NAME: ………………………………………….CLASS:…………………………………..

DEEPER LIFE HIGH SCHOOL

Website: www.dlhschools.com E-mail: deeperlifehighschool@yahoo.com
FIRST TERM: E-LEARNING NOTES
SUBJECT: ECONOMICS
CLASS: SS3
SCHEME OF WORK
Week Topic
1. Revision.

2. Economic Lesson from Tigers, Japan, Europe and America

3. Human Capital Development

4. International Trade

5. Balance of payments (B.O.P.)

6. Economic growth and development and Economic development planning

7. MID-TERM BREAK.

8. International Economic Organization

9. Current Economic Plan: MDGs, NEEDS, Vision 2020&Economic development challenges

10. Economic reform program

11. Revision

12. Examination

WEEK 1--Revision
WEEK 2
SUBJECT: ECONOMICS
CLASS: SS3
TOPIC: ECONOMIC LESSONS FROM ASIAN TIGERS, JAPAN, EUROPE AND AMERICA
CONTENT: 1. ECONOMIC LESSONS FROM ASIAN TIGERS
2. ECONOMIC LESSONS FROM JAPAN
3. ECONOMIC LESSONS FROM EUROPE

Sup-Topic 1: Economic Lesson from Asia Tigers

Economic History of the Asian Tigers

The four Asian Tigers - Hong Kong, Singapore, South Korea and Taiwan consistently maintained high
levels of economic growth since the 1960s, fueled by exports and rapid industrialization, which enabled
these economies to join the ranks of the world's richest nations.
Hong Kong and Singapore are among the biggest financial centers worldwide, while South Korea and
Taiwan are important hubs of global manufacturing in automobile/electronic components and information
technology, respectively.
Common characteristics of the four Asian tigers include:
(i) They focus on exports,
(ii) They have educated populace
(iii) They have high savings rates
FACTORS THAT ACCOUNT FOR THE RAPID DEVELOPMENT OF TIGER
ECONOMIES
(i) High public and private saving rates : Savings were high in both the public and the private
sectors. The incentive to safe was very high and this enabled capital to be accumulated for
massive investments in the high income generating sectors.
(ii) High life expectancy: This is made possible by adequate care of the people by government
and this leads to high productivity.
(iii) Highly developed capital and money markets : They pursued stringent credit policies and
state-imposed below-market interest rates for loans to specific export-led industries.
(iv) High level of information technology development : Their highly developed and breakthrough
in information technology boost their external trade and increased foreign exchange earnings
which are used for further investment.
(v) Purposeful, honest and articulate leadership: Their leaders were in their office to serve the
interest of people and ensure that people enjoyed the good things of life.
(vi) Export-based industrial policies: They effectively pursue industrial policies which supported
massive exports to the rich industrialized nations of Europe and America.
(vii) Heavy government investment in education and human capital development : This helped
them to develop highly skilled manpower required to turn the economy around within a very
short time.
(viii) Quality and standardization: Emphasis was placed on production of high quality
standardized goods that would compete at the global level. Experts on Standardization and
quality assurance were brought in from Japan, US and UK.
(ix) Culture and Religious beliefs- The religious beliefs of Singapore, hard work, innovativeness
coupled with their culture of openness and harsh punishments for criminal offences led to a
corruption free economy.
(x) Outward oriented strategies/policies- Their more rapid growth can be associated with much
greater openness. This was achieved by removing all restrictions on imports and giving
freedom to the export sector.
(xi) Slow growth rates of population - This played a great role in reducing family sizes
(dependency ratios), creation of an educated labour force, accumulation of household and
government savings, rise in wages and impressive growth of investments in manufacturing
technology
(xii) Effective and stringent public policies . This consisted of credible macro-economic policies
that kept inflation low, interest rates low, fiscal policies that focused on raising saving rates
and investment rates, as well as policies that enhanced the development of infrastructure.
(xiii) Knowledge- driven economy- The Asian Tiger governments committed to improving research
and development. The industries became knowledge driven industries and e.g. in Singapore
gradually 2 out of 3 jobs were for knowledgeable and skilled workers in manufacturing sector
and 3 out of 4 of the export services sector.
Lessons for the Nigerian Economy
i. Focus on exports: Whereas other developing countries use import substitution strategies for
economic development, the Asian tigers focused on export-oriented industrial development to
richer countries. Domestic production was discouraged through government policies such as high
tariffs also trading the surplus with the richer countries.
ii. Human capital development – They developed specialized skills for their personnel in order to
improve productivity through raising their educational standards.
iii. They had an abundance of cheap labour. This is highly needed for economic development.
iv. Existence of an adequately developed financial system: An adequately developed capital market
would ensure adequate mobilization of capital for industrial and economic development.
v. Maintaining social and political stability together with a stable macroeconomic environment,
vi. High tariffs on imports in the early days to discourage import and encourage export.
vii. Leadership that is interested in the welfare of the citizens would motivate labour to work hard,
thereby raising the level of productivity.
viii. High saving rate will increase the rate of capital formation. This should be done by private
institutions and government instead of spending prestigious non-productive project.
ix. Development of export industries and promotion of certain basic industries that produce
competitive goods for the world market.

Real GDP Growth in the Asian Tiger Economies, 1986-2000

(1886=100)
350

300

250

200 Hong Kong

Indonesia
150
Malaysia
Singapore
100
S. Korea
50 Thailand

0
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

JAPANESE MIRACLE AND LESSONS FROM JAPAN

The period between 1953 and the early 1970s which witnessed unprecedented growth rate in Japan is
termed by some people as “miracle period growth”. The Japanese economy was devastated by the world
war II and the economic activities almost grounded to a halt. But by the early 1970s, the Japanese
industries had become internationally competitive and the income gap between the country and the
United State of America was closed considerably.
Factors that triggered off the Japanese miracle are:
1. Private sector led investment: The profit-motive associated with private sector investment
promoted large-scale investment, leading to economies of scale in production.
 2. High literacy rate and high education standards: Japan is acclaimed to have the highest literacy
rate, and the nature of educational curriculum encouraged discipline.
3. A well disciplined, relatively cheap, highly educated and skilled work force, with reasonable
wage demands by labour unions.
4. Proper management of natural resources.
5. Promotion of exports through the development of world-class, responsive export-oriented
industries which were provided with adequate incentives
6. Massive investments in infrastructure and in heavy manufacturing industries.
7. Highly developed financial and marketing systems
8. Adaptation of foreign or imported technology
9. Massive research and development made them to discover efficient production techniques.
10. High saving rate accompanied with high levels of investment.

Economic Lessons from Europe

There are lessons to learn by developing countries from Europe. These are:
1. Economic integration or co-operation:- This has helped to limit wars which led to waste
of resources in the past. Co-operation in many areas of development has created
economies of scale in production and increased the level of investment.
2. Export-oriented economies:- They bought cheap raw-materials from the developing
countries and produced manufactured goods in which they have comparative advantage.
3. Massive investments in manufacturing industries with reduced reliance on agriculture.
4. Massive investment in education and human capital development.
5. Agrarian and industrial revolutions in Britain led to discoveries and inventions which
changed the economic landscape of Europe.
6. A well developed financial sector: Europe has a well developed financial sector with
financial institutions among the leading ones in the world. This makes for easy
accumulation and transfer of capital for investment

Evaluation:
1 (a) Explain the meaning of the ‘Japanese miracle’
(b) What lessons can your country learn from the economic development of Japan?
2 What is meant by “Asian Tigers?” Examine the development strategies adopted by these countries and
discuss the economic lessons your country can learn from them.
3. Examine the development strategies of the countries of Western Europe. What economic lessons can
your country learn from them?

WEEK 3
SUBJECT: ECONOMICS
CLASS: SS 3
TOPIC: HUMAN CAPITAL DEVELOPMENT
CONTENT: 1. Introduction to human capital development
2. Meaning and definition of human capital development
Sub-Topic 1: Introduction to human capital development

According to modern growth theory, the accumulation of human capital is an important contributor to
economic growth. Numerous cross-country studies extensively explore whether educational attainment
can contribute significantly to the production of overall output in an economy. Although macro studies
have produced inconsistent and controversial results (Pritchett 1996), several micro studies that look into
the same problem have shown a consistently positive relationship between the education of the workforce
and their labor productivity and earnings. General finding is that individuals with more education tend to
have better employment opportunities, greater earnings, and produce more output than those who are less
educated. These findings provide a strong rationale for governments and households to invest substantial
portions of their resources on education, with the expectation that higher benefits will accrue over time.

Sub-Topic 2: Meaning and definition of human capital development

Human capital is the total stock or value of competencies, skills, knowledge, social and personality attributes,
including creativity, embodied in the ability to perform labour in order to produce economic value.

Factors Affecting the Efficiency of Human Capital

1. Increased level of education: Provision of higher and specialized education increases the efficiency of
human capital.
2. On-the job training: Provision of formal and informal training programmes while employed, increase the
skill of the workers and enhance the efficiency of human capital
3. Improved health condition: Provision of better health facilities improve the health of the providers of
labour, thereby enhancing their efficiency.
4. Standard of living: An increase in the standard of living increases the efficiency of human capital.

Brain Drain and its effect on Nigeria Economy

Brain drain is the large scale emigration, over a comparatively short period, of a large number of highly skilled
intellectuals and technical labour to more favourable geographic, economic and professional environment. E.g.
large scale movement of Nigerians health-care professionals to India, America and other high income countries.
It is also referred to as “capital flight”.
Reasons for Human Capital Flight
i. Poor social environment in the source countries: The fewer life opportunities, political and social
instability, economic depression and health risk cause the movement of labour in large scale from less
developed countries to those countries with better opportunities.
ii. Better social environment in host countries: Owing to rich opportunities for profitable employment,
political stability, better living conditions, developed economy, intellectual freedom, etc, there is large
scale movement of labour to these countries.
iii. Individual reasons: These include family influence such as presence of overseas relatives, personal
preference and ambition for an improved career.

Effects Brain Drain on Nigeria Economy

i. Loss of professional skills and talents: The nation is denied the services and expertise they would
otherwise have provided in various areas of the economy such as institutions of higher learning, health
institutions, industries, etc, leading to low level of production and development.
ii. Capital waste: The resources used in training them, either in the forms of scholarships, loans, etc. are
lost to the advanced countries which may have contributed little.
 iii. Increased level of poverty: This is due to general low level of productivity arising from scarcity of highly
productive labour.
iv. Decrease in wealth creation, employment and tax revenue: More entrepreneurs taking their investments
abroad contribute to the high rate of unemployment and decreased wealth creation within the country,
with a consequent reduction of tax revenue.
v. Encourages Individuals to acquire greater education and skills: They do this in order to meet the
demands of the advanced countries that are in demand of their services.

Effects of Brain Drain on Destination Country

i. Higher labour skills are available for services and production in other sectors of the destination country
ii. There is influx of illegal aliens who wish to take advantage of the greater opportunities available

How to Arrest Brain Drain

1. Committed and selfless leadership with a mission and vision: Highly skilled labour will stay in the
country if they discover that leaders are committed and are making genuine efforts at development.
2. Provision of adequate working and living conditions: These would encourage highly skilled labour to
remain in the country to contribute their quotas.
3. Value re-orientation: Nigerians should be taught to believe that our collective hopes and aspirations can
be met within the country.
4. Setting up a national commission to handle the issue of brain-drain: This body would help to formulate
policies and proper solutions to the challenges of brain-drain.

EVALUATION:

1. What is human capital development?

2. List five factors that affect the efficiency of human capital
3. How can brain drain be arrested?

WEEK 4
TOPIC INTERNATIONAL TRADE
CONTENT: (1) Meaning of International Trade and Domestic Trade
Differences between Domestic and International Trade
(2) Reasons for International Trade
Theory of comparative costs and its shortcomings
(3) Globalization- Meaning, features, challenges and
opportunities to the Nigerian Economy
Sub Topic 1 Domestic Trade and International Trade
Domestic or Internal Trade or Home Trade involve the exchange of goods and services among the
residents of country. It includes all trading/selling and buying activities of all types within a particular
country e.g. Nigeria.
International trade or External trade or foreign trade involves the exchange of goods and services between
two or more countries. It is trade among nation. E.g. between Nigeria and other countries. People firms,
government and agencies exchange goods and services across international boundaries.
International trade can be:
1. Bilateral-trade involving exchange of goods and services among two countries. Each country
balances its payments and receipt with each other.
2. Multilateral-trade in which a country exchanges goods and services with many other countries.
Similarities between International trade and internal trade
1. Both trades involve the use of money as a medium of exchange.
2. Both have to do with some degree of specialization between the trading partners which is the
basis of exchange.
3. Both trades involves the buying and selling of goods and services.
4. Both trades arise from inequitable distribution of natural endowments and production resources.
5. Both trades involve the activities of middle men.
Differences between International Trade and Internal (domestic) Trade
1. While International trade takes place across national boundaries, internal trade takes place within
the borders of a country.
2. Internal trade uses local or national currency whereas different currencies are used in foreign
trade.
3. There is no restriction for home trade while foreign trade can be restricted by import/export
duties, tariffs, embargoed
4. International trade is a foreign exchange earner while home trade only generates internal revenue.
5. Factors of production are freely mobile in home trade, but there are restrictions for such in
international trade. e.g. labour mobility is subject to immigration laws among countries.
6. Barriers of distance, transport costs are greater in foreign trade than in home trade.
7. The problems of foreign exchange and balance of payments are peculiar to foreign trade while
internal trade has no such problems.

Sub Topic 2
REASONS/ BASIS FOR INTERNATIONAL TRADE
International trade arose from the international specialization and division of labour. These have to be for
the following reasons:
1. Uneven distribution or endowment in natural resources of nations such as minerals. For instance,
Nigeria has coal and crude oil; Ghana is endowed with bauxite while Canada is enriched with nickel.
2. Differences in climate and soil which gives rise to the cultivation of different crops.
3. Differences in capital stock which determines the quantity and variety of goods and services each
country will be able to produce.
4. Differences in labour skills: There are variations in the volume and quality of labour for productive
activities.
5. Differences in technology: Countries advanced in technology can produce more industrial goods than
others. E.g. Japan is good in electronic goods; Germany is good in Mercedez Benz cars, Switzerland in
watches and China in a variety of items.
6. International trade takes place because no country has attained self sufficiency. For instance Nigeria
imports cars, radio, watches etc from Japan while Japan gets Nigeria’s petroleum. The desire to satisfy
wants each country cannot produce calls for exchange across countries.
7. The need to create a wider market for a nation’s goods and services is another reason for international
trade.
8. International trade is also based on the premises that the cost of production of a commodity differs
from one country to another. So a country will choose to import a good if it is cheaper to do so than to
produce it.
9. International trade is also engaged in because of the desire of nations to improve the standard of living
of their citizens.
Barriers to International Trade
There are problems besetting trade among nations. These includes
1) Differences in currency
2) Natural barriers of distance, seas, deserts, etc
3) Differences in language
4) Trade restrictions by some nations
5) Long and sometimes difficult processing of documents for foreign trade
6) Hindrance from political ideologies of different countries
7) Differences in units of weights and measures
Advantages or Merits of International Trade
1. It is a source of revenue for nations.
2. It leads to increase in total world output of goods and services.
3. It provides a wider market for goods.
4. It enhances better standard of living in many nations.
5. It promotes interdependence among nations which is a prospect for world peace and international
goodwill.
6. It provides employment opportunities for exporters and importers.
7. It leads to a more efficient allocation of world productive resources.
8. It promotes specialization, division of labour and efficiency in production.
9. It enhances world economic growth and social progress.
10. It leads to increased foreign investments in West African nations.
11. It puts in check private monopoly power as importation of goods makes room for competition.

Disadvantages∨Demerits of International Trade

Inspite of its numerous advantages, there are some shortcomings of international trade. These are:
1. It may lead to overdependence on other countries
2. It negatively affects the growth of infant industries
3. It negatively impacts on the cultural and moral values of a country and leads to decadence in
social norms (e.g. indecent and immoral fashions imports into Nigeria)
4. It can reduce the efforts of a nation towards attaining self-sufficiency.
 5. It can generate unemployment as high importation may reduce the level of production of
domestic industries.
6. Unrestricted foreign trade may lead to balance of payment deficit i.e when import is higher than
import.
7. It makes less developed countries become dumping grounds for all kinds of goods including
dangerous and harmful ones such as arms and ammunitions and alcohols.

EVALUATION:
1. What is international trade?
2. Give 5 reasons why developing countries engage in international trade?

The principle of comparative cost Advantages

The law or theory or principle of comparative cost advantage propounded by David Ricardo in 19 th
Century, states that a country will be better off, if it specializes in the production of commodities in which
it has the greatest comparative cost advantage over others and exchange them for commodities in which it
has comparative cost disadvantage. This law is based on the premises of the law of opportunity cost.
A country is said to have comparative advantage over others in the production of a commodity in which
it has the lowest opportunity cost than others. The real cost of production in terms of the alternative goods
forgone is used in comparison with that of other nations.
The principle operates on some basic assumptions that:
i. There are only two trading countries
ii. Only two items are produced
iii. There is free flow and mobility of factors of production
iv. There is no balance of trade between the two countries
v. There is no transport cost
vi. Technology and costs are constant
vii. Labour is the only factor of production
Based on these assumptions, the principle can be illustrated in three stages as follows:

Stage1. Production situation of Nigeria and Thailand with no specialization and no trade.
Country Units of labour Output Opportunity Cost
Rice Cocoa
(in bags)
Nigeria 10 10 150 15 bags of Cocoa or 1
bag of rice
Thailand 10 100 20 5 bags of rice or 1 bag
of Cocoa
Total Output 110 170
  Nigeria- will forgo 15 bags of Cocoa to produce 1 bag of rice or forgo 1 bag of rice to produce 15
bags of Cocoa.
 Thailand- will forgo 5 bags of rice to produce 1 bag of cocoa or forgo 1 bag of cocoa to produce 5
bags of rice.
From the above, we can deduce that Nigeria has a comparative advantage in the production of cocoa
while Thailand has comparative advantage to produce rice.
Stage II. With Specialization
Country Units of labour Output
Rice Cocoa
(in bags)
Nigeria 10 --- 300
Thailand 10 200 ---
Total Output 200 300

Stage III. With Trade

Country Quantity of Consumption
Rice Cocoa
(in bags)
Nigeria 90 210
Thailand 110 90
Total Output 200 300

From the tables,

i. The total production of the countries increased with specialization i.e Rice from the initial
110 bags to 200 bags and Cocoa from 170 bags to 300 bags.
ii. The trading countries now enjoy improved or higher standard of living because they have
more commodities than they could produce before trade.
iii. The trade enhanced more efficient allocation of productive resources i.e. labour.
EVALUATION
 Explain the concept of comparative cost advantage in International trade.

 What are it’s contributions to trade among nations?

WEEKEND ASSIGNMENT
Objective Test:
1. International trade could be bilateral or (a)Mono-lateral (b)multilateral
(c) Horizontal (d) vertical (e) circular
2. International Trade depends on the concept specialization (b) technology
(c) electricity (d) endowments (e) integration
4. Home trade in Nigeria cannot be practiced between (a)North and South (b)Kaduna and Abuja
(c)Abuja and Ghana (d) Lagos and Badagry (e) All of the above
 5. The following are the assumptions of the principle of comparative advantage except
(a) Only two countries (b)no transport costs (c)only two items are produced (d)constant costs
(e)factors of production are varied.
Essay Test
1. Outlined the major exports of Nigeria ans state the contributions they make to her economic
development.
2. What are the obstacles to international trade
3. In tabular form, highlight the differences between internal and international trade
4. Enumerate 5 reasons for international trade
5. State 5 barriers to international trade
PRE- READING ASSIGNMENT
Read fundamentals of Economics by RAI Anyanwuocha, pages 286-288.

WEEKEND ACTIVITY
Read fundamentals of Economics by RAI Anyanwuocha, pages 265-271
REFERENCE TEXTS
(1) Essential Economics by Cole Esan Ande Book 3TONAD PUBLISHERS
(2) Fundamentals of Economics by R.A.I. Anyanwuocha; AFRICANA FIRST PUBLISHERS PLC

WEEK 5
SUBJECT: ECONOMICS
CLASS: SS 3
TOPIC: BALANCE OF PAYMENT
CONTENT:
i. Role of money in international trade
ii. Definition of Balance of payment
iii. Favorable and unfavorable balance of payment
iv. Methods of correcting balance of payment problems

Sup-Topic 1: ROLE OF MONEY IN INTERNATIONAL TRADE

International trade is trade between two or more countries. Foreign trade is made possible as a result of international
specialization. Money plays prominent roles in international trade.

Roles of Money in International Trade

1.It is a medium of exchange of commodities in international trade: - The exchange of goods and services among
the residents and governments of various countries across international boundaries is done by money
2.In international trade, trade credits are sometimes given and payments are made later.
3.Surplus foreign exchange from international trade is kept as reserves in the form of gold or international
currency such as dollar.
4.It serves as unit of account because balance of trade and payment accounts are recorded in monetary terms.
5.At the international level, money can be used for making transfer payment like giving aids to poor countries.
 6.It facilitates economic development: Foreign capital and skills are being imported , thereby helping the
development of developing countries.
TERMS OF TRADE
A term of trade is the rate at which a country’s exports exchange for its import. Simply put, terms of trade are the price
ratio between export and import. It is measured mathematically using this formula below:
Terms of trade = index of export price x 100
Index of import price 1

BALANCE OF TRADE
Balance of trade shows the difference between the values of a country’s visible exports and imports over a given period
of time. It is known as balance of payment on current account. Balance of trade is described as favorable when receipts
from exports are more than payments from imports. On the other hands, it is unfavorable when payments on imports
are more than export receipt. Nigeria visible exports are cotton, cocoa and imports are electronics, cars etc.
Sub topic 2: Definition of Balance of payment
This is statement showing the monetary value of all transactions between a country and the rest of the world during a
given period. It is a record of all payments to and receipts from foreign countries during a particular period of time
usually a year. Balance of payment can be favorable or unfavorable. If the total receipts are more than total payments,
the BOP is favourable. On the other hand, if the total payments are more than total receipts, then it is unfavorable. It is
made up of the current account, capital account and monetary movement account.

COMPONENTS OF BALANCE OF PAYMENT

CURRENT ACCOUNT: - This account shows the total of a country receipts and payments on visible and invisible
trades.
(a) The visible Trade Account (Balance of Trade): It includes visible items like cocoa, palm oil.
(b) Invisible Trade Account): It covers services such as transportation, insurance and banking. Other things
included are travel expenditure (tourism), income from investments such as interests, profits and
dividends, private gifts, government services, and other services.

CAPITAL ACCOUNT: It comprises short and long term capital movement. Capital account shows changes in the
volume of a country’s foreign assets and liabilities through capital movement and investments. The capital account of
balance of payment includes inward and outward foreign securities. It involves the actual flow of money from one
county to another. The balance of payment on capital account is the difference between receipts and payments on
capital expenditure with the rest of the world. It consists of loans and investment.
MONETARY MOVEMENTS OR GOLD MOVEMENTS ACCOUNT: It shows a country balances in its current and
capital accounts. This is the balancing account. Official settlement account shows how surplus or deficit in current
account and capital account are finally settled.

BALANCE OF PAYMENT EQUILIBRUM

Balance of payment is in equilibrium when total receipts are equal to total payments. A country is experiencing
equilibrium in its balance of payment when total inflow is equal to total outflow.

BALANCE OF PAYMENT DISEQUILIBRIUM

This occurs when a nation’s receipts do not equal its payments i.e. total receipts on the capital and current are not
equal to payments within a year. Disequilibrium is either a surplus or deficit. Deficit occurs when total payments of a
country exceed total receipts in a given year whereas a surplus occurs when total receipts are greater than total
payments in a given year.
(A) Balance of payment Surplus /Favorable: A country is experiencing surplus in its balance of payment when
total receipts (inflow) from a country’s export are greater than the total payments (outflow) on imports of
country in a given year. Surplus= Receipt > Payment
EFFECTS OF BALANCE OF PAYMENT SURPLUS
1. Inflationary trend
2. Settlement of debt
3. Increase in inflow
4. Increase in foreign investment
(B) Balance of payment deficit/ Unfavourable: This is a situation where the total payments on import is greater than
the total receipt of a country’s export in a given year or vice versa i.e. the country’s receipts are less than its
payments in a particular year. The likely effects of deficit are accumulation of foreign debts and reduction in
investments abroad.
CAUSES OF BALANCE OF PAYMENT DEFICIT
1. Low level of technology
2. Low level of foreign direct investment
3. High debts service payment
4. Poor performance of non-oil sector
5. Low level of agricultural production
MEASURES TO CORRECT BALANCE OF PAYMENT DEFICIT
(1) Devaluation: Devaluation cheapens export and make import expensive thereby improving the
balance of payment
(2) Reduction of import: The government can restrict imports by the use of tariffs, quotas and
outright embargo on import.
(3) Export promotion measures: Government can encourage the production of exportable goods in
large scale
(4) Borrowing from international financial institution: - A country can borrow money from IMF or
other richer nations in order to correct her balance of payment deficit.
(5) Foreign exchange control: This involves the rationing of foreign exchange in order to reduce
balance of payment deficit.
(6) Promotion of import substitution industries: This is done to replace the commodities that were
previously brought from foreign countries.
(7) Drawing from foreign reserves: Drawing on the value of the country’s foreign reserves to pay the
creditors.
MEANS OF FINANCING BALANCE OF PAYMENT DEFICITS
(1) Counter trade: This is exchange of goods for goods in international market.
(2) Running down external reserve
(3) Borrowing from international financial institution
(4) Short term credit
(5) Grants and aids
(6) Increase of export of goods
EVALUATION:
(1) Explain the term balance of payment deficit
 (2) Under what conditions will devaluation improve a BOP of a country?
(3)What is balance of payments?
(4)State three components of balance of payment

Commercial policy in international trade

Commercial policy in international trade involves the use of certain instrument either to protect the economy or to
promote external trade. These instruments of protection such as the use of quotas, bans, etc
Tools or instruments of trade restriction are:
1. Import duties or tariff
2. Devaluation
3. Foreign exchange control
4. Embargo: an embargo is a ban on the importation of a particular product, or on all imports from a particular
country.
5. Import quota: a quota is a limit on the number of imports allowed into a country each month or year
6. Import license
7. Excise duty reduction
8. Preferential duties
9. Import monopoly
10. Subsidies- these are grants paid to domestic producers to help reduce their production costs and sell their products
at lower prices than imported products.

TARIFF OR RESTRICTION ON TRADE

Tariffs are taxes or duties imposed on import and export by the government of a country. The idea behind tariff
is to restrict the volume of trade or improve the international term of trade.
REASONS FOR THE IMPOSITION OF TARIFFS
1. To protect infant industries
2. Generation of revenue
3. To prevent dumping
4. To improve balance of payment deficit
5. To prevent importation of dangerous goods
6. Retaliatory measures
7. Employment generation
8. Political motive
9. To promote self-sufficiency
10. To check consumption pattern
11. To protect strategic industries.

MEANING OF EXCHANGE RATE

Exchange rate is the rate at which countries exchange their currencies or the rate at which a country decides to
buy or sell her currency in relation to other currencies of the world.

DEVALUATION
Devaluation can be defined as the reduction in the value of the country’s currency in terms of other currencies of
the world. It can also be defined as the fall in exchange value of a country’s currency in relation to the currency
of other countries.
Effects of devaluation on currency
1. Exports becomes cheaper
2. Import becomes expensive
3. Reduction in import
4. Increase in export
5. Balance of payment improvement
6. Employment opportunities
7. Increase in numbers of industries.
Conditions in which devaluation can improve a country’s balance of payment.
1. The elasticity of demand must be elastic
2. The country’s export must have elastic demand in other country
3. Other countries must not devalue their own currencies.
4. There must be no increase in wages and other incomes.

Mathematical approach in currency devaluation and exchange rate.

Example 1: Assuming that Nigeria is willing to buy or sell cocoa at #400 per tone and the USA is willing to buy
or sell at $50, then the value of the two currencies can be fixed at #400 = $50, the ratio then will be #8=$1. The
exchange rate is therefore #8:$1.
Example 2:
Let us assume the initial exchange rate of the Naira and US dollar is #1=$5
A Nigerian importer is to purchase 60 computer systems at a cost of $40 each from the USA
Total amount required to purchase the computer system is 60 x $40= $2400
Since the exchange rate is #1 = $5, total amount of naira required is:
2400 = #480 this means a Nigeria importer will spend #480 to
5 import the 60 computer system to Nigeria.
If Nigeria devalues her currency by 100%, the new exchange rate will be #2 = $5, or #1 = $2.5

$ 2400
The amount of money a Nigeria importer will have to spend will now be = ₦960.00
2.5
₦960 would be required to import the same 60 computer system
Example 3
In a year A, 80 naira exchange for a dollar and later in year B, 130 naira exchanged for a dollar through the
forces of demand and supply
(a) State the effect of the above on the value of the dollar
(b) How much naira would be needed to purchase 50,000 dollar worth of generator from U.S.A in year
A
(c) How much in naira would be needed for the same purpose in year B
(d) (i)calculate the percentage change in the value of the naira between year A and B
(ii) From your calculation, state the effect on the value of the naira
 SOLUTION
(a) The value of the dollar appreciated
(b) In year A
#80 x $50,000 = 4,000,000
4,000,000 would be needed
(c) In year B,
#130 x$50,000 = #6,500,000
#6,500,000 would be needed
(d)(i) Percentage change in the value of naira
#130 - #80 x 100
#80
₦ 50 100
× =62.5 %
₦ 80 1

62.5%
(ii)The value of the naira has depreciated

ECONOMIC INTEGRATION IN WEST AFRICA

Economic integration can be defined as a form of international co-operation among nations to foster their economic
interests. It is the deliberate act of government to pool their economic resources together in order to achieve a greater
efficiency in the production of goods and services for the social and economic welfare of their countries. Countries
with common interests form themselves into an organization whose major objectives are to remove trade barriers and
other obstacles that reduce the free flow of goods and services. A good example of economic integrations in Africa is
Economic Community of West African States (ECOWAS)
TYPES OF REGIONAL ECONOMIC INTEGRATION
1. Free trade area: this is a type of integration in which member countries agree to remove all restriction to trade
among them. Tariffs ,quotas, bans etc are not imposed on goods coming from or going to member nations
2. Common market: This is also known as Economic Community in which there is a common internal and external
tariff policy. There is free mobility of labour and capital between member States. Example is European Economic
Community(EEC)
3. Economic Union: This type of integration which take the form of total integration of the members’ countries. It is
aimed at harmonizing the social, economic, industrial, commercial and technological policies of member States; it
also involves the unification of monetary and fiscal policy of member nations. Example is ECOWAS.
4. Custom union: this is an agreement among nations to eliminate trade barriers such as tariffs, quota etc among
member states and to adopt common barriers to imports from non member countries.
Characteristics of customs union
1.Tariffs are abolished
2.Each member country is given free hand to maintain its custom duties tariff against non member s countries.
3. All track restriction are abolished
4.The members may agree on common custom duties and tariffs against any non member country.
Benefits or advantages of Economic integration
 1. Encourage large scale production resulting in an enlarged market.
2. Promote efficiency.
3. Greater resources mobility is achieved.
4. Countries benefit from specialization
5. creation of job opportunity
6. Promote wide range of economic activities.
7. Stimulation of faster economic growth
8. Effective participation in world market
Problems or disadvantages of economic integration
1. Fear and suspect ion of domination
2. Differences in economic and political ideology
3. Divided loyalty to former colonial masters
4. Physical and monetary differences
5. Inadequate infrastructural facilities
6. Absence of large and developed market.
7. Political instability
8. Reluctance to surrender economic independence
9. Inadequate capital
10. Language barrier.

EVALUATION:
Practice Questions.
The table below shows an extract from balance of payments for country A. Use the table to answer the questions that
follow:
Balance of payments Items
S/N Items of transaction Receipts($) Payments ($)
1 Merchandise (Visible trade) 52,000.00 40,000.00
2 Shipping, other transport and travel 40,000.00 8,000.00
3 Investment income 20,000.00 5,000.00
4 Other services 2,500.00 7,500.00
5 Unrequited transfers 22,800.00 7,000.00
6 Direct investment 50,000.00 26,000.00
7 Other long – term capital 254,000.00 289,000.00
8 Short – term capital 221,000.00 238,000.00

Calculate the:
a)Balance of trade
b) Balance on current account
c)Balance on capital account
d) Balance of payment.

WEEKEND ACTIVITIES
Essay Test
(1) What is balance of payment?
(2) State three components of balance of payment
 (3) Explain the term balance of payment deficit
(4) Under what conditions will devaluation improve a BOP of a country?
REFERENCE
Amplified and simplified Economics for sss1, 2&3 by F. Longe

WEEK 6
SUBJECT: ECONOMICS
CLASS: SS 3
TOPIC: Economic growth and Development
CONTENT:
(1) What is economic development
(2) Distinguish between economic growth and development
(3) Characteristics of underdeveloped economy
(4) Factors which influence economic development
(5) Problems of economic development in Nigeria
(6) Element of Development Planning
(7) Nigeria’s Personal Experience
(8) Importance of Economic Planning in National Development.
SUBTOPIC 1: What is economic development?
Definition
Economic development may be defined as the process whereby the level of national production i.e.
national income or per capita income increases over a period of time. Economic development is not the
same thing as industrialization and national development. With economic development, there are
structural transformations in the different sectors of the economy as well as general improvements in
various areas of economic activity leading to increased economic welfare of the citizens.
ECONOMIC GROWTH
Definition
Economic growth is the process by which national income or output is increased. An economy is said to
be growing if there is a sustained increase in the actual output of goods and services per head. Economic
growth implies more output per head as a result of more input and more efficiency. Economic growth is a
stepping stone to economic development. Without economic growth it will be difficult for a country to
attain economic development.

EVALUATION
- Define economic development
- Define economic growth
Sub-topic:
Distinguish between economic growth and development
1. There is a greater emphasis on the increase in output and less emphasis on economic
welfare in the case of economic growth while economic development laid more emphasis
on improvements in the general welfare as a result of more equitable distribution of the
increased output of goods and services among individuals.

2. Economic growth is mainly concerned with the growth of income, while economic
development level as all spheres of economic activity and emphases a more even
distribution of facilities between various areas.

3. Economic growth can take place under conditions of mass unemployment while economic
development implies a reduction in the level of unemployment.

4. There must be a meaningful increase in real income before we can talk of economic
growth, whereas economic development can be achieved by a fairer distribution of
existing goods, services and amenities, even if there is no substantial increase in output.

5. Economic growth lays more emphasis on meaningful increase in real income whereas
economic development pays more attention on a fairer distribution of the real income

EVALUATION
1. Differentiate between economic growth and economic development

SUBTOPIC 3:
Characteristics or features of under developed economy
(1) Low per capita income: - The low level of income per head of the population is due to the
generally low level of productivity which results in low national income or low gross domestic
product.
(2) Use of crude technology: - The use of crude technology give rises to low productivity. The extent
of industrialization is still limited. The use of modern implements in agriculture such as tractors
and harvesters is limited.
(3) There is high level of unemployment and underdevelopment: In underdeveloped countries many
factors of production are either idle or not fully engaged in production. So many people are left
unemployed. The available job opportunities are insufficient for all those who wish to work.
(4) High level of illiteracy: - The high level of illiteracy is partly due to widespread poverty. Many
parents cannot afford the cost of education for themselves or their children.
(5) Low standard of living: - There is low standard of living in under developed economy. Ther is
great disparity in income levels among the population. There are few people who are very rich
while the masses are poor.

EVALUATION
1. List five features of an under developed economy
2. Explain the features listed above.
 Sub-Topic 4:
Factors which Influence Economic Development
(1) Technological development: The level of technology should be developed in order to increase
economic development.
(2) Encouragement of savings and investments: Both individuals and firms should be encouraged to
invest and save in the economy. Capital or fund, provision of some infrastructural facilities can
encourage savings and investments.
(3) Promotion of industrialization: There should be concrete plan to promote rapid industrialization
as this form the bedrock for any economic development.
(4) Provision of capital: The provision of capital through the establishment of financial institutions.
Agricultural Development Bank could be encouraged to make loans to investors.
(5) Political stability: Political stability will lead to the direction of efforts towards projects which
will help to stimulate economic development.
(6) Infrastructural facilities: Provision of economic and social infrastructural facilities such as
electricity, transportation network and water supply.

EVALUATION:
(i) What are the ways to encourage economic development
(ii) Explain them.

Sub-Topic: 5
Problems of economic development in Nigeria
(i) Lack of industrialization leads to low economic development of any nation
(ii) Inadequate capital base: There is inadequate capital to execute the various
development projects which would lead to structural transformations within the
economy.
(iii) Shortage of skilled and technologically trained manpower: There is tendency for
deficiency in technical knowhow in many West African countries. The relative
scarcity of indigenous skilled labour is due to the high level of illiteracy which exists.
(iv) Inadequate economic planning and management: Most of the developing countries
do not have adequate development plan and this hinders economic development. In
some cases, the full costs and implications of economic projects have not been fully
weighed before they are embarked upon. At times, projects are started only to be
abandoned.
(v) Administrative bottlenecks: Certain government policies tend to hinder economic
development projects in economically unviable areas and delays in giving approval to
prospective businessmen for the establishment of manufacturing industries.

Sub-Topic 6: Elements of Development Planning

Development planning is a deliberate effort of government in formulating economic policies on the equitable allocation
and efficient utilization of resources to all sectors of the economy towards achieving rapid economic growth and
development. It involves activities by government to influence, direct and control over the long run the level and
growth of a nation’s economy.
Sub-Topic 2: Nigeria’s Planning Experience
Pre-independence Development Planning
Development planning started with the Colonial era in Nigeria. The first was the Ten-year development and Welfare
Plan (1946 – 1955). This was followed by the second development plan titled “The Economic Program of the
Government and the Federation of Nigeria, 1955 – 1960. The plans were broken into five for each of the four regional
governments, Southern Cameroun and the Federal Territory. These plans were reviewed in 1958 and extended to 1962
when the first National Development Plan was launched.

Post-independence Development Plans

Development plans after Nigeria’s independence were four. These are summarized in the table below.
Nigeria’s Development Plans

National Development Projected

Period Estimated Capital Expenditure
Plan Growth Rate

****
First Plan 1962 – 1968 4.4%

Second Plan 1970 – 1974 **** 6.6%

Initially N30b
Third Plan 1975 – 1980 11%
1977 reviewed: N43.3b

Fourth Plan 1981 – 1985 N82b 7%

Sub-Topic 3: Importance of Economic Planning in National Development

Importance / Objectives /Reasons for Economic Planning
1. To ensure the mobilization and allocation of physical and human resources (i.e. equitable distribution to
all the sectors of the economy).
2. To promote sustained growth and accelerated development.
3. To diversify a nation’s economy to many sectors.
4. To achieve economic self-sufficiency.
5. To increase the Gross National Product.
6. To increase per-capita-income hence, improve people’s standard of living.
7. To create more employment opportunities.
8. To reduce foreign control of the economy.
9. To stabilize prices and prevent inflation and deflation.
10. To bridge the gap between the rich and the poor.
11. To promote international trade in a way that will enhance surplus balance of payment. This is possible
through increased production for exports and reduction of imports.
 12. To mobilize scarce resources for increased productivity.
13. To reduce rural – urban imbalances through projects aimed at developing rural areas.
14. In all, development planning gives direction to the economy as a whole.

EVALUATION;
Enumerate some factors which influence economic development
WEEKEND ASSIGNMENT
Objectives Test
1. Economic growth is the_________________
(a) Rate of increase in a country’s full employment and real output
(b) Rate of increase in a nation’s total population
(c) Increase in the growth rate of a nation’s population

(d) Rate of increase in inflation

(e) Growth in birth rate
2. Given the present state of the Nigerian economy, which of the following measures will promote a
more rapid economic development
(a) Concentration on agricultural export
(b) Diversification of the economy
(c) Complete dependency on foreign loans
(d) Establishment of more colleges of technology
(e) Reliance on foreign trade.
3. All the following points are the causes of Nigeria’s economic problems except
(a) Chronic balance of payments deficit
(b) Encouragement of exports
(c) Mounting debt service payments
(d) Uncontrolled foreign exchange utilization
(e) Double digit inflation
4. One of the ways by which the government can speed up economic development is through the -
------------
(a) Increase in consumption pattern of the people
(b) Encouragement of savings, investment and equitable distribution of income
(c) Increase in the rate of population growth so as to ensure that the country has a large labour
force
(d) Encouragement of importation of raw materials to produce consumer goods
(e) Promotion of corruption in the system
5. One of the characteristics of an under developed economy is ----
(a) Over population
(b) Under population
(c) High capacity utilization
(d) High literacy rate
 (e) High level of investment
ESSAY TEST
(1) Why are West African countries said to be under-developed
(2) Carefully distinguish between economic growth and economic development
(3) Examine the problems which slow down the pace of economic development in west African
(4) What measures are presently taking to develop the rural areas of your country
(5) Discuss the alternative explanation of economic development
PRE-READING ASSIGNMENT
Read about the elements of developing planning
WEEKEND ACTIVITY
Explain the types of economic planning
REFERENCE TEXTS
(1) Essential Economics for SSS Book 3 by Cole Esan Ande; Tonad Publishers ltd
(2) Fundamentals of Economics for SSCE by R.A.I. Anyanwuocha; Africana First Publishers Plc

WEEK 7: MID-TERM BREAK ASSIGNMENT SHOULD BE GIVEN

WEEK 8
SUBJECT: ECONOMICS
CLASS: SS 3
TOPIC: INTERNATIONAL ECONOMIC ORGANIZATION
CONTENT: 1. Historical development, Aims, Objectives and roles of the organizations
2. ECOWAS, ECA, IMF, IBRD, ADB, OPEC, WACH, UNCTAD, GATT
Sup-Topic 1: Economic Organization
Several international organizations exist to encourage trade, economic co-operation and development among nations of
the world. Some of these organizations have almost all the independent countries of the world as members. They
include International Monetary Fund (IMF), International Bank for Reconstruction and Development (IBRD), African
Development Bank (ADB), European Economic Community (EEC), Organization of Petroleum Exporting Countries
(OPEC), United Nations Conference on trade and Development (UNCTAD), Economic Commission of Africa (ECA),
West African Clearing House (WACH), etc.
ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS)
Formation: The economic community of West African States (ECOWAS) was founded on 28th May 1975 in Lagos,
Nigeria. It comprised all the 16 independent nation of West Africa. Abuja is the administrative headquarters of the
community and Lome is the fund headquarters. Nigeria under the leadership of general Yakubu Gowon and Togo
under President Eyadema initiated the formation of the sub-regional economic grouping. Nigeria, Ghana, The Gambia,
Serria Leone and Liberia and the English speaking or Anglophone countries. Senegal, Guinea, Togo, Mali, Benin
Republic, Burkinafaso, Cote de I’voire, Mauritania, and Nigeran Republic are French speaking or Francophone
countries while Cape Verde and Guinea Bissau are Busophone or Portugese speaking countries.
AIMS AND OBJECTIVES OF ECOWAS
1. Co-operation and development: to promote co-operation in all field of economic activities. E.g. energy, agriculture, etc.
2. Trade liberalization: to establish a common market with the aim of liberalizing trade within the region
3. To ensure economic stability: they are also to increase and maintain economic stability with the economic
4. To abolish trade barriers and restriction: one of the aim of ECOWAS was to abolish trade barriers among the member
nations
5. To foster closer relation: this could be achieved by encouraging free movement of citizens, goods and services
6. To increase production: it was formed with the hope of ensuring faster regional industrialization to promote increased
production of goods.
7. Integration of both fiscal and monetary policies: it ensures fiscal and monetary integration of West Africa states
8. Development of African continent: it is aimed at encouraging the progress and development of the Africa continent
9. To raise the standard of living: it was designed to raise and promote the standard of living of the people through co-
operation within the sub-regional
10. Establishment of common fund: this fund is for compensation, co-operation and development between the sub-regions.
11. Poverty reduction: to reduce poverty in West Africa by working towards having viable economies.
ORGANS OF ECOWAS
1. The Authority of Heads of state and Governments
2. The council of Ministers
3. The executive Secretariat
4. The Tribunal of The Community
5. Technical and Specialized Commissions
ADVANTAGES TO BE DERIVED FROM ECOWAS
1. Wider market: The elimination of tariffs walls and other restrictions to trade will allow an expansion of trade in
the sub-region, leading to wider market.
2. Improved Standard of Living: They will be able to import goods and services at relatively low prices from
member countries instead of importing costlier goods from other areas.
3. A base for social and economic development: The amount of capital available for development will be greater
due to the pooling of resources. This will lead to economic and social transformation.
4. A reduction in unemployment: The increased employment will be brought about by the free mobility of labour
and capital within the sub-region.
5. A higher level of output of goods and services: This will be achieved through higher degree of specialization.
6. Effective bargaining power of member states: The member countries will stand as one entity and be in the
position to have a more effective bargaining power in world trade.
7. Conservation of foreign exchange by eradicating smuggling in the area.
8. It leads to increase in foreign investment: This is due to wider market available, increased mobility of factors of
production, great prospects for political stability, etc.

INTERNATIONAL MONETARY FUND (IMF)

The IMF is one of the most well-known international economic organizations. Its headquarters is in Washington DC,
United states of America. It was set up immediately after the Second World War in 1944.
AIMS AND OBJECTIVES OF IMF
(1) To make all currencies freely convertible thereby encouraging international trade
(2) To provide some means of assisting member nations having temporary balance of payments difficulties
(3) To keep exchange rates of international trading nations stable
(4) To provide stand-by credit facilities for nations in need of assistance
(5) To promote international monetary co-operation
 ADVANTAGES/ BENEFITS OF IMF TO WEST AFRICA
1. Some West African countries have obtained from IMF to solve their balance of payment problems.
2. Technical and financial advice has been given to West African countries to overcome their economic
problems.
3. It has helped many West African countries to obtain vital statistics required for planning through
conducting country surveys.

THE INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT

(THE WORLD BANK)
The International Bank for Reconstruction and Development (IBRD) otherwise known as the World Bank was
established in 1944 with its headquarters in Washington D.C.
AIMS AND OBJECTIVES OF IBRD
(1) To provide private foreign investment for economic development in less developed nations of the
world
(2) To provide loans for the reconstruction of ruined economies caused by the Second World War or
natural disasters such as floods, earthquakes, etc.
(3) To encourage infrastructure developments particularly in less developed countries
(4) Promotion of foreign private investment by guaranteeing such investment and by going into
partnership with the foreign investors.
(5) To provide technical assistance especially to the developing countries that requires such assistance.

GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)

In 1974, representatives from twenty-three countries signed a general agreement in Geneva, with the aim of
maintaining trade by removing trade barriers among themselves. Since that time, many countries have joined the
agreement. The following, among others are the primary aims of the agreement
(1) To reduce or remove trade barriers between member countries
(2) To improve the possible unfavorable situation in any member country
(3) To promote international confidence in tariff policies through consultation between member
nations

PERFORMANCE OF THE AGREEMENT

The meetings of member countries are held yearly. Since its inception, many tariffs have been reduced. In 1963,
President Kennedy agreed to reduce America’s tariffs. Other countries have done so, particularly among the
developed countries. The most important criticism of GATT is that it has benefited the wealthier members than
the poor member nations. This is because most tariff reductions have been for industrial goods from the already
industrialized countries, rather than for primary products coming from the less industrialized countries. As a
result of this, most less developed countries feel that they have more to gain in other organizations that from
GATT.
WEST AFRICAN CLEARING HOUSE (WACH)
A West African Clearing House was established on 14 March 1975 in Lagos on the signing of an agreement by
Governors of Central Banks of Gambia, Ghana, Liberia, Nigeria and Sierra Leone, and ratified by their
governments. The agreement came into force after it was ratified by five West African Central Banks. One of the
primary aims of WACH is to promote cooperation among the member countries, particularly in the area of
international monetary transactions. It serves as a clearing house for the region. Twelve countries, i.e. Benin,
Burkina Faso (Upper Volta), Cote d’Ivoire, Gambia, Ghana, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone
and Togo are current members of the association.

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD)

This association was established on 30 December 1964 as a permanent organization of the General Assembly of
the U.N.O. by resolution 1995
The Aims and Objectives of UNCTAD
(1) Help structure traditional patterns of international trade in order to enable developing countries play
their part in World commerce
(2) Increase trade, both with the industrialization countries and among the developing countries.
(3) Promote international trade, especially with a view to accelerating economic development
(4) Formulate principles and policies on international trade and related problems of economic development

ECONOMIC COMMISSION FOR AFRICA (ECA)

The Economic Commission for Africa (ECA) was formed in April, 1985 following the implementation of a
resolution of the United Nations. The organization has fifty two members, Nigeria inclusive. While the ECA
functions as a subcommittee of the UNO, its main duty centers on economic matters having to do with the
continent of Africa.
The Objectives of ECA
(1) Promoting economic and social development in Africa
(2) Strengthening the economic relations of the African countries whether among themselves or with other
countries
(3) Conducting studies on economic, technical and development problems as they relate to the African
countries.

AFRICAN DEVELOPMENT BANK (ADB)

The African Development Bank (ADB) was established in September in 1964 and it commenced operation in
July 1966. It was initially established with twenty three members and it presently boasts of more and a very large
membership. The organization has its headquarters in Abidjan, Cote d’Ivoire and its aims include:
(1) The promotion of investment in African countries
(2) The provision of assistance for development projects and programmes in the member nations
(3) Embarking on activities that will improve the general well-being of the people in African countries
(4) Enhancing the development of African continent in general
The bank has been noticed to be placing special emphasis on the development of social infrastructures,
agriculture and industry

ORGANISATION OF PETROLEUM EXPORTING COUNTRIES (OPEC)

The Organization of Petroleum Exporting Countries (OPEC) was established in 1960 in Baghdad, the capital
of Iraq by five Arab countries which are Iraq, Saudi Arabia, Iran, Kuwait and Venezuela. The organization
now has more members from almost all the continents and Nigeria joined it in 1971.
 OBJECTIVES OF OPEC
(1) Unifying the petroleum prices of the member nations
(2) Working towards the stabilization of oil prices in the international market
(3) Maintaining a steady income for the member countries

WEEK 9
SUBJECT: ECONOMICS
CLASS: SS 3
TOPIC: CURRENT ECONOMIC PLANS
CONTENT: 1. Meanings and objectives of NEEDS, MDGs AND VISION 2020
1. Economic development challenges
Sub-topic 1: Meaning and Objectives of NEEDS, MDGS and Vision 20:2020
Nigeria, like other developing nations, has faced several development challenges. In an attempt to
overcome such challenges, Nigeria has over the years embarked on a number of economic programmes
and long term development strategies. Among these are Millennium Development Goals (MDGs),
National Economic Empowerment and Development Strategies (NEEDS), and Vision 20:2020

Sub-topic 2: National Economic Empowerment and Development Strategy (NEEDS)

NEEDS is a reform agenda instituted by the Nigerian government in March 2004 as a working
framework for the reform of the Nigerian socio-political and economic structure. It aims to promote
macroeconomic stability through transparent rule-based and sound fiscal, monetary and foreign exchange
policies, improve efficiency and transparency in the public sector and promote private sector investment
through improvements in infrastructure, privatization and financial sector reforms. While the federal
government operates under NEEDS, state governments operate under SEEDS (State Economic
Empowerment and Development Strategy)

Objectives National Economic Empowerment and Development Strategy (NEEDS)

(1) Wealth creation
(2) Employment generation
(3) Poverty reduction
(4) Value reorientation

MILLENIUM DEVELOPMENT GOALS (MDGs)

The Millennium Development Goals are a UN initiative. The Millennium Development Goals (MDGs )
are the eight international development goals that were established following the Millennium Summit of
the United Nations in 2000,following the adoption of the United Nations Millennium Declaration . All
189 United Nations member states at the time (there are 193currently), and at least 23 international
organizations, committed to help achieve the following Millennium Development Goals by2015:
1. To eradicate extreme poverty and hunger
2. To achieve universal primary education
3. To promote gender equality
4. To reduce child mortality
 5. To improve maternal health
6. To combat HIV/AIDS, malaria, and other diseases
7. To ensure environmental sustainability
8. To develop a global partnership for development

Each goal has specific targets, and dates for achieving those targets. To accelerate progress, the G8
finance ministers agreed in June 2005 to provide enough funds to the World Bank, the International
Monetary Fund (IMF) and the African Development Bank (ADB) to cancel $40 to $55 billion in debt
owed by members of the heavily indebted poor countries (HIPC) to allow them to redirect resources to
programs for improving health and education and for alleviating poverty.

Relevance of MDGs
1. They serve as guidelines for policy making. For example, the Yaradua’s Seven-Point Agenda.
2. Targets to be achieved by government to reduce poverty are set by MDGs.
3. MDGs programmes touch on the daily lives of all and are meant for their benefit.
4. There are targets against 2015 for each of the eight goals.

VISION: 20:2020
This is a long term economic transformation blue-print. A ten year development plan, for restructuring
Nigeria’s economic growth to enable the country become one of the world’s twenty (20) leading
economies by 2020. It is to be implemented by using series of medium-term plans.

Objectives of Vision 20:2020

The main objectives are to:
1) Eradicate extreme poverty
2) Enhance access to quality health-care
3) Provide accessible and affordable housing
4) Build human capacity for national development
5) Improve gender equality and empower women
6) Foster a culture of recreation and entertainment for enhanced productivity.

Sub-topic 3: ECONOMIC DEVELOPMENT CHALLENGES

Economic development challenges refer to some problems or challenges which the economy is experiencing that
tends to draw back the growth and development of the country. Example of such economic development challenges are
poverty, debt burden and debt relief, HIV/AID eradication, power and energy supply, resource and corruption.
Poverty

1. Poverty
Poverty is an abstract word which can be associated with many things. It means a lack of material possessions
belonging to a person. It is typically measured in monetary term. It also equates to a lack of some of the most basic and
important material goods such as shelter, clothing, gender equality, health facilities, education, jobs and increases in
diseases and sickness.

Effects of Poverty
1.High incidence of diseases
2.Low standard of living
3.Low level of productivity of the work force
4.High incidence of social vices
5.Inadequate level of education
6.Frequent social crises
7.Low life span

Agencies for Poverty Alleviation

Some agencies have been set up in order to eradicate poverty in Nigeria, some of them are: The National Poverty
Eradication Programme (NAPEP), the National Poverty Eradication Council, the National Directorate of
Employment (NDE), etc.
Methods of Poverty Alleviation and Eradication
1.Skill acquisition programmes: People are made to acquire skills required to create wealth as self-employed or in
wage-employment, either as semi-skilled or skilled workers. E.g. NAPEP youth empowerment scheme (YES)
with its Capacity Acquisition Programme (CAP) give short-term training to unskilled and unemployed youths
while Mandatory Attachment Programme (MAP) trains youths who have completed their NYSC by attaching
them to construction firms, manufacturing and financial institutions.
2. Provision of Credit Facilities: Soft loans are provided to those who have acquired skills in the Youth
Empowerment Programmes.
3.Direct loans: This could be given to farmers or other producers at cheap interest rates to enable them expand
production.
4.Rural Infrastructural Development: Development of infrastructures especially in rural areas helps to improve the
standard of living of the people. Provision of water, electricity, good roads, etc would reduce the level of
poverty. Rural Infrastructures Development Scheme (RIDS)
5.Provision of Social Welfare Services: Welfare services will touch directly on the lives of the less privileged
would help to reduce the level of poverty. The Social Welfare Services Scheme (SOWESS) of NAPEP is in
charge.
6.Reduction of youth restiveness and social vices: - Youth restiveness and some social vices could be reduced by
engaging the youth in meaningful activities. Community Skill Development Centres (CSDC) is set up to
provide skills in areas of youth restiveness.

HIV/AIDS and the Economy

HIV means Human Immuno-deficiency Virus; a virus that weakens the immune system, ultimately causing
AIDS. AIDS refers to Acquired Immune Deficiency Syndrome, a cluster of medical conditions, often referred to as
opportunistic infections and cancers and for which, to date, there is no cure.

Challenges of HIV to Economic Development

1.It imposes suffering on individuals and their families: It weakens the immune system of the victims and makes
open to any disease.
 2.It has effect on efficiency of labour: It weakens the victims and makes them to be less efficient in their work
places.
3.It affects fundamental rights at work with respect to discrimination and stigmatization: People try to avoid the
carrier of HIV/AIDS and this really affects them socially and psychologically.
4.It reduces the supply of labour: Those who are victims cannot fit in into their jobs because of its weakening
effects on them.
5.High cost of labour: Reduction in the number of labour force as a result of this disease makes the labour cost to
be very high.
6.High expenditure by government and medical research organizations: Government spends so much on research
to curb the problem and to sustain those who are infected already.

Evaluation
1(a). List the Millennium Development Goals.
(b) Examine the extent to which your country has achieved these goals
2(a) List the main objectives of vision 20:2020
(b) To what extent have these objectives been attained?
3(a)What is meant by poverty?
(b) How has poverty affected the economic development of your country?

WEEK 10
SUBJECT: ECONOMICS
CLASS: SS 3
TOPIC: ECONOMIC REFORM PROGRAM
CONTENT: 1. Consolidation of Financial Institutions
2. Privatization and Commercialization
3. EFCC and ICPC, NAFDAC, SON.
Sub-Topic 1: Privatization and Commercialization
Privatization: This can be defined as the deliberate policy and action of government in transferring the ownership,
control and management of government owned enterprises to private individuals. Privatization goes beyond
restructuring and re-organization of public sectors. It also deals with the wholly or partly transferring of public
enterprises to private sectors.
Objectives of Privatization: There are some reasons for privatizing public enterprises in a country.
1. Free Market Economy: Privatization is meant to embark on systematic conversion of public enterprises to private
sectors to permit free market economy.
2. Restructuring: Privatization restructures the public sectors in a country in order to identify and also reduce the
dominated number of unproductive investments and firms in the public sector.
3. Employment Opportunities: Like commercialization, privatization creates employment opportunity and avenue
for acquiring new knowledge and technique in the production and distribution of essential commodities in the
country.
4. Elimination of Losses: the policy is to ensure constant making of profit by private firms and eliminate losses in
the economy.
5. Efficiency in the use of resources: the policy is implemented to ensure efficiency in the use of resources by the
economic sectors.
COMMERCIALIZATION
Definition: Commercialization can be defined as a deliberate action and policy of the government to make state or
public enterprises more efficient and profit oriented. In other words, commercialization entails restructuring, re-
organizing or re-activating of public enterprises to make them more productive, profit-oriented and self-sufficient
without depending or relying on government aids. Commercialization of public enterprises can be in form of full
commercialized business or partly commercialized enterprises. These enterprises are re-organized and re-structured
public corporation that are expected to operate in the same manner as private enterprises with the primary motive of
profit maximization without government support.
Objectives of Commercialization
1. Growth: One of the reasons for commercialization of public enterprises is to ensure quick growth and expansion of
business enterprises that belong to the government.
2. Employment Opportunities: It is also to create employment opportunities for the citizens as a result of business
expansion and profit generation.
3. Reduction of Embezzlement and Corruption: commercialization of public enterprises was established to reduce
embezzlement, corruption and misappropriation of public funds.
4. Funds Raising: Another objective of commercialization is freedom of public corporations to raise funds and
maintain some business affairs without government interference.
5. Profit Making: commercialization enables public corporations to be diverted from non-profit ventures to profit-
making enterprises.

Sub Topic 3 : EFCC and ICPC, NAFDAC, SON.

EFCC and ICPC
EFCC- ECONOMIC AND FINANCIAL CRIMES COMMISSION
EFCC was established in 2003 as a law enforcement agency to investigate cases of financial crimes. The commission
investigates people in all sectors who appear to be living above their means.
Its main Objectives are:
i. To investigate financial crimes such as advance fee fraud (419) and money laundering.
ii. To investigate people who appear to be living above their means.
iii. To prosecute cases of financial crimes.
Achievement of EFCC
i. Investigation of corruption cases: In September 2006, 31 of the 36 state governors were under
investigation for corruption.
ii. Prosecution and Conviction of High Profile corrupt individuals in Nigeria.
Independent Corrupt Practices Commission and other related Offences (ICPC)
ICPC is an agency inaugurated on 29th September 2000. It was given the mandate to prohibit and
prescribe punishment for corrupt practices and other related offences

Its Objectives are:

i. To receive and investigate reports of corruption and in appropriate cases prosecute offenders.
ii. To examine, review and enforce the correction of corruption prone systems and procedures of
public bodies, with a view to eliminating corruption in public life.
iii. To eradicate and enlighten the public on and against corruption and related offences with a view
to enlisting and fostering public support for the fight against corruption.
iv. To examine documents, which include share certificate, bank books and other accounting
documents
v. To search, arrest, seize and summon persons for examination and information gathering on
corruption and related offences.
vi. Empowered to carry out any other functions as may be prescribed by ICPC Act2000.

Achievements of ICPC

i. It receives petitions relating to corruption in the public sector: - Within three years of
existence, 942 petitions were received and by August 2003, 400 of the petitions were
being investigated.
ii. It has prosecuted some prominent Nigerians. These include Ghali Umar Na’Abba, former
speaker of the House of Representatives: Fabian Osuji, former Minister of Education, and
Cornelius Adebayo, former Minister of Communication and Transport.
iii. It has raised public awareness on corruption through public enlightenment campaign:
More people are aware of the dangers posed by the stealing of public money and are
therefore willing to co-operate to report cases of corruption.
iv. Anti-corruption units have been established in Federal Ministries and parastatals, private
and public educational institutions, etc.

Standard Organization of Nigeria (SON)

The highest decision-making body of the SON is the Nigerian Standards Council (NSC). Its main
functions are;

i. Advising the Federal Government on the national policy on standards, standards specifications,
quality control and metrology.

ii. Determining the overall financial, operational and administrative policy of the organization.

iii. Determining appointments, remuneration and other conditions of service.

ROLES OF SON

i. To organize test and do everything necessary to ensure compliance with standards designated and
approved by the council.

ii. To undertake investigations as necessary into the quality of facilities, materials and products in
Nigeria, and to establish a quality assurance system including certification of factories, products
and laboratories.

iii. To ensure reference standards for calibration and verification of measures and measuring
instrument.

iv. To compile an inventory of products requiring standardization

v. To compile Nigeria Industrial Standards.

The Statutory Functions of the SON are as follows:

i. To investigate the quality of facilities, materials and products in Nigeria, and establish a quality
assurance system, including certification of factories, products and laboratories.

ii. To ensure reference standards for calibration and verification of measures and measuring
instruments

iii. To compile an inventory of products requiring standardization

iv. To foster interest in the recommendation and maintenance of acceptable standards by industry
and the general public.

v. To develop methods for testing materials, supplies and equipment, including items purchased for
use by State and Federal departments and private establishment

vi. To register and regulate standard marks and specifications

vii. To undertake preparation and distribution of standard samples

viii. To establish and maintain laboratories or other institutions, as may be necessary for the
performance of its functions.

ix. To advise State and Federal departments of Government on specific problems relating to
standards.

x. To sponsor appropriate national and international conferences

xi. To undertake research as may be necessary for the performance of its functions.

xii. To use research facilities, whether public or private, according to terms and conditions agreed
upon between the organization and the institutions concerned.
 NAFDAC: The National Agency for Food and Drug Administration Commission
The National Agency for Food and Drug Administration Commission (NAFDAC) was established by Decree No 15 of
1993 as amended. It is an agency of the Federal Ministry of Health. It has the mandate to regulate and control quality
standards of foods, drugs, cosmetics, medical devices, chemicals, detergents and packaged water imported or
manufactured locally and distributed in Nigeria.
Functions of NAFDAC: The agency is to among other things do the following:
1. Regulate and control the manufacture, advertisement, importation, exportation, sale and use of drugs, foods,
cosmetics, medical devices, chemicals, detergents and packaged water.
2. Establish quality assurance system on production premises, raw materials and packaging of the regulated products.
3. Give standard specifications and guidelines on the production, importation, exportation, sale and distribution of the
regulated products.
4. Undertake the certification of production sites and the registration of foods, drugs and other regulated products.
5. Take measures that will put in check the use of narcotic drugs, psychotropic and other health impairing substances.
6. Establish and maintain relevant laboratories or other institutions necessary for the performance of its functions in
strategic areas of Nigeria
7. Undertake measures to ensure that the use of narcotic drugs and psychotropic substances are limited to medical and
scientific purposes
8. Sponsoring of relevant national and internal conferences as it deems appropriate.
9. Liaise with relevant bodies and establishment within and outside Nigeria in the performance of its functions
10. Complete standard specification, regulations and guidelines for production, importation, exportation, sale and
distribution of food, drugs. Etc
11. Compile and publish relevant data resulting from the performance of the functions of the Agency or from other
sources.
Achievements of NAFDAC
i. Six (6) zonal and thirty six (36) state offices have been created and equipped for easier accessibility and
for carrying out its mandate.
ii. Organisation of workshops to enlighten various stakeholders such as “pure water” manufacturers,
National Union of Road Transport Workers, Patent and Proprietary medicine dealers Association, etc.
iii. Holding meetings, in conjunction with the House Committee on health, with Ambassadors of countries
identified as exporting fake drugs to Nigeria, in order to stop the trend.
iv. Increasing the awareness of Nigerians and source of import of drugs to the issue of sub-standard and
fake drugs to Nigeria, in order to stop the trend.
v. Achieving excellent results in the fight against fake drugs to Nigeria. In order to stop the trend
vi. Launch of anti-counterfeiting technologies

EVALUATION
1.Define privatization.
 2.Write the full names of EFCC, ICPC, NAFDAC, SON
3.Enumerate five products regulated by NAFDAC
WEEKEND ASSIGNMENT
1. What is commercialization?
2. Distinguish between privatization and commercialization.
3. State three objectives each of privatization and commercialization.
4. Write short notes on the following: i. EFCC ii. ICPC iii. NAFDAC iv. SON

WEEK 11---Revision
WEEK 12-- EXAMINATION