THEORETICAL ISSUES
It is generally agreed that economic development implies sustained increases in income per capita coupled with positive structural changes (political, cultural and social etc) within an economy over a long period of time. It follows that economic growth may not result in economic development. For development to occur, there must be visible positive changes to income distribution, quality and quantity of education, access to basic needs, modern technology, changes in political structures.
It is often argued that investment stimulates growth; within a market economy, private sector investment remaining the engine of growth with the public sector providing the enabling environment. In the classical sense, the enabling environment may mean providing law and order to allow the free market to thrive. In recent times, the public sector has been know to go beyond provision of law and order. The public sector for the most part regulates, intervenes in the system in order to allow the market to function properly. Government puts in place appropriate fiscal, monetary and exchange rate policies to ensure the function of the system. These political action are crucial if the private sector is to play its role properly. Theoretical, the private sector investments remain the engine of growth. Through capital accumulation, the private sector can ensure the reproduction and sustainability of a market system.
However, the controversy centers on the public sector vis - a –vis public sector investment. In a simple Keynesian framework, high levels of government consumption are likely to increase employment, profitability and investment via multiplier effects on aggregate demand. There are those who maintain that government consumption will “crowd out” private investment by dampening any economic stimulus in the short run and in the long – run by reduction capital accumulation. Either way, the link is between levels of government spending and economic activity rather than factor productivity.
There is no general agreement regarding the relationship between government spending and economic growth. Researchers have arrived at different results. Using a sample of 96 developing countries, Landau (1983) inferred that big government, measured by the share of government consumption expenditures in gross national product (GNP) or gross domestic product (GDP), reduced the growth of per capita incomes. Landau (1986) reaffirmed his earlier findings by examining other set of variable influencing economic growth; these variable included per capita income, the structure of production, population and global economic conditions.
DEVELOPMENT OF INDUSTRY AND MANUFACTURING
INTRODUCTION
an industry connotes a number of firms production similar goods. In light of the foreign, industrialization refers to the process of developing the capacity of a nation to master and locate within its borders, the overall industrial process involving the production of raw materials, production for intermediate products for further production, fabrication of the machines and tools needed for the manufacturer of the desired products and of other machines; skills to operate, maintain and reconstruct the machines and tools; skills to manage factories and to organize the production process. Industrialization thus transcends the manufacturing of consumer goods and when pursued genuinely it can transform structurally the economy. But what has been found in Nigeria and most other less developed nations (LDCs) has not been industrial development but manufacturing and assembly activities carried out within the ambit of import substitution.
Developing/ under developed nations strive to industrialize their economies for many reasons. Among these are the desire to increase national income, productivity and hence the capacity of the economic system to deliver higher levels of wealth and welfare to the people; secure fuller employment, expand the market for local raw materials ans improve the stability of foreign exchange position through import substitution and export promotion industries.
In light of the important role the industrial should play in the structural transformation of the economy, the Nigerian government regards genuine industrialization as a sine qua non in national effects to achieve the degree of self - reliance and confidence without which a nation can neither have stability necessary for social harmony at home nor muster the needed respect and he means required for meaningful involvement in international affairs and interaction. Hence, over the years, a number of fiscal, monetary,