Theory question 108
Economic Growth and DevelopmentSection B
(a) What is a development plan?
(b) Discuss the various ways of financing economic development in Nigeria.
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(a) A development plan is a government document setting out targets for the economy over a period (e.g. 5 years), the projects to be carried out, their cost, and how they will be financed and carried out.
(b) Ways of financing:
1. Taxation (direct and indirect taxes).
2. Revenue from petroleum and other exports.
3. Internal borrowing: treasury bills, development stocks, loans from the central bank.
4. External loans from the World Bank, IMF, AfDB, foreign governments.
5. Foreign aid and grants.
6. Foreign direct investment.
7. Profits of public enterprises and sale of government assets.
8. Deficit financing (printing money) – inflationary.
9. Domestic savings mobilised through banks.
Define clearly, then explain each source.