ABUJA: Capital of Nigeria or Northern Nigeria? (3)

(III) INFRASTRUCTURES ARE CATALYSTS TO GROWTH AND DEVELOPMENT.

This conclusion follows from the 2 previously stated and proved assertions. It supplements the 2 earlier stated positions. In a way, it’s like a continuation but not actually a repetition. This point will be explained from two sides.

(A) Personal Level:

What is the difference between our ancestors and the modern man? Today, the measure of progress or standard of living in any developed society is the amount of time and resources an individual expend in order to satisfy his basic needs. In the stone-age, our ancestors spent a substantial amount of the day trying to satisfy the basic human needs. They spent the whole day hunting, cultivating their crops, searching for water, preparing their food, weaving their clothes, building huts, e.t.c. As a result, they were left with practically very little time to devote to other endeavours.

It is very unfortunate to admit that in Nigeria, much has not changed
in this aspect. We still devote a substantial amount of our time, energy and financial resources into getting. basic human needs. This unfortunate fact deprives us of the opportunity of directing our enormous amount of time, energy and resources into self/professional development. Consequently, the level of our productivity as individuals and a society is minimal.

Furthermore, a well developed transportation network provided by the
government allows us to move from one place to the other at the shortest
time possible. Needless to say that the lesser the time it takes you to
move from one place to the other, the more time you have at your disposal for other productive economic and social activities. Millions of hours saved from traffic hold ups allow you to spend more time at work; attend an evening school or training courses for your professional development; spend more quality time with your families; attend more business meetings, sleep for more hours (Which is very useful for your health), deliver more goods and services; devote more time to sports, attend more vocational activities, e.t.c.

Since there is a correlation between output – which in economic terminology is called Gross Domestic Product, GDP, and the level of
development in a country, consequently, the more goods and services a
country produces, the richer its citizens. The richer the citizens of a
country, the higher their standard of living. The higher the standard of
living of the citizens of a country, the higher the quality of their
lives. The higher the quality of lives of the citizens of a country, the
longer the average life expectancy. The longer the average life
expectancy of the citizens of a country, the more wealth they generate
for themselves and the country. The lesser the time an individual
spend on satisfying his basic needs and moving from one point to the
other, the more productive and developed the society as a whole is going
to be – all things being equal.

Modern telecommunications networks also help in saving millions of man hours. With a modern telecommunications network, we are saved the ordeal of travelling from one end of the city to the other in order to get information, only to discover that the information needed is not yet available. Imagine after travelling for about 2.5 hours from one end of the city to the other in order to see a friend, a business partner or bureaucrat only to be told that he is absent and won’t be back very soon. You will have to spend another 2.5 hours and money to go back. With modern telecommunications networks, all you need to do is just to call and confirm if or/and when your friend, business partner or bureaucrat will be available. Millions of man hours saved from unnecessary travelling from one place to the other could be spent on more productive activities. And the more time we are able to save from making unnecessary trips, the more productive we are going to be. And the more productive we are, the richer we and the government become. Thus, in this regard, modern telecommunication networks not only make our lives more convenient and meaningful but as well acts as catalyst to growth and development.

BUSINESS LEVEL.

In business, there is what is called “barrier to entry.” As the name implies, barriers to entry, are barriers or obstacles that a potential entrepreneur must must jump or overcome in order to set up his business. If a potential entrepreneur is contemplating going into business in Nigeria, he must take into consideration the enormous cost of
acquiring, installing, protecting and maintaining his generators, absence of developed transportation networks, which increases the time it will take him to get to work and the cost of delivering his goods or services to his customers, lack of pipe borne water, absence of effective public security system, e.t.c. All these the above mentioned
are serious barriers or obstacles which are more than enough to discourage a potential entrepreneur from going into business. Standing between him and his dream are the monsters called “dilapidated infrastructures.” But if he eventually summons the courage to go into business, the odds are against him in his quest to build a successful business. Thus, by providing modern, adequate and functioning infrastructures, the government not only reduces or removes completely the barriers before potential entrepreneurs intending to go into business but as well increases his chances of succeeding in commerce. The absence of barriers to entry encourage a large number of potential entrepreneurs to go into business. By providing infrastructures, the government helps in stimulating investments and more business transactions. The more businesses that are opened, the more business transactions. The more business transactions the more people are
employed. The more the number of people that are employed, the more goods and services are produced by the populace. The more goods and services that are produced by the populace, the richer the populace. The richer the populace, the lesser the poverty in the country. The richer the populace and society as a whole, the more the amount of taxes the government collects. The more taxes the government collects, the richer the government in general. The richer the government, the more it could afford to spend not only in maintaining existing infrastructures but also in building more infrastructures, hospitals, schools, universities and protecting the lives and properties of its citizens.

In a nutshell, by providing or investing in infrastructures, the government invariably not only provide the catalyst for growth and development, but in a way, is also the biggest co-investor for all potential, existing investors and its citizens. Therefore, from this analysis, we can infer that this scenario is a win-win relationship between a competent and reliable government and its citizens.

Foreign Direct Investment.

In addition to what has been said, it is also worth mentioning that modern and functioning infrastructures play a very important strategic role in attracting Foreign Direct Investment (F.D.I.) to a country. Trillions of dollars are invested by foreign investors in different countries every year. Every country, including even the United States, with the largest economy in the world, directly or indirectly compete for foreign direct investments.

Supposing you are a foreign investor, who is considering setting up a factory in a developing country, what factors will you take into

consideration in choosing the country to set up your plant? If you are a shrewd business man, then apart from the tax law, general business climate that operate, the major and decisive factor in in your decision should be the level of infrastructure development in the country. Why? Because as has already been pointed out earlier, modern and functioning infrastructure reduces drastically the cost of doing business.

Thus by investing in infrastructure projects, a country strategically position itself as a serious competitor in the foreign direct investment market. Needless to say that all things being equal, the more foreign investments a country is able to attract, the more people are employed. And the more the people that are employed, the more business transactions. The more business transactions, the more the taxes the government collects. The more taxes the government collects, the richer it becomes.

BUSINESS VALUATION: TANGIBLE AND INTANGIBLE ASSETS

A substantial part of our analysis has been devoted to the importance of infrastructure projects in the lives of the citizens and the economy. In order to illustrate other very important projects, apart from infrastructure projects, that a competent and responsible government must implement in order to for its citizens to get the best out of life and make their lives more meaningful, the concept of business valuation will be used.

Companies usually carry out a business valuation of their businesses whenever a Merger and Acquisition (M&A) is in the offing or are about to go public by selling its shares through an Initial Public Offering (IPO). In business valuation, the assets of a company are divided into 2 parts: tangible and intangible assets. Tangible assets are assets that exist physically and can be seen or touched. They include land, machines, equipments, vehicles, plants, buildings, raw materials, e.t.c. Tangible assets are what the staff or workers use for production. With the exception of land, machines, equipments, vehicles, plants, e.t.c. depreciate in value with time. They include patents, intellectual property rights and most importantly the “human resources” or “professional skills” of the company’s personnel.

In a way, infrastructure are like tangible assets that the citizens use for production. The intangible assets are the “invisible” assets of a company. In many cases, they are worth much more than tangible assets. This should not be a surprise. Afterall, it is the knowledgeable employees that design the sophisticated machines, equipments, drugs, made the inventions for the awarded patents, intellectual rights, e.t.c. In non-manufacturing companies i.e. companies that offer only professional services like accounting, auditing, designing, consulting, e.t.c., the value of their skilled personnel is even of more strategic importance. Their knowledgeable staff are their most valuable assets. To be more precise, they are invaluable to their companies because they are the goose that lay the golden eggs. Therefore, it’s no surprise that smart and successful companies invest heavily in the training, providing medical insurance and other benefits in order to keep them and attract more employees with very high professional skills.

We can again draw another parallel or analogue between a corporation and a country. The citizens should be the most valuable asset that a country must have; and neither gold, diamonds, oil nor gas. There are a number of countries who are not rich in mineral resources but have managed to build some of the strongest economies in the world thanks to their knowledgeable citizens. To a responsible and competent government, its citizens should be invaluable assets. By stating that the citizens should be the most valuable assets that a country must have, Of course I mean quality and not quantity. I mean well educated and healthy citizens, and not millions of unhealthy illiterates and semi-illiterates. Therefore, it’s the responsibility of a competent and responsible government to always strive to increase the value of its citizens.

Written by
Bode Eluyera
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