p r o v i s i o n of counterpart funds and se c u r i t y . From the point of view of data for this study, the simple Enquiries at NIDB headquarters i n Lagos, Nigeria, early 1981. 117 so l u t i o n to the problem of sanction withdrawal i s to delete or subtract the associated values from the gross value of sanctions; and since the i n i t i a l raw data were obtained on an establishment-by-establishment (sanction-by-sanction) basis, t h i s was a simple task indeed even at the computer-processing stage. Thus, the values analyzed below are net-sanction values which, over time, should equal the cumulative stream of disbursements. One fa c t about disbursement which makes the use of net sanctions more systematic, meaningful and ( i n fact) unavoidable i s that disburse-ments do not occur completely i n the year i n which the corresponding sanctions are made: they are most commonly made p e r i o d i c a l l y over a rather i n d e f i n i t e period of time, depending on the disbursement terms i n the s p e c i f i c financing agreements and/or the promptitude with which promoters complete d i f f e r e n t phases of project implementation. Thus, disbursement occurs i n " d i s j o i n t e d streams" and the bank's disbursement data for a given year do not show p r o j e c t - s p e c i f i c d e t a i l s (of lo c a t i o n , name, the p a r t i c u l a r previous year i n which the corresponding sanction was made, and so on). As already indicated, however, over a long period of time such as that covered here, net sanctions would equal t o t a l disbursements except that the disbursements for the more recent sanctions (for instance from 1978 or 1979 forwards) would s t i l l be going on even as t h i s w r i t i n g i s being done: i t i s a never-ending streaming process. For purposes of v a l i d a t i o n , the r e l a t i o n s h i p (which, over time, would be " i d e n t i t y " ) between net sanctions and disbursements f o r the 1964-1978 period has been explored by simple c o r r e l a t i o n procedures (see Table 9 and Appendix I ) . I t could be pointed out that the basic 118 TABLE 9: Cor r e l a t i o n Matrix Indicating Relationships Between NIDB Sanctions and Disbursements, 1964-1978* X l X2 V X4 X 5 X 6 SANEQUIT SANLOAN SANTOT j DISBEQUT i DISBLOAN DISBTOT x l SANEQUIT 1.000 0.738** 0.923** ! 0.716** 0.740** 0.749** X2 SANLOAN 1.000 0.929** i 0.473 i i 0.739** 0.722** X 3 SANTOT 1.00 ' 0.641** 0.812** 0.806** X4 DISBEQUT ; l.ooo 0.872** 0.894** X 5 DISBLOAN i i ! 1.000 0.999** X6 DISBTOT 1 i 1.000 * S i g n i f i c a n t at .01 l e v e l . ** S i g n i f i c a n t at more than .01 l e v e l . Source: Computed from sanctions and disbursements data i n Appendix I. 119 f i n a n c i n g data (Appendix I and Table 9) are s a n c t i o n equity (X^) and s a n c t i o n loan (X^) -on the one hand and disbursement equity (X^) and disbursement loan (X,.) on the other. The r e s p e c t i v e t o t a l s , s a n c t i o n t o t a l (X^) and disbursement t o t a l (X^) are summations of each p a i r of equity and loan values. Thus, the most important c o e f f i c i e n t on Table 9 i s the value of the c o r r e l a t i o n between X„ and X, (0.894) which i s 3 6 s i g n i f i c a n t even beyond the .01 l e v e l , a r e f l e c t i o n of the expected i d e n t i t y or n e a r - i d e n t i y between sanctions and disbursements. In the succeeding analyses, NIDB's net sanctions are used to e l i c i t the bank's impact on the p a t t e r n of manufacturing. The analyses at the n a t i o n a l l e v e l , the main subject of t h i s chapter, could now begin. I t i s u s e f u l i n maintaining some pe r s p e c t i v e to b r i e f l y charac-t e r i z e , as an i n i t i a l step, the contemporary character of N i g e r i a n manufacturing and the temporal dynamics of i t s growth process before c o n f i n i n g a t t e n t i o n to i t s temporal and s e c t o r a l r e l a t i o n s h i p s w i t h i NIDB f i n a n c i n g . I I I . 1 . 3 : Contemporary N i g e r i a n Manufacturing and I t s Dynamics There were, i n 1980, 2,930 manufacturing establishments i n the country employing at l e a s t ten people each. The corresponding employ-ment t o t a l was 291,874. The employment s i z e s of the establishments ranged from 10 to over 2,000, w i t h about 82.2 per cent of them i n the 10-100 employment-size range (Table 10). On the other hand, however, most of the employment was concentrated i n the l a r g e r establishments, n e a r l y 80 per cent being i n those establishments employing over 100 TABLE 10: Nigerian Manufacturing Establishments i n 1980 by Employment-Size Ranges 1 2 3 4 5 6 Employment Ranges Establishments Employment Employees Per Establishment Number Number % 10-25 1779 60.7 30,209 10.4 17 26-50 395 13.5 14,615 5.0 37 51-100 231 8.0 17,320 5.9 75 101-200 204 7.0 30,580 10.5 150 201-500 208 7.1 72,900 25.0 350 501-1000 67 2.3 50,250 17.2 750 1001-1999 32 1.1 48,000 16.4 1500 2000 and 14 0.5 28,000 9.6 2000 over To t a l 2930 100.0 291,874 100.0 100 Source: Computed from Nigerian Investment Information and Promotion Centre, Federal Ministry of Industries, I n d u s t r i a l Directory, 8th E d i t i o n (Lagos: 1980). Note: (1) Employment data i n the 1980 I n d u s t r i a l Directory are stated i n ranges denoted by alphabetic codes, thus: B denotes 10-24, C for 25-49; D for 50-99; E for 100-199; F for 200-499; G for 500-999; H for 1000-1999; and I for 2000 or more. The device used f o r converting these ranges into the absolute-value aggregates i n t h i s table has been to take the mid-point value f o r each employment range as the employment value for the corresponding establishment, thus B=17; C=37; D=75; E=150; F=350; H=1500; and 1=2000. One unavoidable r e s u l t of t h i s conversion process i s probably an underestimation of t o t a l employment values, e s p e c i a l l y i n respect of establishments employing more than 2000 and for which the value of 2000 has had to be imputed. (2) Information i n the di r e c t o r y i s s i g n i f i c a n t l y ( r e l i a b l y ) a v a i l a b l e only for the three variables of establishment, employment and c a p i t a l investment. Even then, the c a p i t a l investment information i s not recorded for numerous establishments. 121 people. In f a c t , the consistent pattern i s that the number of employees per establishment varies inversely with the t o t a l number of e s t a b l i s h -ments i n each employment s i z e range (columns 2 and 6 of Table 10). These establishments have, since the mid-1960's, been of diverse c h a r a c t e r i s t i c s , ranging from large, highly c a p i t a l - i n t e n s i v e enterprises, through medium-scale, more labour-intensive processing and assembly enterprises, to small-scale industries of varying degrees of c a p i t a l i n t e n s i t y employing ( i n some cases) hand tools and s k i l l e d a r t i s a n labour and ( i n others) semi - s k i l l e d workers producing less r e f i n e d consumer goods. And although a l l the broad categories of manufacturing (from food and related processing through t e x t i l e s , wood products, paper and p r i n t i n g and publishing, chemicals and p l a s t i c s , non-metallic mineral products, and basic metal industries to fabricated metal products and other industries) are represented (see Table 11), a continuing concern of public p o l i c y has remained that of further broad-ening and d i v e r s i f y i n g the country's i n d u s t r i a l structure. This arises See notes at the bottom of Table 10. I t should also be noted that the Nigerian p r a c t i c e of disregarding establishments employing less than 10 people i n the o f f i c i a l s t a t i s t i c s has led to consistent underestimation of i n d u s t r i a l a c t i v i t y i n the country. For instance, a sample survey of 199 v i l l a g e s c a r r i e d out by the FOS i n 1965 revealed that over 900,000 households were engaged i n smaller-scale (or cottage) industries., throughout the country and empirical observa-t i o n indicates that the number would be s i m i l a r l y high i n the larger towns and c i t i e s : see, FOS, Productive A c t i v i t i e s of Households, (Lagos: 1966), p. 4. Cf. Peter Kilby, I n d u s t r i a l i z a t i o n i n an Open Economy, (1969), pp. 17-18. T A B L E 1 1 : N I G E R I A N M A N U F A C T U R I N G I N 1 9 7 4 A N D 1 9 8 0 : S E C T O R A L D I S T R I B U T I O N S B Y E S T A B L I S H M E N T S , EMPLOYMENT AND P A I D - U P C A P I T A L I N V E S T M E N T I S I C CODE ( 2 - D I G I L E V E L ) r D E S C R I P T I O N 1 9 7 4 1 9 8 0 Erne) l o v m e n t E s t a b l i s h m e n t s E m p l o y m e n t P a i d - u p | C a p i t a l E s t a b l i s h m e n t s E m p l o y m e n t P a i d - u p C a p i t a l p e E s t a b l r i s h m e n l N o . % " " N o . T A m o u n t % N o . % N o . I A m o u n t % " ' ( * , ' 000 ) % % ( # ' 0 0 0 ) 1 9 7 4 1 9 8 0 3 1 F o o d , B e v e r a g e s , a n d T o b a c c o 2 4 1 2 3 . 3 3 0 , 5 2 1 1 7 . 4 6 5 , 3 0 3 1 9 . 3 7 6 1 2 6 . 0 5 6 , 9 0 7 1 1 9 . 5 2 2 7 , 8 6 9 i 1 1 . 2 1 2 7 7 5 3 2 T e x t i l e s , W e a r i n g A p p a r e l , a n d L e a t h e r I n d u s t r i e s 1 6 1 1 5 . 5 3 5 , 1 7 9 3 1 . 5 9 7 , 6 0 6 2 8 . 8 5 6 2 1 9 . 2 6 2 , 1 5 0 2 1 . 3 • L 6 0 . 9 0 1 7 . 9 3 4 3 1 1 1 3 3 W o o d a n d W o o d P r o d u c t s I n c l u d i n g F u r n i t u r e 1 9 6 1 8 . 9 L 5 . 0 6 9 8 . 6 9 , 7 1 8 2 . 9 3 2 4 1 1 . 1 2 0 , 7 3 1 7 . 1 1 5 , 4 3 3 0 . 8 7 7 6 4 3 4 P a p e r a n d P a p e r P r o d u c t s , P r i n t i n g a n d P u b l i s h i n g 9 4 9 . 1 1 2 , 3 7 2 7 . 1 2 1 , 7 4 5 6 . 4 2 2 4 7 . 6 2 4 , 4 0 4 8 . 4 3 3 3 , 3 7 1 4 1 . 0 1 3 2 1 0 9 3 5 C h e m i c a l s , P e t r o l e u m , C o a l , R u b b e r , a n d P l a s t i c P r o d u c t s 1 0 8 1 0 . 4 2 6 , 9 1 8 1 5 . 4 4 8 , 5 6 9 1 4 . 3 3 1 2 1 0 . 6 4 3 , 0 9 5 1 4 . 8 . 5 0 1 , 0 4 9 2 4 . 7 2 4 9 1 3 8 3 6 N o n - M e t a l l i c M i n e r a l P r o d u c t s , e x c e p t P e t r o l e u m a n d C o a l 6 6 6 . 4 9 , 0 4 6 5 . 2 6 0 , 3 7 5 1 7 . 8 1 3 5 4 . 6 1 3 , 0 0 3 4 . 5 . 4 2 , 8 2 3 7 . 0 1 3 7 9 6 3 7 B a s i c M e t a l I n d u s t r i e s 1 9 1 . 8 2 , 4 6 3 1 . 4 1 , 5 0 0 0 . 4 1 7 0 . 6 1 , 8 9 9 0 . 7 3 , 9 5 7 0 . 2 1 2 9 1 1 2 3 8 F a b r i c a t e d M e t a l P r o d u c t s , M a c h i n e r y i n c l u d i n g E l e c t r i c a l a n d C o r r r n u n i c a t i c 1 3 3 n 1 2 . 8 2 2 , 0 4 8 1 2 . 6 3 3 , 6 4 9 9 . 9 5 5 1 1 8 . 8 1 7 , 5 7 8 2 3 , 2 . 4 3 , 4 9 5 7 . 1 1 6 7 1 2 3 3 9 E q u i p m e n t O t h e r M a n u f a c t u r i n g I n d u s t r i e s 1 8 1 . 7 1 , 6 7 1 1 . 0 6 1 3 0 . 2 4 4 1 . 5 2 , 1 0 7 0 . 7 1 , 4 9 5 0 . 1 9 3 4 8 T O T A L 1 , 0 3 6 1 0 0 . 0 L 7 5 , 2 8 7 1 0 0 . 0 3 3 9 , 0 7 8 1 0 0 . 0 1 2 , 9 3 0 . 1 0 0 . 0 2 9 1 , 8 7 ' I 1 0 0 . 0 LOO.O 1 6 9 1 0 0 N o t e : ( 1 ) P e r c e n t a g e v a l u e s d o n o t a l w a y s a d d u p t o e x a c t l y 1 0 0 b e c a u s e o f r o u n d i n g . ( 2 ) D a t a s u n m a r i z e d h e r e - p e r t a i n o n l y t o e s t a b l i s h m e n t s e m p l o y i n g t e n o r m o r e p e o p l e . s n m w r w n p i i t p r t fmm t h P 1974 i n d u s t r i a l s u r v e v r e t u r n s o f t h e F e d e r a l O f f i c e o f S t a t i s t i c s a n d t h e N i g e r i a n I n d u s t r i a l D i r e c t o r y , 1 9 8 0 123 from the observed dominance of low-technology l i g h t i n d u s t r i e s i n the country's i n d u s t r i a l output structure^ which has not changed much since the early 1970's. Thus, for instance, the three leading sectors or industry group types i n 1974 were, by employment, those connected with t e x t i l e s (31.5%), food processing (17.4%) and chemicals (15.4%). By 1980, the only s i g n i f i c a n t change was that fabricated metals had assumed the largest employment proportion (23.2%), with t e x t i l e s (21.3%) and food processing (19.5%) moving in t o the second and t h i r d places respectively. The r e l a t i v e share of basic metal industries had even dropped i n the six-year period (Table 11). In terms of fundamental employment generation as measured by the number of employees per establishment, however, there were some remarkable s h i f t s between 1974 and 1980. The leading employment generators were t e x t i l e and wearing apparel (ISIC 32), chemicals (ISIC 35), and fabricated metal products (ISIC 38), i n that order i n 1974. The remarkable s h i f t which had occurred by 1980 consisted not only i n a generally reduced l e v e l of employment generation per estab-lishment but also the r e l a t i v e movement of chemicals (ISIC 35), fabricated metals (ISIC 38) and basic metal industries (ISIC 37) into the f i r s t , second and t h i r d positions respectively: t e x t i l e s (ISIC 32) had dropped to the fourth place i n t h i s regard within s i x years (a r e f l e c t i o n , perhaps, of the widely-noticed depression i n t h i s industry Central Planning O f f i c e , The Third National Development Plan 1975- 80, (Lagos: 1975), Vol. 1, p. 147; Federal Republic of Nigeria, Outline of the Fourth National Development Plan 1981-1984, (Lagos: 1981), pp. 39-40. 124 group In Nigeria i n the l a s t h a l f decade or so). See Table 11, l a s t two columns. In any event, the country's manufacturing employment was, on the whole, growing at the mean annual rate of 8.0 per cent i n the 8 9 1974-1980 period. As has been observed elsewhere, and apart from the unimpressive contribution of the manufacturing sector to GDP (partly due to the swamping e f f e c t of petroleum) i n the 1970's, i t could be remarked again that the higher growth rates recorded for Nigerian manufacturing i n the 1960's ( i n s p i t e of the C i v i l War) were probably due to the smaller base of i n d u s t r i a l production i n the country i n the early part of that decade. In f a c t , the incidence and growth of manufacturing i n Nigeria i s p r i m a r i l y a phenomenon of the period since the Second World War. Thus, an analysis of the s u r v i v i n g " ^ manufacturing establishments Compare the compound i n t e r e s t rate of growth for the manufacturing sector (of 12.2 per cent per annum, measured by the value added c r i t e r i o n ) for the period 1962 to 1972: Central Planning O f f i c e , op. c i t . (1975), p. 147. See J.O. Akintola, op. c i t . (1975), pp. 154-155, for instance. The word " s u r v i v i n g " i s used to i n d i c a t e , as an o f f i c i a l of the Federal M i n i s t r y of Industry once commented during f i e l d enquiries, that there have been remarkable instances of f a i l u r e f or manufacturing establishments i n Nigeria, e s p e c i a l l y during the period of most rapid growth i n the 1960's. The issues of f a i l u r e and success of adoptions are w e l l known i n d i f f u s i o n studies. And although the subject of i n d u s t r i a l i z a t i o n i n LDCs has become a normal part of the economic development l i t e r a t u r e i n the l a s t two decades, the process i s never-theless an innovation which has not completed i t s d i f f u s i o n phases. Like other innovations, the success or f a i l u r e of manufacturing at a l o c a t i o n i s dependent, among other things, on the q u a l i t y and .quantity of information about the l o c a t i o n , the use made of the information by the 125 (with known years of inception) i n the country i n 1980 reveals that about 51 per cent of them came into being i n the 1961-1970 period and that on the whole about 74 per cent started operation only since the country's independence i n 1960 (Table 12A). The two oldest establishments started functioning i n 1894 and successive additions came very slowly u n t i l the 1950's when a decidedly strong growth trend became noticeable (Figure A). Thus, about 26 per cent of the manufacturing establishments i n the country (whose years of inception were known) i n 1980 took the period between 1894 and 1960 (64 years) to emerge while the bulk (of about 74 per cent) have been established i n the two decades since the early 1960's. It would be noticed i n Figure 4 that the long period of slow growth from 1894 to about 1955 i s followed by the other period of rapid growth from then up to the mid-1970's when the curve begins what seems a tendency to taper o f f . Accordingly, the cumulative growth;curve s t r i k i n g l y resembles a rather incomplete form of the S-shaped or l o g i s t i c curve of d i f f u s i o n studies: the long bottom of the S, representing the take-off period of slow growth i s very pronounced; the middle or intermediate stage of more rapid adoption i s quite prominent; and the top part of the S representing the f i n a l stage of d e c l i n i n g adoptions (1970's) i s , as yet, hardly perceptible from the l o c a t i o n a l actor (firm, establishment or entrepreneur) and chance or luck: A l l a n Pred, The S p a t i a l Dynamics of U.S. Urban-Industrial  Growth, 1800-1914 (Cambridge: The M.I.T. Press, 1966), pp. 100-101; A l l a n Pred, Behaviour and Location, Lund Studies i n Geography, Ser. B, No. 28, 1969, pp. 21-64. 126 TABLE 12A: Nigerian Manufacturing Establishments i n 1980: D i s t r i b u t i o n by States and Known Years of Inception „^ ^ Number of Establishments „, _ , State _ __ ... _ _ T o t a l By Years of Inception 1894- 1921- 1931- 1941- 1951- 1961- 1971-1920 1930 1940 1950 1960 1970 1980 1. Anambra - - 2 4 37 46 22 111 5.9 2. Bauchi - - - - - 2 1 3 0.2 3. Bendel 6 1 2 14 34 105 67 229 12.1 4. Benue - - - - 5 10 21 36 1.9 5. Bo mo - - 1 - 4 :.6 3 14 0.7 6. Crossriver 2 2 1 2 30 98 38 173 9.2 7. Gongola 8. Imo - - - 6 41 52 14 113 6.0 9. Kaduna 2 3 - 2 10 25 7 49 2.6 10. Kano 3 2 1 4 25 53 16 104 5.5 11. Kwara 1 - - - 6 22 7 36 1.9 12. Lagos 1 5 11 29 119 324 79 568 30.1 13. Niger - - - - 2 - 2 4 0.2 14. Ogum - - - 1 4 9 2 16 0.8 15. Ondo - - - 2 8 15 24 49 2.6 16. Oyo - - - 6 21 26 3 56 3.0 17. Plateau 1 1 2 2 4 11 4 25 1.3 18. Rivers - - - 1 20 146 120 287 15.2 19. Sokoto - - - - 5 5 2 12 0.6 Tot a l No. 16 14 20 73 375 955 432 1885 -Percentage 0.8 0.7 1.1 3.9 19.9 50.7 22.9 - 100.0 Cumulative % 0.8 1.5 2.6 6.5 26.4 77.1 100.0 Notes: There were 2930 manufacturing establishments employing 10 or more people i n 1980. This table shows d i s t r i b u t i o n s for the 1885 for which information on year of inception i s a v a i l a b l e . The remaining 1045 establishments (a few of which are i n Gongola state with no entries here) have no information on startment years. Source: Computed from Nigerian Investment Information and Promotion Centre, Federal Ministry of Industries, I n d u s t r i a l Directory, 8th E d i t i o n (Lagos: 1980). 127 FIGURE A: NIGERIAN MANUFACTURING ESTABLISHMENTS IN 1980: CUMULATIVE PERCENTAGE GROWTH BY KNOWN YEARS OF INCEPTION empirical curve. On the whole, the curve suggests that i n d u s t r i e s are s t i l l growing i n the country but seemingly with slower momentum than i n the 1960's. The rest of t h i s chapter i s devoted to analyzing, at the national l e v e l , the r e l a t i o n s h i p between manufacturing and NIDB financing during the study period. III.2: Nigerian Manufacturing and NIDB Financing: The Temporal  and S t r u c t u r a l Relationships As indicated above (section III.1.1), the c r i t e r i a of paid-up c a p i t a l investment and employment have been used as measures of : manufacturing i n the analysis of the temporal and s e c t o r a l r e l a t i o n -ships (or impact) of i n d u s t r i a l development vis-^a-vis NIDB financing at the nationa l l e v e l . Also as remarked e a r l i e r (section I I I . l ) , d i v i s i o n of the study period (1964 to 1980) into time segments i s not p a r t i c u l a r l y important for the analysis at the nationa l l e v e l except as i n c i d e n t a l l y warranted by the temporal pattern of data a v a i l a b i l i t y on t o t a l manufacturing on the one hand (see Table 12B for example) and the analysis of s e c t o r a l r e l a t i o n s h i p s f o r appropriate points i n time (1974 and 1980) on the other hand. The analysis of temporal r e l a t i o n s I t i s possible that the elimination of a large number of manu-fac t u r i n g establishments from the generation of the curve i n Figure 4 (due to lack of information on start-up year f o r some establishments) might have influenced the general configuration of the curve (see note at the bottom of Table 12A). TABLE 12B: Total Manufacturing and NIDB Net Financing (Cumulated to Match Total Manufactural Data), 1965-1980 1 2 3 4 5 6 7 8 9 Year T o t a l No. Total Paid- To t a l NIDB- Employ- Total Col. 4 Col. 6 Col. 5 of Estab- Up Investment Employ- Assisted ment i n NIDB as % of as % of as % of lishments i n Mfg. ment i n Estab- NIDB Net Col. 1 Col. 2 Col. 3 (M'000) Mfg. listments Assisted Finan-(No.) Estab- cing lishments (M'000) (No.) 1965 776 134934 95614 44 12071 6042.0 - 5.7 4.5 12.6 1968 625 128464 86728 67 15603 :. 10219.0 10. 7 8.0 18.0 1969 639 160868 102532 82 23377 ; 14309.0 12.8 8.9 22.8 1970 703 191694 127162 100 25624 V18053.0 14.2 9.4 20.2 1972 1052 381962 167480 140 33931 •29614.5 13.3 7.8 20.3 1973 1008 328782 166820 167 39959 .45344.2 16.6, 13.8 20.3 1974 1036 373171 175287 186 45400 )62361.;5 18.0 16.7 25.9 1978 1064 648941 300397 301 78448 280279.2 28.3 43.2 26.1 1980 2930 2030393 291874 381 88109 380826.7 13.0 18.8 30.2 Sources: Sources c i t e d at the bottom of Table 6A; and enquiries at NIDB Headquarters, Lagos, 1981. Note: The data on th i s table s t a r t s from 1965 because one of the measures used for t o t a l manufac-turing (paid-up c a p i t a l investment) i s av a i l a b l e only from that year forward. NIDB-related data have been cumulated appropriately to match the t o t a l manufactural data. t 130 (or impact) comes f i r s t ; i t i s followed by an examination of s e c t o r a l r e l a t i o n s h i p s . In both cases, the t o t a l of NIDB's equity and loan sanctions i s used to measure the bank's f i n a n c i n g a c t i v i t y . I I I . 2 . 1 : The Temporal R e l a t i o n s h i p s Between I n d u s t r i a l Development and NIDB Financing at the N a t i o n a l L e v e l The r e l e v a n t data could be viewed i n a p r e l i m i n a r y way by r e f e r r i n g to the o v e r a l l t o t a l s of the values i n v o l v e d as w e l l as to simple proportions or percentages. 12 In the 1965-1980 p e r i o d , N i g e r i a n manufacturing establishments increased from 776 to 2930 and the corresponding paid-up c a p i t a l investment and employment increased from N134.9 m i l l i o n to N2,030.4 m i l l i o n on the one hand and from 95,614 to 291,874 people on the other hand. During the same study p e r i o d , NIDB's t o t a l net f i n a n c i n g increased from N6.0 m i l l i o n to the cumulative grand t o t a l of N380.8 m i l l i o n . The as s o c i a t e d c l i e n t establishments or e n t e r p r i s e s were 44 i n 1965 and by 1980 the number had r i s e n to a t o t a l of 381. The increase i n the employment associated w i t h the bank's c l i e n t enter-13 p r i s e s was from 12,071 to 88,109 people (Table 12B) . Thus the ^ p r o p o r t i o n of N i g e r i a n manufacturing establishments which rece i v e d NIDB f i n a n c i n g rose u n s t e a d i l y from 5.7 per cent i n 1965 to 13.0 per The i n i t i a l year i s indicated as 1965 here because of the cumulation which has had to be done i n order to e s t a b l i s h a temporal match between the arrays of data on manufacturing and NIDB financing (see Appendix II and Table 12B-). ^Notice that the values indicated for t o t a l manufacturing on Table 12-B -are values of relevant measures shown i n Table 6A above. The year-by-year t o t a l s for NIDB financing (including the cost structures of projects or enterprises assisted) from 1964 to 1980 and shown i n Appendix I I I . 131 cent i n 1980. S i m i l a r l y , the employment i n NIDB-assisted e s t a b l i s h -ments increased from 12.6 per cent of the t o t a l n a t i o n a l manufactural employment i n 1965 to 30.2 per cent i n 1980; and the proportion of t o t a l paid-up c a p i t a l investment i n the country's o v e r a l l manufacturing constituted by NIDB's t o t a l financing increased from 4.5 per cent i n 1965 to 18.8 per cent i n 1980 (Table 12B, columns 7, 9 and 8). The suggestion by these empirical values, that the impact of NIDB's financing a c t i v i t i e s (by both equity and loan investments) have been such that Nigerian t o t a l manufacturing has generally increased as NIDB financing increased yearly during the study period i s , i n f a c t , to be expected and that suggestion i s further reinforced by the high p o s i t i v e c o r r e l a t i o n s between the in d i c a t o r s or measures of national manufacturing and the in d i c a t o r s associated with NIDB financing (Table 13). For the analysis at t h i s point, the most important r e l a t i o n s h i p s are those indicated by the correlations between t o t a l manufacturing establishments (X^), paid-up c a p i t a l investment (X^) and employment (X^) on the one hand and NIDB t o t a l financing, i . e . the sum of equity and loan financing (X-^) on the other. The c o r r e l a t i o n values (of each of X^ through X^ with X ^) are s i g n i f i c a n t even beyond the .01 l e v e l (Table 13). The equally s i g n i f i c a n t c o r r e l a t i o n s among the indica t o r s of national manufacturing (X^ through X^) are, as shown before (Table 6B), quite normal. S i m i l a r l y , the high i n t e r c o r r e l a t i o n s e s p e c i a l l y among the variables composing the c a p i t a l structure of NIDB-assisted enterprises (project equity or X^, project loan or X^ and project t o t a l or X R) on the one hand and among the components of X4 ' Note, Sf JSSSL^ ii 5 ^ ^ . ^ o t h - coefficients n a m e s a r e s h o w n i n a b b r e v i a t e d f o r m s are significant at the .01 level. S o u r c e : C c * p u t e d i r o n t h e v a l u e s o f the 11 v a r i a ^ l e s T ZZl^u^ ^ ^ ABPendix H. 133 NIDB financing or p a r t i c i p a t i o n (NIDB equity or X , NIDB loan or X y l u and NIDB t o t a l or on the other could hardly have been otherwise i n view of the l i n e a r dependence among the variables i n each group. In p a r t i a l conclusion on the temporal r e l a t i o n s h i p s between i n d u s t r i a l development and NIDB's financing a c t i v i t i e s , i t could be said that the bank's f i n a n c i a l investments have had a p o s i t i v e e f f e c t ; as i t s net equity and loan financing have increased over the years, so also has.the i n t e n s i t y or extent of manufacturing i n the country. However, whether or not the s e c t o r a l pattern of the bank's financing has tended to be proportionately concentrated i n one sector rather than another ( i n furtherance of the nationa l i n d u s t r i a l development objective of d i v e r s i f y i n g the country's i n d u s t r i a l output structure e s p e c i a l l y since the early 1970's) i s another matter which w i l l now be examined. III.2.2: National I n d u s t r i a l Output Structure and NIDB Financing The output structure of Nigerian manufacturing has been a matter of concern and attention for the country's i n d u s t r i a l development planning. The s e c t o r a l breakdown or output structure of manufacturing i s conceived as the percentage share of the various industry-type groups or sectors (designated at the two-digit l e v e l by the 9 ISIC numbers i n t h i s study) i n national manufacturing. A r e l i a b l y focussed analysis of Nigerian i n d u s t r i a l output structure f o r 1972, for instance, has revealed a number of lower-than-normal performance features, e s p e c i a l l y as compared to some other developing countries. F i r s t i s the dominance of low technology l i g h t i n d u s t r i e s r e f l e c t e d i n the contributions of 34.3 per cent and 17 per cent of value added respectively by food, beverages and tobacco (ISIC 31) and t e x t i l e s and wearing apparel (ISIC 32), f o r a combined share of 51 per cent (instead of about 31 per cent for the other developing countries compared). The second i s the e s s e n t i a l i n s i g n i f i c a n c e of the engineering industry group. Although t h i s group's aggregate contribution of 12.9 per cent compared rather favourably with the 16.4 per cent for the comparison group of LDC's, i t was dominanted by such elementary compon ents as metal f u r n i t u r e and f i x t u r e s , s t r u c t u r a l metal products and fabricated metal (with such basic engineering industry components as a g r i c u l t u r a l and s p e c i a l i n d u s t r i a l machinery, household e l e c t r i c a l apparatus and transport equipment accounting f o r only 2.3 per cent). A t h i r d i n d i c a t o r of r e l a t i v e s t r u c t u r a l imbalance was revealed by the anomalous composition of the chemical industry group (ISIC 35): while such components of the group as basic i n d u s t r i a l chemicals, f e r t i l i z e r s and pe s t i c i d e s accounted for only 0.2 per cent of value added, the consumer-oriented components as t o i l e t r i e s , household detergents and the l i k e accounted for a whole 8.2 per cent. Further, while the comparatively high proportion of 9.4 per cent for petroleum r e f i n i n g i s understandable (Nigeria being a major petroleum producer) the performance i n t h i s component does not compensate s u f f i c i e n t l y Central Planning O f f i c e , The Third National Development Plan 1975-80, Vol. 1, (Lagos: 1975), pp. 147-149. 135 e i t h e r f or the anomally i n the chemicals group as a unit or the manufacturing sector as a whole. The analysis of the financing a c t i v i t i e s of the country's most important i n d u s t r i a l development finance i n s t i t u t i o n could, therefore, hardly afford to neglect an examination of what re l a t i o n s h i p s those f i n a n c i a l a c t i v i t i e s bear to an admittedly d e f i c i e n t i n d u s t r i a l structure! I n c i d e n t a l l y , although NIDB (as a development bank) i s expected to s t r i k e a balance (compatible with i t s f u n c t i o n a l environ-ment) between developmental-impact and revenue-generating considerations i n i t s choice of projects for financing (section II.1.5) and although the bank's records reveal s e n s i t i v e i d e n t i f i c a t i o n with various other aspects of natio n a l i n d u s t r i a l development p o l i c i e s including the issue of regional balance (section II.2.1 above), those same records show no e x p l i c i t concerns for the country's i n d u s t r i a l output structure to a degree even remotely commensurate with those shown by the country's economic planners. The analysis i n this., regard would at least r e f l e c t whether the bank's statement of p r i o r i t i e s merely omits e x p l i c i t concern for the s t r u c t u r a l issue without a c t u a l l y neglecting i t or that the bank's s i l e n c e over i t a c t u a l l y amounts to ranking i t into i n s i g n i f i c a n c e . The analysis of NIDB financing v i s - a - v i s the structure of Nigerian manufacturing i n i t i a l l y s c r u t i n i z e s the r e l a t i o n s h i p s f o r each of the data years adopted and l a t e r makes a comparative synthesis. III.2.3: Cumulative NIDB Financing and the Structure of Nigerian  Manufacturing, 1974 Table 14 shows the structure of Nigerian manufacturing i n 1974 TABLE 14: NIGERIAN MANUFACTURING AND NIDB CUMULATIVE NET FINANCING, 1,9,7,4'.:.; SECTORAL DISTRIBUTION ISIC Measurement NIDB TOTAL NET FINANCING MANUFACTURING, 1974 (SANCTIONS) CUMULATED, 1964 - 1974 ( 2 - D i g i t Level) 1 2 3 4 5 6 Type Establishments Paid-up C a p i t a l No. of People Employi E n t e r p r i s e s =d Financed T o t a l Financing Associated Employment 31. No./Value(#'000) 241 65.303 30.521 27 10.199.5 3.255 % 23.3 19.3 17.4 14.5 16.4 7.5 32. No./Value (0 000) 161 97,606 55,179 44 16,670.0 20,258 % 15.5 '28.8 31.5 23.7 26.7 46.8 33. No. /ValueC*' 000^ 1 196 9,718 15,069 15 4,362.4 3,941 % 18.9 2.9 8.6 8.1 7.0 9.1 34. No./Valued'000) 94 21,745 12,372 5 472,0 469 % 9.1 6.4 7.1 2.3 0.8 1.1 35. N o . / V a l u e 0 0 0 ) 108 48,569 26,918 30 7,386.2 3,738 % 10.4 14.3 15.4 16.1 11.8 8.6 36. N o . / V a l u e 0 0 0 ) 66 60,375 9,046 10 10,303.5 2,798 % 6.4 17.8 5.2 5.4 16.5 6.4 37. i No. /Value<j»' 000) 19 1,500 2,463 1 293.0 365 % 1.8 0.4 1.4 0.5 0.5 0.8 38. No./Value(*'000) 133 33,649 22,048 34 6,513.0 5,149 % 12.8 9.9 12.6 18.3 1 — : — r o . 4 11.9 39. No./Value{&' 000) H18 613 1,6/1 20 b , l b i . 4 3,42/ % 1,7 0.2 1.0 10.» 9.9 /.9 T o t a l No. Value/(*'000) 1,036 339,078 175,287 186 62,361.0 43,400 % 100.0 100.0 •100.0 100.0 100.0 100.0 Notes: (1) NIDB's investments i n mining, f i n a n c e , and h o t e l and tourism( s t r i c t l y non-manufacturing a c t i v i t i e s ) have had to be grouped w i t h the miscellaneous industry—type group (ISIC 39) i n t h i s t a b l e . The r e l a t i v e l y s m a l l values f o r the three a c t i v i t y areas are d i s t i n g u i s h e d i n Appendix IV. (2) The 9 aggregate i n d u s t r y - t y p e groups used here, ISIC 31 to 39, are not designated f o r reasons of space only. T h e i r designations are shown i n Table 11 whose components f o r 1974 and 1980 are d u p l i c a t e d r e s p e c t i v e l y i n t h i s t a b l e and Table 16 below ( f o r convenience). Source: Same as f o r Tables 6A and 7 above. 137 as w e l l as the s t r u c t u r a l d i s t r i b u t i o n of NIDB's t o t a l net financing cumulated to 1974. The table reveals, f o r instance, that the two largest-sharing sectors of paid-up c a p i t a l and employment i n na t i o n a l manufacturing i n 1974 were those connected with t e x t i l e s and food processing (ISIC 32 and 31), resp e c t i v e l y accounting for 28.8 and 19.3 per cent on the one hand and 31.5 and 17.4 per cent on the other. The lowest-sharing sector was the category of "other manufacturing" i n d u s t r i e s " (ISIC 39) with 0.2 and 1.0 per cent re s p e c t i v e l y by paid-up c a p i t a l and employment. A most s t r i k i n g correspondence i s observable i n the s t r u c t u r a l d i s t r i b u t i o n of NIDB financing: the t e x t i l e sector also shared the highest proportion (26.7 per cent) of the cumulated value of NIDB's net financing and the associated employment (48.8 per cent) up to 1974. While the lowest proportionrof NIDB financing f o r 1974 (0.5 per cent) was for the basic metal indus-t r i e s (ISIC 37), the second highest-receiving sectors (ISIC,31 and 36, resp e c t i v e l y with 16.4 and 16.5 per cent) p r a c t i c a l l y also included the food processing sector (ISIC 31) which also ranked second i n t o t a l manufacturing. The suggestion produced by the values i n Table 14 of a l i n e a r r e l a t i o n s h i p between the structure of manufacturing generally and the s e c t o r a l d i s t r i b u t i o n of NIDB's cumulative net financing by 1974 i s more c l e a r l y stated by the c o r r e l a t i o n values i n Table 15. Attention should be directed p a r t i c u l a r l y to the r e l a t i o n s h i p s between the two basic measures of manufacturing (paid-up c a p i t a l , and employment, X^) on the one hand and NIDB net financing (X,.) on the other. TABLE 15: Cor r e l a t i o n Matrix Relating Nigerian Manufacturing i n 1974 to NIDB T o t a l Financing (Sanctions) Cumulated to 1974 X l x 2 X 3 X4 X 5 X 6 MFGESTAB •PAIDUPCA MFGEMPLT PROJESTA NIDBTOT ASSEMPLT x l MFGESTAB 1.000 0.503 0.656* 0.505 0.424 0.331 X2 PAIDUPCA 1.000 0.857** 0.670* 0.887** t 0.713* X 3 MFGEMPLT 1.000 0.838** 0.779** 0.850** X4 PROJESTA 1.000 0.782*" * 0.771** X5 NIDBTOT 1.00 0.808** X 6 ASSEMPLT 1.000 Note: The shortened v a r i a b l e names for Xn through X, correspond 1 6 with the column headings (1 through 6) i n Table 14. * S i g n i f i c a n t at .05 l e v e l . ** S i g n i f i c a n t at .01 l e v e l . Source: computed from the absolute values i n Table 14. 139 I t would be noticed that the c o r r e l a t i o n c o e f f i c i e n t of 0.887 between paid-up c a p i t a l (X^) and NIDB t o t a l financing (X,.) i s s i g n i f i -cant at the .01 l e v e l ; so also i s the c o r r e l a t i o n value of 0.779 between manufacturing employment (X^) and the bank's t o t a l financing (X,-). Two other noteworthy re l a t i o n s h i p s are those indexed by the corr e l a t i o n s of 0.773 between paid-up c a p i t a l (X^) and employment associated with NIDB-financed enterprises (Xg) and of 0.850 between t o t a l manufactural employment (X^) and employment associated with NIDB-financed enterprises (Xg), the one s i g n i f i c a n t at the .05 l e v e l and the other at the .01 l e v e l of confidence. The inference from the c o r r e l a t i o n analysis i s self-warranting: the s t r u c t u r a l pattern of NIDB's cumulative financing by 1974 and the associated employment (X,. and X^) had come to p a r a l l e l the s t r u c t u r a l magnitudes within manufacturing as a whole (as measured by paid-up c a p i t a l , X^, and employment, X^) i n 1974. The fac t that the s t r u c t u r a l d i s t r i b u t i o n of manufactural plants or establishments (X^) does not r e l a t e s i g n i f i c a n t l y to any of the three variables associated with NIDB financing (X^. through X^) further suggests that the cumulative s t r u c t u r a l e f f e c t of NIDB's financing a c t i v i t i e s has been such that the bank's funds were d i s t r i b u t e d strongly more i n sympathy with capital-investment and employment magnitudes i n the various sectors than on the basis of establishment numbers, a tendency more favourable to l a r g e r - s i z e enterprises (or sectors with such l a r g e r - s i z e enter-prises) . This l a s t inference i s further reinforced by the extended analysis made possible by regressing, for instance, NIDB's t o t a l net 140 financing on paid-up c a p i t a l investment i n manufacturing. The pattern of scatter points f o r the 9 aggregate sectors (ISIC 31 to 39) plotted xn M m i l l i o n (Figure 5), i s compatible with the highly s i g n i f i c a n t c o r r e l a t i o n c o e f f i c i e n t of 0.887 reported above. A computed regression l i n e has been inserted through the scattergram. The corresponding regression c o e f f i c i e n t of .0057 makes further i n t e r -p retation possible. I t implies that for every unit of cumulative NIDB investment or financing, there was, by 1974, N.0057 m i l l i o n (or about N5,700) of paid-up c a p i t a l investment. The "response" l e v e l thus suggested i s more e x p l i c i t l y examined f or the 1975-1980 period below (III.2.4). In the meantime, the analysis turns to an examination of the s t r u c t u r a l c h a r a c t e r i s t i c s of manufacturing v i s - a -v i s cumulative NIDB financing by 1980. III.2.4: The Structure of Manufacturing i n 1980 and Cumulative  NIDB Financing Even a casual inspection of the structure of Nigerian manu-facturing i n 1980 (Table 16) indicates some departures from the 1974 pattern (Table 14). for instance, the largest proportion of paid-up c a p i t a l was i n the t e x t i l e s group (ISIC 32) i n 1974 but i n the paper, p r i n t i n g and publishing group (ISIC 34) i n 1980. And while the food-processing group (ISIC 31) ranked second on th i s c r i t e r i o n i n 1974, the chemicals group (ISIC 35) had moved into the second place i n 1980 when the food-processing group s t i l l ranked t h i r d by a wide margin. Similar divergences between the s t r u c t u r a l patterns f o r 1974 and 1980 are also noticeable i n respect of t o t a l manufacturing employment as 141 FIGURE 5:PAID-UP CAPITAL IN MANUFACTURING IN 1 9 7 4 AND NIDB CUMULATIVE FINANCING TO 1 9 7 4 : SCATTERGRAM AND REGRESSION --t... ANALYSIS OF SECTORAL DISTRIBUTIONS 100 ~ 90 80 -3-rH 70 6 0 J 50 H 40 J 30 20 i •rH v< 10 02 r = 0 . 8 8 6 5 A Y = . 0 0 5 7 A X 39 o To" —r— 15 NIDB Net Financing Cumulated to 1 9 7 4 (M M i l l i o n TABLE 16: NIGERIAN MANUFACTURING AND NIDB FINANCING, 1980: SECTORAL DISTRIBUTION ISIC ( 2 - D i g i t Level ) Measurement Type MANUFACTURING, 1980 - , N I D B ™ T A L N E T FINANCING (SANCTIONS) CUMULATED. 1964 - 1980 1 1 2 3 1 4 5 6 Establishment Paid-up Ca p i t a l No. of Peopl Employed 2 Enterprises Financed Total Financing Associated Employment 3 1 . No./Value(#' 000) 761 227 ,869 56,507 65 101,216.4 19,881 JL _ J 126-IL- 11.2 l i ; 5 . _ _ . 62 .150 68 _2_6_._6____ 48 ,432.6 ' 11.6 30 .619 32 . No./Value (**000) 562 160,901 X J_ 19-2 2 1 . 3 . 3 3 . No. /Valued* 000) 324 150.433 20 .731 29 16.445.4 6.128 J L _L 11 .1 0.8 j 7.1 7.6 4 . 3 7 .0 34 . No./Valued'000) 224 833 ,371 24 ,404 15 3 , 9 0 1 . 0 .. 840 % _j 7.6 41 . 0 8 .4 3.9 1.0 1.0 3 5 . . 36 . No./Value(*'000) 312 501 ,049 43 ,095 45 3 4 , 0 2 9 . 6 7,355 I_ 10 .6 ™.o. /Value (*' 000) 135 24 .7 142 ,823 14.8 13,003" 11 .8 3 T " 8 .9 5J,TTSS 8 .3 4",J8"a % J 4 .6 J 7.0 4.5 8.7 J 14 .0 • 5.0 37 . N o . / V a l u e d 000) 17 3,957 1,899 14 9,14~0.4~ r,4"dr % J 0 .6 0.2 0.7 3.7 2 .4 1.6 38 . No./Valued'000) 551 143,495 67 ,578 42 9,93~8T7" 5\4T5" % J 18 .8 7.1 23 .2 1 11 .0 2.6 6.2 39 . N o . / V a l u e d 000) 44 1,495 2,107 70 104",^4"4".9 r2",CTJCT % J 1.5 0.1 0.7 18 .4 -. 27 .4 13.7 T o t a l No. /Value (•& 0C )0) 2 ,930 2 , 0 3 0 , 3 9 3 291,874 381 3 8 0 . 8 2 6 . 4 88 ,109 % 100 .0 100 .0 100.0 ••• 100.0 100 .0 100 .0 Notes: (1) NIDB's investments i n mining, finance, and hotel and tourism ( s t r i c t l y non-manufactural a c t i v i t i e s ) have had to be grouped with financing i n the miscellaneous industry-type group (ISIC 39) i n t h i s table. The r e l a t i v e l y small values f o r the three a c t i v i t y areas are distinguished i n Appendix V. (2) The 9 aggregate industry-type groups used here, ISIC 3 1 - 3 9 , are not designated f o r reasons of space only. Their designations are shown i n Table 11 whose components f or 1974 and 1980 are duplicated r e s p e c t i v e l y i n this table and Table 14 above ( for convenience). Source: Same as for Tables 6A and 7 above. 143 w e l l as NIDB t o t a l financing and the associated employment except that the t e x t i l e s group s t i l l had the largest percentage (34.8) of employment associated with NIDB-financed enterprises i n 1980 (columns 3-6 i n Tables 14 and 16). A focussed examination of the s t r u c t u r a l changes which occurred i n NIDB financing i n the 1975-80 period v i s - a - v i s the s t r u c t u r a l pattern of manufacturing e x i s t i n g i n 1974 i s undertaken below (section III.2.5). For now, the s t r u c t u r a l d i s t r i b u t i o n f o r 1980 alone as w e l l as i t s r e l a t i o n s h i p to NIDB financing i s further probed v i a c o r r e l a t i o n analysis (Table 17). Again, the most important r e l a t i o n s h i p s on Table 17 are those between manufacturing paid-up c a p i t a l (X^ and employment X^) on the one hand and cumulative NIDB t o t a l financing (X,.) on the other. The hypothetical expectation i s that i f the d i s t r i b u t i o n of NIDB financing had, to any appreciable extent, taken account of the s t r u c t u r a l imbalance revealed f o r Nigerian manufacturing i n the early 1970's, the bank's financing decisions would have been such that between 1974 and 1980, i t s financing cumulated over the ent i r e 1964-1980 period, would reveal a s t r u c t u r a l pattern more favourable to manufacturing sectors of r e l a t i v e l y more depressed rankings i n 1974. In other words, there should be, for 1980, a negative s t r u c t u r a l c o r r e l a t i o n between manufacturing and NIDB financing so cumulated. The obtained r e s u l t s (Table 17) are highly consistent with the in v e r s e - r e l a t i o n s h i p expectation. The c o r r e l a t i o n c o e f f i c i e n t s of -0.298 between manufacturing paid-up capital.(X^) and NIDB financing (X Q) as w e l l as that of -0.010 between manufactural employment (X2) and NIDB financing are c l e a r l y negative. This i s a remarkable r e v e l a t i o n ! The consequent inference i s as suggested above: that although NIDB's records do not give prominence to the issue of s t r u c t u r a l balance, the bank seems, to a noticeable extent, have been s t r u c t u r i n g i t s f i n a n c i a l sanctions (since the early 1970's to favour the r e l a t i v e l y underdeveloped sectors of manufacturing. Th r e s u l t ( p r o v i s i o n a l l y f o r now) i s a cl e a r though non-significant inverse r e l a t i o n s h i p between manufacturing and cumulative NIDB financing by 1980. TABLE 17: Co r r e l a t i o n Matrix For Nigerian Manufacturing i n 1980 (X^ and X^) and NIDB Financing Cumulated from 1964 to 1980 (X ): A S t r u c t u r a l Analysis PAIDUPCA MFGEMPLT NIDBTOT X l X2 X 3 : x i PAIDUPCA 1.000 0.194 -0.298 X2 MFGEMPLT 1.000 -0.010 X 3 NIDBTOT 1.000 Source: Computed from the relevant values i n Table 16. The p r o v i s i o n a l inference from the above c o r r e l a t i o n analysis which does not exclude the s t r u c t u r a l pattern of NIDB financing from 1964 to 1974 could be further ascertained by excluding the bank's financing during the 1964-74 period and focussing on the s t r u c t u r a l d i s t r i b u t i o n of financing from 1975 to 1980 v i s - a - v i s the structure of a l l manufacturing by 1974 (Table 18). The r e s u l t i n g "truncated" values f o r NIDB financing could then be analyzed, again, by c o r r e l a t i o n procedures and simpler graphic r e l a t i o n s . III.2.5: S t r u c t u r a l Relations of Manufacturing and NIDB Financing  i n the 1975-1980 Period Table 18 shows t o t a l manufacturing i n 1974 alongside cumulative NIDB financing f o r the 1975-1980 period only. The c o r r e l a t i o n values i n Table 19A indic a t e the r e l a t i o n s h i p s . The r a t i o n a l e of the analysis i s s i m i l a r to that i n the l a s t s ection (III.2.4): that i n view of the comparatively depressed status of some sectors of manufacturing i n 1974, the s e c t o r a l a l l o c a t i o n of NIDB financing i n the in-between period (1975-80) should favour the depressed sectors. Also as indicated above, the s e c t o r a l values f o r manufacturing i n 1974 should therefore y i e l d an inverse r e l a t i o n s h i p with the s e c t o r a l pattern of NIDB financing i n that in-between period. This expectation i s fundamentally f u l f i l l e d . For one thing, none of the variables measuring manufacturing, through X^, correlates s i g n i f i c a n t l y with variables associated with NIDB financing (X^ through X^). Even more t e l l i n g l y , one of the basic measures of manufacturing, paid-up c a p i t a l investment (X 2) , consistently shows negative c o r r e l a t i o n s not only with NIDB t o t a l financing (X^) but also with the number of NIDB-financed enterprises (X^) as w e l l as NIDB financing i n the form of equity (X,.). The other basic measure of manufacturing, t o t a l manufacturing employment (X„), while not TABLE 18: The St r u c t u r e of N i g e r i a n Manufacturing i n 1974 and Cumulative NIDB Financing i n the 1975-80 P e r i o d ISIC ( 2 - D i g i t Level) Manufacturing, 1974 Cumulative NIDB Financing, 1975-1980 •V'l 3 5 6 7 Number of Es tablishments Paid-Up C a p i t a l (N'000) Number Employed Number of Ent e r p r i s e s Financed Equity Financing (M'OOO) T o t a l Financing (M'OOO) Associated Employment 31. 241 65,303 30,521 38 9,912.4 91,016.9 16,626 32. 161 97,606 55,179 24 2,355.0 31,762.6 10,361 33. 196 9,718 15,069 14 685.0 12,083.0 2,187 34. 94 21,745 12,372 10 110.0 3,429.0 371 35. 108 48,569 26,918 15 1,163.4 26,643.4 1,617 36. 66 60,375 9,046 23 5,391.3 42,975.0 1,582 37. 17 6,500 2,463 13 120.0 8,847.4 1,036 38. 133 33,649 22,048 8 200.0 3,425.0 326 39. 18 613 1,671 50 8,563.3 98,283.0 8,603 1,036 339,078 175,287 195 28,500.4 318,465.3 42,709 y i e l d i n g negative correlations with NIDB-associated v a r i a b l e s does not, nevertheless, exhibit s i g n i f i c a n t r e l a t i o n s h i p s even at the .05 l e v e l . The separate i n c l u s i o n of NIDB's equity financing (one of the two components of NIDB t o t a l financing, the other being loan financing) i s that equity financing (X,.) represents a greater commitment on the part of the bank to enterprises i t has chosen to finance. This i s so because equity p a r t i c i p a t i o n implies at least part-ownership and entitlement and expectation to share i n the p r o f i t s / l o s s e s of enter-prises financed v i a equity. On the other hand, only i n t e r e s t payments constitute gains from loan financing. As indicated above, NIDB cumu-l a t i v e equity financing i n the 1975-1980 period (X,.) correlates negatively with the s t r u c t u r a l d i s t r i b u t i o n of paid-up c a p i t a l (X^) and very low with manufacturing employment (X^) i n 1974. One already-observed feature of the analysis i n Table 19A i s that none of the c o e f f i c i e n t s mirroring the r e l a t i o n s h i p s between variables r e l a t e d to manufacturing and NIDB (respectively) i s s i g n i f i -cant. This i s true for both the negative and p o s i t i v e c o r r e l a t i o n c o e f f i c i e n t s . This suggests that although NIDB has apparently changed the s t r u c t u r a l pattern of i t s financing i n a way i d e n t i f i a b l y d i f f e r -ent from the 1964-1974 pattern (Table 15), and noticeably i n favour of sectors which emerged as r e l a t i v e l y depressed i n 1974, the change has not been d r a s t i c enough to generate c o r r e l a t i o n c o e f f i c i e n t s which are s i g n i f i c a n t . These same observations are also true for the analysis r e l a t i n g the s t r u c t u r a l d i s t r i b u t i o n of manufacturing i n 1980 to that of NIDB financing i n the 1975-1980 period (Table 19B); the only difference i s that the negative r e l a t i o n s h i p s are more pronounced. TABLE 19A: Cor r e l a t i o n Matrix f or the S t r u c t u r a l Relations Between Nigerian Manufacturing i n 1974 (X through X ) and NIDB Financing (X. through X ) Cumulated from 1975 to 1980 V ESTABS X2 PAIDUPCA X 3 MFGEMPLT X4 PROJECTA X5 PROJEQUT X6 NIDBTOT X7 ASSEMPLT x l ESTABS 1.000 0.657* 0.503 -0.046 0.127 0.054 0.489 X2 PAIDUPCA 1.000 0.857** -0.040 -0.023 -0.017 0.475 X 3 MFGEMPLT 1.000 0.072 0.204 0.138 0.465 TABLE 19B: Co r r e l a t i o n Matrix f or the S t r u c t u r a l Relations Between Nigerian Manufacturing i n 1980 (X± through X3> and NIDB Financing (X 4 through X ?) Cumulated from 1975 to 1980 X l X2 X 3 X4 X5 X6 X7 X l ESTABS 1.000 0.088 0.919** 0.011 0.181 0.117 0.567* X2 PAIDUPCA 1.000 0.194 -0.351 -0.271 -0.286 -0.215 X 3 MFGEMPLT 1.000 -0.180 -0.057 -0.091 0.331 * S i g n i f i c a n t at .05 l e v e l . ** S i g n i f i c a n t at .01 l e v e l . Notes: The shortened v a r i a b l e names (X.. through X ) correspond to the column headings (1 through 7 i n Table 18. -The v a r i a b l e names are the same for Tables 19A and 19B. 149 In view of the importance of the leading sectors i n the country's i n d u s t r i a l i z i n g economy, and the subtle i n t r a - s e c t o r a l anomalies r e f e r r e d to e a r l i e r (beginning of section III.2.2), the bank could hardly go that f a r , presumably. Thus, while Figure 6 shows such industry-type groups as basic metal (ISIC 37) and "others" (ISIC 39) to have been d i s t i n c t l y favoured, and t e x t i l e s (ISIC 32), paper and publishing (ISIC 34) as w e l l as chemicals (ISIC 35) to have been r e l a t i v e l y disfavoured, such other s i g n i f i c a n t groups as food processing (ISIC 31) and non-metallic mineral products (ISIC 36) s t i l l received not inconsiderable propor-tions of NIDB financing i n the 1975-1980 period. The conclusion i n f e r a b l e from the analyses would appear compelling. Although the issue of s t r u c t u r a l balance does not feature as prominently as other industrial-development planning concerns i n NIDB's records, the clear suggestion i s that the bank's financing patterns do seem to have taken into account (since the early 1970's) the development-p o l i c y objective of evolving a balanced i n d u s t r i a l sturcutre. It does t h i s noticeably i n the 1975-1980 period by s t r u c t u r i n g i t s financing to favour most of the sectors which had been r e l a t i v e l y depressed. The analysis of the bank's financing v i s - a - v i s the regional (state) pattern of manufacturing, perhaps a p o l i t i c a l l y more i n t e r e s t i n g dimension (at l e a s t within N i g e r i a ) , i s the other major substantive aspect of t h i s study. It forms the subject of Chapter 4. FIGURE 6: SECTORAL DISTRIBUTION OF NIGERIAN MANUFACTURING, 1974 AND 1980 AND 1980 NIDB CUMULATIVE NIDB FINANCING, 1975 - 1980 (%) Paid-up C a p i t a l , 1980 Mfg. Employment, 1980 Cumulative NIDB Financing, 1975-80 ? Value too small to show well ISIC 31 1 ISIC 32. ' ISIC 33 I ISIC 34 ' ISIC ,35 I ISIC 36 I I S I C ^ 7 ' ISIC 38 l l S I C ^ f Sectors of Manufacturing by ISIC Groups Ln O 151 CHAPTER FOUR NIGERIAN MANUFACTURING AND NIDB FINANCING: PATTERNS  AND RELATIONSHIPS AT THE REGIONAL (STATE) LEVEL IV.1 Preliminary Remarks This chapter i s devoted to the analysis of Nigerian manufacturing v i s -a-vis NIDB financing i n the regional (state) context. It f u l f i l s the second primary objective of t h i s study: e l i c i t i n g the extent to which NIDB's financing a c t i v i t i e s have contributed to or (hopefully) mitigated the e s s e n t i a l l y polarized pattern of i n d u s t r i a l development i n Nigeria (Section 1.6.1 above). Accordingly, i t addresses the p o l i c y issue of equity or balance i n the l o c a t i o n of public investment (respresented here by NIDB financing) as well as related theoretical/conceptual issues. The data years f o r which analyses are performed to e l i c i t relevant r e l a t i o n s h i p s are primarily.as i n the previous chapter, 1974 and 1980. IV.1.1 Operationalizing the P o l i c y and Conceptual Frameworks It i s useful to r e c a l l that since the immediate post Civil-War years of the early 1970s, Nigerian development-planning p o l i c y has co n s i s t e n t l y advocated the need and desire to reduce e x i s t i n g d i s p a r i t i e s i n develop-ment among the d i f f e r e n t geographical areas of the country. Fundamentally, the p r i n c i p l e i s expected to guide investments i n a l l sectors of the economy and at a l l l e v e l s of s p a t i a l organization: that i s , i t i s expected to apply not only to federal investments i n a l l the 19 states but also to state investments within t h e i r corresponding l o c a l government areas (see Section 1.4.3 above). Of course, i t i s i n the context of the federal l e v e l -152 type of investment v i s - a - v i s the states that the balanced-development p r i n c i p l e has received the strongest p o l i c y attention i n N i g e r i a . And since NIDB i s a federal government-owned finance i n s t i t u t i o n which has also strongly i d e n t i f i e d i t s e l f with the balanced-development p r i n c i p l e i n i t s industrial-development financing function (see Section II.2.1 above), i t i s that context (federal-to-state investments) which i s relevant to t h i s study. Further, i t could also be noted that the conceptual idea of influencing an economic system to induce convergence (reduce d i s p a r i t y ) , generally or i n a p a r t i c u l a r sector of the economy, i s one which must r e a l i s t i c a l l y adopt an i n d e f i n i t e (or at least f l e x i b l e ) time horizon. Thus, any s p e c i f i c empirical study t i e d to p a r t i c u l a r points i n time (as must be the case i n the convergence/divergence context), could only hope to unravel the d i r e c t i o n and/or i n t e n s i t y of events within the period covered. A p a r t i c u l a r a n a l y t i c a l problem of the equity or balanced-develop-ment issue i n the Nigerian context i s that relevant public documents do not provide s p e c i f i c operational guides. The only general guide that could be discerned i s contained i n the statement that "The objective (of the balanced-development polic y ) i s to move r a p i d l y to the achievent of a minimum economic and s o c i a l standard for every part of the country".^ Operationally i n t h i s context, t h i s means that within NIDB's constraining considerations for e f f i c i e n c y , e f f o r t s should be made ( i n i n d u s t r i a l investment-location matters) to channel investments to areas deemed to have been r e l a t i v e l y "disfavoured". Federal Republic of Nigeria, The Second National Development Plan, 1970-74, (Lagos: 1970), p.32. ~ ; 153 A n a l y t i c a l l y , a r e l i a b l e procedure that could show the r e l a t i v e gains or losses for the regional (state) units concerned would f a c i l i t a t e inferences as to how e f f e c t i v e the p o l i c y has been between at least two points i n time. If an erstwhile "disfavoured" region or group of regions make r e l a t i v e gains (no matter how small) within such a period of time, or i f i t takes a larger number of states to account for a c e r t a i n proportion of the relevant magnitudes (manufacturing and NIDB financing) at the more recent point i n time (1980) than at an e a r l i e r point i n time (1974) , the minimum requirements of the balanced-development p r i n c i p l e would have been s a t i s f i e d , and convergence would have been occurring. On the other hand, an i n d i c a t i o n of r e l a t i v e loss f o r previously disadvantaged regional u n i t s , or a reduction i n the number of regional units accounting for a c e r t a i n proportion of the relevant magnitudes at a more recent point i n time (1980) than at an e a r l i e r point i n time (1974) would not only i n d i c a t e a divergence between stated public p o l i c y objectives and actual public investment-location behaviour but also reveal a continuation (and con-ceivably, accentuation) of the s p a t i a l l y polarized industrial-development s i t u a t i o n . Obviously then, the p r i n c i p l e involved i s not ne c e s s a r i l y an equal-or proportional-sharing one. For one thing, the balanced-development p r i n c i p l e came into prominence at a p a r t i c u l a r period (early 1970s) , against the background of e x i s t i n g and observable developmental imbalances. It i s not the objective of the balanced-development p o l i c y (from then) to pursue i t s a n t i - d i s p a r i t y goals "at the cost of stagnation i n areas which 2 are presumed to be r e l a t i v e l y more developed..." . And i n any event, the exi s t i n g pattern of investments and manufactural a c t i v i t i e s i n the early Federal Republic of Niger i a , Ibid., p. 32. 154 1970s are not e n t i r e l y or even s i g n i f i c a n t l y wholly a t t r i b u t a b l e to past public (federal) development p o l i c i e s . D i f f e r e n t i a l regional o r i e n t a -tions to private r i s k - t a k i n g and entrepreneurship have played c r u c i a l roles i n the evolution of the polarized system. In f a c t , an analysis of paid-up c a p i t a l i n Nigerian manufacturing for the 1963-1972 period has shown that the f e d e r a l government accounted for only 3 to 5 per cent while pr i v a t e Nigerian entrepreneurship accounted for between 9 and 12 per cent, with foreign investors, state governments and others accounting 3 for the rest i n varying proportions. Thus, even as i m p l i c i t i n the relevant p o l i c y statements, evaluation of the balanced-development p o l i c y could hardly ignore the underlying differences i n regional production e f f o r t s , structures and c a p a b i l i t i e s . Besides, disentangling the c e n t r a l (federal) component from t o t a l i n d u s t r i a l investment (on a regional basis) i s neither easy nor the s p e c i a l focus of t h i s study. The c e n t r a l public investment of i n t e r e s t here i s that represented by NIDB financing, although that may not be uninfluenced by the c i r c u l a r and cumulative-causation process which accompanies s p a t i a l development generally. The above comment also c a l l s attention to the "constraining" e f f i c i e n c y c r i t e r i a which guides NIDB financing. The bank, despite i t s avowed commitment to the balanced-development p o l i c y , goes to i n c r e d i b l e extents to be s a t i s f i e d that i t s prospective c l i e n t enterprises are economically d e s i r a b l e , t e c h n i c a l l y f e a s i b l e and commercially v i a b l e (see Section II.2.2 above). Certa i n l y then, regions which have been r e l a t i v e l y J.O. Akintola-Arikawe, "Nigerian Indigenisation P o l i c y and the Manufacturing Sector (with a Game Frame-work for Evaluation)" The Nigerian Journal of  Economic and S o c i a l Studies, Vol. 24, No. 1, 1982, Table 1. 155 "disfavoured" i n i n d u s t r i a l development could be "favoured" only i n two f e a s i b l e ways. F i r s t , at the margin of project s e l e c t i o n where applicant enterprises from both "favoured" and "disfavoured" areas are being con-sidered for financing and there i s no s i g n i f i c a n t consideration to take into account other than regional (state) l o c a t i o n of the enterprise, NIDB could select the enterprise from states needing upward " l e v e l l i n g " . Secondly, NIDB could engage i n more promotional a c t i v i t i e s i n such states i n order to increase the number of prospective enterprises that could s u c c e s s f u l l y a t t r a c t i t s funds. I t i s against the background of the above considerations that the succeeding analyses could be meaningfully viewed. IV.1.2 Data Years and Measurement C r i t e r i a As indicated before (Section I I I . l ), the analysis of Nigerian manufacturing and NIDB financing within the balanced-development perspec-t i v e employs 1974 (for early 1970s) and 1980 (most recent f o r r e l i a b l y a v a i l a b l e data) as reference points i n time. And while the same measures of NIDB financing as used i n Chapter III are employed, the c r i t e r i a of plant or establishment numbers and employment are used to measure manufacturing. The actual analysis now follows. It proceeds from an i n i t i a l examination of the regional patterns of manufacturing i n 1974 and 1980, the d i s t r i b u t i o n of NIDB financing patterns and l a t e r employs various a n a l y t i c a l devices to e l i c i t the d i r e c t i o n (divergence/convergence) and extent of change i n the patterns. IV.2 The Regional Pattern of Manufacturing and NIDB Financing IV.2.1 I n i t i a l Examination of Regional Manufactural Patterns A useful i n i t i a l step i s to examine the regional pattern of manu-156 facturing i n the two relevant data years, 1974 and 1980. Table 20 shows the basic patterns of values using the establishment and employment c r i t e r i a . (1963 population t o t a l s are also entered alongside the values). Table 21 shows the same set of data expressed as percentages. The l a t t e r table reveals the wide v a r i a t i o n s i n the regional (state) d i s t r i b u t i o n of Nigerian manufacturing, whether i n d u s t r i a l - a c t i v i t y incidence i s measured by establishments or employment. The range i n 1974 was from less than 1 per cent share for Bauchi, Benue, Borno, Gongola and Niger states to over 30 per cent for Lagos state. The general pattern had not changed noticeably by 1980 except that Lagos' share of i n d u s t r i a l establishments had dropped to about 28 per cent. A common general method of i n d i c a t i n g the r e l a t i v e s i g n i f i c a n c e of manufacturing among s p a t i a l units i s to express manufacturing employment as numbers per 1000 people i n the corresponding u n i t . The l a s t two columns of Table 21 shows the i n d u s t r i a l employment per 1000 for Nigeria's regional units for both 1974 and 1980. The values (less than 1 for 8 and 6 states r e s p e c t i v e l y i n 1974 and 1980) r e f l e c t the r e l a t i v e i n s i g n i f i c a n c e of manufacturing as a source of employment i n Ni g e r i a . Even the values of 3 and 5 persons per thousand i n the whole country (columns 6 and 7 of Table 21) i s f a r from impressive .(and that i s i n s p i t e of the old and outdated population data base used to e l i c i t t h i s rough i n d i c a t i o n ) . Only three states had, i n both 1974 and 1980, over 5 people i n every thousand employed i n manufacturing, with Lagos state having 61 and 100 i n the . 4 respective years. 4 The r e l a t i v e l y high values for Lagos state could be a t t r i b u t e d to the pra c t i c e (among many Nigerians from outside Lagos state) of leaving cosmopolitan Lagos to be counted i n t h e i r home states during census counts. The r e s u l t i s that the population-number base used for Lagos state greatly understates the number of people who normally l i v e and work i n metropolitan Lagos. 157 TABLE 20: The Regional Pattern of Nigerian Manufacturing: Absolute Values, for 1974 and 1980. 1 9 - 7 4 1 9 8 0 State E s t a b l i s h - Employ- E s t a b l i s h - Employ- 1963 ment ment ment ment Population (millions) 1. Anambra 98 4,851 225 9,649 2.9 2. Bauchi 4 348 5 771 2.2 3. Bendel 59 14,843 253 19,221 2.4 4. Benue 8 112 50 1,299 3.0 5. Borno 8 678 12 697 3.0 6. Crossriver 48 8,844 189 14,439 3.6 7. Gongola 14 231 21 1,238 3.0 8. Imo 54 2,329 391 15,285 3.3 9. Kaduna 48 20,725 64 15,684 4.1 10. Kano 83 12,854 209 28,560 5.8 11. Kwara 23 2,534 39 6,327 2.3 12. Lagos 323 85,757 812 140,300 1.4 13. Niger 8 183 6 102 1.3 14. Ogun 42 3,609 48 3,288 1.6 15. Ondo 36 2,262 47 3,220 2.7 16. Oyo 98 6,980 77 5,273 5.2 17. Plateau 45 3,618 64 6,047 2.0 18. Rivers 15 2,185 403 18,876 1.8 19. Sokoto 22 2,344 15 1,598 4.5 Total 1,036 175,287 2,930 291,874 56.1 Sources: Federal O f f i c e of S t a t i s t i c s , I n d u s t r i a l Survey of Niger i a , 1973 &  1974, (Lagos: 1976); enquiries at the i n d u s t r i a l survey unit of the Federal O f f i c e of S t a t i s t i c s , early 1981; Nigerian Investment Infor-mation and Promotion Centre, Federal M i n i s t r y of Industries, I n d u s t r i a l Directory, 8th E d i t i o n , (Lagos: March 1980). Notes: 1. Data summarized here pertain to manufacturing establishments employing ten or more people. The data sources used (compiled mainly on the basis of i n d i v i d u a l establishments) exhibit varying degrees of information incompleteness on some var i a b l e s except i n respect of the establishment and employment measures employed here. 2. The population values derive from the 1963 census (the l a s t f u l l -scale census i n Nigeria so f a r ) , the immediate source being Federal Republic of Niger i a , "Federal M i l i t a r y Government Views on the  Report of the Panel on Creation of States, (Lagos: Federal M i n i s t r y of Information, P r i n t i n g D i v i s i o n , 1976), pp. 31-32. TABLE 21: Percentage D i s t r i b u t i o n of Nigerian Manufacturing (by States), 1974 and 1980. 1974 1980 1963 Population State 1 E s t a b l i s h -ments 2 Employ-ment 3 E s t a b l i s h -ments 4 Employ-ment 5 Population (%) 6 Mf g. Emp. per 1000 (1974) 7 Mfg. Emp. per 1000 (1980) 8 Concentra-t i o n Index (74) 1. Anambra 9.5 2.8 7.7 3.3 5.2 1.7 3.3 0.5 2. Bauchi 0.4 0.2 0.2 0.3 3.9 0.2 0.4 0.1 3. Bendel 5.7 8.5 8.6 6.6 4.3 6.2 8.0 2.0 4. Benue 0.8 0.1 1.7 0.4 5.3 0.04 0.4 0.02 5. Borno 0.8 0.4 0.4 0.2 5.3 0.2 0.2 0.1 6. Crossriver 4.6 5.0 6.5 4.9 6.4 2.5 4.0 0.8 7. Gongola 1.4 0.1 0.7 0.4 5.3 0.1 0.4 0.02 8. Imo 5.2 1.3 13.3 5.2 5.9 0.7 4.6 0.2 9. Kaduna 4.6 11.8 2.2 5.4 7.3 5.1 3.8 1.6 10. Kano 8.0 7.3 7.1 9.8 10.3 2.2 4.9 0.7 11. Kwara 2.2 1.4 1.3 2.2 4.1 1.1 2.7 0.3 12. Lagos 31.2 48.9 27.7 48.1 2.5 61.3 100.2 19.7 13. Niger 0.8 0.1 0.2 0.03 2.3 0.1 0.1 0.04 14. Ogun 4.1 2.1 1.6 1.1 2.9 2.3 2.1 0.7 15. Ondo 3.5 1.3 1.6 1.1 4.8 0.8 1.2 0.4 16. Oyo 9.5 4.0 2.6 1.8 9.3 1.3 1.0 0.4 17. Plateau 4.3 2.1 2.2 2.1 3.6 1.8 3.0 0.6 18. Rivers 1.4 1.2 13.8 6.5 3.2 1.2 10.5 0.4 19. Sokoto 2.1 1.3 0.5 0.5 8.0 0.5 0.4 0.2 Total 100.0 100.0 100.0 100.0 100.0 3.1 5.2 1.0 Source: Computed from Table 20. 159 A f i n a l i n i t i a l view of the regional pattern of manufacturing r e l a t e s each state's share of manufacturing employment i n 1974 to the respective state's share of national population i n 1963 by means of a concentration index (column 8 of Table 21), A state with i d e n t i c a l percentage shares i n both respects would y i e l d an index of 1. States sharing more or le s s of manufacturing employment than population would, res p e c t i v e l y , y i e l d indices greater or less than 1. It would be noticed from Table 21 (column 8) that 16 of the 19 state units had (to varying extents i n 1974) , les s employment share i n manufacturing than t h e i r shares of n a t i o n a l population (as old as the population data base i n e v i t a b l y i s ) , the indices being under 1. Only three states (Bendel, Kaduna and e s p e c i a l l y Lagos) had more than 1. However, these indices are only of suggestive s i g n i f i c a n c e i n t h i s context. As remarked above (Section IV.1), since the issue of o v e r a l l d i s p a r i t i e s i n development should take account of performance i n a l l economic-activity sectors or be related to an o v e r a l l measure such as aggregate income per head (either of which i s beyond the scope of t h i s study), the appropriate basis for addressing the regional-imbalance issue i n the si n g l e sector of i n t e r e s t here (manufacturing) cannot be o v e r a l l population but indices/measures r e l a t e d to the manufacturing sector alone. This i s the d i r e c t i o n taken i n Section IV.3 below. In the meantime, a s i m i l a r i n i t i a l examination of the related NIDB-financing data during the study period i s required. IV.2.2 I n i t i a l Examination of the Regional Pattern of NIDB Financing Table 22 shows the regional d i s t r i b u t i o n of NIDB's t o t a l net financing cumulated from the 1964 to 1974 and from 1964 to 1980. As explained before, NIDB's t o t a l financing consists of the sum of the bank's TABLE 22: NIDB's Total Net Financing, 1964-1974 and 1964-1980: D i s t r i b u t i o n by States. 1964-1974 1964 - 1980 State C l i e n t Establishments Total Financing Cl i e n t Establishments . Total Financing No % (N'000) % No. % (N'000) "..% 1. Anam.br a : 15 8.1 3176.00 5.1 28 7.3 18621.0 4.9 2. Bauchi 0.0 0.0 0.0 0.0 8 2.1 21889.4 5.7 3. Bendel 12 6.5 2972.0 4.8 21 5.5 16322.0 4.3 4. Benue 0.0 0.0 0.0 0.0 3 0.8 12480.0 3.3 5. Borno 2. 1.1 860.0 1.4 7 1.8 7120.0 1.7 6. Crossriver 4 2.2 6499.6 10.4 13 3.4 24911.6 6.5 7. Gongola 0.0 0.0 0.0 0.0 2 0.5 8318.5 2.2 8. Imb 13 7.0 3612.0 5.8 29 7.6 18162.0 4.8 9. Kaduna 9 4.8 4050.0 6.5 20 5.2 18572.8 4.9 10. Kano 3 1.6 418.0 0.7 8 2.1 10568.0 2.8 11, Kwara 1.1 5.9 4529.5 7.3 23 6.0 12116,5 3.2 1.2, Lagos 93 50.0 23265,7 37.3 138 36.2 91320.9 24.0 13. Niger 0.0 0.0 0.0 0.0 5 1.3 13385.0 3.5 14. Ogun 9 4.8 6317.7 10.1 32 8.4 49183.9 12.9 15. Ondo 3 1.6 2367.0 3.8 5 1.3 6540.2 1.7 16. Oyo 2 1.1 1920.0 3.1 18 4.7 33282.0 8.7 17. Plateau 3 1.6 347.0 0.5 4 1.0 427.0 0.1 18. Rivers 4 2.2 707.0 1.1 8 2.1 6090.0 1.6 19. Sokoto 3 1,6 1320,0 2.1 9 2.4 11516.0 3.0 Total 186 100.0 62361.5 100.0 381 100.0 380826.8 100.0 Notes: (1) On t h i s table, the number of c l i e n t establishments i s the same as the number of i n a n c i a l sanctions. (2) In mid-1982, Ml (one Naira), the Nigerian monetary un i t , i s equivalent to $1.52 (U.S.) or $1.94 (Canadian). Source: Same as for Table 7, 161 loan and equity p a r t i c i p a t i o n i n (or sanctions to) i t s c l i e n t establishments or enterprises (see Appendices VIA and VIB). And the word "net" denotes the fact that the values shown exclude cancelled or withdrawn sanctions (see Section I I I . 1.2 above). It could be noticed that, as with manufacturing, there i s enormous v a r i a t i o n i n the sum t o t a l of NIDB net financing from 1964 to 1974 and cumulatively from 1964 to 1980. One s t r i k i n g point about the values for the 1964-1974 period i s that four of the states did not receive NIDB financing i n that period. The reason i s simple: a l l four are states created a f t e r 1974 and apparently, none of the c l i e n t enterprises i n some of the larger twelve states from which they were created i n 1976 was located i n the areas that came to form these four state units i n 1976. Even then, the wide range of proportional .shares of NIDB financing, from 1.1 per cent ( c l i e n t establishments) and 0.7 per cent (money value) to 50 per cent (establishments) and 37 per cent (money value) i n 1974 i s c e r t a i n l y considerable. The same wide v a r i a t i o n s are s t i l l apparent when cumulative NIDB financing i s viewed for the e n t i r e study period, 1964 to 1980 although the range i s narrowed somewhat: at least there i s no state without some share of the bank's financing, no matter how small. One gets a hint of what i s expectable from Table 22: that although there might have been, by 1980, a development i n the d i r e c t i o n of con-vergence i n the regional pattern of manufacturing i n a s s o c i a t i o n with NIDB financing, considerable d i s p a r i t i e s s t i l l persisted such that there might not be a s i g n i f i c a n t d i f f e r e n c e between the regional i n d u s t r i a l pattern i n the early 1970s (when the balanced development p o l i c y emerged into prominence) and the pattern as i t stood i n 1980. The succeeding sections of t h i s chapter t r i e s to r e l a t e and analyze the patterns i n 162 order to e l i c i t more c l e a r l y the d i r e c t i o n and extent of change (convergence/ divergence). This begins by simultaneous probing the r e l a t i o n s h i p s be-tween NIDB f i n a n c i n g and manufacturing patterns f o r the two data years adopted. IV. 2.3 R e l a t i o n s h i p s Between the Regional P a t t e r n s of Manufacturing and NIDB  Fina n c i n g , 1974 and 1980 The data f o r e x p l o r i n g the r e l a t i o n s h i p s are the raw values i n Tables 21 and 22 (with some disaggregated components from Appendices VIA and VIB in c o r p o r a t e d ) . The corresponding c o r r e l a t i o n c o e f f i c i e n t s which index the r e l a t i o n s h i p s are shown i n Table 23 (A and B). A t t e n t i o n should f i r s t be d i r e c t e d to the primary measures of manu-f a c t u r i n g establishments (Xp and employment (X 2) and t h e i r c o r r e l a t i o n s w i t h NIDB t o t a l net f i n a n c i n g (X^) . I t would be no t i c e d that by 1974 (Table 23,A), NIDB t o t a l f i n a n c i n g was high where manufacturing e s t a b l i s h -ments were numerous, and v i c e v e r s a . The c o r r e l a t i o n c o e f f i c i e n t of 0.892 i s thus s i g n i f i c a n t even at the .01 l e v e l . S i m i l a r l y , manufacturing employment c o r r e l a t e s very h i g h l y w i t h NIDB t o t a l f i n a n c i n g cumulated to 1974. What i s true of the two measures of manufacturing i n r e l a t i o n to NIDB t o t a l f i n a n c i n g i n 1974 i s e q u a l l y t r u e of the same set of v a r i a b l e s i n 1980: the c o r r e l a t i o n c o e f f i c i e n t s are s i g n i f i c a n t at the .01 l e v e l . In f a c t , two dominant features of Table 23 (A and B) deserve e x p l i c i t mention. F i r s t , both f o r the primary measures of manufacturing (X-^  and X2) and a l l the incorporated v a r i a b l e s r e l a t e d to NIDB f i n a n c i n g (X^ to X5), the c o r r e l a t i o n s and i n t e r c o r r e l a t i o n s are s i g n i f i c a n t at the .01 l e v e l . The consequent inference i s s e l f - w a r r a n t i n g : at both p o i n t s i n time (1974 and 1980), the r e g i o n a l p a t t e r n of N i g e r i a n manufacturing r e v e a l s TABLE 23: Relationships Between the Regional (State) Patterns of Manufacturing and NIDB Financing, 1974 and 1980. X l ESTABS X2 EMPLOYMT X 3 PROJESTA X4 NIDBEQUT X5 NIDBLOAN X 6 NIDBTOT X7 P0P63 A. RELATIONSHIPS AT 1974 X l ESTABS 1.000 0.938** 0.934** 0.808** 0.895** 0.892** -0.062 x 2 EMPLOYMT 1.000 0.968** 0.854** 0.921** 0.922** -0.159 X 3 PROJESTA 1.000 0.875** 0.954** 0.954** -0.310 x 4 NIDBEQUT 1.000 0.907** 0.933** -0.237 X5. NIDBLOAN 1.000 0.998** -0.287 X 6 NIDBTOT 1.000 -0.283 X7 POP63 1.000 B. RELATIONSHIPS AT 1980 x l ESTABS 1.000 0.881** 0.816** 0.627** 0.645** 0.647** -0.204 x 2 EMPLOYMT 1.000 0.938** 0.830** 0.798** 0.806** -0.197 x 3 PROJESTA 1.000 0.907** 0.907** 0.912** -0.287 X4 NIDBEQUT 1.000 0.934** 0.946** -0.321 X5 NIDBLOAN 1.000 0.999** -0.220 X 6 NIDBTOT 1.000 -0.231 X7 POP63 1.000 * S i g n i f i c a n t at .05 l e v e l . ** S i g n i f i c a n t at .01 l e v e l . Note The v a r i a b l e s i n the matrices are i d e n t i f i e d thus: Xl for manufacturing establishments; X 2 for employment i n manufacturing; X 3 for NIDB-financed establishments c a l l e d project e s t a b l i s h -ments; X 4 for the equity component of NIDB financing; X 5 for the loan component of NIDB financing; and X 6 for t o t a l NIDB financing (the sum of X4 and X 5 ) . 164 a very strong association with NIDB financing. Even on the basis of these re l a t i o n s h i p s alone, the conclusion that the regional structure of Nigerian manufacturing has been impacted such that (at le a s t since the early 1970s) i t has come to correspond broadly to the regional d i s t r i b u -t i o n of the bank's financing would appear to be se l f - e v i d e n t . Secondly, the population v a r i a b l e has been included i n the analysis i n Table 23 to test what was stated as a l o g i c a l proposition e a r l i e r : that i n view of the fact that the production patterns i n other sectors of the economy (not covered i n t h i s study) would exhibit d i f f e r e n t i a l regional advantages/disadvantages, as well as the known fact that o v e r a l l c e n t r a l (federal) investment i n Nigerian manufacturing i s of humble proportions, i t would be grossly inappropriate to analyze the issue of balanced develop-ment i n any one sector (which happens to be manufacturing here) on the bases of regional shares of t o t a l national population even i f up-to-date population data were a v a i l a b l e . This i s because the d i f f e r e n t i a l capabi-l i t i e s (advantages) of the various regions would a t t r a c t public investment d i f f e r e n t i a l l y such that no analysis of a sing l e sector from the balanced-development perspective (including t h i s study) could be conclusive by i t -s e l f . As i f to dramatize the v a l i d i t y of t h i s point, the population v a r i a b l e (X^ i n Table 23) co n s i s t e n t l y reveals negative c o r r e l a t i o n s with a l l the other v a r i a b l e s (X^ through X^). I t i s nevertheless not f u t i l e to examine the degree of convergence/ divergence i n the regional pattern of the country's manufacturing v i s - a - v i s NIDB financing since balanced development i n manufactural a c t i v i t i e s s t i l l remains, to the extent possible, an important objective of pu b l i c p o l i c y . Among other things, even the review of NIDB operating p o l i c i e s has indicated that t h i s most important i n s t i t u t i o n f o r channeling public 165 resources into the i n d u s t r i a l sector has firmly•committed-itself to the p o l i c y of balanced development i n the area of manufacturing. One inference from the analysis i n Table 23 i s that the absolute  magnitudes of Nigerian manufacturing and NIDB financing remain p o l a r i z e d . The importance of the analyses below i s therefore to v e r i f y not only the broad d i r e c t i o n and (perhaps) extent of p o l a r i z a t i o n but also whatever subtle convergence-inducing patterns might be associated with NIDB financing. These related questions could now be addressed d i r e c t l y . IV.3 Divergence/Convergence i n Regional Manufacturing Patterns and  NIDB Financing: D i r e c t i o n and Extent? There are various a n a l y t i c a l devices for e l i c i t i n g changes i n regional structures. Here, two of such devices have been adopted: one involves the use of cumulated percentage shares (rather s i m i l a r to Lorenz c u r v e s ) 5 and the other features rank-difference analysis procedures. The f i r s t would adequately reveal differences i n the configurations of the regional patterns involved ( i . e . between the aggregate patterns for 1974 and 1980); while the second could be used to e l i c i t the s i g n i f i c a n c e of differences between the pattern i n 1974 and the pattern of change (or quantitative  additions) during the 1974-1980 period ( i . e . the d i f f e r e n c e i n the i n -between period that created the aggregate pattern for 1980). This would be p a r t i c u l a r l y relevant since the issue of balanced development came into The usual Lorenz curve i s normally constructed with the population v a r i a b l e shown along the v e r t i c a l axis but the e s s e n t i a l inappropriateness of that v a r i a b l e i n t h i s context has been indicated above (Section IV.3)., See, for example, the use of the Lorenz Curve and G i n i c o e f f i c i e n t s i n J.P. Cole, The Development Gap: A S p a t i a l Analysis of World Poverty  and Inequality, (Chichester: John Wiley & Sons, 1981), esp. pp. 439-442. 166 prominence i n the e a r l y 1970s (represented here by 1974) . And s i n c e the two measures of manufacturing adopted c o r r e l a t e so h i g h l y , i t would not make any appreciable d i f f e r e n c e i f , f o r t h i s purpose, one of the measures i s dropped w h i l e the other one alone (employment) i s used s i d e by s i d e w i t h NIDB f i n a n c i n g . IV.3.1 A n a l y s i s of Regional Configurations Of course, the cumulative-percentage procedure r e q u i r e s conversion of the r e l e v a n t values i n t o percentages and ranking and cumulating them. The ranks of each of the 19 r e g i o n a l ( s t a t e ) u n i t s i nvolved here i n respect of the re l e v a n t v a r i a b l e s (manufacturing employment and NIDB t o t a l f i n a n c i n g by 1974 and 1980) are summarized i n Table 24A, ordered only by the a l p h a b e t i c a l arrangement of the s t a t e u n i t s . The cumulative curves generated from the corresponding percentage values (from Tables 21 and 22 above) are p l o t t e d i n Figures 7 and 8.* The r e a l u t i l i t y of the cumulative percentage curves i n t h i s context i s that i t becomes easy to i d e n t i f y how many r e g i o n a l ( s t a t e ) u n i t s account f o r c l e a r l y l a r g e proportions of manufacturing and NIDB f i n a n c i n g at each of the two p o i n t s i n time, 1974 and 1980 (see v e r t i c a l bars i n Figures 7 and 8 ) . For t h i s purpose, the c r i t i c a l value f o r a " c l e a r l y l a r g e p r o p o r t i o n " has been set equal to 80 per cent. T h i s , however, i s more of an i n d i c a t i v e / e m p i r i c a l rather than a t h e o r e t i c a l l y - b a s e d and binding choice. Any other i n d i c a t i v e value considered " c l e a r l y h i g h " enough (such as 75 or 90 percent) could have been chosen f o r the purpose. Although a s c r u t i n y of Table 24A would r e v e a l which s t a t e s c o n t r i b u t e d to the 80 per cent p r o p o r t i o n i n 1974 and 1980, Table 24B makes i d e n t i f i c a t i o n of the c o n t r i b u t i n g s t a t e s more convenient. 167 TABLE 24A: Ranks of Regional (State) Units on Relevant Variables. Manufacturing (Empl.) NIDB Total Financing State : — 1974 1980 1974 1980 1. Anambra 7 2. Bauchi 16 3. Bendel 3 4. Benue 17 5. Borno 15 6. Crossriver 5 7. Gongola 17 8. Imo 11 9. Kaduna 2 10. Kano 4 11. Kwara 10 12. Lagos 1 13. Niger 17 14. Ogun 8 15. Ondo 11 16. Oyo 6 17. Plateau 8 18. Rivers 14 19. Sokoto 11 8 7 6 17 16 5 3 8 9 15 16 11 18 12 16 7 2 4 15 16 15 6 6 8 5 5 6 2 14 14 9 4 12 1 1 1 19 16 10 12 3 2 12 9 16 11 10 3 10 15 19 4 13 18 14 11 . 13 168 TABLE 24B: Number of Regional (State) Units Accounting f o r 80 per cent of Manufacturing and NIDB Financing, 1974 and 1980. Year Variable Contributing Regional Units i n Rank Order 1974 Manufacturing Employment Five states: Lagos, Kaduna, Bendel, Kano, and Crossriver NIDB Financing Seven states: Lagos, Crossriver, Ogun, Kwara, Kaduna, Imo, Anambra 1980 Manufacturing Employment NIDB Financing Six states: Lagos, Kano, Bendel, Rivers, Kaduna and Imo Ten states: Lagos, Ogun, Oyo, Crossriver, Bauchi, Anambra, Kaduna, Imo, Bendel and Niger FIGURE 7: CUMULATIVE PERCENTAGE CURVES OF REGIONAL (STATE) SHARES OF MANUFACTURING AND NIDB TOTAL FINANCING, 1 9 7 ^ K ) V o j -pr v_n ON -O CO NO o P N U ^ U\ ON -O OO NO Rank Numbers of Regional Units 170 FIGURE 8: CUMULATIVE PERCENTAGE CURVES OF REGIONAL (STATE) SHARES OF MANUFACTURING AND NIDB TOTAL FINANCING, 1980 100 Manufacturing (employment) > m • u a m o W) -P Q) O u <x> Pn CD > • H -P n3 r H e o Number of regional units accounting for 80 per cent i n 1980 M ro Vjj f (Jl (J\ -vi CD O Rank Numbers of Regional Units 171 I t would be no t i c e d i n Figure 7 (1974) that i t required only f i v e s t a t e s (Lagos, Kaduna, Bendel, Kano, and C r o s s r i v e r ) to produce 80 per cent of N i g e r i a n manufacturing, the remaining 20 per cent being shared by the other 14 s t a t e s : a c l e a r l y p o l a r i z e d r e g i o n a l p a t t e r n . In 1980, on the other hand (Figure 8), i t takes s i x s t a t e s to account f o r the 80 per cent p r o p o r t i o n (Lagos, Kano, Bendel, R i v e r s , Kaduna and Imo). Thus, although the p a t t e r n of manufacturing s t i l l remains p o l a r i z e d i n 1980, the observable d i r e c t i o n of change i s towards convergence. How-ever, t h i s d i r e c t i o n a l change i s c l e a r l y i n c i p i e n t only: only two s t a t e s among the 1980 " c o n t r i b u t o r s " are not i n the l i s t of c o n t r i b u t o r s f o r 1974 (Imo and R i v e r s ) ; on the other hand, one of the c o n t r i b u t i n g s t a t e s f o r 1974 ( C r o s s r i v e r ) has dropped out of the l i s t of c o n t r i b u t o r s by 1980. And i n any event the d i r e c t i o n a l change i s i n d i c a t e d by the excess of j u s t one s t a t e i n 1980 over the 1974 number. The corresponding p a t t e r n of cumulative ( t o t a l ) NIDB f i n a n c i n g could be i n t e r p r e t e d s i m i l a r l y . For 1974, i t takes seven s t a t e s to account f o r 80 per cent of NIDB cumulative f i n a n c i n g up to that point i n time, the s t a t e s being Lagos, C r o s s r i v e r , Ogun, Kwara, Kaduna, Imo and Anambra. A d i r e c t i o n a l change s i m i l a r to that n o t i c e d f o r manufacturing i s a l s o observable f o r NIDB cumulative f i n a n c i n g by 1980: i t takes ten s t a t e s (Lagos, Ogun, Oyo, C r o s s r i v e r , Bauchi, Anambra, Kaduna, Imo, Bendel and Niger) to account f o r the 80 per cent p r o p o r t i o n . Generally again, there i s a d i s c e r n i b l e change i n the r e g i o n a l d i s t r i b u t i o n of NIDB f i n a n c i n g i n the d i r e c t i o n of convergence, a l b e i t a l s o i n c i p i e n t . A number of observations a r i s e from the NIDB-related p a t t e r n , however. F i r s t , i t r e q u i r e s , i n both 1974 and 1980, l a r g e r numbers of sta t e s to account f o r 80 per cent of NIDB f i n a n c i n g than i s the case w i t h 172 manufacturing. The suggestion i s that the bank's funds are being spread to more and more states sharing smaller proportions of national manufac-turing, a pattern which, i f c o n s i s t e n t l y fostered, could further propagate the tendency towards convergence. Secondly, two of the f i v e highest-sharing states i n respect of manufacturing employment for 1974 (Bendel and Kano) are not included i n the l i s t of the seven highest-sharing states i n regards to NIDB financing for the same year. On the other hand, four of NIDB's highest-sharing states for 1974 (Ogun, Kwara, Imo, and Anambra) are not i n the l i s t of the f i v e states having the highest proportions of manufacturing for 1974 . The spreading of r e l a t i v e l y larger proportions of NIDB financing into states with r e l a t i v e l y low shares of national manufacturing i s even more pronounced i n the 1980 pattern to the advantage of Ogun, Oyo, C r o s s r i v e r , and Anambra as well as (ever low-ranking) Bauchi and Niger States. Again, an i m p l i c a t i o n of a consistent adherence to the p r a c t i c e of granting r e l a t i v e l y larger proportions of i n d u s t r i a l - f i n a n c e funds to manufactural enterprises i n some states sharing comparatively low proportions of national manufacturing would also be to strengthen the Incipient tendency towards convergence. The t h i r d and f i n a l observation r e l a t i n g to the cumulative percentage curves i s almost the converse of the second. While some of the larger contributors to national manufacturing for both 1974 and 1980 (that i s , those states accounting for the 80 per cent proportion, such as Kano and Rivers) do not feature on the l i s t of highest receivers of NIDB financing, some others (Lagos, Kaduna and Crossriver for 1974 as well as Lagos again, Bendel, Kaduna and Imo for 1980) do. This i s the issue of c i r c u l a r and cumulative causation which has, i n t h i s context, the 173 implication that regional units with r e l a t i v e l y numerous enterprises capable of taking advantage of NIDB's i n s t i t u t i o n a l funding would tend to generate enough c l i e n t enterprises which, i n t o t a l , would appear s i g n i -f i c a n t i n the national context. In other words, areas with i n i t i a l advantages would tend to a t t r a c t r e l a t i v e l y more advantages and gain cumulatively over time. The relevance of t h i s process i s i m p l i c i t i n the discussion of " i n t e r n a l regional e f f o r t s " below (Section IV.4.2). The change i n the regional patterns of manufacturing and NIDB financing ( i n the d i r e c t i o n of convergence) which i s observable between 1974 and 1980 has been repeatedly described as i n c i p i e n t because the change appears minimal and so f a r , i t i s not c l e a r whether or not i t i s of any s i g n i f i c a n c e . It i s therefore desirable to re-examine the pattern. That re-examination, i n contrast to the above analysis which tends to emphasize larger contributors and r e c i p i e n t s (respectively, to national manufacturing and of NIDB funds), would indi c a t e the r e l a t i v e p o s i t i o n of each state unit i n the changing pattern as well as e l i c i t whatever s i g n i f i c a n c e inheres i n the change between 1974 and 1980. IV.3.2 A Re-examination of the Regional Pattern of Change As indicated at the beginning of the preceding section, rank-differ e n c e c o r r e l a t i o n analysis could e l i c i t , at d i f f e r e n t stages, the r e l a t i v e p o s i t i o n of each state unit and whatever s i g n i f i c a n c e inheres i n the changing regional structure. What i s relevant i n the context of t h i s study has two dimensions to i t : (a) Whether or not the more recent (1980) d i s t r i b u t i o n of manu-factu r i n g r e f l e c t s the balanced-development, equity, or " l e v e l l i n g " p r i n c i p l e to a degree consistent with d i s p a r i t i e s 174 i n the pattern of manufacturing e x i s t i n g at the e a r l i e r point i n time (1974)-, and (b) s i m i l a r l y , whether the related pattern of NIDB financing by 1980 r e f l e c t s the same p r i n c i p l e v i s - a - v i s the 1974 pattern. Other relevant pairs of regional patterns (for 1974 and 1980) should also be re-examined. The r a t i o n a l e of the analysis could be described f u l l y i n the context of the f i r s t dimension. (a) Re-examining the Regional Pattern of Change i n Manufacturing It has been indicated e a r l i e r that an equal-sharing p r i n c i p l e i s not the guide. There are cl e a r i n t e r r e g i o n a l differences i n the pattern of manufacturing e x i s t i n g i n 1974. The l o g i c of the balanced-development p r i n c i p l e i n the Nigerian context i s therefore to gradually r a i s e the l e v e l of development (manufacturing here) i n the less developed states such that there would eventually be a condition of near-equality or f a i r l y even 6 d i s t r i b u t i o n . Analyzing the 1974-1980 change from t h i s perspective requires the r i g i d expectation that the highest additions to regional manufacturing (from 1975 to 1980) should occur i n , or go to the least developed states and the lowest to the most developed states.^ One i s i n e f f e c t postulating that there should be an inverse r e l a t i o n s h i p between the l e v e l of i n d u s t r i a l development e x i s t i n g i n 1974 and in-between  additions which generate the aggregate pattern for 1980. 6 See footnote number 1 of t h i s chapter above. ^This i s consistent with the " l e v e l l i n g " p r i n c i p l e i n the balanced-development philosophy. 175 Again, i n view of the highly s i g n i f i c a n t c o r r e l a t i o n between the two measures of manufacturing i n i t i a l l y adopted, i t does not matter whether the number of establishments or employment i s used; but for consistency with the l a s t section (IV.3.1), the employment c r i t e r i o n would s u f f i c e . Table 25 shows the d i f f e r e n c e between manufactural employment i n 1974 and 1980 (as absolute and percentage values and with state ranks). Table 26 juxtaposes the rankings for 1974 and those shown on Table 26 (1975-80 ad d i t i o n s ) , with the 1974 rankings as the organizing v a r i a b l e . With respect to the l e v e l of manufacturing e x i s t i n g i n 1974, i t would be noticed that Lagos state c l e a r l y ranks f i r s t while three states (Benue, Gongola and Niger rank l a s t together (seventeenth as things turn out)); other states occupy various positions in-between. The hypothetical-addition rank column on Table 25 derives from the r i g i d i n v e r s e - r e l a t i o n s h i p expectation postulated above: that i f additions to manufacturing had occurred ( i n 1975-80) i n perfect accordance with the balanced-development concept ( i . e . so as to " l e v e l up" le s s developed states and " l e v e l down" more developed s t a t e s ) , states which shared more manufacturing i n 1974 should receive the least additions and those that shared less should receive the highest additions as commensurate with the extent of t h e i r backwardness i n t h i s connection. Thus, Lagos state should have received the least addition (with rank 19) while Benue, Gongola and Niger should have received the largest (with rank 3). However, as the l a s t three columns of Table 25 reveal, the actual ranks deriving from the 1975-1980 additions d i f f e r from the hypothetical ranks. The extent of the differences or "deviations" appears i n the l a s t column of the table. 176 TABLE 25: Regional (State) Pattern of Additions to Manufacturing (Employment) i n the 1975-1980 Period. State No. % Rank 1. Anambra 4,798 3.9 6 2. Bauchi 423 0.3 13 3. Bendel 4,378 3.5 7 4. Benue 1,187 1.0 10 5. Borno 19 0.02 14 6. Crossriver 5,595 4.5 5 7. Gongola 1,007 0.8 11 8. Imo 12,285 9.9 4 9. Kaduna 0* 0.0 15 10. Kano 15,706 12.7 3 11. Kwara 3,793 3.1 8 12. Lagos 54,543 44.1 1 13. Niger 0* 0.0 15 14. Ogun 0* 0.0 15 15. Ondo 958 0.8 12 16. Oyo 0* 0.0 15 17. Plateau 2,429 2.0 9 18. Rivers 16,691 13.5 2 19. Sokoto 0* 0.0 15 Total 123,812 100 -S our c e: Compu t ed from the relevant values i n Table 20. Note: *The value of 0 (zero) for some states a c t u a l l y indicates negative. 177 TABLE 26: Regional (State) Ranks on Manufacturing (Employment) E x i s t i n g i n 1974, and A d d i t i o n s i n the 1975-1980 P e r i o d . C*.O^„ T> I • R a n k b y 1975-80 A d d i t i o n ber. State Rank xn _ No. 1974 Hy p o t h e t i c a l A c t u a l D e v i a t i o n 1 Lagos 1 19 1 +18 2 Kaduna 2 18 15 + 3 3 Bendel 3 17 7 +10 4 Kano 4 16 3 +13 5 C r o s s r i v e r 5 15 5 +10 6 Oyo 6 14 15 - 1 7 Anambra 7 13 6 + 7 8 Ogun 8 12 15 - 3 9 Plateau 8 12 9 + 3 10 Kwara 10 10 8 + 2 11 Imo 11 9 4 + 5 12 Ondo 11 9 12 - 3 13 Sokoto 11 9 15 - 6 14 Ri v e r s 14 6 2 + 4 15 Borno 15 5 14 - 9 16 Bauchi 16 4 13 - 9 17 Benue 17 3 10 - 7 18 Gongola 17 3 11 - 8 19 Niger 17 3 15 -12 Sources: Tables 24A and 25. * Mean = 7 178 For c l a r i t y , i t should be stated that the smaller the numerical value of a state's rank i s , the higher i s the rank of that state. There-fore, i n c a l c u l a t i n g deviations, i f a state's actual a l l o c a t i o n rank value i s lower than i t s hypothetical-addition rank value, that state i s regarded as having a p o s i t i v e deviation (denoted by the plus sign), i n d i c a t i n g that the state did not experience s u f f i c i e n t "downward l e v e l l i n g " i n the d i s t r i b u t i o n of additions. Conversely, where a state's actual-addition rank value i s higher than the hypothetical, the deviation i s negative (minus si g n ) , i n d i c a t i n g that the state concerned did not enjoy enough "upward l e v e l l i n g " with respect to i t s proportional share of 1975-1980 additions. The r e a l values of the deviations are not as c r i t i c a l l y important as t h e i r d i r e c t i o n (that i s , whether they are p o s i t i v e or negative) except insofar as the deviation values r e f l e c t the extent of departure from hypothetical expectations. What the analyses of 1975-1980 additions to manufacturing thus reveal could be summarized as follows. F i r s t , no state completely f u l f i l s the r i g i d l y i d e a l i z e d expectations of the balanced-development or equity p r i n c i p l e . Only one state (Ogun with a deviation of -1) comes very close to the zero deviation required for f u l f i l l m e n t . On the whole, therefore, 10 states did not experience s u f f i c i e n t "downward l e v e l l i n g " as t h e i r p o s i t i v e deviations i n d i c a t e . These are Lagos, Kaduna, Bendel, Kano, Crossriver, Anambra, Plateau, Kwara, Imo and Rivers (seven of them being on the l i s t of the largest contributors to national manufacturing shown on Table 24B) . On the other hand, the remaining 9 states (Oyo, Ogun, Ondo, Sokoto, Borno, Bauchi, Benue, Gongola and Niger) did not experience enough "upward l e v e l l i n g " as denoted by t h e i r negative signs. 179 However, the rather wide-ranging deviation values could be more neatly interpreted by reference to the mean value of a l l deviations which turns out to be 7 (disregarding the signs i n the averaging process). States with deviation values not greater than the mean ( i . e . l e s s than or equal to the mean) could be regarded as having " t o l e r a b l y " conformed to the expected outcome of the balanced-development notion and those with deviations above the mean value as having had "unacceptably" high deviations. The d i s t r i b u t i o n on t h i s basis i s as follows: Number of states with deviations not exceeding the mean = 11. Number of states with deviations above the mean = 8 . Thus, the second point revealed i s that the eleven states with deviations not exceeding the mean exhibit " t o l e r a b l e " l e v e l s of conformity. However, while s i x of these (Kaduna, Anambra, Plateau, Kwara, Imo and Rivers) could be said to exhibit p o s i t i v e t o l e r a b i l i t y (since t h e i r deviations are p o s i t i v e ) , the other f i v e (Oyo, Ogun, Ondo, Sokoto and Benue) exhibit negative " t o l e r a b i l i t y " f o r the opposite reason. On the other hand (and f i n a l l y ) , four of the 8 states with deviations above the mean (Lagos, Bendel, Kano, and Crossriver) have p o s i t i v e "unacceptability" and the remaining four (Borno, Bauchi, Gongola and Niger) exhibit negative unacceptability, the respective reason being s i m i l a r to those of the l a s t paragraph. The strength and therefore the degree of a c c e p t a b i l i t y of the r e l a t i o n s h i p between the actual and hypothetical addition rankings of the 19 states could even be more s u c c i n c t l y e l i c i t e d by s t a t i s t i c a l t e s t i n g . For t h i s purpose, Spearman's rank-difference c o r r e l a t i o n , p (rho), i s p a r t i c u l a r l y appropriate, the aim being to a s c e r t a i n i f the rankings of the states on actual additions (1975-1980), c o r r e l a t e 180 s i g n i f i c a n t l y with their, rankings on hypothetical additions (deriving from l e v e l s of i n d u s t r i a l development e x i s t i n g i n 1974). 2 This i s done by applying the formula p = 1 - ^ 2 where ED2 = N(N -1) sum of the squared differences between ranks; and N = number of pairs of measurements. Computing with the values i n the "hypothetical" and " a c t u a l " columns i n Table 26, 19(19 2-1) 6 8 4 0 or approximately -0.1219 The n u l l hypothesis appropriate to t h i s context i s that there i s no 8 c o r r e l a t i o n or r e l a t i o n s h i p between the two sets of ranking. I f , on inspection of the appropriate tables, the obtained c o r r e l a t i o n c o e f f i c i e n t , p , i s less than the c r i t i c a l value for s i g n i f i c a n c e , the hypothesis would have to be upheld; i f , on the other hand, the obtained value of p i s s i g n i f i c a n t , the hypothesis would have to be rejected. I t turns out that the obtained c o e f f i c i e n t (p = -0.1219) i s not s i g n i f i c a n t even at the .05 l e v e l of confidence. This lack of s i g n i f i -cant c o r r e l a t i o n remains true even a f t e r estimating (and t e s t i n g with) the Z r a t i o , using the formula Zp = p /N - 1 Hubert M. Blalock, J r . S o c i a l S t a t i s t i c s , (New York: McGraw-Hill Book Company, 1972), pp. 416-418; J.P. G u i l f o r d , Fundamental S t a t i s t i c s  i n Psychology and Education, (New York: McGraw-Hill Book Company, 1965), pp.. 305-308 and 593. 181 The hypothesis of no c o r r e l a t i o n i s t h e r e f o r e upheld. The c o n c l u s i o n i s thus s t r a i g h t f o r w a r d : there i s no s i g n i f i c a n t r e l a t i o n s h i p or c o r r e l a -t i o n between the rankings of the 19 s t a t e s w i t h respect to h y p o t h e t i c a l (or expected) and a c t u a l a d d i t i o n s to manufacturing i n the 1975-1980 p e r i o d . That i s i n s p i t e of the much-publicised equity or balanced-development p r i n c i p l e , the d i s t r i b u t i o n of a d d i t i o n s to manufacturing among the s t a t e s d i d not on the whole, occur i n proportions t h a t , to any important extent, took cognizance of the e x i s t i n g l e v e l s of i n d u s t r i a l development (1974) and the r e l a t e d s o c i e t a l philosophy which pre-supposes the need f o r a ppropriate upward or downward l e v e l l i n g . The r e s u l t s obtained could h a r d l y have been otherwise. Apart from whatever other reason might be aduced (such as time h o r i z o n ) , the balanced-development concept i s an i s s u e of p u b l i c p o l i c y which i s not b i n d i n g on p r i v a t e entrepreneurs, i n c l u d i n g those i n manufacturing. And s i n c e the p r i v a t e s e c t o r as a source of the investments which generate " a d d i t i o n s " to manufacturing i s not only f a r more important than the p u b l i c sector i n N i g e r i a (see Section IV.1. above) but a l s o behaves i n i t s own i n t e r e s t s , i t i s h i g h l y u n l i k e l y to be s i g n i f i c a n t l y i n f l u e n c e d by (what might seem to i t ) a b s t r a c t and u n p r o f i t a b l e issues of s p a t i a l l y balanced development. (b) Re-examination of Other Regional P a t t e r n s The methodology used f o r a n a l y z i n g the d i f f e r e n c e between the patterns of manufacturing e x i s t i n g i n 1974 and a d d i t i o n s to manufacturing i n the 1975-1980 period ( i n c l u d i n g the l o g i c of the balanced-development concept) i s a l s o appropriate f o r re-examining other r e l e v a n t p a i r s of r e g i o n a l patterns f o r 1974 v i s - a - v i s those f o r the 1975-1980 p e r i o d as w e l l as those f o r the comulative aggregates e x i s t i n g i n 1980. Thus, as 182 indicated e a r l i e r (beginning of t h i s s e c t i o n ) , the following paired patterns are re-examined using the same procedures employed for additions to manu-facturing (without reporting the s i m i l a r computational processes involved): (1) manufacturing pattern i n 1974 and/with NIDB cumulative ( t o t a l ) financing pattern up to 1974; (2) manufacturing pattern i n 1974 and/with NIDB cumulative ( t o t a l ) financing pattern, 1975-1980; (3) manufacturing pattern i n 1980 and/with NIDB cumulative (to t a l ) financing pattern up to 1980; and (4) cumulative (t o t a l ) NIDB financing pattern up to 1974 and NIDB financing pattern cumulated for the 1975-1980 period. The relevant computations are based on the data In Tables 20 and 22 as well as Appendices VIA, VIB and VIC. The r e s u l t s of the ( s p a t i a l ) rank-difference analyses are summarized i n Table 27 together with the corresponding s i g n i f i c a n c e r a t i n gs. The column headings i n Table 27 (1-4) correspond to the l i s t i n g of pairs of regional patterns (1-4) indicated i n the l a s t paragraph. The r e s u l t s can be described b r i e f l y . F i r s t , the rank-difference analysis of manufacturing (employment) in 1974 with cumulated NIDB t o t a l net financing up to 1974 ( i . e . 1964-1974) i s intended to e l i c i t whether NIDB's financing patterns up to 1974 rela t e s s i g n i f i c a n t l y to the regional pattern of manufacturing e x i s t i n g i n 1974. The rank-difference c o r r e l a t i o n c o e f f i c i e n t i n t h i s respect (p = 0.6943) i s s i g n i f i c a n t even beyond the .01 l e v e l of confidence. By way of r e c a l l , the accompanying n u l l hypothesis i n t h i s context i s that there i s no c o r r e l a t i o n or r e l a t i o n s h i p between the two sets of ranking (column 1 of Table 27). A non-significant c o e f f i c i e n t warrants 1 8 3 upholding the hypothesis while a s i g n i f i c a n t c o e f f i c i e n t compels r e j e c t i o n . Since the obtained c o e f f i c i e n t here i s s i g n i f i c a n t ; the hypothesis of "no r e l a t i o n s h i p " i s rejected. That i s , up to 1974, the cumulative regional pattern of NIDB t o t a l financing does bear a s i g n i f i c a n t r e l a t i o n -ship to the regional (state) d i s t r i b u t i o n of manufacturing e x i s t i n g on the Nigerian landscape i n 1974. This r e s u l t i s hardly s u r p r i s i n g since, p r i o r to the early 1970s when the balanced-development p o l i c y came into prominence, NIDB was not so pre-occupied with balancing i t s financing a c t i v i t i e s r e g i o n a l l y . It was free to apply only i t s t e c h n i c a l c r i t e r i a for finaneing }even at the margin. The s i t u a t i o n then was most conducive to the c i r c u l a r and cumula-t i v e causation process: areas/regions with most manufacturing enterprises would normally have more p o t e n t i a l c l i e n t s to seek and obtain NIDB financing and the cumulative (over-time) e f f e c t would be a strong s p a t i a l r e l a t i o n s h i p between the banks financing and manufactural a c t i v i t i e s . Secondly, the rank-difference c o e f f i c i e n t (of p = 0.3491) between the manufacturing pattern e x i s t i n g i n 1974 and t o t a l NIDB financing cumulated (summed) over the 1975-1980 period only (column 2 of Table 27), though p o s i t i v e , j u s t f a l l s short of s i g n i f i c a n c e even at the .05 l e v e l of confidence. The analysis i n t h i s connection i s intended to e l i c i t whether, at a time when the balanced-development p o l i c y has come into rpominence and NIDB has f u l l y subscribed to i t (1975-1980), the regional pattern of the bank's financing takes account of the polarized pattern of manufacturing e x i s t i n g i n 1974. NIDB i s expected (and a s p i r e s ) , even within the constraints of i t s t e c h n i c a l c r i t e r i a , to spread i t s financing to r e l a t i v e l y l e s s industrially-developed regions/.states) . The fac t that the rank-difference c o e f f i c i e n t i s p o s i t i v e indicates that NIDB financing TABLE 27: Rank-difference Correlation Analyses of Manufacturing and NIDB Total Financing Patterns i n a Regional Context and at Different Points i n Time: Results. Summarized Aspects MFG74 with NIDBTOT74 MFG74 with NIDB75/80 MFG80 with NIDBTOT80 NIDBTOT74 NIDB75/80 1. Rank-difference Co r r e l a t i o n C o e f f i -cient ( p ) 0.6943 0.3491 -0.0078 0.4996 2. Sign i f i c a n c e Rating P o s i t i v e and s i g n i f i c a n t be-yond .01 l e v e l of confidence P o s i t i v e but not quite s i g n i f i c a n t even at .05 l e v e l of confidence Negative but not remotely close to being s i g n i f i -cant at .05 l e v e l of confidence P o s i t i v e and s i g n i f i c a n t at the .05 l e v e l of confidence but not at .01 Notes: (1) For the analyses here, manufacturing i s measured by the employment c r i t e r i o n . (2) The column headings i n t h i s table (1-4) correspond to the l i s t i n g (1-4) of pairs of regional patterns for rank-difference analysis indicated above. (3) Computed from relevant values i n Tables 20 and 22 as well as Appendices VIA, VIB and VIC. 185 i s r e l a t e d to the e x i s t i n g p a t t e r n , again a r e f l e c t i o n of the cumulative-causation process. Perhaps more im p o r t a n t l y , however, the r a n k - d i f f e r e n c e c o e f f i c i e n t i s not s i g n i f i c a n t and the hypothesis of "no r e l a t i o n s h i p " has to be upheld. The inference i s that NIDB has d i s t r i b u t e d i t s f i n a n c i n g ( r e g i o n a l l y ) i n the 1975-1980 period such that regions ( s t a t e s ) ranking h i g h on manufacturing d i d not rank h i g h on the r e c e p t i o n of i t s funds; and conversely, areas ranking low on manufacturing received p r o p o r t i o n a t e l y more of (or ranked high on) the bank's f i n a n c i n g , a r e s u l t which i s con-s i s t e n t w i t h the cumulative-percentage curve a n a l y s i s i n S e c t i o n VI.3.1. (summarized i n Table 24B where such s t a t e s as Bauchi and Niger which share very low proportions of n a t i o n a l manufacturing are among the s t a t e s accounting f o r a high p r o p o r t i o n of NIDB f i n a n c i n g even over the e n t i r e 1964-1980 p e r i o d ) . Thus, although N i g e r i a n manufacturing s t i l l remains r e g i o n a l l y p o l a r i z e d by 1980, i t could be s a i d that NIDB has, s i n c e the balanced-development p o l i c y became prominent i n the e a r l y 1970s, been attempting to c o n s t i t u t e i t s e l f i n t o a c o u n t e r v a i l i n g f o r c e ( v i s - a - v i s the c i r c u l a r and cumulative causation process). T h i r d l y , the r a n k - d i f f e r e n c e a n a l y s i s r e l a t i n g to the r e g i o n a l p a t t e r n of manufacturing i n 1980 and NIDB t o t a l f i n a n c i n g cumulated to 1980 ( i . e . over the e n t i r e 1964-1980 period) i s intended to e l i c i t what r e l a t i o n s h i p the two patterns bear to each other by 1980 (column 3 of Table 27). The r a n k - d i f f e r e n c e c o e f f i c i e n t ( p = -0.0078) i s negative and h i g h l y i n s i g n i f i c a n t and compels acceptance of the "no r e l a t i o n s h i p " hypothesis. Both p o i n t s warrant an inference s i m i l a r to that i n the l a s t paragraph: the f a c t that the c o e f f i c i e n t makes i t i n t o the negative d i r e c t i o n (no matter how l i t t l e ) suggests that on the whole and f o r the e n t i r e 1964-1980 period viewed cumu l a t i v e l y , the net r e s u l t (by 1980) of 186 NIDB financing practices has been to generate an inverse r e l a t i o n s h i p be-tween states' rankings on manufacturing and on financing from the bank; and the non-significance of the c o e f f i c i e n t which leads to accepting the "no r e l a t i o n s h i p hypothesis" implies that NIDB has been making an e f f o r t to d i s s o c i a t e (proportionately) the regional l o c a t i o n of i t s financing from areas sharing large proportions of national manufacturing. This i s a p r a c t i c e l i k e l y to push the regional structure of Nigerian manufacturing further i n the d i r e c t i o n of convergence with time. F i n a l l y , the rank-difference analysis involving NIDB t o t a l financing cumulated to 1974 and also the bank's financing cumulated for the 1975-1980 period (column 4 of Table 27) i s intended to e l i c i t whether or not states ranking high or low on the bank's financing by 1974 also rank s i m i l a r l y i n the 1975-1980 period. The obtained c o e f f i c i e n t ( p = 0.4996) i s s i g n i -f i c a n t at the .05 l e v e l of confidence and leads to a r e j e c t i o n of "the no r e l a t i o n s h i p " hypothesis. That i s , there i s a s i g n i f i c a n t r e l a t i o n s h i p between states' ranking on NIDB cumulative financing up to 1974 and the corresponding ranks for 1975-1980. This analysis i s a l o g i c a l complement of that r e l a t i n g 1974 manufacturing to NIDB,financing for 1975/80 which yielded a "no-relationship" r e s u l t (column 2 of Table 27). It would be remembered that the rank-difference c o e f f i c i e n t i n that case was not s i g n i -f i c a n t , meaning that NIDB financing patterns i n 1975/80 did not correspond with manufacturing patterns i n 1974. Apparently continuing i t s convergence-inducing pattern i n the 1975/80 period, the bank's financing pattern ( i n 1975/80) reinforced i t s financing pattern up to 1974 such that a s i g n i -f i c a n t c o e f f i c i e n t r e s u l t s , a c l e a r tendency also r e f l e c t e d for both patterns (manufacturing and cumulative t o t a l financing) by 1980 (column 3 of Table 27). 187 Thus, the analyses summarized i n Table 27 quite f a i r l y reveals the convergence-inducing dynamics of NIDB financing patterns v i s - a - v i s the regional pattern of manufacturing during the study period. However, Nigerian pattern of manufacturing s t i l l remains polarized although an i n c i p i e n t tendency towards convergence has become observable by 1980. This i n a l l p r o b a b i l i t y , could not be unrelated to the regional pattern of NIDB financing j u s t analyzed. The suggestion, nevertheless, i s that NIDB would need to continue i t ' s convergence-inducing patterns for some time to come. For now, however, a second implication i s that NIDB i s (of course) only one of the sources of funds for investment i n manufacturing i n the Nigerian economy. The continuing imbalance ( a l b e i t diminishing) r e f l e c t s not only the e f f e c t of past investment patterns but also the importance of other sources of funds f o r i n d u s t r i a l investment, e s p e c i a l l y the private sector notably since Nigerian i n d i g e n i z a t i o n began 9 i n the early 1970s. Two points a r i s e from these observations. It c a l l s for an examination of how NIDB favours areas i t wishes to favour (what might be c a l l e d the mechanics of NIDB "favouritism"). Also, since private entrepreneural e f f o r t i s of importance i n generating the aggregate patterns noticeable at any point i n time, i t i s also desirable to examine b r i e f l y what i n t e r n a l e f f o r t s are d i s c e r n i b l e on the part of i n d i v i d u a l states to respond p o s i t i v e l y to NIDB financing. To the extent possible with the a v a i l a b l e data, these two issues are examined i n the next section, the f i n a l substantive analyses i n t h i s study. See, for example, Federal Republic of Niger i a , "Nigerian Enterprises Promotion Decree 1977", Laws of the Federal Republic of Nigeria, 1977, (Lagos: Federal M i n i s t r y of Information, P r i n t i n g D i v i s i o n ) , pp. A17-A34. 188 IV.4 The Mechanics of NIDB "Favouritism" and Internal Regional E f f o r t E s s e n t i a l l y the same set of data could be used to explore the issues of NIDB "favouritism" to various areas of the country and the i n t e r n a l e f f o r t s made by the same areas i n the i n d u s t r i a l development d r i v e . However, i t i s convenient to discuss the former f i r s t and the l a t t e r l a s t . IV.4.1 Analysis of NIDB "Favouritism" Direct evidence i s not av a i l a b l e on how NIDB implements i t s d i v e r -gence-inducing p o l i c y at the project s e l e c t i o n stage since a l l p o t e n t i a l c l i e n t enterprises are expected to be subjected to the same set of technical c r i t e r i a (economic d e s i r a b i l i t y , t e c h nical f e a s i b i l i t y and commercial v i a b i l i t y ) i n the a p p l i c a t i o n process. What i s known of development banks generally suggests that policy-consistent favouritism could be practiced i n two general ways: de-emphasizing tech-n i c a l c r i t e r i a s e l e c t i v e l y , or a c t u a l l y favouring enterprises from "disadvantaged" areas, both at the margin of p r o j e c t - s e l e c t i o n decisions; and s e l e c t i v e l y i n t e n s i f y i n g promotional a c t i v i t i e s i n order to "breed" p o t e n t i a l c l i e n t enterprises i n r e l a t i v e l y disadvantaged areas. However, the path taken i n t h i s study has been to e l i c i t patterns and trends from the record ( i . e . relevant data) rather than mere p o l i c y statements or general p r a c t i c e s . Accordingly, three main ways i n which the bank might have "favoured" d i f f e r e n t areas could be e l i c i t e d by com-puting and comparing the r a t i o s or indices r e l a t i n g to: (a) the number of NIDB-financed enterprises ( c l i e n t or project establishments) i n a state v i s - a - v i s the number of manu-fac t u r i n g establishments i n the state; 189 (b) the t o t a l (cumulated, 1964-1980) amount of NIDB equity financing i n a state v i s - a - v i s the equity component of project costs i n the state (cumulated, 1964-1980); and (c) t o t a l NIDB financing (cumulated, 1964-1980) i n a state v i s - a - v i s t o t a l project costs i n the state (cumulated, 1965-1980). The r a t i o n a l e for the choice of these c r i t e r i a for indexing NIDB "favouritism" would seem obvious. In the f i r s t place, NIDB financing to any state i s transmitted v i a the medium of the manufacturing enter-p r i s e which manages (autonomously or through the bank's promotional a c t i v i t y ) to become one of the bank's c l i e n t enterprises. It i s i n that context (of being or becoming a c l i e n t ) that NIDB has an opportunity to favour or disfavour. An index r e l a t i n g the actual number of c l i e n t enterprises i n a state to the number of manufacturing establishments i n the state which, p o t e n t i a l l y could be NIDB c l i e n t s would r e f l e c t at least the opportunities which the bank has had for favouring that state. The same rationale applies to the other two c r i t e r i a . However, the r a t i o of NIDB financing i n the form of equity ( i n r e l a t i o n to the equity component of the cost structures of c l i e n t enter-prises i n a state) even has extra s i g n i f i c a n c e . Equity financing (rather than loan financing) involves greater commitment because i t c a r r i e s the implication of part-ownership and the expectable expenditure of resources to nurture the enterprise concerned to success. F i n a l l y , the t h i r d c r i t e r i o n , t o t a l financing (the sum of equity and loan financing), i s useful to r e f l e c t the t o t a l extent of NIDB financing i n a state v i s - a - v i s the t o t a l financing costs of c l i e n t establishments i n a state. 190 The computational method i s s i m i l a r to that used for obtaining l o c a t i o n quotients or indices of concentration. That i s , the f i r s t of the pa i r s of v a r i a b l e s outlined above i s computed as a percentageof the second. The percentage thus obtained i s then divided by a s i m i l a r (corresponding) percentage for the country as a whole. The value thus obtained i s designated the concentration index. If the index i s approxi-mately 1, the state concerned i s described as normal (N). If i t i s le s s than 1 ( e f f e c t i v e l y 0.8), i t i s described as disfavoured (D). And i f the index i s greater than 1 ( i . e . over 1.4), the state concerned i s described as favoured, F (see rules at the bottom of Tables 28 through 30). A separate table summarizes each state's "favouritism score" . Since there are three c r i t e r i a for analyzing the "favouritism" issue, a state scores 1 point for being favoured on each, for a maximum of 3 points and the minimum of 2 needed to earn the "grand r a t i n g " of "convergence-favoured". No scores are earned for " p a r t i a l r a t i n g s " of disfavoured (D) or normal (N); and at l e a s t two " p a r t i a l r a t i n g s " of D would y i e l d a grand r a t i n g of "convergence-disfavoured" while at least two of N would y i e l d "neutral". A "mixed grand r a t i n g " i s given where a l l three " p a r t i a l r a t i n g s " (D, F, N) are represented. Anambra state could be used to i l l u s t r a t e the computational process. It ' s project ( c l i e n t ) establishment number expressed as a percentage of t o t a l manufacturing establishments i n the state y i e l d s 12.44 per cent. The corresponding percentage for the whole country i s 13.00. Therefore, Anambra's index of concentration i s 12.44/13 = 0.96 or approximately 1 (see Table 28). The state's o v e r a l l designation depends on how i t s indices turn out on a l l three grounds of comparison (summarized i n Table 31 below). S i m i l a r l y for other states and for the two other grounds of comparison (Tables 29 and 30). 191 Table 28 shows the concentration indices for each state i n respect of NIDB-financed enterprises (project establishments) and t o t a l manu-factu r i n g establishments. The " p a r t i a l r a t i n g s " column shows that 8 of the states are "disfavoured" (D); these are Bendel, Benue, Crossriver, Gongola, Imo, Kano, Plateau and Rivers, S i m i l a r l y , 8 are "favoured" (D): Bauchi, Borno, Kaduna, Kwara, Niger, Ogun, Oyo and Sokoto. The' remaining three (Anambra, Lagos and Ondo) are "normal" (N), S i m i l a r l y , Table 29 shows the indices and ratings i n respect of NIDB equity financing and project equity cost for each state. The r e s u l t s are as follows. There are f i v e "disfavoured" states; f i v e are "favoured"; and nine are "normal". F i n a l l y , Table 30 shows the concentration indices and p a r t i a l ratings i n respect of t o t a l NIDB financing (equity and loans combined) and t o t a l cost of projects ( c l i e n t e n terprises), composed also of equity and loan components (see Appendix VIB). Four states are "disfavoured" i n t h i s respect; eight are "favoured"; and the remaining seven are "normal". Table 31 summarizes the p a r t i a l ratings i n the successive tables (28-30) and makes i t possible to view the ratings together, Column 5 of Table 31 has been inserted to r e c a l l the rankings of the various regional units on 1980 manufacturing (employment); i t helps to suggest what states are most i n need of r e l a t i v e favouritism. The summary table indicates that f i v e states are convergence-favoured (Anambra, Bendel, Borno, Kwara and Sokoto); 5 are convergence-disfavoured (Bauchi, Benue, Gongola, Kano and Plateau); two are mixed (Imo and Niger); and seven are neutral (Crossriver, Kaduna, Lagos, Ogun, Ondo, Oyo and R i v e r s ) . In the convergence-favoured group are states with ranks 8, 3, 18, 9 and 14 r e s p e c t i v e l y on 1980 manufacturing. Those with ranks 18 and 14 192 TABLE 28: Concentration Indices Based on:NIDB-Financed (Project) Establishments and Total Manufacturing Establishments by States, 1980. Project E s t a b l i s h - Concentration P a r t i a l State ments as % of Total Index Rating Manufacturing Estab-lishments 1. Anambra 12.44 0.96 N 2. Bauchi 160.00 12.31 F 3. Bendel 8.30 0.64 D 4. Benue 6.00 0.46 D 5. Borno 58.33 4.47 F 6. Crossriver 6.88 0.53 D 7. Gongola 9.52 0.73 D 8. Imo 7.42 0.57 D 9. Kaduna 31.25 2.40 F 10. Kano 2.83 0.23 D 11. Kwara 58.97 4.54 F 12. Lagos 17.00 1.31 N 13. Niger 83.33 6.41 F 14. Ogun 66.67 5.13 F 15. Ondo 10.64 0.82 N 16. Oyo 23.38 1.80 F 17. Plateau 6.25 0.48 D 18. Rivers 1.99 0.15 D 19. Sokoto 60.00 4.62 F Nation 13.00 1.00 Source: Computed from relevant values i n Table 20 and Appendix VIB. Notes: (1) The l e t t e r symbols have the following i n t e r p r e t a t i o n s : D = Disfavoured; F = Favoured; N = Normal. The applicable empirical rules are as follows: (a) A state i s considered disfavoured when i t s concentration index i s less than 0.7, that i s closer to 0.5 than to 1 (approximately) or c l e a r l y l e s s than 0.7. (b) A state i s considered normal i f i t s concentration index i s as high as 0.8 but below 1.5 (approximately). (c) A state i s considered favoured i f i t s index i s 1.5 or more. (2) The c l i e n t establishments for Bauchi state includes two hotels. This accounts for the fact that i t s number of c l i e n t e s t a b l i s h -ments exceeds the t o t a l number of manufacturing establishments e x i s t i n g i n the state by 1980. However, the few non-manufac-turing NIDB c l i e n t enterprises. i n the data (a net of 19) were included i n the analyses f o r every state concerned. The ra t i o n a l e i s that from the viewpoint of employment generation, human welfare and development, the few non-manufacturing c l i e n t enterprises could be j u s t as important. Besides, the i n c l u s i o n makes i t possible to take account of a l l NIDB O D e r a t i o n s i n a l l states. 193 TABLE 29: Concentration Indices Based on NIDB Total Equity Financing and Total Equity Cost of C l i e n t Projects by States, 1980. NIDB Equity as Concen- P a r t i a l State % of Project t r a t i o n Rating Equity Index 1. Anambra 10.45 1.68 F 2. Bauchi 3.23 0.52 D 3. Bendel 9.79 1.58 F 4. Benue 2.79 0.45 D 5. Borno 11.58 1.86 F 6. Crossriver 5.46 0.88 N 7. Gongola 2.48 0.40 D 8. Imo 4.72 0.76 N 9. Kaduna 6.36 1.02 N 10. Kano 0.41 0.07 D 11. Kwara 10.68 1.72 F 12. Lagos 7.92 1.28 N 13. Niger 7.20 1.16 N 14. Ogun 7.54 1.21 N 15. Ondo 6.93 1.12 N 16. Oyo 7.71 1.24 N 17. Plateau 0.00 0.00 D 18. Rivers 7.26 1.17 N 19. Sokoto 11.93 1.92 F Nation 6.21 1.00 _ Source: Computed from relevant "Project Cost" and "NIDB P a r t i c i p a t i o n " values i n Appendix VIB. Notes: The l e t t e r symbols have the following i n t e r p r e t a t i o n s : D = Disfavoured; F = Favoured; N = Normal. The applicable empirical rules are as follows: (a) A state i s considered disfavoured when i t s concentration index i s less than 0.7, that i s closer to 0.5 than to 1 (approximately) or c l e a r l y less than 0.7. (b) A state i s considered normal i f i t s concentration index i s as high as 0.8 but below 1.5 (approximately). (c) A state i s considered favoured i f i t s index i s 1.5 or more. 194 TABLE 30: Concentration Indices Based on NIDB Total Financing and Total Project Cost by States, 1980. NIDB Total Concen-State Financing as % t r a t i o n of Total Project Index Cost 1. Anambra 34.64 1.76 F 2. Bauchi 12.96 0.66 D 3. Bendel 31.62 1.60 F 4. Benue 9.79 0.50 D 5. Borno 28.74 1.46 F 6. Crossriver 15.59 0.79 N 7. Gongola 3.88 0.20 D 8. Imo 36.30 1.84 F 9. Kaduna 21.37 1.08 N 10. Kano 32.60 1.65 F 11. Kwara 35.33 1.79 F 12. Lagos 24.98 1.27 N 13. Niger 11.36 0.58 D 14. Ogun 23.31 1.18 N 15. Ondo 16.04 0.81 F 16. Oyo 26.85 1.36 N 17. Plateau 41.88 2.12 F 18. Rivers 23.06 1.17 N 19. Sokoto 27.68 1.40 N Nation 19.71 1.00 _ P a r t i a l Rating Source: Computed from relevant "Project Cost" and "NIDB P a r t i c i p a t i o n " values i n Appendix VIB, Notes: The l e t t e r symbols have the following i n t e r p r e t a t i o n s : D = Disfavoured; F = Favoured; N = Normal. The applicable empirical rules are as follows: (a) A state i s considered disfavoured when i t s concentration index i s less than 0.7, that i s closer to 0.5 than to 1 (approximately) or c l e a r l y less than 0.7. (b) A state i s considered normal i f i t s concentration index i s as high as 0.8 but below 1.5 (approximately). (c) A state i s considered favoured i f i t s index i s 1.5 or more. 195 (respectively, Borno and Sokoto) would appear to be the two i n that group needing the convergence-favoured r a t i n g most. Of the f i v e which are convergence-disfavoured, the f i r s t three (Bauchi, Benue and Gongola resp e c t i v e l y with ranks 17, 15 and 15) appear even more i n need of the convergence-favoured r a t i n g . The "mixed" category r e f l e c t s d i f f e r e n t outcomes with respect to the three c r i t e r i a for measuring NIDB "favouritism". While the suggestion i s that each of the two states concerned i s favoured i n respect of at least one c r i t e r i o n , the two are not equally i n need of NIDB "favouritism": Niger with rank 19 appears most i n need among a l l states. F i n a l l y , most of the seven states with "neutral" ranking seem r e l a t i v e l y able to afford being i n that category, e s p e c i a l l y Lagos with rank 1 on 1980 manufacturing (and every other v a r i a b l e used i n t h i s study). However, three states i n the group (Ogun, Ondo and Oyo re s p e c t i v e l y with rank 12, 12 and 11) appear to need at least the "mixed" r a t i n g to improve t h e i r r e l a t i v e standings. On the whole, the varied pattern of the ratings point to the d i f f i c u l t y inherent i n the nature of the p o l i c y task NIDB has assumed: how, within the bank's own technical and i n s t i t u t i o n a l guidelines, i s the job of "engineering" balanced development to be car r i e d out? However, the assorted patterns of mixed, neutral, disfavoured and favoured ratings i n the analysis i s consistent with the i n c i p i e n t convergence e a r l i e r noticed for the whole regional system (Section IV.3.1) as well as the observed pattern of divergence between state rankings on manufacturing and on NIDB financing i n the 1975-1980 period (Section IV.3.2); although the fact that the analysis of NIDB "favouritism" n e c e s s a r i l y employs the sum of NIDB-finaneing variables over the whole 1964-1980 time span ( i n order to e l i c i t the o v e r a l l 196 favouritism patterns over the ent i r e study period) has, not unexpectably, d i l u t e d the pattern. Nevertheless, the e s s e n t i a l inference from the rank-difference analysis pertaining to NIDB financing e s p e c i a l l y i n the 1975-1980 period r e f l e c t i n g an e f f o r t to favour erstwhile "disadvantaged" states i s again apparent here: of the 9 states ranking 11 to 19 on 1980 manufacturing, two are i n the convergence-favoured group, one i s i n the mixed, and the three i n the neutral group have at least one "F" r a t i n g each. Even two of them i n the convergence-disfavoured group (Bauchi and Benue, re s p e c t i v e l y with rank 17 and 15) have at least one p a r t i a l r a t i n g of "F" each. Only Gongola (rank 15) cons i s t e n t l y has p a r t i a l ratings of "D" on a l l three c r i t e r i a of "favouritism" (Table 31). Conversely, Lagos state, seemingly l e a s t i n need of favouritism i n t h i s context, con-s i s t e n t l y records a neutral r a t i n g on a l l three c r i t e r i a . Thus, the e a r l i e r conclusion that NIDB would have to continue i t s convergence-inducing practices f o r quite some time into the future i n order to be able to a l t e r ( s i g n i f i c a n t l y ) the s t i l l - p o l a r i z e d regional pattern of Nigerian manufacturing, also re-emerges very strongly here. Apart from the three c r i t e r i a used for analyzing NIDB "favouritism", i n t e r e s t - r a t e s e t t i n g patterns (with respect to loans) would also have been eminently s u i t a b l e . However, NIDB does not charge i t s c l i e n t s i n t e r e s t rates which are d i s c e r n i b l y d i f f e r e n t from those of commercial banks and i t does not publish the in t e r e s t rates which i t charges on loans to i n d i v i -dual c l i e n t establishments. What i s known i s that since the l a t e 1970s, for instance, NIDB in t e r e s t rates have averaged 10^ to 11 per cent per a n n u m . T h i s compares markedly with the highest of the average i n t e r e s t NIDB, General P o l i c i e s . (Lagos: 1980?), p. 2. Even minor extra charges (of 3/4%) on undisbursed parts of loans and (2%) on overdue p r i n c i p a l and in t e r e s t would push the mean NIDB rates higher than those of commercial banks further. TABLE 31: Summary of "Favouritism" Appraisal i n Relation to NIDB Financing by States, 1980. State 1 E s t a b l i s h -ments Index Appraisal i n respect of: 2 3 4 Equity Total Total Financing Financing Favouritism Index Index Score 5 Ground Rating 6 Ranking on 1980 Mfg. 1. Anambra N F F 2 Con.-Fav. 8 2. Bauchi F D D 1 Con.-Disfav. 17 3. Bendel D F F 2 Con.-Fav. 3 4. Benue D D D 0 Con.-Disfav. 15 5. Borno F F F 3 Con.-rFav. , 18 6. Crossriver D N . N 0 Neutral 7 7. Gongola D D D 0 Con.-Disfav, 15 8. Imo D N F 1 Mixed 6 9. Kaduna F N N 1 Neutral 5 10. Kano D D F 1 Con.-Disfav. 2 11. Kwara F F F 3 Con.-Fav. 9 12. Lagos N N N 0 Neutral 1 13. Niger F N D 1 Mixed 19 14. Ogun F N N 1 Neutral 12 15. Ondo N N F 1 Neutral 12 16. Oyo F N - N 1 Neutral 11 17. Plateau D D F 1 Con.-Disfav. 10 18. Rivers D N N 0 Neutral 4 19. Sokoto F F N 2 Con.-Fav. 14 Source: Tables 28-30 and Table 24A resp e c t i v e l y for columns 2, 3, 4 and 6. Note: The abbreviated words read f u l l y as follows: Con-.-Fav. = Convergence-favoured, and Con.-Disfav. = Convergence-disfavoured. 1 9 8 rates charged by commercial banks (those to "other advances") i n the l a s t h a l f of the 1970s, (Table 32). TABLE 32: Mean Lending Rates of Commercial Banks i n Niger i a , 1975-1979. n . . c r, ' Rates by Years (%) Categories of Customers £ ^—' 1975 1976 1977 1978 1979* 1. F i r s t Class Advances 6.0 6.0 6.0 6.8 7.0 2. Produce Advances 9.0 8.0 7.5 8.9 9.3 3. Other Advances 9.0 10.0 9.3 10.8 11.0 Source: Central Bank of Nigeria, Economic and F i n a n c i a l Review, Vol. .: No.l, June 1979, p. 34. Note: * Mean for 1979 covers only January to June. Apparently, NIDB takes the p o s i t i o n that i t s long-term financing services are s u f f i c i e n t l y valuable to warrant no concessions on i n t e r e s t rates. In any event, the analysis i n respect of NIDB "favouritism" also y i e l d s some insig h t s f o r the issue of i n t e r n a l regional e f f o r t , the f i n a l aspect examined here. These insig h t s could be b r i e f l y summarized before examining the other dimension which also mirrows the i n t e r n a l / regional e f f o r t f a c t o r : the pattern of sanction withdrawals. IV.4.2 Internal Regional E f f o r t and NIDB Financing It i s d i r e c t l y pertinent within the balanced-development perspective to ask what i n t e r n a l l y relevant developmental e f f o r t a state should make before expecting p u b l i c - p o l i c y induced concessions i n a given area of economic a c t i v i t y . That l i n e of thought has to be made contextually 199 relevant. For the concerns here the observable in d i c a t o r s of i n t e r n a l regional e f f o r t s are the e x i s t i n g manufacturing enterprises or e s t a b l i s h -ments which, with i n d i v i d u a l s e l f - o r g a n i z a t i o n , could approach NIDB for financing and mobilize resources to meet the bank's conditions for financing. From the analysis i n the preceding section (IV.5.1), some i n i t i a l inferences regarding i n t e r n a l s e l f - o r g a n i z a t i o n and e f f o r t could be e l i c i t e d . The " i n t e r n a l " (state-based) percentages used for computing the concentration indices are useful i n t h i s regard . To the extent that the relevant percentage value for a state (NIDB c l i e n t enterprises expressed as a percentage of a l l establishments i n the state) i s low, to that much extent i s that state (relevant enterprises i n i t ) not taking adequate advantage of NIDB's financing c a p a b i l i t i e s . I t ' s i n t e r n a l e f f o r t i s , therefore, considered correspondingly low. The national percentage of 13 provides, i n t h i s regard, a u s e f u l reference value as an i n d i c a t o r of "mean" national e f f o r t : 13 out of every 100 enterprises i n the country are NIDB's c l i e n t s (Table 28). The component states could thus be grouped into e f f o r t - l e v e l categories of those below and above the "mean" national effort-making l e v e l (see Table 33). It would be noticed on Table 33 that 9 of the 19 states have per-centage values above the national mean with respect to the proportion of enterprises which have attracted NIDB financing and 10 are below. The p r a c t i c a l u t i l i t y or i n d i c a t i o n provided by t h i s type of grouping i s that i t should suggest to manufacturing and other relevant enterprises i n states belonging i n the below-average group, e s p e c i a l l y those ranking very low i n t h e i r shares of national manufacturing (notably Benue, Gongola, Ondo and Plateau) the need to take more advantage of NIDB's financing c a p a b i l i t i e s . 200 TABLE 33: Grouping of States by Internal (Regional) Effort-Making Categories i n Relation to A t t r a c t i n g NIDB Financing (Based on C l i e n t Establishments i n State Expressed as Percentage of a l l Manufacturing Establishments i n State): National "Average" =13. Categories No. of States % (Range) Names of States A. Above Average 17-160* Bauchi, Borno, Kaduna, Kuara, Lagos, Niger, Ogun, Oyo, Sokoto B. Below Average 10 2-12 Anambra, Bendel, Benue, Crossriver, Gongola, Imo, Kano, Ondo, Plateau, Rivers Source: Table 28. Note: *The 160 per cent value i s for Bauchi state, see note number 2 at the bottom of Table 28. If Bauchi i s eliminated, the range i n the above-average category would be 17-83 per cent. 201 The anomalous s i t u a t i o n i n which low ranking states f i n d themselves i n the above-average group r e f l e c t s t h e i r " e f f o r t s " r e l a t i v e to the number of manufacturing establishments i n them. However, i t simultaneous has implications for the other i n d i c a t o r of the i n t e r n a l - e f f o r t factor to be examined presently. This group oddly includes states ranking lowest on 1980 manufacturing, notably Niger, Borno and Bauchi, ranking 19, 18 and 17 r e s p e c t i v e l y (see Table 31). The fact i s that although these states are making the best use of NIDB financing r e l a t i v e to the number of relevant enterprises i n them, they are s t i l l very much behind i n comparison to other states i n the nation as far as manufacturing i s concerned. Of course, they may have countervailing comparative advantages i n sectors other than manufacturing, a reminder to the point made e a r l i e r that the balanced-development issue cannot be conclusively evaluated within the context of studies dealing with si n g l e sectors of the economy. For now, however, t h i s phenomenon i s a confirmation of Schatz's "capital-shortage i l l u s i o n " t h e s i s : that the problem i n many LDCs ("Disadvantaged" states here) i s not so much the shortage of c a p i t a l f or investment as i t i s the fewness or ,11 shortage of v i a b l e projects i n which to invest a v a i l a b l e c a p i t a l . In f a c t , the other i n d i c a t o r of i n t e r n a l regional e f f o r t (or lack of i t ) could 12 best be viewed i n the l i g h t of the capital-shortage i l l u s i o n concept. Sayre P. Schatz, 0p_. C i t . , 1974, pp. 89-101. Data on rejected financing applications would have been eminently suited to t h i s purpose but f i e l d enquiries have revealed that NIDB does not keep records of t h i s type of information. Could i t be that the bank i s j u s t unwilling to release such data, probably for p o l i t i c a l reasons? 202 The p r e l i m i n a r y d i s c u s s i o n of the data r e l a t i n g to NIDB f i n a n c i n g i n d i c a t e d ( S e c t i o n III.1.2) that the bank made a t o t a l of 421 sanctions between 1964 and 1980. Forty of the sanctions were subsequently w i t h -drawn or c a n c e l l e d because the e n t e r p r i s e s concerned were, f o r v a r i o u s reasons, not able to f u l f i l l t h e i r p a r ts of the r e l e v a n t f i n a n c i n g agree-ments. The bulk of the analyses i n t h i s study have t h e r e f o r e had to be based on data f o r the r e a l sanctions remaining (381) and the word "net" has been c o n s i s t e n t l y used to r e f l e c t t h i s . The e n t e r p r i s e s whose sanc-t i o n s were c a n c e l l e d are d i s t r i b u t e d unevenly a l l over the country. A simple percentage a n a l y s i s of the p a t t e r n of sanction withdrawal (that i s , expressing the number of sanctions withdrawn i n a s t a t e as a percentage of t o t a l or gross sanctions i n the s t a t e over the 1964-1980 period) s u f f i c i e n t l y r e v e a l s how w e l l or badly e n t e r p r i s e s i n v a r i o u s s t a t e s used the o p p o r t u n i t i e s f o r NIDB f i n a n c i n g which they had. I t would thus suggest inferences regarding i n t e r n a l r e g i o n a l e f f o r t s . Table 13 34 represents the p a t t e r n . The p a t t e r n of percentage values on the t a b l e i n d i c a t e s that 7 s t a t e s d i d not s u f f e r s a n c t i o n withdrawal, the i m p l i c a t i o n being that i n t e r n a l e f f o r t s were made to use the c a p i t a l ( f i n a n c i n g ) made a v a i l a b l e . Of the remaining 12 s t a t e s (those that s u f f e r e d s a n c t i o n withdrawal through the would-be c l i e n t e n t e r p r i s e s located i n them), Benue was worst h i t (33 per c e n t ) , followed by Bauchi (22 per c e n t ) , Kano (20 per c e n t ) , Anambra (18 per c e n t ) , Ondo (17 per c e n t ) , Bendel and Borno (13 per cent each), Lagos 13 The withdrawal values f o r each s t a t e could a l s o be compared to the 1980 f i g u r e s f o r manufacturing i n each s t a t e . However, i t makes no r e a l d i f f e r e n c e f o r the r e l a t i v e p o s i t i o n s of s t a t e s i n t h i s connection. The percentage values would be merely scaled down since the denominators would thus be l a r g e r . The i n t e r p r e t a t i o n would t u r n out to be the same. 203 TABLE 34: The State Patterns of NIDB Gross Sanctions and Withdrawals, 1964-1980. NIDB Sanctions, 1964-1980 State Gross Number No. Withdrawn % Withdrawn 1. Anambra 34 6 17.6 2. Bauchi 9 2 22.2 3. Bendel 24 3 12.5 4. Benue 3 1 33.3 •5. Borno 8 1 12.5 6. Crossriver 13 0 0.0 7. Gongola 2 0 0.0 8. Imo 29 0 0.0 9. Kaduna 22 2 9.1 10. Kano 10 2 20.0 11. Kwara 24 1 4.2 12. Lagos 157 19 12.1 13. Niger 5 0 0.0 14. Ogun 32 0 0.0 15. Ondo 6 1 16.7 16. Oyo !9 1 5.3 17. Plateau 6 0 0.0 18. Rivers 9 1 11.1 19. Sokoto 9 0 0.0 Total/Nation 421 40 9.5 Source: Same as for Table 7. 204 (12 per cent), Rivers (11 per cent), Kaduna (9 per cent), Oyo (5 per cent) and Kwara (4 per cent). The f i r s t 9 states among these twelve are above the national "average" of 10 per cent and the remaining 3 are below. While the various sanction-withdrawal proportions mirror the extents to which i n t e r n a l regional e f f o r t s were not made to use funds made a v a i l -able by the bank and therefore the p r e v a i l i n g degrees of capital-shortage i l l u s i o n , they are c l e a r l y more serious for some states than others, e s p e c i a l l y those ranking low on shares of 1980 n a t i o n a l manufacturing. Thus, agains, such states as Benue (rank 15), Bauchi (rank 17), and Ondo (rank 12) should have made enough i n t e r n a l e f f o r t s not only to use the sanctions they got but also to a t t r a c t more. It would, i n f a c t , be consistent with NIDB's promotional objectives i f groups/associations of l o c a l i n d u s t r i a l i s t s and even relevant m i n i s t r i e s of state governments organize to p u b l i c i z e how relevant enterprises could take more advantage of NIDB's financing services. The twin issues of NIDB "favouritism" and i n t e r n a l regional e f f o r t s conclude the substantive analyses of t h i s study. The next f i n a l chapter c a r r i e s a synthesis of the main analyses and inferences of the study and also makes pertinent observations and remarks on the continuing role/of NIDB i n Nigerian i n d u s t r i a l development. 205 CHAPTER FIVE THE ANALYSES IN RETROSPECT AND CONCLUDING REMARKS V. l Preliminary Remarks and the Study's Objectives As indicated i n the f i r s t chapter, the broad objective of the study has been to analyze the financing a c t i v i t i e s of Nigeria's most important development finance i n s t i t u t i o n , NIDB, with a view to e l i c i t i n g how much i t s financing patterns show consistency with some major elements of industrial-development planning p o l i c i e s and objectives i n Ni g e r i a . Since NIDB's raison d'etre i s to provide medium- and long-term financing p r i m a r i l y i n the f i e l d of manufacturing, the study necess a r i l y requires analysis of the relevant patterns of Nigerian manufacturing i n close association with NIDB financing data i n order to e l i c i t the desired r e l a t i o n s h i p s . Broadly, the study covers the 1964-1980 period but the relevant data have been aggregated/cumulated p r i m a r i l y for two points i n time (1974 and 1980) i n order to make i d e n t i f i c a t i o n of p o l i c y - r e l a t e d changes i n patterns possible. The industrial-development p o l i c y elements i n the l i g h t of which the analyses have been performed are those r e l a t i n g to: (a) the goal of evolving a more balanced i n d u s t r i a l output structure for Nigeria (III.2 .2); and (b) the objective of gradually evolving a more balanced regional/ s p a t i a l pattern of manufacturing consistent with the long-term s o c i e t a l objective of r e l a t i v e l y even development i n Nigeria (1.4.3 and IV.1). It has also been indicated that NIDB records strongly r e f l e c t r e l e -vant public p o l i c y objectives i n i t s functional environment, e s p e c i a l l y (for the concerns of t h i s study) the objective of evolving a more 206 regionally-balanced pattern of development (II.2.1). The type of changes and r e l a t i o n s h i p s which the study sought to e l i c i t were thus made consistent with the i n i t i a l statement of the study's s p e c i f i c objectives: (a) ascertaining the degree to which NIDB's financing or c r e d i t a c t i v i t i e s have contributed to Nigerian i n d u s t r i a l development generally; and (b) e l i c i t i n g the extent to which the financing a c t i v i t i e s of the bank have mitigated the e s s e n t i a l l y polarized pattern of Nigerian manufacturing. Necessarily, such conceptual notions as balanced development ( s t r u c t u r a l and s p a t i a l here), convergence/divergence and the related con-cepts of c i r c u l a r and cumulative causation as well as Schatz's c a p i t a l -shortage i l l u s i o n t h e s i s provided the t h e o r e t i c a l frame of reference at appropriate stages of the analyses. In view of the main p o l i c y elements examined and the corresponding objectives of the study, the study was c a r r i e d out at two l e v e l s of analyses: the national l e v e l of analysis concerned ( i n i t i a l l y ) with the temporal r e l a t i o n s h i p s between i n d u s t r i a l development and NIDB financing and ( l a t e r ) the bank's financing a c t i v i t i e s v i s - a - v i s Nigeria's i n d u s t r i a l output structure (Chapter Three); and the regional l e v e l of analysis con-cerned with e l i c i t i n g how much NIDB's financing patterns have been con-s i s t e n t with evolving a r e g i o n a l l y balanced pattern of manufacturing i n the country (Chapter Four). The analysis at the national l e v e l employed, pr i m a r i l y , the relevant c r i t e r i a of paid-up c a p i t a l investment and employment as basic measures of 207 manufacturing, incorporating numbers of production u n i t s , plants or establishments as necessary. Total financing (the sum of equity and loans) was used as the fundamental measure of NIDB financing, also i s o l a t i n g relevant associated components and v a r i a b l e s such as number of c l i e n t (project) enterprises, the equity component and associated employment as necessary at d i f f e r e n t stages. The regional l e v e l of analysis employed, fundamentally, the yardsticks of number of e s t a b l i s h -ments and employment to measure manufacturing, and e s s e n t i a l l y the same measure of NIDB financing as used at the national l e v e l ; i t also features d i f f e r e n t i a l i s o l a t i o n of v a r i a b l e s for scrutiny at various stages. The succeeding pages constitute a synthesis of the major r e l a t i o n -ships e l i c i t e d from the analyses. They also cover relevant conclusions and remarks related,to the analyses and the continuing r o l e of NIDB i n Nigeria's i n d u s t r i a l development. V.2 Temporal and S t r u c t u r a l Relationships Between NIDB Financing Patterns  and Manufacturing: The National Level of Analysis. The temporal analysis i s summarized f i r s t . V.2.1 Synthesis and Conclusion on the Temporal Analysis A preliminary overview of the NIDB data revealed that over the 1964-1980 study period, the bank made a t o t a l of 421 sanctions, 40 (9.5 per cent) of which were subsequently canceled or withdrawn (mainly between 1972 and 1978) for various reasons r e f l e c t i n g the i n a b i l i t y of the c l i e n t enterprises to meet one or the other aspect of the relevant financing agreements. Thus, the substantive analyses were based on the remaining 381 sanctions (net financing) since the withdrawn sanctions, though 208 examined at a point i n the regional analysis, had to be deleted from the substantive data. S i m i l a r l y , a preliminary analysis of the manufactural data shows that Nigerian manufacturing establishments increased from 2 i n 1894 to 2,930 in 1980. While about 51 per cent of them came into being between 1961 and 1970, about 74 per cent of the 1980 t o t a l started operating only since the country's independence i n 1960. And while about 82.2 per cent of the establishments e x i s t i n g i n 1980 employed 10-100 people each, most of the t o t a l manufactural employment (almost 80 per cent) was concentrated i n larger s i z e establishments employing over 100 people. By cumulative aggregation (addition), i t was possible to e s t a b l i s h a temporal match between the two sets of data, those r e l a t i n g r e s p e c t i v e l y to NIDB financing and manufacturing over the study period (Table 12B). The subsequent temporal analysis revealed that: (a) the proportion of Nigerian manufacturing establishments which received NIDB financing increased unsteadily from 5.7 per cent i n 1965 to 13.0 per cent i n 1980; (b) the employment i n the NIDB-financed enterprises or e s t a b l i s h -ments s i m i l a r l y increased from 12.6 per cent of t o t a l n a t i o n a l manufactural employment i n 1965 to 30.2 per cent i n 1980^; The i n d i c a t i o n of 1965 as the i n i t i a l terminal year here r e s u l t s from the aggregation which had to be done to e s t a b l i s h a temporal match between t o t a l manufacturing and NIDB data: while NIDB data i s complete from 1964 to 1980, the data on national manufacturing was not complete i n respect of some desired variables for some years, including 1964. 209 (c) when NIDB's t o t a l financing i s expressed as a proportion of the t o t a l paid-up c a p i t a l investment i n manufacturing, a temporal increase from 4.5 to 18.8 per cent was also obtained f o r the study period. The suggestion from these empirical values that Nigerian manufacturing has increased temporally as NIDB financing increased i s indeed to be expected since the bank operates within the country and p r i m a r i l y i n the f i e l d of manufacturing. That suggestion i s further reinforced by the high p o s i t i v e c o r r e l a t i o n s between the measures of manufacturing and NIDB financing i n the temporal analyses. Thus, for instance, the temporal c o r r e l a t i o n be-tween paid-up c a p i t a l (manufacturing) and NIDB's t o t a l financing (of 0.906) as well as that between t o t a l employment i n manufacturing and NIDB t o t a l _ financing (of 0.931) were s i g n i f i c a n t even at the .01 l e v e l of confidence. The same high l e v e l s of r e l a t i o n s h i p were revealed by the i n t e r c o r r e l a t i o n s between the two basic measures of manufacturing (as w e l l as the e s t a b l i s h -ment measure) with such NIDB-associated variables as project (or assisted) establishment and employment numbers (Table 13). The p a r t i a l conclusion that the extent or i n t e n s i t y of Nigerian manufacturing has increased with increases i n NIDB financing over the study period i s therefore self-warranting. V.2.2 Manufacturing Output Structure and NIDB Financing The r e l a t i o n s h i p between the cumulative s t r u c t u r a l patterns of NIDB financing and the structure of o v e r a l l manufacturing was also analyzed by c o r r e l a t i o n procedures, using data sets for two points i n time, 1974 and 1980. It was indicated that NIDB's general records do not r e f l e c t con-cerns for the s t r u c t u r a l imbalances and problems of the manufacturing .210 sector to an extent even remotely comparable to the concerns shown for the spatially-balanced development issue. Nevertheless, the analyses i n t h i s regard reveals a s t r i k i n g r e l a t i o n s h i p between the bank's financing patterns and the component s t r u c t u r a l groups within the manufacturing sector. The i n i t i a l analysis showed, for instance, that: (a) the t e x t i l e s group (ISIC 32) shared the largest proportions of paid-up c a p i t a l and employment i n manufacturing i n 1974 (respectively 28.8 and 31.5 per cent); and that the same t e x t i l e s group shared the highest proportion of NIDB financing cumulated to 1974 (26.7 per cent); and (b) although the lowest sharing industry-groups of manufactural employment and paid-up c a p i t a l were not the same as those for NIDB financing up to 1974, the correspondence between the r e l a t i v e rankings of industry-type groups and NIDB financing reached down at least to the second-ranking sectors: the next highest receivers of NIDB financing being the food processing and non-metallic mineral products group (ISIC 31 and 36), each with approximately 16.5 per cent; one of these (food processing) also ranked second on o v e r a l l manufacturing (with 19.3 and 17.4 per cent r e s p e c t i v e l y by paid-up c a p i t a l and employment). Further analyses of the s t r u c t u r a l r e l a t i o n s h i p s between manufacturing and the bank's financing strongly reinforced the i n i t i a l l y observed pattern of correspondence. For instance, the c o r r e l a t i o n c o e f f i c i e n t s (of 0.887) between paid-up c a p i t a l i n manufacturing and NIDB t o t a l financing and (of 0.0779) between manufactural employment and NIDB t o t a l financing up to 1974 were both s i g n i f i c a n t at the .01 l e v e l of confidence. The 211 inference and conclusion of a strong association between the s t r u c t u r a l rankings of various industry-type groups and the s t r u c t u r a l d i s t r i b u t i o n of NIDB financing by 1974 could hardly be r e s i s t e d . The inference i s further reinforced by the r e s u l t s of an analysis regressing NIDB's t o t a l financing on manufactural paid-up c a p i t a l . The scatter points on the accompanying scattergram was r e i n f o r c i n g enough. The related regression c o e f f i c i e n t of .0057 also implies that by 1974, for every unit of cumula-t i v e NIDB investment or financing, there was NO.0057 m i l l i o n (or about M5,700) of paid-up c a p i t a l investment, a r e l a t i v e l y high l e v e l of "response". However, the s t r u c t u r a l analysis of 1980 manufacturing and NIDB financing•(cumulated to 1980) revealed divergences from the 1974 pattern of r e l a t i o n s h i p s . The 1980 r e l a t i o n s h i p s between the s t r u c t u r a l patterns of manufacturing and of NIDB financing were therefore further examined by c o r r e l a t i o n a n a l y s i s . The hypothetical expectation was that i f , to any important degree, NIDB had patterned i t s financing i n the 1974-1980 period to favour industry-type groups which had r e l a t i v e l y depressed status i n 1974 ( i n pursuance of a p o l i c y of s t r u c t u r a l balance i n manufacturing), there should be, for 1980, a negative or non-significant s t r u c t u r a l c o r r e l a t i o n between manufacturing and NIDB financing. The obtained r e s u l t s were highly consistent with the inverse-r e l a t i o n s h i p expectation. The c o r r e l a t i o n c o e f f i c i e n t s of -0.298 between paid-up c a p i t a l and NIDB's t o t a l financing and of -0.010 between manu-f a c t u r a l employment and NIDB t o t a l financing are c l e a r l y negative. The inference i s straightforward: although NIDB does not give much prominence to the issue of s t r u c t u r a l balance, the s t r u c t u r a l d i s t r i b u t i o n of the bank's financing strongly r e f l e c t s a concern to gradually a l t e r the 212 country's i n d u s t r i a l structure i n the d i r e c t i o n of increased balance. Since the obtained negative c o e f f i c i e n t s are not s i g n i f i c a n t , however, the r e v e l a t i o n has to be described as a strong tendency rather than an established pattern. Further analyses by c o r r e l a t i o n and graphic procedures reveal why the fin d i n g could, perhaps, be more than a tendency. NIDB financing cumulated for the 1975-1980 period only was i s o l a t e d and analysed with the manufac-t u r a l pattern ( s t r u c t u r a l ) e x i s t i n g i n 1974, a l l with a view to a s c e r t a i n -ing how much the r e l a t i v e l y depressed industry groups of 1974 were favoured by NIDB financing i n the in-between period, 1975-1980. E s s e n t i a l -l y the same r e s u l t s were obtained. The two measures of manufacturing correlated very low with NIDB t o t a l financing i n the in-between period, one (paid-up c a p i t a l ) negatively and the other (employment) p o s i t i v e l y but n o n - s i g n i f i c a n t l y . The accompanying graphic analysis (Figure 6) revealed the r e l a t i v e s t r u c t u r a l d i s t r i b u t i o n s . While i t showed such industry-type groups as basic metal (ISIC 37) and "others" (ISIC 39) to have been d i s t i n c t l y favoured, and t e x t i l e s (ISIC 32), paper, p r i n t i n g and publishing (ISIC 34) as well as chemicals (ISIC 34) to have been r e l a t i v e l y disfavoured, such other s i g n i f i c a n t groups (of 1974) as food processing (ISIC 31) and non-metallic mineral products (ISIC 36) s t i l l received not inconsiderable proportions of NIDB financing i n the 1975-1980 period. The inference and conclusion from the analyses were compelling: without giving much prominence to a p o l i c y of s t r u c t u r a l balance, the s t r u c t u r a l d i s t r i b u t i o n of NIDB's financing since the early 1970s c l e a r l y r e f l e c t s a concern which i s consistent with the national development-p o l i c y objective of evolving a balanced i n d u s t r i a l structure. This, of 213 course, does not mean the s t r u c t u r a l imbalance of the manufacturing sector has disappeared. It does mean that NIDB shows evidence of t r y i n g to mitigate i t . The fact that the " t r a d i t i o n a l l y " dominant industry groups have not s i g n i f i c a n t l y relinquished t h e i r r e l a t i v e preponderance suggests a need for NIDB to continue i t s apparently cautious "balancing act" f o r some i n d e f i n i t e time into the future. It i s not even c e r t a i n , except i n view of Nigeria's long-term p o l i c y of evolving an e s s e n t i a l l y s e l f - r e l i a n t economy (1.4.3), how far the structural-balance p o l i c y could be pursued i n one broad sector of the economy. Issues of comparative advantage v i s - a - v i s other countries (and e s p e c i a l l y within the Economic Community of West A f r i c a n States) might necessitate r e v i s i o n s at some future point i n time when the country's own i n t e r n a l c a p a b i l i t i e s might have been more f u l l y r e a l i z e d . At present, Nigerian manufacturing i s s t i l l undergoing fundamental growth and has not attained the peak of development even i n industry-type groups i n which the country might have comparative advantage p o t e n t i a l l y . The f i n a l remark i n respect of the s t r u c t u r a l analyses then follows: that since the private sector i s a very important source of entrepreneural investment i n Niger i a , public p o l i c y i n respect of s t r u c t u r a l balance could s e r i o u s l y consider making provisions for s t r u c t u r a l l y s e l e c t i v e incentives for industry groups i t wishes to encourage. The mammoth d i r e c t investments i n iron and s t e e l projects by government since the mid-1970s indicates that the provision of encouragement and incentives to desired industry groups i s not new to the Nigerian development-planning experience; that experience already features many incentive programmes i n the area of manufacturing generally. A s t r u c t u r a l l y s e l e c t i v e incentive programme would therefore 214 represent a new adaptation of an old t o o l to address a current concern. V .3 The Regional Patterns of Manufacturing, NIDB Financing and the  Balanced Development P o l i c y A second fundamental objective of the study has been to e l i c i t the extent to which NIDB's financing a c t i v i t i e s have tended to mitigate the re g i o n a l l y polarized pattern of Nigerian manufacturing. This i s i n view of the country's public p o l i c y objective of evolving a r e g i o n a l l y / s p a t i a l l y balanced pattern of development. NIDB's records show, among other things, an avowed commitment to the a n t i - d i s p a r i t y p o l i c y i n i t s a l l o t e d function of i n d u s t r i a l development financing. While the stated intent i s not to pursue the a n t i - d i s p a r i t y goal at the cost of stagnation i n regions (states) presumed to be r e l a t i v e l y more developed, i t s desired e f f e c t i s a rapid movement towards the attainment of a minimum standard of s p a t i a l l y balanced development. There could hardly be a s p e c i f i c statement of time-bound targets i n the regional convergence/divergence induction issue and there i s none i n the Nigerian case. The basic a n a l y t i c a l task i s therefore that of e l i c i t -ing the d i r e c t i o n and extent of change, hopefully towards convergence. Real i s i n g that the p r i n c i p l e involved i s thus not an equal-sharing or proportional one and that i n view of d i f f e r e n t i a l production c a p a b i l i t i e s i n d i f f e r e n t sectors, the population c r i t e r i o n could not be meaningfully used as a basis for analyzing the regional balance/imbalance issue for one . economic-activity sector. The analyses i n respect of the balanced-develop-ment issue passed through many stages to e l i c i t pertinent trends i n the patterns of manufacturing and NIDB financing during the study period. An i n i t i a l overview of the regional patterns of Nigerian manufacturing i n 1974 and 1980 did not r e f l e c t any appreciable change. For instance, the 215 proportion of manufacturing establishments for Lagos state had dropped from 31 to 28 per cent. Kaduna and Bendel states ranked r e s p e c t i v e l y second and t h i r d i n 1974 but only Kaduna had dropped out of i t s rank (replaced by Kano).in 1980. Similar changes occurred i n respect of most other states, except that Bauchi, Benue, Borno, Gongola and Niger states remained c o n s i s t e n t l y ranks of 15 to 19. Part of the i n i t i a l analysis of regional manufactural patterns also revealed the e s s e n t i a l i n s i g n i f i c a n c e , of manufacturing as an employment generating sector i n the Nigerian economy. Even with the old 1963 population data, the number of people per 1000 employed i n manufacturing ranged from less than 1 i n 6 states even i n 1980. Also unimpressive was the nation a l "average" of f i v e people per thousand i n that year. Only Lagos state's 61 and 100 persons i n 1974 and 1980 appears f a i r l y remarkable. A c o r r e l a t i o n analysis of the regional patterns of manufacturing and NIDB financing for the adopted points i n time followed the separate preliminary overviews. The analysis revealed that: (a) the regional pattern of manufacturing correlated very s i g n i f i -cantly (.01 l e v e l ) with the pattern of NIDB financing by 1974 as well as 1980 (Table 23); and (b) therefore, at both points i n time, the regional patterns of NIDB financing and manufacturing revealed a very strong a s s o c i a t i o n . Thus, although the 1980 pattern of NIDB financing had, unlike manufacturing, shown a divergence from the 1974 pattern, the absolute magnitudes of the bank's financing were, i n 1980, broadly low where manufacturing was low and v i c e versa. An i n i t i a l inference of the persistence of p o l a r i z a t i o n was therefore warranted. 216 However, the differences i n i t i a l l y revealed i n NIDB financing pattern by 1980 as well as the objective of the study also warranted a concerted examination of the convergence/divergence issue i n a number of stages. V.3.1 Analysis of Regional Configurations F i r s t , an analysis of the regional configuration of manufacturing v i s -a-vis NIDB financing t r i e d to determine how many of the 19 regional (state) units were needed to account for a " c l e a r l y high percentage" (set at 80 per cent) of the relevant values of manufacturing and NIDB financing i n 1974 and 1980. The accompanying cumulative percentage curves (Figures 7 and 8) revealed that: (a) by 1974, i t required f i v e regional (state) units to account for 80 per cent of manufacturing (measured by employment) and seven regional units to.account for the same proportion of NIDB financing, a c l e a r l y polarized pattern for both v a r i a b l e s but more so for manufacturing than f o r NIDB financing (Figure 7); (b) but by 1980, s i x regional units accounted for the 80 per cent proportion i n respect of manufacturing and ten i n regards to NIDB financing, the two structures again being polarized non-uniformly. A number of inferences followed from the a n a l y s i s . F i r s t , since a greater number of units accounted for the c r i t i c a l proportion of each of the v a r i a b l e s i n 1980 than i n 1974 (no matter how small), the i n d i c a t i o n i s that there has been a slow or i n c i p i e n t tendency towards convergence. Secondly, f o r both points i n time, the 80 per cent proportion was accounted for by larger numbers of regional units for NIDB financing 217 pattern than for the pattern of manufacturing. The inference i s that although both patterns revealed i n c i p i e n t convergence i n the 1974-1980 period, the NIDB pattern revealed the convergence-prone trend more strongly. The summary of the two patterns for the respective years (Table 24B) also revealed that the s p e c i f i c units counted towards the 80 per cent proportion f o r the NIDB pattern included remarkable numbers of regional units sharing very low proportions of national manufacturing and did not, therefore, form part of the l i s t s of units accounting for 80 per cent, of manufacturing. This leads to two a d d i t i o n a l inferences. F i r s t , there i s the observable tendency for NIDB to spready s i g n i f i c a n t proportions of i t s funds to states not cur r e n t l y sharing much of nationa l manufacturing, states such as Ogun and Kwara i n 1974 and Bauchi, Ogun and Niger i n 1980. Thus, there i s the implication that NIDB was t r y i n g to counteract the polarized pattern of manufacturing between 1974 and 1980. On the other hand, some states having large proportions of manufacturing were also i n -cluded i n the NIDB-related l i s t . The observable force at work thus could be seen as the cumulative and c i r c u l a r causation process: some regional units with r e l a t i v e l y numerous enterprises capable of taking advantage of NIDB's financing would tend to generate enough c l i e n t enterprises which would a t t r a c t the bank's funds even when i t s a t t i t u d e i s convergence-prone; and although the t o t a l financing going to such already "favoured" units might appear modest i n r e l a t i o n to t h e i r proportional importance i n national manufacturing, the financing "captured" by then would neverthe-les s appear r e l a t i v e l y large i n the o v e r a l l n a t i o n a l context. In any event, the numerous enterprises i n such "favoured" units cannot be 218 completely starved of financing. The net e f f e c t would therefore amount to the basic notion of the cumulative process: areas with i n i t i a l advantages would tend to a t t r a c t r e l a t i v e l y more advantages and gain cumulatively over time. Nevertheless, the revealed change i n the d i r e c t i o n of con-vergence i n the patterns of manufacturing and NIDB financing, a l b e i t i n c i p i e n t , c a l l e d f or a more i n c i s i v e re-examination of the regional system. V.3.2 Re-examination of the Regional Pattern of Change The analysis i n respect of manufacturing was intended to a s c e r t a i n whether the 1980 pattern r e f l e c t s the balanced-development, equity or " l e v e l l i n g " p r i n c i p l e to a degree consistent with d i s p a r i t i e s observable i n the 1974 pattern. The rank-difference analysis used for t h i s purpose car r i e d the n e c e s s a r i l y r i g i d hypothetical expectation of an inverse rank-order r e l a t i o n s h i p : that the highest addition to regional manufacturing i n the in-between period (1975-1980) should occur i n states (regional units) ranking l a s t i n 1974 and v i c e versa. In other words, i f additions to manufacturing had occurred ( i n 1975-1980) i n perfect accordance with the balanced-development p r i n c i p l e ( i . e . so as to " l e v e l up" l e s s developed states and " l e v e l down" more developed s t a t e s ) , states which shared, more manufacturing i n 1974 should r eceive the least additions and those that. shared l e a s t should receive the highest additions commensurate with the extent of t h e i r backwardness i n t h i s regard. The n u l l hypothesis consistent with the rank-difference analysis i s that there i s no c o r r e l a t i o n or r e l a t i o n s h i p between the pair of rankings. The obtained c o e f f i c i e n t ( p = -0.1219) was not s i g n i f i c a n t even at the .05 l e v e l and the n u l l hypothesis had to be upheld. The implication i s that since there i s no s i g n i f i c a n t r e l a t i o n s h i p between the actual and 219 hypothetical ( r i g i d l y expected) rankings of the 19 states on the 1975-1980 additions to manufacturing, and i n sp i t e of the much p u b l i c i s e d balanced-development p r i n c i p l e , the d i s t r i b u t i o n of additions to manu-facturing did not, on the whole, take cognizance of the l e v e l of d i s -parities/divergence e x i s t i n g i n 1974. The greater importance of the private sector (rather than the public) whose investment decisions generate the bulk of the additions and which i s not bound by the " l e v e l l i n g " p o l i c y i s , among other f a c t o r s , probably most responsible for the obtained r e s u l t . Other patterns associated with manufacturing and NIDB financing were s i m i l a r l y re-examined, using rank-difference a n a l y s i s : the manu-factu r i n g pattern i n 1974 with NIDB cumulative financing to 1974; the manufacturing pattern i n 1974 with cumulative NIDB financing pattern i n 1975-80; manufacturing pattern i n 1980 with NIDB financing pattern cumulated, 1964-1980; and cumulative NIDB financing pattern up to 1974 with NIDB's cumulated financing pattern for 1975-80 (Table 27). The rank-difference analysis i n respect of manufactural and NIDB financing patterns up to 1974 yielded a s i g n i f i c a n t c o e f f i c i e n t ( p = 0.6943) and necessitated r e j e c t i o n of the "no r e l a t i o n s h i p " hypothesis. This i s consistent with the fact that the balanced develop-ment issue (from the 1970s) was not a p o l i c y of s i g n i f i c a n t force p r i o r to the early 1970s. The s i m i l a r analysis i n respect of 1974 manufactural pattern and NIDB 'financing pattern cumulated over 1975-80 was intended to reveal whether, at a time when the balanced-development or equity p r i n c i p l e had come into prominence and NIDB had f u l l y subscribed to i t (1975-80), the regional pattern of the bank's financing took account of the polarized 220 pattern of manufacturing e x i s t i n g i n the early 1970s (1974). The fact that the obtained rank-difference c o e f f i c i e n t ( p = 0.3491) i s p o s i t i v e indicates that NIDB financing was related to the e x i s t i n g (1974) polarized pattern i n i t s broad configurations, again a r e f l e c t i o n of the cumulative causation process. However, the other f a c t that the c o e f f i c i e n t i s not s i g n i f i c a n t and that the hypothesis of "no r e l a t i o n s h i p " has to be upheld, y i e l d s the inference that NIDB had d i s t r i b u t e d i t s financing (regionally) i n the 1975-80 period such that many states ranking high on manufacturing did not rank high on i t s funds; and conversely, states ranking low on manufacturing received proportionately high amounts of the bank's financing. The analyses i n the above respects and i n respect of the other two pairs of v a r i a b l e s analyzed v i a rank-difference c o r r e l a t i o n thus produced r e s u l t s which are consistent with the cumulative-percentage curve analyses (IV.3.1). The analyses f a i r l y reveal the convergence-inducing dynamics of NIDB financing patterns v i s - a - v i s the regional pattern of manufacturing whose change (also i n the d i r e c t i o n of convergence) i s slower and hardly p e r c e p t i b l e . V.3.3 NIDB "Favouritism" and Internal Regional E f f o r t s A f i n a l l i n e of enquiry attempted to examine how, within i t s con-s t r a i n i n g t e c h n i c a l c r i t e r i a (of economic d e s i r a b i l i t y , t e c h n i c a l f e a s i b i l i t y and commercial v i a b i l i t y ) , NIDB could favour states ranking low on n a t i o n a l manufacturing, and what i n t e r n a l e f f o r t s states make to take advantage of NIDB financing c a p a b i l i t i e s . The examination of NIDB "favouritism" used indices of concentration mirroring three c r i t e r i a : the number of NIDB-financed enterprises i n a state v i s - a - v i s a l l manufacturing i n the state; the t o t a l of NIDB 221 financing i n a state (cumulated over the 1964-80 period) i n r e l a t i o n to the equity component of project costs i n the state; and t o t a l NIDB financing i n a state v i s - a - v i s the t o t a l of c l i e n t - p r o j e c t costs i n the state, a l l cumulated over the study period. The r e s u l t s of the analyses were summarized i n a f o u r - f o l d grouping of states (Table 31): those which are convergence-favoured, convergence-disfavoured, mixed and n e u t r a l . Two of the f i v e states i n the convergence-favoured group (that i s , having been rated favoured on at least two of the three c r i t e r i a ) , ranked 18 (Borno) and 14 (Sokoto) on 1980 manufacturing and need the convergence-favoured r a t i n g most i n that group. Of the f i v e which are convergence-disfavoured, three (Bauchi, Benue and Gongola, r e s p e c t i v e l y with 1980 rankings of 17, 15 and 15) need the convergence-rating even more. Each of the two states with "mixed" r a t i n g had at least one c r i t e r i o n on which i t was favoured but both were not equally i n need of "favouritism". Niger state which ranked 19 on 1980 manufacturing i s most i n need among a l l the states. F i n a l l y , although most of the seven states with "neu t r a l " r a t i n g ( i . e . neither favoured nor disfavoured on at l e a s t two of the three c r i t e r i a ) seem able to afford the neutral r a t i n g , three of them (Ogun, Ondo and Oyo, r e s p e c t i v e l y with 1980 rankings of 12, 12 and 11) would need at least the "mixed" r a t i n g to improved t h e i r r e l a t i v e standings. The i n t e r n a l e f f o r t of regional units to use NIDB financing capabi-l i t i e s was investigated i n two ways: the simple percentages of the c r i t e r i a used for examining NIDB "favouritism " jand sanction withdrawal. In the f i r s t place, for instance, to the extent that the number of NIDB c l i e n t enterprises i n a state expressed as a percentage of a l l manu-facturing enterprises i n the state i s low, to that much extent i s the state not using the financing f a c i l i t i e s of NIDB. On t h i s basis, states 222 were grouped into two groups i n r e l a t i o n to a national "average" derived from the analysis, those above and those below the average. Although such states as Bauchi, Borno, Niger and Sokoto rank low on n a t i o n a l manufacturing, they emerge included among the 9 states i n the above-average category of effort-making. On the other hand, such other low ranking states as Benue, Gongola and Ondo which emerged included i n the below-average group of 10 states r e f l e c t Schatz's captial-shortage i l l u s i o n t h e s i s . Although these states rank low on 1980 manufacturing, they have not s u f f i c i e n t l y made the needed s e l f - o r g a n i z a t i o n and e f f o r t to a t t r a c t NIDB financing. On the other hand, the other method used for r e f l e c t i n g the extent of i n t e r n a l regional e f f o r t s , sanctions withdrawal, i s even more compatible with the capital-shortage i l l u s i o n t h e s i s . It involved expressing the number of sanctions withdrawn i n a state as a percentage of the gross number of NIDB sanctions i n the state to r e f l e c t how much the opportunities which the state had was a c t u a l l y used. Seven states suffered no sanction withdrawal and thus had 0.0 per cent, r e f l e c t i n g the highest degree of i n t e r n a l e f f o r t and least i l l u s i o n s regarding c a p i t a l or financing need. Thus, twelve states suffered sanction withdrawal including, again such states as Benue (33 per cent), Bauchi (22 per cent) and Ondo (17 per cent) which were among those l e a s t able to afford sanction withdrawal, and should have made enough i n t e r v a l e f f o r t s to use the sactions a c t u a l l y made to them and even a t t r a c t more. V.4 Concluding Remarks Rather s i m i l a r to the observations made i n respect of the s t r u c t u r a l dimension of Nigerian manufacturing and NIDB financing, the conclusion i n 223 respect of the balanced-development p o l i c y i s thus that although Nigerian manufacturing pattern s t i l l remained polarized by 1980, there has been an i n c i p i e n t trend i n the d i r e c t i o n of convergence. Also, since the balanced-development p o l i c y came into prominence i n the early 1970s, NIDB has been making noticeable e f f o r t to constitute i t s e l f into a counter-v a i l i n g force ( v i s - a - v i s the c i r c u l a r and cumulative causation process) i n shaping the regional d i s t r i b u t i o n of Nigerian manufacturing i n the d i r e c t i o n of convergence. Obviously, i t would take many more years for the s p a t i a l structure to reveal a s i g n i f i c a n t s h i f t . Since NIDB i s a public finance i n s t i t u t i o n , i t s e x i s t i n g a n t i - d i s p a r i t y practices could be expected to continue.consistently into the future, unless public p o l i c y takes a new turn. However, the process of inducing convergence could be furthered even more by the design and a p p l i c a t i o n of incentives aimed at l u r i n g private-sector investment to appropriate l o c a t i o n s , e s p e c i a l l y at the project inception stage. E x i s t i n g Nigerian experience 2 i n the design and implementation of incentive programmes should serve a useful purpose i n the refinement of d e t a i l s to accommodate the balanced-development objective. Further, the analysis of NIDB "favouritism" and i n t e r n a l regional e f f o r t s underscores the fact that the c r i t i c a l actors whose number and behaviour could accelerate or retard the slowly-emerging tendency towards convergence are the i n d i v i d u a l production units or establishments i n various states of the country. These enterprises need to be aware of NIDB financing services i n the f i r s t place. Any measure which serves to Nigerian Investment Promotion and Information Centre, Federal M i n i s t r y of Industry, Op. C i t , , (1980), pp. 238-239, for instance. 224 increase that awareness and stimulate appropriate response would ultimately help the convergence process. Such awareness-promotion measures could include energetic information dissemination services by the state govern-ments and relevant chambers of commerce and industry, periodic media commentaries on NIDB's financing services and procedures, seminars aimed at e l i c i t i n g the complementary r o l e of NIDB's long-term financing services v i s - a - v i s the relevant services provided by other f i n a n c i a l intermediaries, and a c t i v e promotional involvement by NIDB i t s e l f . In addition to the balanced-development issue, Nigerian manufacturing i s s t i l l undergoing i t s fundamental growth process. The issue of promo-t i o n a l a c t i v i t y aimed at making the bank's services better known and r e a d i l y accessible would therefore be very important for a l l parts of the country, even i f the balanced-development p o l i c y did not e x i s t . It has two r e l a t e d aspects: p r o m o t i o n a l : a c t i v i t y i n the sense of getting NIDB to s e l e c t i v e l y take fundamental i n i t i a t i v e s which could accelerate the i n d u s t r i a l i z a t i o n process; and r e l a t e d l y , bringing even the routine services of the bank closer to both e x i s t i n g and prospective enterprises i n various parts of the country. In respect of s t r i c t promotional a c t i v i t y (see the ten categories outlined i n Chapter Two, I I . 1.4), NIDB does not do much beyong being represented on " a l l the Boards of projects (enterprises) in which i t p a r t i c i p a t e s 3 f i n a n c i a l l y " . As for such s t r i c t promotional a c t i v i t i e s as o r i g i n a t i n g and executing investment proposals, carrying out f e a s i b i l i t y studies for spe c i a l projects or organizing general i n d u s t r i a l surveys, NIDB does not Comment from the s p e c i f i c questionnaired enquiry i n t h i s respect. 225 get involved. I t ' s basic approach i s to s i t and wait for prospective c l i e n t enterprises to come along and request i t s services. Its non-involvement i n s t r i c t promotional a c t i v i t i e s such as the above might be due to the d i s t i n c t overlap i t could create with the functional responsi-b i l i t i e s of such other public i n s t i t u t i o n s as the Mi n i s t r y of Economic Planning, the Federal O f f i c e of S t a t i s t i c s and some s p e c i a l i z e d research i n s t i t u t e s i n the country. Besides, the l i m i t e d prospect of f i n a n c i a l returns on such a c t i v i t i e s within a reasonable period of time might be a deterrent. On the other hand, the d e s i r a b i l i t y of bringing the bank's services closer to the diverse parts of the country from which interested entre-preneurs have had to make long t r i p s to NIDB headquarters i n Lagos i s consistent even with the bank's sit-and-wait approach. 4 And i t has made e f f o r t s i n that d i r e c t i o n since the early 1970s. This has taken the form of opening up area administrations and l i a i s o n o f f i c e s i n various parts of the country. By the l a s t quarter of 1980, there were f i v e such area administrations covering a l l 19 states i n the country. Also, NIDB's Board of Directors had approved the establishment of 14 l i a i s o n o f f i c e s , 9 of which had not been s p e c i f i c a l l y named (Table 35). The area adminis-t r a t i o n s are intended to enable relevant entrepreneurs or investors to use NIDB services without needing to t r a v e l to NIDB headquarters i n Lagos The sit-and-wait approach i s s t i l l appropriate for describing the long l i s t of promotional a c t i v i t i e s to be found i n some NIDB publications since the fundamental processes are i n i t i a t e d by the c l i e n t promoters: see, for example, NIDB, NIDB B u l l e t i n , V ol. 3, No. 2, Jan.-June, 1978, p. 12. TABLE 35: NIDB's Area Administrations and Liaison O f f i c e s , 1980. Designation Location (Base) Creation Date States Served A. AREA ADMINISTRATIONS 1. North-western area administration 2. South-eastern area administration 3. North-eastern area administration 4 . South-western area administration 5. Lagos area administration Kaduna (Kaduna state) Aba (Imo state) Bauchi (Bauchi state) Akure (Ondo state) Lagos (Lagos state) October, 1972 May, 1973 September, 1980 September, 1980 August, 1980 Kaduna, Niger, Sokoto, and Kano states Imo, Anambra, Benue, Crossriver, and Rivers states Bauchi, Plateau, Borno and Gongola states Ondo, Oyo, Bendel and Kwara states Lagos and Ogun states B. LIAISON OFFICES 6. Sokoto (Sokoto state) 7. Yola (Gongola state) 8. Makurdi (Benue state) 9. Benin-City (Bendel state) 10. Enugu (Anambra state) Locations of 9 other l i a i s o n o f f i c e s not yet s p e c i f i e d . J August, 1980 Source: NIDB, NIDB General P o l i c i e s (Lagos: 1981?), pp. 8-11. 227 for appraisal of t h e i r projects. They also supervise enterprises i n which NIDB finances are already invested. On the other hand, the l i a i s o n o f f i c e s are more or l e s s l i k e information o f f i c e s intended "to help e x i s t i n g and prospective c l i e n t s l i n k up with NIDB's Head O f f i c e and Area Administra-t i o n s " . ^ The apparent int e n t i o n i s to have at least a l i a i s o n o f f i c e i n each state c a p i t a l where an area administration o f f i c e does not exist.-It would therefore" seem apparent that the bank i s going a l l out to f u l f i l i t s assigned function of medium- and long-term financing for i n d u s t r i a l development within the context of i t s p o l i c y environment. How-ever, i t would take some time to ascertain how e f f e c t i v e l y the new branches or o f f i c e s could f u l f i l the roles for which they are established and how much the volume of business would j u s t i f y the expenditure of public resources involved i n each case. F i n a l l y , as indicated at various points i n t h i s study, the study of a si n g l e sector of the economy could not provide a conclusive evaluation of the equity or balanced-development concept i n N i g e r i a , e s p e c i a l l y as that concept r e l a t e s to the a l l o c a t i o n of public investment. This i s because, the production structures for which each area or state of the country has comparative advantages d i f f e r to a considerable extent. Thus, while the balanced-development p o l i c y could u l t i m a t e l y lead to the evolution of a c l o s e l y - k n i t pattern of complementary regional production structures, the opportunities offered by the production structures (type of economic a c t i v i t i e s ) which could a t t r a c t public encouragement would therefore d i f f e r from one part of the country to the other and only a coverage of a l l NIDB, NIDB General P o l i c i e s , Op. C i t . , (1981?), p. 9. 228 sectors of economic a c t i v i t y could y i e l d a conclusive evaluation. Industry or manufacturing seems to have attracted more attention because of the trappings of modernity associated with i t but i t i s nevertheless one among many other sectors of the country's economy.^ Inc i d e n t a l l y , t h i s i s also why the population v a r i a b l e which would be appropriate i n an a l l - s e c t o r a n alysis, i s not appropriate as a basis for viewing or judging the adequacy of public investment i n s i n g l e -sector studies. 229 BIBLIOGRAPHY A. GOVERNMENT PUBLICATIONS AND OTHER PUBLIC DOCUMENTS Central Bank of N i g e r i a , Economic and F i n a n c i a l Review, v o l 17., No.l, June, 1979. Central Planning O f f i c e , Second Progress Report on the Second National  Development Plan,--1970 - 1974, Lagos: 1974. Central Planning O f f i c e , Third National Development Plan, 1975 - 80. Lagos: 1976?, Revised Vol. I I . 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Capital Accumulation and Technology Transfer: A Comparative Analysis of Nigerian Manufacturing Industries. New York: Praeger Publishers, Inc., 1975. United Nations Economic and S o c i a l Council, Commission on Transnational Corporations, T r a n s n a t i o n a l Corporal-inns on World Development: A Re-examination. New York: Commission on Transnational Corpor-ations, 20 March, 1978. Weaver, Clyde. "Development Theory and the Regional Question: A c r i t i q u e of Regional Planning and I t s Detractors" i n Development from  Above o r Below? edited by Walter B. Stohr and Fraser Taylor, Chichester: John Wiley and Sons, 1981, pp. 73-105. World Bank, Development Finance Companies, Sector Paper, Washington D.C. World Bank, 1976V A P P E N D I X I : N I D B S A N C T I O N S AND D I S B U R S E M E N T S , 1 9 6 4 - 1 9 7 8 Y e a r s * 1 E Q U I T Y N I D B S A N C T I O N S ( 4 * ' 0 O 0 ) N I D B D I S B U R S E M E N T ( = * t ' 0 0 0 ) I Q A N T O T A L \ h • *6 E Q U I T Y LOAN TOTAL 1 9 6 4 9 5 8 . 0 2 , 4 1 7 . 4 3 , 3 7 5 . 4 5 0 8 . 0 2 , 2 5 7 . 4 2 , 7 6 5 . 4 1 9 6 5 3 2 2 . 6 2 , 3 4 4 . 0 2 , 6 6 6 . 6 2 2 1 . 1 1 , 7 2 5 . 4 1 , 9 4 6 . 5 1 9 6 6 1 1 0 . 0 6 1 7 . 0 7 2 7 . 0 7 1 . 1 3 8 0 . 0 4 5 1 . 0 1 9 6 7 6 4 0 . 0 1 , 3 9 4 . 0 2 , 0 3 4 . 0 6 0 0 . 0 6 5 0 . 0 1 , 2 5 0 . 0 1 9 6 8 1 4 0 . 0 1 , 3 0 4 . 0 1 , 4 4 4 . 0 1 0 0 . 0 1 , 0 0 0 . 5 1 , 1 0 0 . 5 1 9 6 9 7 3 0 . 0 4 , 0 8 6 . 0 4 , 8 1 6 . 0 3 6 0 . 0 1 , 9 0 7 . 8 2 , 2 6 7 . 8 1 9 7 0 4 5 8 . 0 5 , 9 1 4 . 0 6 , 3 2 7 . 0 1 5 9 . 6 2 , 0 3 3 . 0 2 , 1 9 2 . 6 1 9 7 1 1 , 1 4 0 . 0 1 0 , 2 6 3 . 0 1 1 , 4 0 3 . 0 5 8 4 . 7 3 , 5 6 4 . 4 4 , 1 4 9 . 1 1 9 7 2 1 6 0 . 0 3 , 9 2 8 . 0 4 , 0 8 8 . 0 7 3 0 . 0 4 , 8 6 0 . 9 5 , 5 9 0 . 9 1 9 7 3 2 , 3 9 3 . 0 1 5 , 3 9 2 . 2 1 7 , 7 8 5 . 2 1 0 0 . 0 3 , 8 0 1 . 2 4 , 8 0 1 . 2 1 9 7 4 2 , 2 4 2 . 5 1 7 , 0 4 5 . 0 1 9 , 2 8 7 . 5 1 , 4 6 3 . a 5 , 8 9 7 . 9 7 , 3 6 1 . 7 1 9 7 5 4 , 2 4 5 . 0 5 5 , 5 7 3 . 6 5 9 , 8 1 8 . 6 1 , 5 1 8 . 7 1 1 , 3 1 4 . 0 1 2 , 8 3 2 . 7 1 9 7 6 5 , 8 8 0 . 0 4 5 , 5 0 3 . 0 5 1 , 3 8 3 . 0 4 , 2 7 5 . 0 2 7 , 1 0 9 . 9 3 1 , 3 8 4 . 9 1 9 7 7 4 , 3 4 2 . 2 6 9 , 9 2 5 . 1 7 4 , 2 6 7 . 3 2 , 0 8 7 . 5 4 0 , 0 2 3 . 7 4 2 , 1 1 1 . 2 1 9 7 8 2 , 7 4 9 . 1 3 2 , 0 3 9 . 7 3 4 , 7 8 8 . 8 5 , 2 8 6 . 9 4 0 , 5 6 5 . 7 4 5 , 8 5 2 . 6 S o u r c e : E n q u i r i e s a t N I D 3 H e a d q u a r t e r s i n L a g o s , e a r l y 1 9 8 1 n e a r 1 9 6 5 1 9 6 8 1 9 6 9 1 9 7 0 1 9 7 2 1 9 7 3 1 9 7 4 1 9 7 8 1 9 8 0 A P P E N D I X I I : N I D B - A S S I S T E D I N D U S T R I E S AND N I D B N E T F I N A N C I N G CUMULATED T O MATCH TOTAL MANUFACTUR ING D A T A , 1 9 6 5 - 1 9 8 0 4 | 5 i . a i v i « i » i 1 0 1 1 1 1 | 2 I 3 TOTAL M A N U F A C T U R I N G N o . o f E s -^ a j g l i s h - b a p i t a l ( # ' 0 0 0 ) E m p l o y m e n t E s t a b s ( n o . ) E m p l o y m e n t 7 7 6 6 2 5 6 3 9 7 0 3 P a i d - u p I T o t a l 6 | 7 | 8 I 9 N I D B - A S S I S T E D I N D U S T R I E S AND N E T F I N A N C I N G C l i e n t | A s s o c i a t e d 1 3 4 , 9 3 4 1 2 8 , 4 6 4 1 , 0 5 2 1 , 0 0 8 1 , 0 3 6 1 , 0 6 4 2 , 9 3 0 1 6 0 , 8 6 8 1 9 1 , 6 9 4 3 8 1 , 9 6 2 3 2 8 , 7 8 2 3 7 3 , 1 7 1 6 4 8 , 9 4 1 2 , 0 3 0 , 3 9 3 9 5 . 6 1 4 8 6 , 7 2 8 1 0 2 , 5 3 2 1 2 7 , 1 6 2 1 6 7 , 4 8 0 1 6 6 , 8 2 0 1 7 5 , 2 8 7 3 0 0 , 3 9 7 2 9 1 , 8 7 4 4 4 6 7 8 2 1 0 0 1 4 0 1 6 7 1 8 6 3 0 1 3 8 1 1 2 , 0 7 1 1 5 , 6 0 3 2 3 , 3 7 7 2 5 , 6 2 4 3 3 . 9 3 1 3 9 , 9 5 9 4 5 . 4 0 0 7 8 , 4 4 8 8 8 , 1 0 9 P R O J E C T C O S T (44'000) N I D B F I N A N C I N G (• t 'OOO) Equity 1 8 , 2 5 5 . 3 2 2 , 1 0 0 . 5 3 1 , 6 0 8 . 5 3 7 , 9 3 9 . 2 5 6 , 2 1 1 . 2 loan 1 4 , 7 0 1 . 8 2 2 , 1 3 1 . 2 3 8 , 9 8 2 . 4 4 6 , 5 1 5 . 2 8 6 , 9 7 4 . 8 8 7 , 7 2 8 . 6 1 4 9 , 3 9 2 . 6 4 8 2 , 1 8 1 . 7 5 9 3 , 5 4 4 , 4 1 3 8 , 4 5 6 . 5 2 8 2 , 0 1 8 . 5 Total 3 2 , 9 5 7 . 1 4 4 , 2 3 1 . 7 7 0 , 5 9 0 . 9 8 4 , 4 5 4 . 4 1 4 3 , 1 8 6 . 0 2 2 6 , 1 8 5 . 1 1 , 1 0 9 , 5 8 7 . 6 1 , 3 3 8 , 5 3 3 . 6 4 3 1 , 4 1 1 . 1 5 9 3 , 1 4 0 . 3 1 1 , 9 3 2 , 0 7 8 . 0 Eqnit-v 1 , 2 8 0 . 6 2 , 1 7 0 . 6 2 , 5 7 0 . 6 2 , 9 3 8 . 6 3 , 7 9 8 . 6 6 , 0 7 3 . 6 8 , 3 3 5 . 9 2 5 , 5 5 2 . 2 3 6 , 8 3 6 . 2 4 , 7 6 1 . 4 Total 8 , 0 4 8 . 4 1 1 , 7 3 8 . 4 1 5 , 1 1 4 . 4 2 5 , 8 1 5 . 9 3 9 , 2 7 0 . 6 5 4 , 0 2 5 . 6 2 5 4 , 7 2 7 . 0 3 4 3 , 9 9 0 . 5 6 , 0 4 2 . 0 1 0 , 2 1 9 . 0 1 4 , 3 0 9 . 0 1 8 , 0 5 3 . 0 2 9 , 6 1 4 . 5 4 5 , 3 4 4 . 2 6 2 , 3 6 1 . 5 2 8 0 , 2 7 9 . 2 3 8 0 , 8 2 6 . 7 & „ • KB source cited at the botta, of Table 64; and enquiries at MI8 Headquarters, U>gos, 1981. See bottom of Append* VIA beta. A P P E N D I X I I I : N I D B N E T F I N A N C I N G ( S A N C T I O N S ) : A N N U A L T O T A L S , 1 9 6 4 - 1 9 8 0 1 2 3 4 'I 5 e 1 , 1 8 Y e a r N o . o f C l i e n t E s t a b l i s h m e n t s A s s o c i a t e d P R O J E C T COST ( W 0 0 0 ) N I D B N e t F I N A N C I N G (it' 0 0 0 ) E n p l o y m e n t E o u i t v L o a n s T o t a l E a u i t v L o a n T o t a l 1 9 6 4 2 6 7 , 7 9 8 1 1 , 6 0 6 . 2 7 , 9 2 0 . 4 1 9 , 5 2 6 . 6 9 5 8 . 0 2 , 4 1 7 . 4 3 , 3 7 5 . 4 1 9 6 5 1 8 4 , 2 7 3 6 , 6 4 9 . 1 6 , 7 8 1 . 4 1 3 , 4 3 0 . 5 3 2 2 . 6 2 . 3 4 4 . 0 2 , 6 6 b . o 1 9 6 6 7 8 7 5 4 0 4 . 0 7 4 6 . 8 1 , 1 5 0 . 8 1 1 0 . 0 6 1 7 . 0 16 1 . U 1 9 6 7 9 1 , 4 8 3 1 , 8 8 5 . 2 3 , 3 3 6 . 4 5 , 2 2 1 . 6 6 4 0 . 0 1 , 3 9 4 . 0 2 , 0 3 4 . 0 1 9 6 8 7 1 , 1 7 4 1 , 5 5 6 . 0 3 , 3 4 6 . 2 4 , 9 0 2 . 2 1 4 0 . 0 1 , 2 7 6 . 0 1 , 4 1 6 . 0 1 9 6 9 1 5 7 , 7 7 4 9 , 5 0 8 . 0 1 6 , 8 5 1 . 2 2 6 , 3 5 9 . 2 4 0 0 . 0 3 , 6 9 0 . 0 4 , 0 9 0 . 0 1 9 7 0 1 8 2 , 2 4 7 6 , 3 3 0 . 7 7 , 5 3 2 . 8 1 3 , 8 6 3 . 5 3 6 8 . 0 3 , 3 7 6 . 0 3 , 7 4 4 . 0 1 9 7 1 2 9 6 , 7 5 9 1 2 , 7 6 6 . 0 3 1 , 0 0 2 . 5 4 3 , 7 6 8 . 5 7 0 0 . 0 7 , 1 4 7 . 5 7 , 8 4 / . 0 1 9 7 2 1 1 1 , 5 4 8 5 , 5 0 6 . 0 9 , 4 5 7 . 1 1 4 , 9 6 3 . 1 1 6 0 . 0 3 , 5 5 4 . 0 3 , 7 1 4 . 0 1 9 7 3 2 7 6 , 0 2 8 3 1 , 5 1 7 . 4 5 1 , 4 8 1 . 7 8 2 , 9 9 9 . 1 2 , 2 7 5 . 0 1 3 , 4 5 4 . 7 1 5 , 7 2 9 . 7 i-T /"Vi tl O 1 9 7 4 1 9 5 , 4 4 1 6 1 , 6 6 4 . 0 1 4 3 , 5 6 2 . 0 2 0 5 , 2 2 6 . 0 2 , 2 6 2 . 3 1 4 , 7 5 5 . 0 1 7 , 0 1 7 . 3 1 9 7 5 3 8 1 2 , 9 9 7 1 0 7 , 1 4 3 . 2 2 5 0 , 6 7 3 . 2 3 5 7 , 8 1 6 . 4 4 , 2 4 5 . 0 5 4 , 4 7 3 . 6 5 8 , 7 1 8 . 6 r n ^ o o r\ 1 9 7 6 2 6 8 , 7 0 7 1 2 7 , 1 3 2 . 6 2 9 9 , 5 7 3 . 2 4 2 6 , 7 0 5 . 8 5 , 8 8 0 . 0 4 4 , 2 5 3 . 0 5 0 , 1 3 3 . 0 1 9 7 7 2 7 6 , 0 2 4 4 8 , 1 8 4 . 4 1 7 6 , 0 4 6 . 3 2 2 4 , 2 3 0 . 7 4 , 3 4 2 . 2 6 9 , 9 3 5 . 1 7 4 , 2 7 7 . 3 1 9 7 8 2 4 5 , 3 2 0 5 0 , 3 2 8 . 9 1 0 1 , 2 7 6 . 4 1 5 1 , 6 0 5 . 3 2 , 7 4 9 . 1 3 2 , 0 3 9 . 7 3 4 , 7 8 8 . 8 1 9 7 9 3 0 3 , 7 9 3 5 2 , 5 8 7 . 5 1 1 1 , 2 5 0 . 1 1 6 3 , 8 3 7 . 6 4 , 6 7 6 . 8 3 9 , 1 8 1 . 0 4 3 , 8 5 7 . 8 1 9 8 0 5 0 5 , 8 6 8 5 8 , 7 7 5 . 2 1 1 7 , 6 9 5 . 9 1 7 6 , 4 7 1 . 1 6 , 6 0 7 . 2 5 0 , 0 8 2 . 5 5 6 , 6 8 9 . 7 T o t a l 3 8 1 8 8 , 1 0 9 5 9 3 , 5 4 4 . 4 1 , 3 3 8 , 5 3 3 . 6 1 , 9 3 2 , 0 7 8 . 0 3 6 , 8 3 6 . 2 3 4 3 , 9 9 0 . 5 3 8 0 , 8 2 6 . 7 S o u r c e : S e e b o t t o m o f A p p e n d i x V I A b e l o w . A P P E N D I X I V : N I D B N E T S A N C T I O N S B Y S E C T O R S , 1 9 6 4 - 1 9 7 4 N o . o l A s s o c i a t e d P R O J E C T C O S T ( * ' 0 0 0 ) N I D B P A R T I C T P A T I Q N m ' 0 0 0 ) I S I C CODE E s t a b l i s h m e n t s E m p l o y m e n t E q u i t y L o a n T o t a l E q u i t y L o a n T o t a l 2 8 2 4 5 0 1 8 8 . 4 3 2 4 5 1 2 . 4 3 0 1 8 0 2 1 0 2 9 0 0 0 0 0 0 0 . 0 3 0 6 4 9 1 2 , 6 8 6 • 5 , 5 1 8 8 , 2 0 4 1 0 0 2 , 3 9 4 2 , 4 9 4 3 1 2 7 3 , 2 5 5 1 3 , 0 6 7 . 6 2 1 , 8 7 4 . 3 3 4 , 9 4 1 . 9 t , 1 9 7 . 5 9 , 0 0 2 1 0 , 1 9 9 . 5 3 2 4 4 2 0 , 2 5 8 3 5 , 1 8 0 . 8 6 1 , 3 8 6 . 1 9 6 , 5 6 6 . 9 2 , 4 3 6 1 4 , 2 3 4 1 6 , 6 7 0 3 3 1 5 3 , 9 4 1 9 , 2 4 4 1 6 , 2 2 9 . 3 2 5 , 4 7 3 . 3 6 2 9 . 4 3 , 7 3 3 4 3 6 2 . 4 3 4 5 4 6 9 9 7 2 5 1 7 1 , 4 8 9 1 0 4 6 2 4 7 2 3 5 3 0 3 , 7 3 8 1 1 , 7 1 8 . 3 2 4 , 6 1 6 . 8 3 6 , 3 3 5 . 1 6 4 0 . 5 6 , 7 4 5 . 7 7 , 3 8 6 . 2 3 6 1 0 2 , 7 9 8 5 3 , 2 7 7 1 1 6 , 6 6 0 1 6 9 , 9 3 7 1 , 7 0 9 . 5 8 , 5 9 4 1 0 , 3 0 3 . 5 3 7 1 3 6 5 3 1 8 5 2 2 8 4 0 4 3 2 5 0 2 9 3 3 8 3 4 5 , 1 4 9 1 4 , 2 1 5 . 6 1 9 , 3 8 0 3 3 , 5 9 5 . 6 1 , 0 9 0 5 , 4 2 3 6 , 5 1 3 3 9 12 2 , 4 8 6 8 , 5 2 4 1 4 , 9 9 0 . 5 2 3 , 5 1 4 . 5 4 5 0 3 , 0 0 7 . 4 3 , 4 5 7 . 4 T O T A L 1 8 6 4 3 , 4 0 0 1 4 9 , 3 9 2 . 6 2 8 2 , 0 1 8 . 8 4 3 1 , 4 1 1 . 4 8 3 3 5 . 9 5 4 , 0 2 5 . 6 6 2 , 3 6 1 . 0 N o t e : T h e I S I C c o d e n u m b e r s 2 8 , 2 9 , a n d 3 0 a r e a r b i t r a r y c o d e s u s e d f o r t h e f e w n o n - m a n u f a c t u r i n g e n t e r p r i s e s f i n a n c e d b y N I D B . T h e c o d e s , a p p r o p r i a t e l y s e q u e n c e d f o r c o m p u t e r - p r o c e s s i n g p u r p o s e s , t r a n s l a t e t h u s : 2 8 f o r m i n i n g ; 2 9 f o r f i n a n c i a l ; a n d 3 0 f o r h o t e l a n d t o u r i s m . T h e n o r m a l I S I C c o d e s f o r m a n u f a c t u r i n g ( 3 1 - 3 9 ) h a v e b e e n t r a n s l a t e d i n v a r i o u s t a b l e s i n t h e t e x t . S e e T a b l e 1 1 , f o r e x a m p l e . S o u r c e : S e e b o t t o m o f A p p e n d i x V I A b e l o w . A P P E N D I X V : N I D B N E T S A N C T I O N S B Y S E C T O R S , 1 9 6 4 - 1 9 8 0 I S I C C o d e N o . o f J A s s o c i a t e d ' P R O J E C T C O S T ( # ' 0 0 0 ) N I D B P A R T I C I P A T I O N ( * 0 0 0 ) ±-iii^j-L\^tynidi is E q u i t y l o a n T o t a l E q u i t y L o a n T o t a l 2 8 2 4 5 0 . 1 8 8 3 2 4 5 1 2 3 0 1 8 0 2 1 0 2 9 2 0 0 3 , 0 5 0 3 , 0 5 0 0 3 , 0 5 0 3 , 0 5 0 3 0 2 7 4 , 0 5 5 5 6 , 6 0 7 . 7 1 2 2 , 3 0 5 . 7 1 7 8 , 9 1 3 . 4 6 , 4 7 7 . 6 4 8 , 7 3 8 . 5 5 5 , 2 1 6 . 1 3 1 6 5 1 9 , 8 8 1 1 8 9 , 7 4 4 . 3 3 9 5 , 5 2 5 . 8 5 8 5 , 2 7 0 . 1 1 1 , 1 0 9 . 9 9 0 , 1 0 6 . 5 1 0 1 , 2 1 6 . 4 3 2 6 8 3 0 , 6 1 9 7 1 , 8 4 5 . 1 1 5 7 , 1 9 9 . 2 2 2 9 , 0 4 4 . 3 4 , 7 9 1 4 3 , 6 4 1 . 6 4 8 , 4 3 2 . 6 3 3 2 9 6 , 1 2 8 2 2 , 3 7 9 . 5 3 7 , 6 0 0 . 8 5 9 , 9 8 0 . 3 1 , 3 1 4 . 4 1 5 , 1 3 1 1 6 , 4 4 5 . 4 3 4 1 5 8 4 0 5 , 6 9 2 . 2 8 , 7 0 5 . 4 1 4 , 3 9 7 . 6 1 2 0 3 , 7 8 1 3 , 9 0 1 3 5 4 5 7 , 3 5 5 2 1 , 0 8 5 . 8 9 8 , 2 3 7 . 4 1 1 9 , 3 2 3 . 2 1 , 8 0 3 . 9 3 2 , 2 2 5 . 7 . 3 4 , 0 2 9 . 6 3 6 • 3 3 4 , 3 8 0 1 3 7 , 4 6 2 . 3 2 9 5 , 6 4 0 . 4 4 3 3 , 1 0 2 . 7 7 , 1 0 0 . 8 4 6 , 1 7 7 . 7 5 3 , 2 7 8 . 5 3 7 1 4 1 , 4 0 1 6 , 9 2 0 1 8 , 9 7 8 . 2 2 5 , 8 9 8 . 2 1 6 3 8 , 9 7 7 . 0 9 , 1 4 0 . 4 3 8 4 2 5 , 4 7 5 1 6 , 9 2 7 . 6 2 6 , 0 9 2 . 3 4 3 , 0 1 9 . 9 1 , 2 9 0 . 7 8 , 6 4 8 9 , 9 3 8 . 7 3 9 3 9 7 , 5 2 5 6 4 , 6 9 1 . 8 1 7 4 , 8 7 4 . 4 2 3 9 , 5 6 6 . 2 2 , 6 3 5 . 7 4 3 , 3 3 3 . 1 4 5 , 9 6 8 . 8 T o t a l 3 8 1 8 8 , 1 0 9 5 9 3 , 5 4 4 . 4 1 , 3 3 8 , 5 3 3 1 , 9 3 2 , 0 7 7 . 4 3 6 , 8 3 6 . 0 3 4 3 , 9 9 0 . 4 3 8 0 , 8 2 6 . 4 N o t e : T h e I S I C c o d e n u m b e r s 2 8 , 2 9 , a n d 30 . a r e a r b i t r a r y c o d e s u s e d f o r t h e f e w n o n - m a n u f a c t u r i n g e n t e r p r i s e s f i n a n c e d b y N I D B . T h e c o d e s , a p p r o p r i a t e l y s e q u e n c e d f o r c o m p u t e r p r o c e s s i n g p u r p o s e s , t r a n s l a t e t h u s : 2 8 f o r m i n i n g ; 2 9 f o r f i n a n c i a l , a n d 3 0 f o r h o t e l a n d t o u r i s m . T h e n o r m a l I S I C c o d e s f o r m a n u f a c t u r i n g ( 3 1 - 3 9 ) h a v e b e e n t r a n s l a t e d i n v a r i o u s t a b l e s i n t h e t e x t . S e e T a b l e 1 1 , f o r e x a m p l e . S o u r c e : S e e b o t t o m o f A p p e n d i x V I A b e l o w . A P P E N D I X V I A : N I B D N E T S A N C T I O N S B Y S T A T E S , CUMULATED FOR 1 9 6 4 - 1 9 7 4 S t a t e s N o . o f C l i e n t E s t a b l i s h m e n t s A s s o c i a t e d E m p l o y m e n t P R O J E C T C O S T ( # ' 0 0 0 ) N I D B P A R T I C I P A T I O N ( # ' 0 0 0 ) E q u i t y L o a n T o t a l E q u i t y L o a n T o t a l 1 . A n o m b r a 1 5 2 , 5 9 9 3 , 2 7 1 . 5 5 , 4 7 6 . 3 8 , 7 4 7 . 8 3 4 0 2 , 8 3 6 3 , 1 7 6 2 . B e n d e l 1 2 1 , 7 0 4 5 , 9 0 6 . 4 1 5 , 5 6 9 . 2 21,475.6 468 2 , 5 0 4 2 , 9 7 2 3 . B o r n o 2 2 8 6 1 , 7 0 0 3 , 8 0 1 5 , 5 0 1 0 8 6 0 8 6 0 4 . C r o s s r i v e r 4 2 , 1 5 7 3 5 , 7 2 0 6 5 , 9 4 0 1 0 1 , 6 6 0 1 , 6 1 9 . 6 4 , 8 8 0 6 , 4 9 9 . 6 5 . I m o 1 3 2 , 4 5 1 4 , 1 4 3 . 2 1 1 , 8 3 3 1 5 , 9 7 6 . 2 1 6 0 3 , 4 5 2 3 , 6 1 2 6 . K a d u n a 9 3 , 8 2 6 1 0 , 0 6 4 1 7 , 3 7 9 2 7 , 4 4 3 2 0 0 3 , 8 5 0 4 , 0 5 0 7 . K a n o 3 6 5 0 4 2 0 6 2 0 1 , 0 4 0 4 8 3 7 0 4 1 8 8 . K w a r a 1 1 2 , 4 0 2 6 , 5 3 8 1 1 , 3 5 4 . 8 1 7 , 8 9 2 . 8 1 , 1 5 9 . 5 3 , 3 7 0 4 , 5 2 9 . 5 9 . L a g o s 9 3 2 2 , 8 6 4 5 , 1 8 2 . 2 7 5 , 0 9 5 . 9 8 0 , 2 7 8 . 1 3 , 3 8 0 . 8 1 9 , 8 8 4 . 9 2 3 , 2 6 5 . 7 1 0 . O g u n 9 1 , 3 1 0 1 8 , 4 5 4 5 4 , 6 1 9 . 1 7 3 , 0 7 3 . 1 1 8 0 6 , 1 3 7 . 7 6 , 3 1 7 . 7 l l . O n d o 3 . 1 , 8 8 6 7 , 1 4 2 1 2 , 0 0 1 1 9 , 1 4 3 2 5 0 2 , 1 1 7 2 , 3 6 7 1 2 . 0 y o 2 1 9 8 1 , 4 8 4 . 9 2 , 3 1 5 . 8 3 , 8 0 0 . 7 1 0 0 1 , 8 2 0 1 , 9 2 0 1 3 . P l a t e a u 3 7 1 3 0 6 . 4 5 9 5 9 0 1 . 4 0 3 4 7 3 4 7 1 4 . R i v e r s 4 1 , 3 4 7 6 6 0 1 , 4 7 6 . 7 2 , 1 3 6 . 7 7 0 6 3 7 7 0 7 1 5 . S o k o t o 3 1 , 6 4 9 2 , 1 0 0 3 , 9 4 1 . 7 6 , 0 4 1 . 7 3 6 0 9 6 0 1 , 3 2 0 T o t a l 1 8 6 4 5 , 4 0 0 1 4 9 , 3 9 2 . 6 2 8 2 , 0 1 8 . 8 4 3 1 , 4 1 1 . 4 8 , 3 3 5 . 9 5 4 , 0 2 5 . 6 6 2 , 3 6 1 . 5 S o u r c e s : N I D B A n n u a l R e p o r t s a n d A c c o u n t s , N I D 3 B u l l e t i n s a n d E n q u i r i e s a t N I D B H e a d q u a r t e r s i n L a g o s , N i g e r i a . N o t e s : ( 1 ) P r o j e c t - c o s t v a l u e s h a v e b e e n i n d i c a t e d h e r e i n o r d e r t o i n d i c a t e t h e c o s t s t r u c t u r e s o f t h e a s s o c i a t e d c l i e n t e n t e r p r i s e s . ( 2 ) C h l y s t a t e s w i t h n e t s a n c t i o n s i n t h e 1 9 6 4 - 1 9 7 4 p e r i o d a r e s h o w n . A P P E N D I X V 1 B : N I D B N E T S A N C T I O N S B T S T A T E S , CUMULATED FOR 1 9 6 4 - 1 9 8 0 S t a t e s N o . o f E s t a b l i s h m e n t s A s s o c i a t e d E m p l o y m e n t P R O J E C T COST ( # ' 0 0 0 ) N I D 3 P A R T I C I P A T I O N ( # ' 0 0 0 ) E q u i t y L o a n T o t a l E q u i t y L o a n T o t a l 1 . A n a m b r a 2 8 3 , 6 5 3 1 7 , 1 3 1 . 3 3 6 , 6 3 2 5 3 , 7 6 3 . 3 1 , 7 9 0 . 0 1 6 , 8 3 1 1 8 , 6 2 1 . 0 2 . B a u c h i 8 2 , 5 8 9 5 1 , 7 6 9 . 8 1 1 7 , 0 9 7 . 4 1 6 8 , 8 6 7 . 2 1 , 6 7 0 . 7 2 0 , 2 1 8 . 7 2 1 , 8 8 9 . 4 3 . B e n d e l 2 1 3 , 4 8 2 1 5 , 4 0 5 . 8 3 6 , 2 1 3 . 2 5 1 , 6 1 9 . 0 1 , 5 0 8 . 0 1 4 , 8 1 4 1 6 . 3 2 2 . 0 4 ; B e n u e 3 6 2 5 3 8 , 6 5 1 . 8 8 8 , 8 0 0 . 0 1 2 7 , 4 5 1 . 8 1 . 0 8 0 . 0 1 1 . 4 0 0 1 2 . 4 8 0 . 0 5 . B o r n o 7 9 9 6 8 , 2 1 9 . 0 1 6 , 5 5 1 . 0 2 4 , 7 7 0 . 0 9 5 0 . 0 6 , 1 7 0 7 . 1 2 0 . 0 6 . C r o s s r i v e r 1 3 4 , 1 5 4 5 3 , 4 1 0 . 0 1 0 5 , 0 8 9 . 7 1 5 8 , 4 9 9 . 7 2 , 9 1 3 . 6 . 2 1 , 9 9 8 2 4 . 9 1 1 . 6 7 . G o n g o l a 2 7 , 2 2 3 6 6 , 3 5 0 . 0 1 4 8 , 0 5 0 . 0 2 1 4 , 4 0 0 . 0 1 , 6 4 8 . 5 6 . 6 7 0 8 . 3 1 8 . 5 8 . I m o 2 9 6 , 3 7 1 1 7 , 1 6 7 . 9 3 2 , 8 6 1 . 2 5 0 , 0 2 9 . 1 8 1 0 . 0 1 7 . 3 5 2 1 8 . 1 6 2 . 0 9 . K a d u n a 2 0 5 , 9 3 1 2 9 , 2 7 5 . 4 5 7 , 6 4 1 . 4 8 6 , 9 1 6 . 8 1 . 8 6 2 . 8 1 6 . 7 1 0 1 8 . 5 7 2 . 8 1 0 . K a n o 8 1 , 1 4 6 1 1 , 6 8 1 . 5 2 0 , 7 3 9 . 5 3 2 , 4 2 1 . 0 4 8 . 0 1 0 . 5 2 0 1 0 . 5 6 8 . 0 1 1 . K w a r a 2 3 3 , 0 5 6 1 1 . 8 8 2 . 0 2 2 . 4 1 8 . 0 3 4 . 3 0 0 . 0 1 . 2 6 9 . 5 1 0 . 8 4 7 1 2 . 1 1 6 . 5 1 2 . L a g o s 1 3 8 3 1 , 6 1 4 1 1 9 , 5 9 2 . 8 2 4 6 , 0 0 4 . 4 3 6 5 , 5 9 7 . 2 9 , 4 6 9 . 3 8 1 , 8 5 1 . 6 9 1 , 3 2 0 . 9 1 3 . N i g e r 5 4 , 8 0 1 3 3 , 7 6 8 . 2 8 4 , 0 1 5 . 0 1 1 7 , 7 8 3 . 2 2 , 4 3 0 . 0 1 0 , 9 5 5 1 3 , 3 8 5 . 0 1 4 . O g u n 3 2 3 , 5 9 1 4 6 , 2 9 6 . 3 1 6 5 , 5 8 0 . 4 2 1 1 , 8 7 6 . 7 3 , 4 9 1 . 2 4 5 , 6 9 2 . 7 4 9 , 1 8 3 . 9 1 5 . O n d o 5 2 , 1 3 5 1 4 , 9 3 5 . 9 2 5 , 8 3 8 . 0 4 0 , 7 7 3 . 9 1 , 0 3 5 . 7 5 , 5 0 4 . 5 6 , 5 4 0 . 2 1 6 . O y o 1 8 2 , 7 7 8 3 3 , 2 9 7 . 9 9 0 , 6 7 8 . 2 1 2 3 , 9 7 6 . 1 2 , 3 5 6 . 0 3 0 , 9 2 6 3 3 , 2 8 2 . 0 1 7 . P l a t e a u 4 7 1 3 3 2 . 8 6 8 6 . 7 1 , 0 1 9 . 5 0 . 0 4 2 7 4 2 7 . 0 1 8 . R i v e r s 8 1 , 7 4 3 8 , 6 8 7 . 0 1 7 , 7 2 4 . 7 2 6 , 4 1 1 . 7 6 3 1 . 0 5 , 4 5 9 6 . 0 9 0 . 0 1 9 . S o k o t o 9 2 , 1 5 0 1 5 , 6 8 9 . 0 2 5 , 9 1 2 . 9 4 1 , 6 0 1 . 9 1 , 8 7 2 . 0 9 , 6 4 4 1 1 , 5 1 6 . 0 T o t a l 3 8 1 8 8 , 1 0 9 5 9 3 , 5 4 4 . 4 1 , 3 3 8 , 5 3 3 . 0 1 , 9 3 2 , 0 7 7 . 4 3 6 , 8 3 6 . 3 3 4 3 , 9 9 0 . 5 3 8 0 . 8 2 6 . 8 S o u r c e : S a m e a s f o r A p p e n d i x V I A . N o t e : ( 1 ) O f c o u r s e , t h i s t a b l e i n c l u d e s t h e v a l u e s s h o w n i n A p p e n d i x V I A . ( 2 ) P r o j e c t - c o s t v a l u e s h a v e b e e n s h o w n h e r e i n o r d e r t o i n d i c a t e t h e c o s t s t r u c t u r e s o f t h e a s s o c i a t e d c l i e n t e n t e r p r i s e s . A P P E N D I X V I C : N E T S A N C T I O N S B Y S T A T E S , 1 9 7 5 - 8 0 ( CUMULATED) S t a t e s C o d e N o . o f A s s o c i a t e d P R O J E C T C O S T ( # ' 0 0 0 ) I ! N I D B P A R T I C I P ATT C N t=# f 0 0 0 ) E s t a b l i s h m e n l 3 E m p l o y m e n t E q u i t y L o a n T o t a l E q u i t y 1 L o a n j T o t a l 0 1 1 3 1 , 0 5 4 1 3 , 8 5 9 . 8 3 1 , 1 5 5 . 7 4 5 , 0 1 5 . 5 1 , 4 5 0 . 0 1 4 , 0 2 5 . 0 1 5 , 4 7 5 . 0 0 2 8 2 , 5 8 9 5 1 , 7 6 9 . 8 1 1 7 , 0 9 7 . 4 1 6 8 , 8 6 7 . 2 1 , 6 7 0 . 7 2 0 , 2 1 8 . 7 2 1 , o o y . 4 ^ i oc/i f\ 0 3 9 1 , 7 7 8 9 , 4 9 9 . 4 2 0 , 6 4 4 . 0 3 0 , 1 4 3 . 4 1 , 0 4 0 . 0 1 2 , 3 1 0 . 0 1 3 , o o U . O M c\ A o t~\ r\ 0 4 3 6 2 5 6 , 2 5 1 . 8 8 8 , 8 0 0 . 0 1 9 , 4 5 1 . 8 1 , 0 8 0 . 0 1 1 , 4 0 0 . 0 1 2 , 4 8 0 . 0 0 5 5 7 1 0 6 , 5 1 9 1 2 , 7 5 0 . 0 1 9 , 2 6 9 . 0 9 5 0 . 0 5 , 3 1 0 . 0 1 1 , 5 7 0 . 0 0 6 9 1 , 9 9 7 1 7 , 6 9 0 3 9 , 1 4 9 . 7 9 , 8 3 9 . 7 1 , 2 9 4 . 0 1 7 , 1 1 8 . 0 1 8 , 4 1 2 . U 0 7 2 7 , 2 2 3 6 6 , 3 5 0 . 0 1 4 8 , 0 5 0 . 0 2 1 4 , 4 0 0 . 0 1 , 6 4 8 . 5 6 , 6 7 0 . 0 8 , 3 1 8 . 5 0 8 1 6 3 , 9 2 0 1 3 , 0 2 4 . 7 2 1 , 0 2 8 . 2 3 4 , 0 5 2 . 9 6 5 0 . 0 1 3 , 9 0 0 . 0 1 4 , 5 5 0 . 5 0 9 1 1 2 , 1 0 5 1 9 , 2 1 1 . 4 4 0 , 2 6 2 . 4 5 9 , 4 7 3 . 8 1 , 6 6 2 . 8 1 2 , 8 6 0 . 0 1 4 , 5 2 2 . 8 1 0 5 4 9 6 1 1 , 2 6 1 . 5 2 0 , 1 1 9 . 5 3 1 , 3 8 1 . 0 0 . 0 1 0 , 1 5 0 . 0 1 0 , 1 5 0 . 0 1 1 1 2 6 5 4 5 , 3 4 4 . 0 1 1 , 0 6 3 . 2 1 6 , 4 0 7 . 2 1 1 0 . 0 7 , 4 7 7 . 0 7 , 5 8 6 . 6 1 2 4 5 8 , 7 5 0 6 8 , 1 1 0 . 6 1 7 0 , 9 0 8 . 5 2 3 6 , 0 1 9 . 1 6 , o 8 8 . 5 6 1 , 9 6 6 . 7 6 8 , 0 5 5 . 2 1 3 5 4 , 8 0 1 3 3 , 7 6 8 . 2 8 4 , 0 1 5 . 0 1 1 7 , 7 8 3 . 2 2 , 4 3 0 . 0 8 , 9 5 5 . 0 1 1 , 3 8 5 . 0 1 4 2 3 2 , 2 8 1 2 7 , 8 4 2 . 3 1 1 0 , 9 6 1 . 3 1 3 8 , 8 0 3 . 6 3 9 , 8 7 6 . 5 3 9 , 5 5 5 . 0 4 2 , 8 6 6 . 2 1 5 2 2 4 9 7 , 7 9 3 . 9 1 3 , 8 3 7 . 0 2 1 , 6 3 0 . 9 7 8 5 . 7 3 , 3 8 7 . 5 4 , 1 7 3 . 2 1 6 1 6 2 , 5 8 0 r\ 3 1 , 8 1 3 . 0 8 8 , 3 6 2 . 4 9 1 . 7 1 2 0 , 1 7 5 . 4 1 1 8 . 1 2 , 2 5 6 . 0 0 . 0 2 9 , 1 0 6 . 0 8 0 . 0 3 1 , 3 6 2 . 0 8 0 . 0 1 7 1 8 1 4 u 3 9 6 8 , 0 2 7 . 0 1 6 , 2 4 8 . 0 2 4 , 2 7 5 . 0 5 6 1 . 0 4 , 8 2 2 . 0 5 , 3 8 3 . 0 1 9 6 5 0 1 1 3 , 5 8 9 . 0 2 1 , 9 7 1 . 2 3 5 , 5 6 0 . 2 1 , 5 1 2 . 0 8 , 6 8 4 . 0 1 0 , 1 9 6 . 0 T o t a l 1 9 5 " 4 2 , 7 0 9 4 4 4 , 1 5 1 . 8 1 , 0 5 6 , 5 1 5 . 2 1 , 5 0 0 , 6 6 7 . 0 2 8 , 5 0 0 . 4 2 8 9 , 9 6 4 . 9 1 , 2 2 3 , 3 9 3 . 7 

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