The Political Economy of Private Investment in Nigeria

R. O. Ekundare

doi:10.1017/S0022278X00022084

The Political Economy of Private Investment in Nigeria

Published online by Cambridge University Press: 11 November 2008

R. O. Ekundare

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The traditional and basic economic philosophy of private investment is best expressed by Adam Smith: Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command…every individual…endeavours so [to employ his capital]…that its produce may be of the greatest possible value…He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it… By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.1

Type: Articles
Information: The Journal of Modern African Studies , Volume 10 , Issue 1 , May 1972 , pp. 37 - 56

DOI: https://doi.org/10.1017/S0022278X00022084 [Opens in a new window]
Copyright: Copyright © Cambridge University Press 1972

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References

^{Page 37 note 1} Smith, Adam, The Wealth of Nations (London, 1776);Google Scholar Everyman edn. 1910, vol. I, pp. 398–400.

^{Page 37 note 2} Marshall, Alfred, Principles of Economics (London, 8th edn. 1922), p. 229.Google Scholar

^{Page 38 note 1} Keynes, J. M., The General Theory of Employment, Interest and Money (London, 1954 edn.), p. 109.Google Scholar

^{Page 38 note 2} Under the customary extended family system, the rich members Cater for their less ortunate relatives–the old, the sick, the poor, the unemployed, etc. –without the establishment of formal institutions for social security. ‘Everybody is his brother's keeper.’ The fimitations on the use of the notion of income per capita are recognised, but it has been adopted here for simplicity.

^{Page 38 note 3} Adam Smith, op. cit. p. 243.

^{Page 38 note 4} The contributions of government-induced investment are discussed in Frankel, S. H., Capital Investment in Africa (London, 1938).Google Scholar

^{Page 39 note 1} Nigeria Trade Journal (Lagos), IV, 3, July–September 1956, p. 92.

^{Page 39 note 2} See Report of the Coker Commission of Inquiry into the Affairs of Certain Statutory Corporations in Western Nigeria (Lagos, 1962); ‘The Eastern Nigeria Development Corporation: a study in sources and uses of public funds, 1949–1962’, in Nigerian Journal of Economic and Social Studies (Ibadan), March 1964; and ‘A Wide-Ranging Development Institution: Nigeria's Northern Region Development Corporation, 1949–1962’, ibid. July 1964.

^{Page 39 note 3} Rowan, Leslieet al., Investment and Development (London, 1965), p. 5.Google Scholar

^{Page 40 note 1} Clarke, W. M., Private Enterprise in Developing Countries (London, 1966), pp. 24–5.Google Scholar

^{Page 40 note 2} Some people hold the view that ‘even the prospect of nationalisation of a foreign company, if done after giving it a fair run for its money and with adequate compensation, is not so great a deterrent to future investment as a constant attitude of hostility and threat’. Bank, Barclays, Overseas Review (London), 01 1966, p. 1.Google Scholar

^{Page 40 note 3} Aid to Pioneer Industries Ordinance (No. 10 of 1952).

^{Page 40 note 4} See Aluko, S. A., Fiscal Incentives for Industrial Development in Nigeria (Vienna, 1967),Google Scholar a study conducted for the Research Division, U.N. Department of Economic and Social Affairs.

^{Page 40 note 5} For the full text, see Oversees Economic Survey: Nigeria (London, 1957), and Economic Survey of Nigeria (Lagos, 1959).

^{Page 41 note 1} Debate in the House of Representatives (Lagos), February–March 1958.

^{Page 42 note 1} Budget Speech: 18th March 1964 (Lagos, 1964).

^{Page 43 note 1} E.g. Setting up an Industry in Nigeria (Lagos, 1955) and The Role of the Federal Government in Promoting Industrial Development in Nigeria (Lagos, 1958).

^{Page 44 note 1} Reported, in Nigeria Trade Journal, VI, 2, 04–06 1958, p. 50.Google Scholar

^{Page 44 note 2} Ibid. IV, 4, October—December 1956, p. 122.

^{Page 45 note 1} See Suckow, Samuel, Nigerian Law and Foreign Investment (The Hague, 1966).Google Scholar

^{Page 45 note 2} Immigration (Control of Aliens) Regulations, 1963.

^{Page 46 note 1} Suckow, op. cit. p. 36.

^{Page 46 note 2} Nurkse, R., Problems of Capital Formation in Underdeveloped Countries (Oxford, 1966), p. 88.Google Scholar

^{Page 46 note 3} Barclays Bank, Overseas Review, January 1966.

^{Page 46 note 4} Nurkse, op. cit. pp. 88–9.

^{Page 46 note 5} In interviews with young graduates trained by foreign firms it was confirmed that some of these firms were ready to release trainees from their bonds rather than allow them to hold key posts.

^{Page 46 note 6} Nigeria Trade Journal, XIII, 1, January–March 1965, p. 12.

^{Page 47 note 1} Ibid. XIV, 4, October—December 1966, p. 179.

^{Page 47 note 2} Ibid. XIII, 1, Jaunary—March 1965, p. 12.

^{Page 50 note 1} Barclays Bank, Overseas Review, March 1970.

^{Page 50 note 2} Federal Republic of Nigeria Official Gazette (Lagos), LVII, II, March 1970, pp. A 46–48.

^{Page 51 note 1} Research Group, The Other Side of Nigeria's Civil War (Cambridge, Mass., 1970), p. 16.

^{Page 53 note 1} Central Bank of Nigeria, Annual Report, December 1968.

^{Page 53 note 2} Ibid. December 1969.

^{Page 53 note 3} Second National Development Plan, 1970–1974 (Lagos, 1970), p. 279.

^{Page 53 note 4} Ibid. p. 280.

^{Page 56 note 1} Schatz, S. P., Development Bank Lending in Nigeria (London, 1964), pp. 89 and 97.Google Scholar

^{Page 55 note 1} Nurkse, op. cit. p. 88.

^{Page 55 note 2} Clarke, op. cit. p. 20.

^{Page 55 note 3} International Development Review (Washington), June 1963.

^{Page 55 note 4} ‘The word neo-colonialism was coined to express this vague fear that direct political control will be succeeded by direct economic control.’ Rowan, op. cit. p. 12.

^{Page 56 note 1} Barclays Bank, Oversees Review, January 1966, p. 2.

^{Page 56 note 2} The Nigerian Tobacco Company and Guinness (Nigeria) Ltd offered ordinary stocks for sale to the Nigerian public in 1960 and 1966 respectively.

^{Page 56 note 3} Young, A., ‘Increasing Returns and Economic Progress’, in The Economic Journal (Cambridge), 12 1929,Google Scholar quoted by Nurkse, op. cit. p. 86.

^{Page 56 note 4} Rowan, op. cit. p. 6.

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