Continental J. Social Sciences 3 (2010)

Continental J.
Social Sciences 3: 1 - 6, 2010 ISSN: 2141 - 4265

© Wilolud Journals, 2010 http://www.wiloludjournal.com
THE EFFECT OF COMPANY INCOME TAX ON DIVIDEND POLICY OF FINANCIAL INSTITUTIONS IN

NIGERIA
S.E. Samuel and S.J. Inyada

Department of Accounting, Kogi State University, Anyigba- Nigeria.
ABSTRACT
This study appraised the effect of company income tax on dividend policy of financial
institutions in Nigeria. In doing this, the researcher attempted to examine the nature and history
of taxation in Nigeria; explain the meaning and types of dividend policy and examine the
relationship between corporate income tax and dividend policy of financial institutions in
Nigeria. To enable an empirical comparison of the findings, a critical review of related
literature was carried out. A survey research method was used in the study. The analytical tools
used in analyzing the data collected for the study was regression analytical techniques. Data
was obtained from the published accounts of fifteen financial institutions in Nigeria. It was
discovered that there is significant relationship between corporate income tax and dividend
policy of the financial institutions in Nigeria.
KEYWORDS: Company Income Tax, Dividend Policy, Nigeria Stock Exchange, Dividend
Payout, Financial Institutions, Retained Earnings
INTRODUCTION
Dividend policy is the core component of a firm’s overall financial policy. It is comprised of a series of decisions
regarding how the firms distribute profits to their shareholders and it mostly includes basic contents about the
selection of dividend policy, dividend payout ratio and payout channel etc. Since the dividend policy determines
whether distribute the earnings to shareholders or self-finance through retained earnings, so it is an important issue
that receives more attention these days from both academics and practitioners (Li et al., 2006). Corporate income tax
is one of the major sources of revenue to all governments. In Nigeria, it is a factor to be reckoned with in Federal
Government’s budget. The taxes so collected come back to the taxpayers in form of services and to either
encouraged or discouraged some activities in the private sector; though, this depends on whether the policy of the
government is towards discouraging or encouraging such companies (Ola, 1999).
A lot of controversies regarding taxes and dividend policy have attracted many academic interests. The debate over
the importance of dividend policy was first sparked in Miller and Modigliani (1961), which suggested that both firm
financing and dividend policy was irrelevant for firm investment decisions and independent of the value of the firm
(Elston, 1999). Financial theorists such as Brennan (1970), Masulis and Trueman (1988) have stipulated that taxes
affect organisational corporate dividend policy. If this speculation were true, changes in corporate dividend payout
would be expected whenever the government changes its income tax policy (Wu, 1996). However, this does not
always apply especially in the banking business. Lintner (1956) had asserted that the major determinants of dividend
policy are the anticipated level of future earnings and the pattern of past dividend. This discrepancy may have
underpinned Modigliani and Miller (1961) theory, which provided a platform for the enormous debates and
researches on dividend policy. The financial sector is of interest in this research because of the structure of its
dividend as revealed in the study.
Dividends are usually paid to owners or shareholders of business at specific periods. This is apparently based on the
declared earning of the company and the recommendations made by its directors. Thus, if there are no profits made,
dividends are not declared. But when profits are made, the company is obligated to pay corporate tax including other
statutory taxes to the government. This is an essential corporate responsibility particularly profit making companies.
The taxes no doubt reduce the profits available at the disposal of the organisations, either to be retained or
distributed as a dividend to shareholders of the company. Dividend policy is the trade-off between retaining earning
and paying out cash or issuing new shares to shareholders. Some firms may have low dividend payout because
management is optimistic about the firm’s future and therefore wishes to retain their earnings for further expansion.
Frankfurter and Wood (1997) indicate, dividend pattern of a firm is a cultural phenomenon that changes
continuously in relation to environment and time. It is hard to deny that taxes are important to investors. Although,
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S.E. Samuel and S.J. Inyada: Continental J. Social Sciences 3: 1 - 6, 2010
dividend affects the shareholders tax liability, it does not in general alter the taxes that must be paid regardless of
whether the company distributes or retains its profit (Brealey, Myers and Marcus, 1991).
Taxation is not a new word in Nigeria or the world as a whole. In Nigeria, taxation has been in existence even before
the coming of the colonial men or the British. Taxation can be defined as the system of imposing a compulsory levy
on all income, goods, services and properties of individuals, partnership, trustees, executorships and companies by
the government (Yunusa, 2003). Anyafo (1996) defined taxation as a compulsory payment made by individuals and
organization to relevant Inland Revenue authorities at the federal, state or local government level. Tobansi-Ochiogu
(1994) sees taxation as a levy imposed by the government against the income, profit or wealth of the individual,
partnership, corporate organization. Ola (1999) defined taxation as compulsory levy imposed on a subject or upon
his property by the government to provide security, social amenities and create conditions for the economic well-
being of the society. Tax is not an assessment of benefits. It is a means of distributing the burden of the cost of
government (Jones, 1998). This study shall be directed at evaluating the effects of company income taxes on the
dividend policy of financial institutions in Nigeria.
The main objective of this study is to appraise the effect of corporate income tax on dividend policy of financial
institutions in Nigeria. Specifically, this study intended to:
I. Explain the nature and history of taxation in Nigeria.
II. Explain the meaning and types of dividend policy.
III. Examine the relationship between corporate income tax and dividend policy of financial institutions in
Nigeria.
To examine the impact of corporate income tax on dividend policy of financial institution in Nigeria critically and
objectively, the following null hypothesis was formulated and tested:
Ho: There is no significant relationship between company income tax and dividend of financial institutions in
Nigeria.
Company Income Tax in Nigeria: Nature and history

Income tax is one of the major sources of revenue to all government. In Nigeria, it is a factor to be reckoned with in
Federal Government’s budget the taxes so collected come back to the tax has over the years encouraged or
discouraged some activities in the private sector; though, this depends on whether the policy of the government is
towards discouraging or encouraging such companies (Ola,1999).
According to Azubike (2007), the history of taxation in Nigeria can be dated back to the era of Sahara trade and the
introduction of Islamic religion in Nigeria between 800AD and 1400AD. The rulers in the Northern Nigeria were
known as “Safawa”, Kings, who grew rich due to gifts and levies paid to them by their subordinates as taxes on
cattle and agricultural crops. The Islamic religion later introduced various forms of taxes namely: Zakat, Kurdin
Kasa, Shukka Shukka, Jangalia, Kharant etc. The Zakat was imposed on educational and charitable purposes. In the
south, the Obas and Ezes relied on tributes, arbitrary levies, special contributions at special festivals or events, fees,
present, all collected through the head of families as it system of taxation. The first legal backing of taxation was in
1904 when Sir Frederick Lugard introduced the Native Revenue Proclamation. This proclamation was further
enhanced in 1906. After independence in 1960, the government enacted three major tax laws, namely: Federal
Income Tax Act (FITA), 1961; Income Tax Management Act (ITMA), 1961 and Companies Income Tax Act
(CITA), 1961. The companies Income Tax Act (CITA) 1961 was applied to companies in Nigeria. It was later
repealed and replaced with the companies Income Tax Act (CITA) 1979 with amendment in 1993 up to 1999. The
Act is contained in chapter 60, Laws of the Federation of Nigeria (LFN) 1990. It is the sole responsibility of the
Federal government to administer corporate Income taxes in Nigeria.
Meaning and Types of Dividend Policy

In discussing the meaning of dividend policy, it is important to highlight what a dividend is. A dividend is simply
the money that a company pays out to its shareholders from the profits it has made (Droughty, 2000). Such
payments can be made in cash or by issuing of additional shares as in script dividend. Davies and Pain (2002)
however defined it as the amount payable to shareholders from profit or distributable reserves. Companies that are
listed in the stock exchange are usually obligated to pay out dividends on a quarterly or semi annual basis. The semi
2
annual or quarterly payment is referred to as the interim dividend. The final payment, which is usually paid at the
end of the financial year of the company, is known as the final dividend. Dividends are normally paid after the
corporate tax has been deducted.
Dividend policy is primarily concerned with the decisions regarding dividend payout and retention. It is a decision
that considers the amount of profits to be retained by the company and that to be distributed to the shareholders of
the company (Watson and Head, 2004). Theoretically, there are different types of dividend policies. These include
constant payout, progressive policy, residual policy, and zero policy and non-cash policy. Investors are seen to
belong to a particular group or clientele. This is because they tend to pitch their tent with a particular policy that
might suite them. This is the clientele effect of dividend policy (Hutchinson, 1995; Kolb and Rodriguez, 1996).
(i) Constant or fixed policy: The Company pays out a fixed amount of its profit after tax as dividend. Thus, the
company maintains a fixed payout ratio of dividend. Pandey (2005) define payout as the ratio of dividend to
earnings. A company may as a matter of policy, decide to constantly payout sixty percent of its after tax profit as
dividend to its shareholders and retaining the remaining fraction. This type of policy allows the shareholders the
opportunity to clearly know the amount of dividend to expect from their investments in the company. However as
noted by Watson and Head (2004), the policy could be traumatic to companies experiencing a volatile or fluctuating
profit earning. This is because of the uncertainty of its profit. If capital projects are to viable capital projects, the
policy can be chaotic.
(ii) Progressive policy: Payments on dividend is on a steady increase usually in line with inflation. This could result
in increasing dividend in money terms. The firm uses the policy as a ratchet. Every effort is made to sustain the
increase even though marginal. Seldom, the company may be constrained to cut down on dividend payout. This is to
enable it sustain its operations. This though not a frequent action as it sends a wrong signal to investors. Firms
operating this policy will opt to avoid paying dividends during the period rather than consistently cut down on the
dividend (Kolb and Rodriguez, 1996).
(iii) Residual policy: Dividends are just what is left after the company determines the retained profits required for
the future investment. This policy gives preference to its positive NPV (Net Present Value) projects and paying out
dividends if there are still left over funds available. Dividend becomes a circumstantial payment only paid when the
investment policy is satisfied. There is a tendency therefore that this type of policy could give rise to a zero dividend
structure. Firms may need to modify this policy to ensure that investors of the different clienteles are not chased out
by a strict application of the policy (Kolb and Rodriguez, 1996).
(iv) Zero dividend policy: Some firms may decide not to pay dividend. This is especially common in newly formed
companies that rather require capital to execute its projects. All the profit is thus retained for expansion of the
business. Investors who prefer capital gains to dividends because of taxation will naturally be lured by this kind of
policy. This type of policy is quite easy to operate and avoids all the costs associated with payment of dividends
(Watson and Head, 2004).
(v) Alternative policies: In order to give shareholders a choice between dividends or new shares, the company might
choose to buy back shares. This is share or stock repurchase. This has a significant advantage in terms of tax to the
shareholder. While the dividend is fully taxed just as ordinary income, the stock repurchase or buyback is not taxed
until the shares are sold and the shareholder makes a profit or capital gain (Ross, Westerfield and Jordan, 2001).
There is also the policy of stock dividends and split. Shareholders are given additional shares in lieu of cash to the
shareholders (Brealey, Myers and Marcus, 1999).
MATERIALS AND METHODS

A survey research method was used for the study. The major source of data shall be through the published accounts
of financial institutions in Nigeria. Though, relevant literatures including periodicals and journal articles giving
clues on the investment decision/policy, taxation etc also provide veritable data for the analysis. The research was
both qualitative and quantitative in its approach. The qualitative approach includes detail description explanation of
a phenomenon under study while the quantitative approach involves the use of numbers (Encarta Dictionaries,
2009). The methodology was empirical as it will implore statistical tools in analysing data obtained for the study.
The analytical tools used in analyzing the data collected for the study was regression analytical techniques. It has the
3
potential of predicting the values of the dependent variable given values of the independent variable (Martin and
Firth, 1983). The study population consists of all staff of financial institutions in Nigeria quoted on the Nigeria
Stock Exchange (NSE). A systematic sampling technique was used to select fifteen financial institutions in Nigeria.
The choice of the systematic Sampling technique was in order to get convenient samples that will be an adequate
representation of the study. This has the advantage of eliminating possible bias particularly in a survey (Smith,
1991).
RESULTS AND DISCUSSION

Table 1 and Table 2 show the Regression Summary and Coefficient of the dependent and independent variables used
to determine the relationship that exists between corporate income tax and dividend policy of financial institutions in
Nigeria via SPSS package (version 17.0).
Table 1: Regression Summary
Model R R Square Std Error of the Sig. F Change

Estimate
1 .552 .305 2779.540 .033
Source: SPSS Output File
Table 2: Coefficients
Unstandardized Coefficients Standardized

Model Coefficient t Sig.
B Std. Error Beta
Constant 494.657 1283.841 .385 .706
Tax .884 .370 .552 2.388 .033
Tables 1 and 2 show the Correlation between tax and dividend of fifteen financial institutions used in the study. The
correlation shows a perfect positive correlation between the tax and dividend. This indicates that tax weigh heavily
on the determination of dividend policy of financial institutions in Nigeria. In table 1 the value of R, coefficient of
correlation, is 0.552 which indicates a positive but moderate relationship between tax and dividend while the
coefficient of determination (r2) is 0.305 which mean that about 31% of the dependent variable is accounted for by
the independent variable and the remaining 79% is accounted for by other variables. The positive relationship
implies that as dividend increases, corporate tax increases. In table 2, the regression coefficient is 0.884 and the t-
statistics is 2.388. The level of significance/p-value is 0.033; this is 3.3% level of significance. That mean 96.7%
confidence interval which mean it is significant because its more than 95% confidence level and less than 5%
significant level. The significant level shows that the independent variable (tax) may necessarily be contributing to
the variation in the dependent variable (dividend). Therefore, the null hypothesis is not true, as the simple regression
analysis shows a significant effect of corporate income tax on dividend. This implies therefore that a change in tax
will significantly affect the dividend policy of the financial institutions in Nigeria.
The discussion of the findings of the study is based entirely on the research hypothesis, which is in line with the
research objectives. Dividends are taxed at shareholders marginal tax rate, while capital gains first are only taxed
when realized, and second, have a lower tax rate than the highest marginal personal tax rate. A high dividend policy
is justified if a firm does not have any good investment uses for its cash. It is better to return money to the
shareholders rather than invest in negative net present value projects, such as holding cash. Ross, Westerfield and
Jordan (2001) highlight that effective tax rates on dividend income are higher than the tax rates on capital gains. The
dividends are taxed as ordinary income while the capital gains are taxed at a relatively lower rate and are taxed when
the shares are sold. Thus, these options of accepting a cash dividend or differing it for a capital gain explains the
significant effect of the tax on the dividend as obtained in the study. A low dividend policy is justified to minimize
shareholders’ personal taxes. A high dividend policy could hypothetically make sense in a tax system with higher
4
rates on capital gains than on dividends. Similarly, if a firm’s shareholders are exempt from taxation, then the
rationale for paying low dividends would be reduced. The low dividend and extra policy is not appropriate for firms
in all industries. It is best for companies in industries where firms infrequently experience large but temporary
increases in earnings. It is not appropriate for firms with high, steady earnings. Mature, low growth firms are more
likely to follow a constant nominal payment, increasing the dividend regularly as earnings increase.
CONCLUSION
Based on the results and discussions above, the following conclusions can be deduced:
The result of the study is consistent with the findings of scholars and researchers with similar interest such as Jensen
and Johnson (1995); Miller and Scholes (1978, 1982). This study provides additional evidence that corporate income
tax affect the dividend policy of corporate organizations.
There is a significant relationship between corporate income tax and dividend policy of financial institutions in
Nigeria. Therefore, a change in corporate income tax rate will significantly affect the dividend policy of financial
institutions in Nigeria.
ACKNOWLEDGMENT
A number of individuals have contributed immensely in bringing this article to its present state. We are thankful to
all of them for their criticisms, help and encouragement. Even though time and space constraint would not permit us
to list their names, we must specifically express our gratitude to professor Akpa Abimaje Dr, Achua of Benue State
University, Makurdi, Nigeria; Dr. Ajachukwu, Mr. Rufai, Mr. Obinna, Mr. Audu, and Mr. Simon, and Gbegi all of
Kogi State University, Anyigba, Nigeria.
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Azubike, J.B.U. (2007). “An Evaluation of the Relevance of the Pioneer Income Tax Relief as an Alternative
Investment Incentive to Companies in Nigeria”. ICAN Students’ Journal, July/ September, 15-19
Brealey, R.A., Myers, S.C. and Marcus, A.J. (1991). Principles of Corporate Finance (4th Ed.).London: McGraw-
Hill.
Brennan, M. (1970). “Taxes, Market Valuation & Corporate Financial Policy” National Tax Journal, 23, 417-427.
Company Income Tax Act (1994). Federal Republic of Nigeria, Lagos: Federal Government Printer
Davies, T. and Pain, B. (2002). Business Accounting & Finance. Berkshire: McGraw-Hill.
Droughty, M. (2000). The Joy of Money. London: Simon & Schuster Ltd.
Elston, J. A. (1999). “Dividend Policy, Liquidity Constraints and Firm Investment In Germany”. Retrieved from:
www.bus.ucf.edu/wp/working%20papers/1999/9944_p.pdf
Encarta Dictionaries (2009). Redmond, WA: Microsoft Corporation
Frankfurter, G.M. and Wood, B.G. (1997). “The Evolution of Corporate Dividend Policy” Journal of Financial
Education, 23, 16-32.
Jensen, G. and Johnson, J. (1995).The Dynamics of Corporate Dividend Reductions. Financial Management, 24(4),
31-51
Jones, S.A. (1998). Principles of Taxation for Business and Investment Planning. United States: Irwin/McGraw-Hill
Kolb, R.W. and Rodriguez, R.J. (1996). Financial Management (2nd Ed.). Cambridge: Blackwell Publishers.
5
Hutchinson, R. (1995). Corporate Finance. Cheltenham: Stanley Thorne Ltd.
Lintner, J. (1956). “Distribution of Income of Corporations among Dividends, Retained Earnings and Taxes”. The
American Economic Review, 46(2), 97-113.
Li, L, Yin-feng, Q, Song, L and Man-shu, W. (2006). “Who Makes the Dividend Policy Decision and their Motives
for doing so?: Analysis based on a Questionnaire Survey of Non-state-Owned listed Companies in China”.
Retrieved from: www.ccfr.org.cn/cicf2006/cicf2006paper/20060128200110.pdf
Martin, E.T and Firth, J.R. (1983). Core Business Studies Statistics. London: Mitchell Beazley Publishers
Masulis, R.W. and Trueman, B. (1988). “Corporate Investment & Dividend Decisions Under Differential Personal
Taxation”. Journal of Finance and Quantitative Analysis, 23, 369-386.
Miller, M.H. and Modigliani, F. (1961). “Dividend Policy, Growth, and the Valuation of Shares” Journal of
Business, 34, 411-433.
Miller, M.H. and Scholes, M.S. (1978). “Dividend & Taxes”. Journal of Financial Economics, 6(4), 333-64
Miller, M.H. and Scholes, M.S. (1982). “Dividend & Taxes: Some Empirical Evidence”.Journal of Political
Economy, 90(6), 1118-1141.
Ola, S.C. (1999). Income Tax Law and Practice in Nigeria. Ibadan: Heinemann Educational Books (Nig) Plc.
Pandey, I.M. (2005). Financial management (9th Ed.).Delhi: Vikas Publishing House Pvt Ltd.
Ross, S.A.; Westerfield, R.W. and Jordan, B.D. (2001). Essentials of Corporate Finance (3rd Ed). Singapore:
McGraw-Hill.
Tobansi-Ochiogu, A.C. (1994). Nigerian Taxation for Students with Worked Examples. Enugu: A.C. Ochiogu
Publishers Ltd
Smith, C.B. (1991). A Guide to Business Research (2nd Ed.) Chicago: Nelson-Hall.
Watson, D. and Head, A. (2004). Corporate Finance: Principles & Practice (3rdEd.) Essex: Pearson Education Ltd.
Wu, C. (1996) Taxes & Dividend Policy. International Journal of Economics and Finance, 5, 110-122.
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Received for Publication: 12/04 /2010

Accepted for Publication: 02/05 /2010
Corresponding Author:
S.E. Samuel
Department of Accounting, Kogi State University, Anyigba- Nigeria.
E-mail: aglowsun@yahoo.com
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Continental J. Social Sciences 3: 7 - 17, 2010 ISSN: 2141 - 4265
INFORMAL SAVINGS MOBILIZATION AND INVESTMENT: A CASE STUDY OF ROTATING SAVINGS

AND CREDIT ASSOCIATIONS (ROSCA) IN KOGI STATE, NIGERIA
1
Adofu, I , 2Antai, E., And 3Alabi,O.
1
Department of Economics, Kogi state university, Anyigba, Nigeria, 2Business Development / Research Unit.
Baantai Farms (Nig) Ltd, Oron, Akwa Ibom, Nigeria, 3Department of Agricultural Economics, Kogi state university,
Anyigba, Nigeria
ABSTRACT
The rural economy of Nigeria despite the vortex of informal financial institutions lacks the
vital resource desperately needed for economic growth as a result of the poor rate of capital
accumulation. This paper examined the impact of informal savings mobilization on investment
in Kogi State, Nigeria using rotating savings and credits association in Kogi State as case
study, it specifically examines the purpose of loans/credits obtained, the nature of ROSCA in
the informal financial sector of Kogi State, the average savings and credits obtained by
members of ROSCAS. It also gathers opinion on whether grass root governmental intervention
in the activities of rural saving mobilization is necessary for effectiveness and also examined
the constraints/ perceived problems of members of ROSCAS. One hundred and eighty seven
(187) respondents was randomly selected from six (6) local government area of Kogi State
with the aid of well structured questionnaire, and analyzed using tabular analysis, percentage
rating and chi-square tool. The study revealed that 39.03% saved an average monthly sum of
between N 5000 – N10,000, 23.51%, 8.02% and 4.31% saved between N1000-N5000,
N10,000-N100,000 and above N100,000 respectively. Majority (71.12%) obtained credits
ranging between N10,000 – N100,000 the perceived problems/constraints identified includes
lack of trust/fear of default (26.20%), method of savings mobilization (23.52%), leadership
structure (13.36%), death of member (20.32%) lack of participation in decision making
(16.60%) as their major constraints. The study further revealed that informal savings
mobilization had no significant impact on investment in the rural sector of Kogi State while
government intervention at the grassroots level had significant impact on the promotion of
ethical savings mobilization to drive investment projects. Based on the findings of the study, it
is recommended inter alia that sustainable ROSCAs should be inaugurated per village unit to
broaden rural savings channels and also the proactive participation of the grassroots’ apparatus
of state in the disbursement of credits facilities, monitoring of project execution and
performance to be used as indicator for further credit grants for expansion.
KEYWORDS: informal, Saving, Mobilization, investment. Intervention, grassroots.
INTRODUCTION
Contemporary studies of developing economy have acknowledged the informal financial institutions as a major
player in the financial institutions. These derived from two school of thought viz the financial repression school
(McKinnon and Shaw 1973) and the structuralist school of thought (Hugon:1990). The former sees the emergence
of informal financial institution to be a result of the excessive regulation of the formal financial sector, while the
later argues that the informal financial sector exists to serve other social goals than, making higher profits. The
structuralist, therefore, considered the existence of informal financial institution to be a consequence of social rather
than pure economic motives (Hugon: 1990).
Though the size of the informal financial market is not easily determinable due to its complex nature and
institutions, it has been variously claimed that the informal financial sector in many developing countries,
particularly in Africa is as large as or even larger than the formal sector (Wai: 1980, Chandarvarkar: 1985, and
Christenseen: 1993). In some African countries, the quantum of loans transacted through informal financial
institutions exceeds the formal volume of resources intermediated through the formal financial institutions showing
an indicator that holds huge investment potentials. (Anyeetey and Hyuha: 1991).
In Taiwan, the ratio of financial loans to private enterprise from the informal financial institution averaged 30
percent during the period 1971-1988 There are two basic problems arising from the presence of a large informal
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Adofu, I et al.,: Continental J. Social Sciences 3: 7 - 17, 2010
financial institution. The first is its implication for financial intermediation. The second is its impact on monetary
policy and investment especially when a large amount of money is outside the banking system.
The first case is an indication that investment and savings potentials are high in relation to the size of formal finance.
There is thus a prevalence of substantial financial gap in the population, which is not yet serviced through the
banking system. Consequently, owing to the failure of the financial system to allocate resource efficiently to a
segment of the market, or the population, there is the tendency to patronize the informal financial channel for
investment funds.
In the second case, the central banks, ability to influence financial and monetary condition through manipulation of
deposit money banks’ (DMBs) reserve balance using indirect monetary policy instrument is impaired. Nnanna
(2001) identified the existence of dualistic financial market as a serious constraint to good money management and
investment in Nigeria.
In addition, government polices (fiscal and monetary) are normally formulated on the platform of the formal sector
in mind and it is as a result of policy failures that the searchlight is being beamed on the informal financial
institution. Given the inter-relationship between the formal and informal financial sector, policy measures directed at
regulating the formal financial systems, without addressing the factor which have given rise to the countervailing
influence of the latter.
Nigeria is a cash based economy whose financial institutions are relatively shallow vis-à-vis the size of the countries
gross domestic product (GDP). For instance broad money as a share of (GDP) has hovered around 13.0 to 28.7
percent, compared to 58.30, 43.0 and 45.0 percent in South Africa, Kenya, and Namibia respectively between 1996
and 2000. Currency outside bank as a percentage of broad money supply averaged 47.2 percent between 1991 and
2000 in Nigeria. Indicating that there are enormous resource outside the ambit of the regulating authorities (the
formal financial institution) that can be pooled for investment in infrastructural facilities, social amenities, industrial
development etc with a total of 23 deposit money banks in Nigeria, having a branch network of 4827 (3920 urban
and 907 rural) and the bank-customer ratio of 1:47589 (47589 persons per bank), the country is grossly under
banked. On the contrary, the informal financial associations, in various forms with an average membership of 10
persons per association are found in all the rural communities. Thus, it becomes imperative to understand the
informal financial institution in Nigeria, especially with respect to issues relating to it size, nature, structure, loan
administration, and cost of funds, investment potentials and the role of information in order to aid fashioning out
appropriate policy options. Such an investigation would also help in evolving a more pragmatic relationship with the
rural monetary authorities, towards proactive rural monetary management and its impact on investment in the
economy.
Informal financial markets have been identified as a highly heterogeneous group, incorporating all financial
transactions consummated outside the functional scope of formal financial regulations (Anyeetey and Hyula, 1991).
Informal network of financial markets participants include money lenders, rotating savings and credit association
(ROSCAs) mobile saving collectors, mutual assistance groups, landlords, neighbours friends and family members
(Meier 1970).
Informal financial intermediation in savings mobilization are easily identifiable in Nigeria because of the contiguity
of shared forms and characteristic, there is however, no identifiable distraction between informal financial
institutions operating in urban and those in rural areas. Also the volume of resources mobilized does not exhibit any
meaningful difference base on location. The informal financial markets operates mostly on the principles of Rotating
Saving and Credit Associations (ROSCAs), which have a long history in developing countries, and they continue to
be a major source of credit in African countries. Typically, a small group is formed from a village or family group
where enforcement costs are low because of powerful social sanctions. Each member agrees to contribute
periodically, certain amount into a common pool, so that each in rotation can receive one large sum. It is built on
trust and membership is often drawn from homogenous groups e.g. from the same ethnic background, same work
place or same neighbourhood. If a member defaults in repaying the loan, the community bans him and if a member
is banned from one group, he is rejected by the community.
8
ROSCAs is a group of individuals who agree to meet for a defined periods of time in order to save and borrow
together, “ROSCAs are the poor man’s bank, where money is not idle for long but changes hands rapidly, satisfying
both consumption and production needs”.
These groups of individuals come together and make regular cyclical contributions to a common fund, which is then
given as a lump sum to one member in each cycle. Participation is based on trust and social forces, and the desire to
continue to be a member. It can be considered as a form of informal microfinance. The details vary as membership
may be restricted by gender (often women only), ethnic group or place of residence the contribution amount varies
according to a number of factors, and especially the ability to reliably contribute a certain amount. Socio-economic
level is also an important criterion of membership. The cycle period and method of selecting a winner also vary.
Meetings can be regular or tied to seasonal cash flow cycles in the rural communities where each member
contributes the same amount at each meetings and one member takes the whole sum of money during the life of the
ROSCAs, and use it for whatever purpose she or he wishes. This method of savings is a popular alternative to the
risks of saving at home where family and relative may demand access to savings.
Every transaction is seen by every member during the meetings. Since no money has to be retained inside the group,
no record has to be kept unless otherwise stated.
These characteristics make the system a model of transparency and simplicity that is well adapted to communities
with LOW LEVEL of LITERACY and weak systems for protecting collective property rights. The system further
reduces the risk to members because it is time limited typically lasting no more than one year. This reduces the size
of loss should someone take funds early and not pay back. Variously called Esusu in West Africa and the Caribbean,
tontines in Cambodia, etibi in Oron nation, wichingye in Korea, arisan in Indonesia, xitique in Mozambique and
djanggis in Cameroon, ROSCA are informal or pre-cooperative microfinance groups that have been documented
around the developing world. A famous early study by anthropologist Clifford Geertz documented the arisans of
Modjokuto in eastern Java. He described them as intermediate institution forming up within peasant social structure,
to harmonize Agrarian economic patterns with commercial ones, to act as a bridge between peasants and trader
attitudes towards money and its uses”. The individuals in the ROSCA select each other, which ensure that
participation is based on trust and social force, and a genuine commitment to participate.
The multiplicity and spread of membership among different forms of institutions is equally common both amongst
the rural and urban clients, sanctions and loans recovery methods are broadly similar, between urban and rural
dwellers, across peoples, societies, communities and countries in almost all forms of informal financial institutions,
peer group pressure and cohesion provide the most potent tool for loan recovery, an attribute that is conspicuously
missing in the formal financial institutions, the membership pattern in usually widespread, but largely contiguous.
Thus, people who do not reside within a contiguous geographical location are not admitted.
ROSCAs are not registered with the government and efforts are made to keep government from intervening in the
management of their affairs, thus their activities are not regulated by government laws and edicts.
Basically, most savings among the relatively poor are held in the form of real assets. This equilibrium portfolio
allocation results from the poor performance of financial assets and from the strong demand for owning real assets
which are used directly in production. The poor performance of financial savings among the poor should not be
surprising, because financial savings is subject to precisely the same information and enforcement difficulties as
lending. Consequently, financial savings in the informal sector is held within close social groups in order to contain
the moral hazard and adverse selection problems associated with enlisting assets to strangers (Anyeetey and Udry:
1994) group savings schemes of one sort or another are known to operate in about half of all African countries
(Anyeetey and Udry: 1994). The group tends to be socially homogenous as a means of avoiding information and
enforcements difficulties. The group also tends to build social collateral (Besky and Coate, 1994) by increasing
information flows, providing benefits (which can be cut off) to members and serving as a focal point for social
interaction. Informal group savings, therefore, in addition to its direct role of mobilizing savings may serve to
ameliorate the information and enforcement difficulties associated with other financial transactions (Anyeetey and
Udry: 1994).
The major problem with domestic savings mobilization in Kogi state of Nigeria is that inadequate savings are being
mobilized to facilitate the required investment needed for economic growth. Also, the type of savings available that
9
is shrouding in principles based on uninformed and exoteric foreign economic models do not make indigenous
financial intermediations possible, Kogi states as well as Nigeria’s low and stagnant savings rates have not
compared well with regions and countries of Asia, given Nigeria the lowest savings rates among the developing
regions.
The Gross Domestic Savings being the most available measure of saving performance re-enforce this claims as
shown below, 17% GDS in 2006, compared with 26.0% in south Asia, 24.0% in Latin America and the Caribbean’s
and really 42.9% in east Asia and pacific countries (world bank 2007). The much lower level of savings in Kogi
state and Nigeria may explain much of the lower of economic activity in the region and the slower pace of growth.
Aside from savings rates, stability over time is crucial for smooth predictable investment and Nigeria again fares
worse than other developing countries, due mainly to exogenous shocks to primary commodity dependence; and not
taking the ‘Nigerian project’ as a national pride to defend.
Research had shown that savings potentials are relatively large and widely un-mobilized in the rural economy,
creating a lag in the capital accumulation potentials of the rural dwellers; it is against this background that the
following questions are posed in the study.
- What are the socioeconomic/demographic characteristics of the respondents (age, marital status, religion,
educational level, occupation).
- What is the average amount mobilized and granted as credits.
- What purposes are the credits utilized on
- What are the constraints of the respondents?
- Does the savings been mobilized encourage investment in sustainable projects.
- What is the grassroots government’s role in monitoring saving mobilization and disbursements in the rural
economy?
Objective of the Study: The general objective of the study is to assess the impact of informal savings mobilization
on investment in Kogi State, Nigeria.
The Specific Objective Include:

- Identify the socioeconomic/demographic characteristics (such as age, marital status, religion, educational
level, occupation) of the respondents.
- Observe the savings and credit pattern.
- Examine the purpose of credits obtained
- Identify the constraints of the respondent in mobilizing rural savings and the role of government.
- Ascertain if the mobilization of rural savings has any impact on the expansion of investment opportunities
and based on the findings; make appropriate distortions of informal financial institutions activities in
savings mobilization and its adverse effect on investment in Kogi State, Nigeria.
MATERIALS AND METHOD.

Area of study: The study was carried out in Kogi state of Nigeria. The state has twenty one (21) local government
areas and is located in the middle belt, North Central area of Nigeria, lies between latitude 7o, 15 minutes North and
longitude 7o, 32 minutes East on an altitude of four hundred and twenty meters above sea level. The state
experiences two major seasons, dry and wet seasons which favours the growth of varieties of food and cash crops.
The major economic activities of the people are farming; fishing, services and government employees and the major
crops grown are yam, cassava, and rice while the cash crops include cashew, oil palm, and Neem tree. Kogi State is
abundantly endowed with Iron Ore, Limestone and coal.
Population and sampling procedure: - The populations for the study are traders, farmers, catering and food seller,
tailors e.t.c in Kogi State, Nigeria who are members of ROSCAs group. Multi stage sampling was employed for the
study. The state was divided into three geographical zones with twenty one local government areas. The first stage
of the sampling involves selection of local government areas from each zone. Each of the geographical zones has an
average of seven local government areas which Two Local government was randomly selected in each local
government area. 10 ROSCA members were selected for the study from organized informal financial institutions
(ROSCAs) representing 15% of the population, making one hundred and eighty seven respondents as shown in
Table 1.
10
Data Collection: Data were sourced from primary sources. Data’s from primary sources were collected with the aid
of well structure questionnaire and oral interview/observation. The following were collected from the well structured
questionnaires:
1) Age measured in years.
2) Level of education measured in years
3) Family size the measured by number of heads per household.
4) Annual loan/income obtained and size of contribution measured in Naira.
Other information collected includes.

1) Purpose for which loan is collected.
2) Sex, mental status, religion.
3) Occupation of the respondents and based on this primary source of data collection, he analysis of the research
shall be done.
Analytical Technique: The data obtained from interview schedule was subject to descriptive and inferential
statistical analysis. Descriptive statistics for this study include frequency, percentages and means and a hypothesis
was tested using chi-square(Adofu,2007).
RESULTS AND DESCUSSION

Table 1: Analysis of sample selection
Selected local No of No. of No. of No. of
government area programme program respondent in sample
selected local govt. respondent.
Dekina Local 8 2 120 35
Government
Idah Local 5 1 80 25
Government
Lokoja Local 10 3 170 45
Government
Kabba local 5 1 70 25
government
Okene local 4 1 85 22
government
Ajaokuta local 5 2 108 35
government
Total 37 10 633 187
* Source: Field survey, 2009.
The respondents were requested to describe their socioeconomic characteristics, such as age, marital status, sex,
religion, level of education and occupation as presented in table 2.
Table 2 showed that 21 to 25 years were 12.3 %, 26-35 years were 28.0 %, and 36-45 years old respondents were
25.1 %, 46-55 were 18.7 % while those above 55 % were 13.5 %. This shows that majority of the respondents are
neither too young or too old as they constitute the active populations as such savings from ROSCA would be used
for beneficial projects. Majority of the sampled respondents are male (66.8 %) while female 33.2 %, on marital
status, the results indicates that 30.4 percent of the respondents are single, 55.2 % Married while 14.4 % are
widowed/divorced.
On religion, 47.06 % of the respondents are Christians, 32.09 percents are Muslims while 20.85 % are traditional
worshipers. The educational level of the respondents showed that 36.36 % of the ROSCA participants had no formal
education 23 % had adult literacy education, 29.94 % had primary education while 10.7 %had higher education.
On the occupation of the respondents, the result showed that 10.16 % of the rural women were engaged mainly in
11
Table 2:requency distribution of respondents according to demographic characteristic (such as age, sex, marital
status, religion, level of education and occupation).
Variables Frequency Percentage
(a) Sex
Male 125 66.8
Female 62 33.2
Total 187 100
(b) Age (yrs)
21-25 23 12.3
26-35 53 28.0
36-45 47 25.1
46-55 35 18.7
Above 55 29 15.5
Total 187 100
(c) Religion
Christianity 88 47.06
Islam 60 32.09
Traditional 39 20.85
Total 187 100
(d) Marital Status
Single 56 30.4
Married 104 55.2
Widowed /divorced 27 14.2
Total 187 100
(e) Level of education
No formal education 68 36.36
Primary education 56 29.94
Higher education 20 00.70
Adult literacy education 43 23.00
Total 187 100
(f) Occupation
Farming 19 10.16
Trading 29 15.57
Catering and food selling 28 14.97
Tailoring 20 10.69
Okada rider 31 16.58
Others 60 32.09
Total 18 7 100
farming, 15.51 % in trading, 14.91 % engaged in catering and food selling, 10.69 % are into tailoring, 16.58 % in
okada riding business while 32.09 % represent the other category (Those in other unspecified occupation such as
civil servant, shoe repairers, tax collection, mechanic operators etc.) Table further shows that respondents were
mainly self employed.
12
Table 3: Frequency distribution of purpose loan/credit obtained

Purpose Frequency Percentage
(a) human capital development 85 45
(b) business expansion 50 27
(c) others 52 28
Total 187 100
Table 4: Frequency distribution of respondents by mean Level of income

Level of income Frequency Percentage
(a) Below N 1000 12 6.42
(b) N 1000-N5000 36 19.25
(c) N5000-N10,000 70 37.43
(d) N10,000-N100,000 52 27.81
(e) Above N100-000 17 9.09
Total 187 100
Table 5: Frequency distribution of respondents by the nature of ROSCAs in the informal financial sector of Kogi
state,
Variables (membership by type Frequency Percentage
of ROSCAs)
(a) common ROSCAs 173 92.51
(b) commissioned ROSCAs - -
(c) promotional ROSCAs 14 7.49
Total 187 100
Table 6: Frequency distribution of respondents according to their average monthly savings with ROSCAs
Level of income saved Frequency Percentage
(a) Below N1000 44 23.51
(b) N1000-N5000 47 25.13
(c) N5,000-N10,000 73 39.03
(d) N10,000-N100,000 15 8.02
(e) Above N100,000 8 4.31
Total 187 100
Table 7: Frequency distribution of the respondents on the average monthly credit collected by members of ROSCAs
Variables Frequency Percentage
(a) below N100 - -
(b) N1000- N5000 11 5.88
(c) N5000- N10,000 39 20.86
(d)N10,000-N100,000 133 71.12
(e) above N100,000 4 2.14
Total 187 100
Condition for Giving Loan to Rural Dwellers by ROSCAs

The following are the pre-requisite loans to rural drivellers by ROSCAs
• You must be a registered member of ROSCA
• Intending borrowers must be a bonafide contributing members of ROSCA for a period not less than six
month.
• Members must attend meeting regularly and subscribe fully their daily, weekly or monthly share of the
common wealth and must well known in the soup
• Repayment of the loan is usually the time frame of the ROSCA season which is usually one year.
13
Purpose of Loan/Credit Obtained

As shown in table 3, the result revealed that majority of the respondents (45 %) used their loans obtained from the
scheme mainly for consumption purposes (Human capital development like self knowledge acquisition, education of
children, demonstration effect. Etc 27% used theirs to finance investment projects while 28% used theirs on others
on other unspecified purposes) implying that since majority of the respondents fall into the active adult life where
the marginal propensity to consume is relatively high due to low income, most of the rural credits are geared
towards ameliorating the consumption difficulties thereby crowding out investment opportunities
THE INCOME LEVEL OF RESPONDENTS

The mean income levels of respondents are depicted in Table 4. it showed that 6.42% the respondents earn a
monthly income of less than N1000, 19.25% earned between N1000-N5000,27.81% between N10,000-
N1000\,000,909% earned above N100,000 while 37.43% earned between N5000-N10,000
The nature of ROSCA in Kogi State, Nigeria
In the course of this study, certain features were identified as typical of ROSCAs in mobilizing savings in the
informal financial sector of Kogi State, Nigeria. Some of these features are the membership and types of ROSCAs
involved in by the respondents, the average monthly contributions by members, the average monthly credits
obtained by members and the most severe problems mitigating against members of ROSCAs in Kogi State.
This are depicted in Table 5, 6,7and 8.

From Table 5, 92.57 % of the respondents belonged to the common (ROSCAs) which is limited to a particular field
of specialty and size, as this is evident because the common ROSCAs due to the various constraints of fear of
default etc are limited to between 10 and 40 members, the commissioned ROSCAs had no member among the
various sampled respondents studied, while the promotional (ROSCAs) had 7.49% as members, indicating that the
country wide introduction of a community based savings scheme by fin bank nig plc called naira wise where daily
savings are mobilized from the respondents and micro credits advanced.
From Table 6, 23.57% saved below N1000, 25.13% saved between N1000-N5000, 39.03% saved between N5000-
N10,000, 8.02 % saved between N10,000-N100,000 while only 4.31 % of the respondents saved above N100,000
averagely per month, re-enforcing the abysmally low rate of capital formation which inhibits investment
opportunities in sustainable rural projects.
From Table 7, it was observed that only 2.14% of the respondents obtained credits above N100, 000 averagely per
month, 71.12 % borrowed between N 10,000-N100, 000, 20.86% borrowed between N5000-N10, 000, and 5.88%
between N1000-N5000 etc.
Table 8: Frequency distribution on the perceived Problem of ROSCAs in Kogi state, Nigeria
Constraints Frequency Percentage Commutative Rank
Per Problem
(a) lack of trust/fear of default 49 26.20 1st
(b) method of saving mobilization 44 23.52 2nd
(c) leadership structure 25 13.36 5th
(d) death of a member 38 20.32 3rd
(e) lack of participation in decision 31 16.60 4th
making
TOTAL 187 100
Based on the questionnaire, some potential constraint of the members of ROSCAs in the informed financial sector of
Kogi State were identified from table 8, the results obtained by the use of percentage rating which provides a
measure of the relative seventy of some of the problems confronting the members. As revealed on the table above,
lack of trust and year of default is the most difficult problem of the members having been rated the first with 26.20
percentage score the, second most difficult problem is the methods of savings mobilization with 23.52 %, followed
by the death of a member with 20.32%, lack of participation of members in the decision making process of most
14
ROSCAs rated fourth with 16.60 percent while the less difficult problem faced by the respondents is the style of
leadership structure rated fifth with 13.36 %.
Table 9: Chi-square tests of relationship between the mobilization of rural savings by ROSCAs and investment in
the rural economy of Kogi State.
Fo fe Fo-fe (fo-fe)2 (fo-fe)2 /fe
16 16.58 -0.58 0.3364 0.0203
9 8.42 0.58 0.3364 0.0400
43 43.10 -0.1 0.01 0.0002
22 21.90 0.1 0.01 0.0005
27 26.52 0.48 0.2304 0.0087
13 13.48 -0.48 0.2304 0.0171
38 37.80 0.2 0.04 0.0011
19 19.20 -0.2 0.04 0.0021
Σ0.09
Dr=(r-1) (-1), (4-1) (2-1) = 3, ∝ =0.05 x2 t=7.815

chi-square calculated = 0,09
chi-square tabulated = 7.815, since the calculated
chi-square is less than the tabulated chi-square i.e x2c(0.09)<x2t (7.815), we accept the null hypothesis Ho and
reject the alternative hypothesis H1. Hence we conclude that the mobilization of rural savings by ROSCAs (a
form of informal financial institution) had no significant impact on investment in the economy of Kogi state,
Nigeria
Table 10: Chi-square tests of relationship between the local government’s apparatus of state and activities of
informal financial institutions in mobilizing rural savings
Fo Fe Fo-fe (fo-fe)2 (fo-fe)2/fe
46 38.77 7.23 52.27 1.3482
12 19.23 -7.23 52.27 2.7183
35 337.43 -2.43 5.90 0.1576
21 18.57 2.43 5.980 0.3180
19 25.40 -6.4 40.96 1.6126
19 12.60 6.4 40.96 3.2508
25 23.40 1.6 2.56 0.1094
10 11.60 -1.6 2.56 0.2207
Σ 9.515
Df=3, ∝=0.05, x2t=7.815, x2c=9.515
The calculated chi-square (x2c) is greater than the tabulated chi-squaare (x2t).i.e x2c(9.515) > x2t (7.815). Hence, we
accept the alternative hypothesis (H1) and reject null hypothesis (HO), implying that the government either directly
or through a public private initiatives has to intervene in the operations of informal financial institution to ensure
effective management of rural resource mobilization
POLICY IMPLICATION
A general look at these results thus conformed with the views of steel and Anyeetey (1997) that observed that
ROSCAs can help in mobilizing the people’s daily collection of deposits, which can in turn be used as working
capital to restock supplies enabling them expand their output and earn a stream of profits, thereby providing a
significant source of income to household for increased standard of living. We also observed that credit provided by
ROSCAs can increase income and build assets. But unfortunately the lack luster attitudes of the informal financial
players which calls for excessive exploitation of the rural participants through the high interest rate inherent in the
informal sector impedes these good intention thus making investment of the said credit facilities impossible. As such
a pragmatic grassroots approach should be taken in active collection with a profit maximizing financial partner
(public/private owned) that would take advantage of the low cost of information dissemination inherent in the
15
peculiar rural settings of the participants for the purpose of tapping into the enormous pool of idle rural finance
needed for investment.
Quoting Senator Barack Obama, President of the united state of America; “…the financial market is a force for good
and evil, its power to generate wealth and ensure freedom is largely unmatched, but also… without the watchful eye
of the people and state, the market can spiral out of control”. As such this alliance between the local apparatus of
state and the informal financial players is needed to forge a lasting solution to the cyclical low level of capital
formation, which is an impediment to economic growth through investment.
CONCLUSION AND RECOMMENDATION

This study assessed the impact of informal savings mobilization on investment in Kogi State, Nigeria. Questionnaire
was used to collect data from the respondents. For the purpose of the study, 187 respondents representing six local
government areas in Kogi State were selected, using the members of ROSCAs as sampling frame.
The respondents attitude towards saving majority (87.67%) saved between the point of dis-savings and N10, 000,
indicating the low level of monthly savings while 12.33 % saved above N10, 000-N100, 000. On the respondents
benefits derived from the rural credits obtained, majority (73%) of the respondent obtained credits to finance human
capital development and other unspecified consumption while only (27%) of the respondents used credits obtained
to finance investment/expansion of existing business.
On the constraints/perceived problems faced by ROSCAs member, 26.20% of the respondent perceived lack of
trust/fear of default as their major constraints, 23.52% identified the method of savings mobilization as constraining
factor, 13.36% said leadership structure was the inhibiting determinant to effective rural finance administration,
20.32% and 16.60 identified death of a member and lack of participation in decision making respectively as a
detrimental factor in effective rural finance management.
Based on the finding in this study, one can realize that although the efforts of ROSCAs in efficiently mobilizing and
allocating rural finance, it brings improvement to the living conditions of the rural dwellers who are members of
ROSCAs, as such to achieve greater effectiveness, more awareness /a state wide re-orientation is necessary to
sensitize the rural dwellers on the need to be more entrepreneurial minded to break through from the Rat Race of
Poverty.
REFERENCES
Adofu, I. (2007), Telecommication Sector Reforms in Nigeria, Issues, Outcome and Challenges. African J.
Economy and Society. 7(2
Aryeetey E. and M. Hyuha (1991) “The informed financial sector in Africa: An empirical study” In A. Chhibber and
S Fischers (Eds). Economic reforms in Sub-Saharan Africa A World Bank Symposium
1)
Aryeetey E. and C. Udry (1994) “The characteristic of informal financial markets in Africa” paper presented at the
plenary sessions of the workshop of Africa economic research consortuion, Nairobi, Kenya.
2)
Aryeetey E. (1997) Rural finance in Africa: institutional development and access for the poor. In Bruno, M. and
Pleskovic B(Eds) Annual world bank conference in development economics 1996 Washington D.C. The World
Bank.
3)
Besky and coate 1994. Regiorial industrialization in Nigeria. Africa economic reseach consortium, Nairobi Kenya.
4)
Chandarvarkar, A.G (1985) “The Non-institutional sector in development countries: Macroeconomics Implications
for savings policies” Savings and Development, No.2.
Christenseen(1993). Cited in Akiri, E.S.and Adofu, I. (2007). Interest Rate Deregul-Ation and Investment in
Nigeria. J. Economics and Management Studies.
Hugon (1990). Cited in Clifford, G. (1996), The Rotating Savings and Credit Association: A middle rung in
16
development. Cambridge/Ma/USA. Massachusetts Institute of Technology, Centre for Internal Studies.
.
Meier, R.L (1990) “Reducing the transaction cost of Financial Inter Mediation: theory and Innovations” Paper
Presented at the International conference on savings and credits for Development, Copenhagen, May 25-31.
5)
McKinnon, R.I and Shaw, E (1973) Money and Capital Markets in economic development Washington DC. The
Brookings Institution.
Nnanna 2001. “Forging collaboration between formal and informal financial markets: some thoughts”. Journal of
Savings and development No.3, XVIII
Wai, U. T. (1980), The Role of Unorganised Financial Markets in Economic Devel- Opment and the Formulation of
Monetary and Fiscal policy. Savings and Investment, No. 4
World Bank (2007), Attacking Poverty, a three pronged strategy. World Bank policy And Research Bulletin vol. 40
N O 1.

Adofu, I ,
Department of Economics, Kogi state university, Anyigba, Nigeria
17
HOUSEHOLD WATER SECURITY: A CASE STUDY OF IBADAN SOUTH WEST LOCAL GOVERNMENT
1
Amao, I.O and 2Omonona, B.T.
1
National Horticultural Research Institute, Ibadan, Nigeria, Department of Agricultural Economics, University of
Ibadan, Ibadan, Nigeria,
ABSTRACT
Household water security is a relatively new concept in water demand management literature
for both developed and developing countries. The study examined household water security in
Ibadan Southwest Local Government Area of Oyo State. A random sampling technique was
used to select 40 households from the study area. Well structured questionnaires were used to
obtain information from the households. Descriptive as well as inferential statistics were used
to analyze the results of the study. Most of the respondents were male (65.0%), married
(87.5%) and within 41-50 years (42.5%). A large percentage of these respondents have average
household size of 5-10 members (60%), have a maximum of 4 children in the household
(80.0%) and have attained Senior School Certificate (SSC) or Ordinary National Diploma
(OND) (45%) level of education. The study further revealed that number of children in the
household was found to significantly affect household water consumption, while number of
males was negatively significant. Rainwater (26.2%) was the most common source of water
available to households. Drinking water was mostly sourced from borehole (32.8%) and water
keg (70.0%) was the mostly used storage facility. Also, households collected water from less
than 1km distance (57.5%); 60% use a maximum of 4 children and 85.5% involve at most 4
females to collect water for household consumption. Thus, more improved sources of water
such as piped water in-house should be made available to households in the study area to
improve access to water for all household uses.
KEYWORDS: household water security, water availability, water access, water storage.
INTRODUCTION
Water is literally the source of life on earth. The human body is 70% water. People begin to feel thirsty after a loss
of only 1% of bodily fluids and risk death if fluid loss nears 10% % (Park, 2002). Water is a basic human right.
Without it societies wither and people die (Joanne, 2000). Man needs water for drinking, cooking, bathing, sewage
disposal, irrigation for agriculture, industrial uses and for recreational purposes amongst many other uses
(Aderibigbe et al, 2008).
Household water security envisages availability of water as the central focus. However, this does not mean that mere
availability of water is sufficient to meet the household water security. The idea of water security allows water to be
considered as a natural resource commodity and entitlement. These are all complementary perspectives that go to
establish household water security. There are three critical factors that determine household water security-
availability, accessibility and usage. The degree of combination of these factors will determine the Household Water
Security (HWS) at a given point of time. (Ariyabandu, 2001).
Particularly, in Ibadan Nigeria, there has been inadequate provision and management of environmental infrastructure
- Unrepaired water pipes, inability to generate sufficient funds, erratic power supply, and poor management which
has prevented over half of Ibadan's residents from having access to potable water, with its attendant health and
economic problems (UN-HABITAT, 2010). Thus, the purpose of the study was to examine household water security
in Ibadan city and specifically, the Ibadan South West Local Government Area, one of the local governments in the
metropolis. Specifically, the following objectives were addressed:
To examine the socio-economic characteristics of households in the study area.

- To examine the influence of socio-economic and demographic factors on household water consumption.
- To identify the sources of water, its usage pattern, storage and access in the study area.
18
Amao, I.O and Omonona, B.T: Continental J. Social Sciences 3: 18 - 23, 2010
METHODOLOGY
The Study Area
Ibadan South West Local Government Area was carved out of the defunct Ibadan Municipal Government (IMG) in
1991. The Administrative Headquarter is located at Oluyole Estate. It covers a landmass of 133.5 square kilometers
with a population density of 2,401 persons per square kilometer. The 2010 estimated population for the area was
projected 320,536 people, using a growth rate of 3.2% from 2006 census. The Local Government Area is bounded
by Ibadan North West and Ido Local Government Areas to the north, Oluyole Local Government in the south, Ido
Local Government Area in west and Ibadan North and South East in the east (Oyo State Government, 2010).
The local government was purposively selected for the study based on the investigator’s experience in the study
area. 40 households were randomly selected and structured questionnaires were administered to them based on the
specific objectives of the study.
Frequencies, percentages and a linear regression model were used to analyze the data.
The linear regression model used in the analysis is specified as follows:
Y = f ( Xi, U i )
Where, Y is the quantity of water consumed by the household, Xi includes, age, marital status, level of education,
religion, household size, number of children in household, number of males in household, number of females in
household, occupation of household head, average monthly expenditure, household water expenditure and Ui is the
error term.

Socio-economic characteristics of respondents
In the study area as indicated in Table 1, most of the respondents were male (65.0%), married (87.5%) and within
41-50 years (42.5%). A large percentage of these respondents were also Christians (72.5%), have average household
size of 5-10 members (60%), have a maximum of 4 children per household (80.0%) and have attained Senior School
Certificate (SSC) or Ordinary National Diploma (OND) (45%) level of education. In addition, most sampled
household heads in the study area are civil servants (40%), 52.5% of respondents indicated an average monthly
expenditure (₦20,000 - ₦50,000) and household water expenditure of less than ₦500 (30%).
Table 1: Socio-economic characteristics of households

Variable Frequency Percentage
Age of respondent
30-40 13 32.5
41-50 17 42.5
51-60 8 20.0
>60 2 5.0
Gender of respondent
Female 14 35.0
Male 26 65.0
Marital Status
Single 2 5.0
Married 35 87.5
Divorced 1 2.5
Widowed 2 5.0
Level of Education
No formal education 1 2.5
Primary Education 5 12.5
SSC/OND 18 45.0
HND/B Sc 14 35.0
M Sc/PhD 2 5.0
19
Table 1 ..... Cont
Religion 72.5
Christianity 29 27.5
Islam 11
Household size
1-4 16 40.0
5-10 24 60.0
Number of children in household
1–4
5 – 10 32 80.0
8 20.0
Occupation of household head
Civil service
Trading 16 40.0
Artisan 3 7.5
Others 13 32.5
8 20.0
Average monthly expenditure
<₦10,000 1 2.5
₦10,000 – ₦20,000 16 40.0
₦20,000 –₦50, 000 21 52.5
> ₦50,000 2 5.0
Household water expenditure
None 8 20.0
<₦500 12 30.0
₦500 - ₦1,000 7 17.5
₦1,000 - ₦2,000 4 10.0
₦2,000 - ₦3,000 5 12.5
>₦3,000 5 12.5
Source: Field survey data, 2010.
Influence of socio-economic and demographic factors on household water consumption

From Table 2, both number of children and males in the household have significant effect on household water
consumption. However, as the number of males in the household increases, household water consumption reduces.
This is because female household members are more involved in sourcing for water than the males as seen in the
gender composition of carriers. Studies have shown that children and women are the key players involved in
sourcing for water in the household (UNICEF Nigeria, 2010).
Table 2: Influence of socio-economic and demographic characteristics on household water consumption

Variable Co-efficient t-value
Constant 223.247 0.846
Age -1.592 -0.681
Marital status -31.563 1.096
Level of education -33.418 -0.633
Religion -23.371 -1.188
Household size -23.057 -0.422
Number of children in household 87.133 1.793*
Number of males in household -42.173 -2.127**
Number of females in household 1.750 0.085
Occupation of household head 7.994 0.477
Average monthly expenditure 0.003 1.298
Household water expenditure 0.000 -0.034
Source: Field survey data, 2010. * - significant at 10%, ** - significant at 5%.
20
Water Sources
The survey found that households use water from multiple sources (Table 3). The sources of domestic water supply
in the household ranges from rainwater to public tap. The most commonly used source is rainwater (26.2%)
followed by hand dug well (24.3%), borehole (19.6%), piped water in-house (10.3%), water from neighbors
(10.3%), water from private vendor (6.5%) and public tap (2.8%). No household indicated the use of water from
rivers, streams and ponds; this might be due to their location which is urban.
Table 3: Sources of water in Ibadan South West Local Government

Sources of water Frequency Percentage
Piped water in-house 11 10.3
Public tap 3 2.8
Private water vendor 7 6.5
Water from neighbors 11 10.3
Hand dug well 26 24.3
Borehole 21 19.6
Rivers, streams and - -
ponds
Rainwater 28 26.2
Source: Field survey data, 2010. Multiple responses
Water usage pattern

As shown in Table 4, households in the study area use water from different sources for more than one activity; hand
dug well, borehole and rainwater are important sources for households. For drinking, most households use borehole
(32.8%), piped water in-house (16.4%) as well as rainwater (16.4%). Cooking, bathing, washing and other domestic
activities, hand dug well is prominently used (50%) as indicated in Table 4.
Table 4: Water sources by pattern of usage in Ibadan South west Local Government
Water source Drinking Cooking Bathing Washing Other domestic uses
and usage
pattern
Piped water in- 11(16.4%) 6 (11.5%) 5 (9.3%) 6 (9.8%) 2 (8.3%)
house
Public tap 1(1.5%) 1(1.9%) 1(1.9%) 1(1.6%) -
Private water 5(7.5%) 6 (11.5%) 4(7.4%) 6(9.8%) 2(8.3%)
vendor
Hand dug well 6(9.0%) 16(30.8%) 26(48.1%) 27(44.3%) 12(50%)
Borehole 22(32.8%) 15(28.8%) 5(9.3%) 4(6.6%) 2(8.3%)
Rivers, streams - - - - -
and ponds
Rainwater 11(16.4%) 8(11.5%) 13(24.1%) 17(27.9%) 8(33.3%)
Water storage facilities

Water storage is a coping strategy to enhance continuous availability and reliability (Osei-Asare, 2004). Table 5
shows that keg was the most commonly used storage facility (70.0%) followed by storage tank (34.1%) however;
some households use more than one storage facility.
Table 5: Water storage facilities

Storage facility Frequency Percentage
Keg 25 70.0
Storage tank 14 34.1
Water trough 12 29.3
Earthen pot - -
Source: Field survey data, 2010. Multiple responses
21
Water access
Time allocated to water collection would differ among households depending on its location (distance to source),
ease of accessibility and household characteristics such as number of water carriers and their gender (Osei-Asare,
2004). Thus, water accessibility was examined considering distance to source of water, and household
characteristics such as number of children, males and females involved in collecting water for household use.
Distance to source
From Table 6, it was observed that 37.5% of respondents collected water from within their residential area while
about 57.5% get theirs from a distance of 1km or less; the remaining 5% collect water from over 1km distance. This
might be due to the fact that rainwater, borehole and hand dug well are the most common sources of water available
to the households.
Table 6: Distance to source of water

Distance to source Frequency Percentage
None 15 37.5
< 1km 23 57.5
>1km 2 5.0
Total 40 100
Household characteristics and water access

About 60% of the households use a maximum of 4 children to collect water, 25% do not involve children at all and
15% use more than 4 children (Table 7). This is as shown in the maximum number of children found within the
households which is 4 (from Table 1).
Table 7: Number of children involved in water collection

Number of children Frequency Percentage
None 10 25.0
1-4 24 60.0
5-8 6 15.0
Total 40 100.0
Gender composition of water carriers

Table 8 shows that 77.5% and 85.5% of households involve a maximum of 4 male and 4 female household members
respectively for water collection. Studies have shown that females (girls and women) are more involved in water
collection in the household (UNICEF Nigeria, 2010, Osei-Asare, 2004).
Table 8: Gender composition of water carriers

Number of male Frequency Percentage Number of Frequency Percentage
water carriers female water
carriers
None 8 20.0 None 4 10.0
1–4 31 77.5 1–4 33 85.5
>4 1 2.5 >4 3 7.5
Total 40 100.0 Total 40 100.0
SUMMARY AND CONCLUSION

Most respondents are male (65.0%), married (87.5%), of 41-50 years of age (42.5%), Christians (72.5%), have
SSC/OND as their highest level of education, are civil servants (45.0%), have household size of 5-10 (60.0%), have
N16,000 - N20,000 as their maximum average monthly expenditure (22.5%) and spend N100 - N500 monthly on
water. Number of children and males in the household significantly influence household water consumption but,
number of males in household has a negative effect on household water consumption. The main sources of water
22
available in the locality include rainwater, borehole and hand dug well. Borehole is the most common drinking water
source while keg is the most frequently used storage facility. A large percentage of households spend about
10minutes to collect water from a distance of less than 1km. It was also observed that 60% of households use
maximum of 4 children to collect water while 85.5% involve at most 4 female household members.
Thus, more improved sources of water such as piped water in-house should be made available to households in the
study area so that they will be able to get better access to water for all household uses. The Oyo State Government
should resolve the issues of un-repaired water pipes, inability to generate sufficient funds, erratic power supply, and
poor management which has prevented over half of Ibadan's residents from having access to potable water.
REFERENCES
Aderibigbe, S.A., Awoyemi, A. O.and Osagbemi, G.K. (2008); Availability, Adequacy and Quality of Water Supply
in Ilorin Metropolis, Nigeria. EuroJournals Publishing, Inc. 2008, European Journal of Scientific Research, ISSN
1450-216X Vol.23 No.4 (2008), pp.528-536, http://www.eurojournals.com/ejsr.htm.
Ariyabandu, R. De. S. (2001); Household water security using rainwater harvesting; retrieved from
http//www.lankarainwater.org/pubs/hwsurwh2001.pdf on 9th April 2010.
Joanne G. (2000); Global Environment Outlook. 2000. UNEP.
Osei- Asare, Y. B. (2004); Household Water Security and Water demand in the Volta Basin of Ghana; PhD thesis,
2004, pp 3, pp51-55., retrieved from http://www.glowa-volta.de/fileadmin/template/Glowa/Downloads/thesis_osei
on 9th April, 2010.
Oyo State Government (2010): Ibadan South west local Government retrieved from
http://www.oyostate.gov.ng/government/Ibadan-south-west on 19 May, 2010.
Park K. (2002) Environment and Health In: Park’s Textbook of Preventive and Social Medicine. Eds. 2002 (17).
UN-HABITAT (2010); Ibadan – Mobilizing Resources through a Technical Coordinating committee retrieved from
http://ww2.unhabitat.org/programmes/uef/cities/summary/ibadan.htm on 20 May, 2010.
UNICEF (2009); Water, Sanitation and Hygiene: Water Supply; retrieved from
http://www.unicef.org/wash/index_watersecurity.html on 9th April, 2010.
UNICEF Nigeria (2010): Safe water saves children's lives, says UNICEF as it celebrates World Water Day with
Nigeria retrieved from http://www.unicef.org/nigeria/media_4122.html on 19 April, 2010.

Amao, I.O
National Horticultural Research Institute, Ibadan, Nigeria
Email: ifeluv@yahoo.com
23
REHABILITATION OF JUVENILE DELINQUENTS: IMPLICATIONS FOR COMMUNITY DEVELOPMENT
Mary Olufunke Adedokun, Eunice Olufunmilayo Osakinle and Bernard Akinlabi Falana
Faculty of Education, University of Ado Ekiti, Ado Ekiti, Ekiti State
ABSTRACT
The study examined the issue of rehabilitating the juvenile delinquents in order to bring peace
and development to the various communities. The study employed a surveys study design. The
population consisted of young male and female members of Akinyele Local Government Area
of Oyo state. A sample of 90 subjects was used for the study. Data collected were subjected to
simple frequency count and percentages Chi-square statistical tool was used for the analysis of
the hypotheses.The study revealed that juvenile delinquency is a social menace that could lead
to social disorder and which does not augur well for the development of communities. Based
on the findings, it is recommended that parents, government, non-governmental organizations
should make efforts at rehabilitating the deviant youth so that they would be useful to
themselves as well as help build a formidable community.
KEYWORDS: social menace, social disorder, correction, and participation
INTRODUCTION
The term juvenile delinquency is a common term in every society. It is a term that deals with deviant behaviour of
the young ones in the society, deviant behaviour means when the young ones are not conforming to the law or
normal behaviour of the society. These young ones in question are supposed to be the leaders of tomorrow and so
care must be taken to tame them and lead them in the right direction for where adequate and proper care is lacking,
they tend to constitute social menace to the community and its development.
The concept of delinquency was first developed in the 19th century before which there was little distinction between
adult and juvenile offenders. Children were almost subjected to the same form of punishment as adults. This
situation led a group of reformers called “child savers” to think of separating adult delinquents from juvenile
delinquents and so in 1899, Juvenile court was established in Chicago to handle the cases of minors who committed
criminal offences (Adetoro, 2009). Adetoro also revealed that the juvenile courts and codes defined child’s
behaviour as a status offence emanating from child abuse and neglect and as such would allow the courts to
intervene to save a child from harm and therefore classify a child as a delinquent. An attempt to protect and
transform the lives of these children and reform them led to the establishment of reform homes (Adetoro, 2009).
Juvenile delinquency is a term that refers to children who act against the law. (http://en.wikipedia.org). Juvenile
delinquency to Sanni et al (2010) refers to delinquent and criminal behaviour among young people as they negotiate
the transition from childhood to adulthood in on increasingly complex and confusing world. A juvenile delinquent
therefore is that person who repeatedly commits crime. It has also been proved that a delinquent will do to someone
else what has been done to him.
This may be due to mental disorders/behavioural issues and such are usually diagnosed with conduct disorder
Holmes et al (2001), . Some of the theoretical causes of juvenile delinquency include the following:
(a) Rational Choice: This theory explains that the causes of crime lie within the individual offender rather than
in their external environment. The classicists, who propounded this theory, believe that offenders are
motivated by rational self-interest. To prevent delinquency, therefore, worthwhile values must be instilled
in these young children, helping them to choose things that are of value against invaluable things.
(b) Theory of social disorganization as propounded by the posivists attributed delinquency to the breakdown of
communal institutions and communal relationships that traditionally encouraged relationships among
people. If the family, school, church and social group play their roles well as agents of socialization,
children would be taught to eschew unacceptable behaviour and respect the rights of others thereby
reducing antisocial and violent behaviour to the barest minimum (Walkate, 2003).
24
Mary Olufunke Adedokun et al.,: Continental J. Social Sciences 3: 24 - 30, 2010
(c) Strain theory states that crime is caused by the difficulty those in poverty have in achieving socially valued
goals by legitimate means (Eadie and Mortley, 2003). Since it may be difficult for them to achieve valued
goals through legitimate means, they may decide to use criminal means to achieve the goals.
(d) The theory of differential association suggests that young people are motivated to commit crimes by
delinquent peers and learn criminal skills from them.
(e) Labeling theory as stated by Eadie andMortley, 2003) states that once young people have been labeled as
criminal they are more likely to offend and that once labeled as deviant a young person may accept that role
and be more likely to associate with others who have been similarly labeled.
(f) Family environment, Graham and Bawling (1991), Walkate (2003), and Farrinton (2002) all believe that
low level of parental supervision, parental conflict or separation, criminal parents or siblings, parents who
do not pay attention to their children are likely to become delinquents exhibiting deviant offending
behaviours.
The above are some of the causative theories of juvenile delinquency. The important thing is for all hands to be on
deck to curb children from becoming maladjusted children for rehabilitation can be very expensive. Expensive, in
the sense that it may take years for delinquent children to be brought back on course. The common saying is that
prevention is better than cure. Prevention should be a watchword for all and sundry in the community. Delinquency
prevention is the broad term for every effort aimed at preventing youth from becoming involved in criminal, or any
other anti social behaviour.
There are various manifestations of juvenile delinquencies in the community today. These include, drinking,
smoking, drug taking, bad mode of dressing, absconding from homes and living on the streets where they begin to
learn to pick-pocket, (Oloruntimilehin, 1998).
Other manifestations include cruelty, bullying, fighting, vandalism, use of foul language, drug abuse etc. Edelman
(1995), reveals that about 1, 2 3 4 youths run away from home and 2, 255 teenagers dropout of school each day.
Every five minutes a juvenile is arrested for some kind of violent crime and every two hours a child is armed with a
weapon. All these manifestations of juvenile should be taken care of by rehabilitating those children that are already
caught in the web of delinquencies so that they would be useful not only to themselves but also contribute to the
process of the development of communities and the nation at large.
It should be noted that destitution, poor living conditions, inadequate education, malnutrition, illiteracy,
unemployment and lack of leisure time activities are factors that marginalize young people which make some of
them vulnerable to exploitations as well as involvement in criminal and other deviant behaviours, rehabilitation
programmes should be put in place for these children so that they are gainfully employed. When they are gainfully
employed, they are likely to desist from these deviant tendencies. World Youth Report (2005) reveals that young
people constitute the most criminally active segment of the population and that eventually most young people will
desist from criminal and deviant activity; (Youth at the United Nations: http://www.un.org/esa/
socdev/unyin/wpayjuvenile/htm). It is to this end that preventive measures must be taken to prevent youth from
deviant behaviours as well as planning for active rehabilitation progammes to redeem those who had become
delinquents or even criminals. In thinking of preventive measures, youth at the United Nations, World programme of
action for Youth (Accessed 19/5/2010), views that the development of social organization, particularly through
youth organizations and community involvement should be fostered by a supportive social policy and within a legal
framework. The document further states that government assistance should focus on facilitating the ability of
community and youth organizations to express and evaluate their needs concerning the prevention of violence and
crime, to formulate and implement actions for themselves and to cooperate with each other.
Rehabilitating delinquents presupposes corrections being imposed on these youth. The common historical form of
correction have always been to offer punishment both corporal and capital as panacea to anti-social behaviour but
people were against these forms of punishment and recommended the penitentiary system’ which was a system by
which offenders would be given a chance to think and have a change of heart and mend their ways (Skidmore,
25
1991). This goes to show that these delinquents should be corrected in a way that they would be useful to themselves
and also serve as correctional vessels to others in the community.
Defining correction, Allen and Simonsen (1989) see correction as a professional service that applies a criminology
knowledge base to the control and rehabilitation of the criminal offender. Correction to them occurs when the
delinquent or criminal behaviour of an offender changed for good through various intervention programmes that will
enable the offender to live a good, responsible and law abiding life again. With various correctional services put in
place, juvenile delinquents will be restored to a condition of constructive, productive, mental, physical and social
functioning level, which is considered normal, this eventually will have positive effect on the development of
communities and the nation at large.
It should also be noted that delinquent behaviour spans both the rural and urban communities and so when planning
for rehabilitation and correctional services, both communities should be put into consideration. For these deviant
young people to be corrected and virtually rehabilitated to participate as active members of their community various
homes had been established like Remand homes, approved institutions (where they can stay not exceeding a period
of 3 years) for corrective training, both occupational and psycho social and the Borstal Institution. The emphasis in
all these institutions is corrective training geared towards rehabilitation of these dented character (Okunola 2002).
This study therefore attempts to discover if rehabilitating the juvenile delinquents will contribute to the process of
development in community. The study attempts to answer the question, is rehabilitation of juvenile delinquents of
any use to the development of the community?
In other words, the essence of this study is to find out how rehabilitation of delinquents can bring improvements to
the community in which we all live while specifically, the study aims at finding out the relationship between
rehabilitation of juvenile delinquents and community development. The following research questions were raised
1. Will rehabilitation of juvenile delinquents make for active participation in community
development?
2. Is there a relationship between juvenile delinquency and community peace?
Hypotheses
Two hypotheses were generated.
1. There is no relationship between rehabilitation of juvenile delinquents and active
participation in community development.
2. There is no relationship between juvenile delinquency and community peace.
METHOD
The study was conducted in Akinyele Local Government Area of Oyo state. The population for the study consisted
of youth in both the rural and urban areas of the local government, a total of 100 boys and girls were randomly
selected for the study.
Instrument
The instrument used for the study consisted of a set of questionnaire items titled Juvenile Delinquent Rehabilitation
Questionnaire (JDRQ) and the instrument examined various issues related to the subject of study.
Validation and Reliability Instrument

To ensure face and content validities of the instrument, copies were given to experts in the Department of Guidance
and Counseling, University of Ado Ekiti and the raised suggestions were made use of in the final draft of the
questionnaire. The items were tested on youth in Ona-Ara Local Government at two weeks internal before testing it
on the actual subjects of study. The result yielded a test retest Pearson Correlation Coefficient of 0.72.
Design and Statistics design. The data collected were analyzed using simple percentages and Chi Square statistical
analysis.
RESULTS : The findings for all the hypotheses are presented here using the descriptive and chi-square analysis.
26
Presentation of Results
Research Hypothesis 1: There is no relationship between rehabilitation of juvenile delinquencies and active
participation in the process of community development
Table 1: Responses Indicating Percentages and Frequencies on Rehabilitation of Juvenile delinquents for active
participation in Community Development
S/N Items SA A D SD
1. Juvenile delinquency is a social problem 28 54 7 1
31.1% 60.% 7.8% 1.1%
2. Juvenile delinquency refers to children who act against
the law and children who commit crime repeatedly
23 55 10 2
25.6% 61.1% 11.1% 2.2%
3. Causes of social delinquency include social
disorganization, peer association and family factor 24 55 10 1
26.7% 61.1% 11.1% 1.1%
4. Delinquency prevention is important for anti social
behaviour 30 44 15 1
33.3% 48.9% 16.7% 1.1%
5. Juvenile delinquents constitute social menace to the
society 24 56 9 1
26.7% 62.2% 10.0% 1.1
6. Juvenile delinquency ranges from violations of legal
and social norms to serve crimes committed by minors 16 64 7 3
17.8% 71.1% 7.8% 3.3%
7. There is a preference for the social rather than judicial
approaches to dealing with young offenders 19 52 18 1
21.1% 57.8% 20.0% 1.1%
8. Living with other people rather than one’s parents
encourage delinquent behaviour 23 50 13 4
25.6% 55.6% 14.4% 4.4%
9. Rehabilitation of juvenile delinquents involves
separating the delinquent from the negative influence 14 61 14 1
15.6% 67.8% 15.6% 1.1%
10. Orderliness in the community is a sign of growth 34 40 8 -
37.8% 53.3% 8.9% -
11. Community should provide specific educational,
employment and leisure programmes that would
distract the attention of youth from violent behaviour 26 58 6 -
28.9% 64.4% 6.7% -
12. Parent-child integration would lead to peace in the 31 55 3 1
community 34.4% 61.1% 3.3% 1.1%
From Table 1, it could be deduced that juvenile delinquency is a social menace as seen in the 91.1% responses that
agreed to this statement. The table also revealed that social disorganization, peer association and family factor cause
delinquent behaviour. This is evident in the 88.8% agreement to the factor from the respondents. The table on the
whole revealed that preventing delinquent behaviour would enable them to participate actively in the process of
community development (83.4% agreed to this fact). It was revealed that when there is parent child integration there
would be peace in the community (95.5%). The table reveals that orderliness is a sign of growth in the community
(91.3%).
27
Hypothesis 1: There is no relationship between rehabilitation of juvenile delinquents and active participation in the
process of community development.
Table 2: Chi-square analysis of relationship between rehabilitation of juvenile delinquents and active participation in
community development
S/N Items SD D A SA X2 cal X2 df P
tab
1. Rehabilitation of juvenile
delinquents involves separating
the delinquent from the negative
influence - 6 58 26
2. Orderliness in the community is 330.88 7.815 3 0.000
a sign of growth - 8 48 34
3. Community should provide
specific educational
employment and leisure
programmes that would distract 1 3 55 31
the attention of youth from
violent behaviour
3. Parent-child integration would
lead to peace in the community - 6 58 26
Total - 23 219 117
As shown above X2cal = 330.889. This is greater than X2 tab = 7.815 at 0.05 level of significance. Therefore, the
null hypothesis is rejected. This shows that there is a strong relationship between rehabilitation of juvenile
delinquents and active participation in community development process.
Table 3: Frequency/ Percentage responses of subjects to relationship between juvenile delinquency and community
peace
S/N Items SA A D SD
1. Rehabilitation programmes help delinquents
to be involved in useful community activities 28 55 7 -
31.1% 61.1% 7.8% -
2. Institutions, communities should be involved
in rehabilitation programmes 34 53 3 -
37.8% 58.9% 3.3% -
3. The family which is the smallest unit in the
community should be involved in preventing
violent behaviour 47 36 5 2
52.2% 40.0% 5.6% 2.2%
4. Rehabilitating delinquents will bring
improvement to communities 34 49 7 -
37.8% 54.4% 7.8% -
Table 3 reveals that 92.2% was recorded as agreeing with the fact that rehabilitation programmes help delinquents
to be involved in useful community activities while 96.7% respondents believed that all hands should be on deck for
rehabilitating the delinquents. 92.2% is of the opinion that family, which is the smallest unit, should play active role
in preventing delinquent behaviours and violence in the community and 92.2% believed that rehabilitating
delinquents would bring improvement to the community.
28
Hypothesis 2: There is no significant relationship between juvenile delinquency and community peace
Table 4: Relationship between juvenile delinquency and community peace

S/N Items SD D A SA X2 cal X2 df P
tab
1. Rehabilitation programmes help
delinquents to be involved in 28 55 7 -
useful community activities
2. Institutions, communities should
be involved in rehabilitation 34 53 3 - 286.51 7.815 3 0.000
programme
3. The family which is the smallest
unit in the community should be
involved in preventing violent 47 36 5 2
behaviour
4. Rehabilitating delinquents will
bring improvement to 34 49 7 -
communities
Total 130 206 19 5
From the table above X2 cal > X2 tab = 7.815 at 0.05 level of significance. The null hypothesis, which states there is
no relationship between juvenile delinquency and community peace is rejected and so the alternative hypothesis,
which establishes relationship between the two variables, is upheld.
DISCUSSION
The study, which assesses the implication of rehabilitation of juvenile delinquency on the process of community
development, comes up with the following findings.
(a) That Juvenile delinquency is a social menace that should be prevented and curbed
(b) That parental care is highly important in the prevention of juvenile delinquency
(c) That various rehabilitation programmes should be put in place to correct these deviant youth
(d) That when delinquency is reduced there would be active participation in the progress of community
development and this would lead to community peace and this will lead to better living as Lowelt (1976)
sees community development as a movement to promote better living for the whole community with the
active participation and on the initiative of the community.
Based on the above findings the following recommendations are made:

That law enforcement agents should be trained, equipped and encouraged by the government towards effective
control of criminal acts in the society. Parents should try to take good care of their children, supervise them as much
as possible not abandoning them to a game of chance. They should monitor them properly to prevent them from
mixing with bad gang that can influence their lives negatively.
For those who are already marked delinquents, government, non-governmental organizations and communities
should embark on rehabilitation programmes that would make them useful elements and thereby contributing to the
process of growth in the community. Efforts should be made in engaging these students in useful activities that
would make them desist from negative tendencies that would lead to chaos instead of peace in the community.
REFERENCES
Adetoro, A.O. (2009). The Impact of Remand Homes, Correctional Service on the Rehabilitation of Juvenile
Delinquents in Ibadan, Oyo State. Unpublished, M.Ed Social Work Project, Ladoke Akintola University of
Technology.(LAUTECH) Ogbomosho.
Allen, H.I. and Simonsen, C.E. (1989) Corrections in America, New York, Macmillan
Eadie, T. and Mortley, R. (2003): Crime Justice and Punishment in Baldock et al, (Eds) Social Policy (3rd edition)
Oxford, Oxford University Press.
29
Edelman, M.W. (1995). United we Stand. A Common Vision Claiming Children 1:6-12.
Farrington, D.P. (2002): Developmental Criminology and Risk focused prevention in M. Maguire et al. (eds.). The
Oxford Handbook of Criminology (3rd ed.) Oxford, Oxford University Press.
Graham, J. and Bawling, B. (1991). Young People and Crime, Home Office Research Study No. 145, London Home
Office.
Holmes, S.E. James, R.S & Javad, K. (2001): “Risk Factors in Childhood that lead to the Development of Conduct
Disorder and Antisocial Personality Disorder”. Child Psychiatry and Human Development, vol. 31 (3) Spring
2001.
Juvenile delinquency (http://en.wikipedia.org/wiki.juvenile_delinguency.) (Assessed 22/05/2010)
Lowelt, T. (1976). Community Development: A Network Approval in Adult Education Vol. 6 No. 3.(pp83-88)
Okunola, M.I. (2002): A Handbook for Nigerian Social Works Ibadan, Daybis Ltd.
Oloruntimilehin, O. (1998): The Problems and Needs of Juvenile Delinquents in Nigeria, Ibadan, Ibadan University
Press.
Sanni, K.B.; Udoh, N.A.; Okediji, A.A. Modo, N.F. and Ezen L.N, (2010) FamilyTypes and Juvenile Delinquency
Issues among Secondary School Students in Akwa Ibom State, Nigeria: Counselling Implication in Journal of Social
Science, 23(1), 21-28 (2010).
Siegel, L. J.; Welsh, B.C. and Senna, J.J. (2003): Juvenile Delinquency: Theory, Practice and Law.
Skidmore, R.A. (1991). Introduction to Social Work Practice. England, Cliffs, New Jersey Prentice Hall Inc.
Walkate, S. (2003): Understanding Criminology – Current Theoretical Debates, Maidenhead, Open University
Press.
Youth at the United Nations (http://www.un.org/esa/socdev/unyin.juvenile) (Accessed 19/5/2010)

Mary Olufunke Adedokun,
Faculty of Education, University of Ado Ekiti, Ado Ekiti
E-mail: funkadedokun@yahoo.com
30
THE ROLE OF RENEWABLE ENERGY RESOURCES IN POVERTY ALLEVIATION AND SUSTAINABLE

DEVELOPMENT IN NIGERIA.
1
Nnaji, C.E., 1Uzoma, C.C. and 2Chukwu, J.O.
1
National Centre for Energy R & D, University of Nigeria, Nsukka, 2Department of Economics, University of
Nigeria, Nsukka
ABSTRACT
The estimated amount of renewable energy resources (such as hydropower, biomass, wind
power, biogas, solar energy and geothermal power) in Nigeria is enormous and abundantly
available. Consequently, the energy industry in Nigeria faces numerous challenges ranging
from political, cultural and socio-economic problems etc., which hamper the full development
and utilization of these resources for poverty alleviation and sustainable development. This
paper reviews the prospects and challenges of integrating the mature and emerging renewable
energy resources for poverty reduction and sustainable development in Nigeria and therefore
calls for an improved energy conservation and development policy. This should be supported
by effective implementation resulting in visible industrialization, employment creation, income
generation even in the rural communities and drastic reduction of poverty in the country.
KEYWORDS: renewable energy, energy, poverty, sustainable development, Nigeria
INTRODUCTION
Poverty is the most crucial problem facing developing countries because of its effect on livelihoods. Poverty refers
to an individual’s (or family’s) lack of access associated primarily with inadequate income to basic human needs
such as food, shelter, fuel, clothing, safe water, sanitation, health care and education. Poverty is manifested as the
inability to achieve a minimum standard of what is needed for material well-being. Human poverty also entails the
denial of opportunities and choices most vital to human development-including a long, healthy, creative life,
knowledge (access to reading and communication) and a decent standard of living.
The number of Nigerians living under poverty is staggering- over 70 million (NBS, 2009).Thus, poverty reduction is
undoubtedly one of the highest ranking issues in the national strategies of many less developed countries and the
most potent issue in the current international development agenda.
The energy crisis, which has engulfed Nigeria for almost two decades, has been enormous and largely contributed to
the incidence of poverty by paralyzing industrial and commercial activities during this period. The Council for
Renewable Energy, Nigeria (CREN) estimates that power outages brought about a loss of 126 billion naira (US$
984.38 million) annually (CREN, 2009) Apart from the huge income loss, it has also resulted in health hazards due
to exposure to carbon emissions caused by constant use of ‘backyard generators’ by different households and
business enterprises, unemployment and high cost of living leading to deteriorating living conditions.
Moreover, according to the Central Bank estimate in 1985, Nigeria consumed 8,771, 863 tones equivalent of oil
(CBN, 1985). This is equal to about 180,000 barrels of oil per day. Since then, oil consumption in Nigeria has
drastically increased. The effect of this on the economy relying solely on revenue from oil is tremendous. Also
Department for Petroleum Resources, DPR (2007) states that petroleum supply more than 78% of total energy
consumption in Nigeria. In the present predicament as a nation, it is obvious that depending mainly on fossil fuel
(petroleum) is not enough to meet the energy needs of the country. Since Nigeria is blessed with abundant renewable
energy resources such as hydroelectric, solar, wind, tidal and biomass, there is need to harness these resources and
chart a new energy future for Nigeria. In this regard, the government has a responsibility to make renewable energy
available and affordable to all.
Nigeria’s dependence on oil for energy is deepening deprivation in the development of her abundant renewable
energy resources, which are environmentally friendly in terms of global warming, air and water pollution, clean and
safe, more accessible and affordable energy that will engender sustainable development and also be a source of
opportunity rather than oppression for the poor or less privileged and therefore a key step towards poverty reduction
in Nigeria.
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Nnaji, C.E et al.,: Continental J. Social Sciences 3: 31 - 37, 2010
THE ENERGY-POVERTY NEXUS.

Energy services are paramount to the basic development challenge of providing adequate food, shelter, clothing,
water, sanitation, medical care, schooling, and access to information. Although energy is one dimension or
determinant of poverty and development, it is very vital. Energy supports the provision of basic needs such as
cooked food, a comfortable living temperature, lighting, the use of appliances, piped water or sewerage, essential
health care (refrigerated vaccines, emergency and intensive care), educational aids, communication (radio,
television, electronic mail, the world wide web) and transport. Energy also fuels productive activities including
agriculture, commerce, manufacturing, industry and mining. Conversely, lack of access to energy contributes to
poverty and deprivation and can contribute to economic decline. Energy and poverty reduction link is strong and
mainly operate through socio-economic development, which involve productivity, income growth, education, health
and gender. These issues are explicitly examined below:-
(i) Productivity
Millions of poor people in Nigeria and other developing countries currently consume, on a per capita basis, just 5
percent of the modern energy services consumed by people in high income countries (UNDP,2004) Such
inadequacy in energy services has condemned the poor to walk or use animal power instead of travelling by
motorized transport. It also means that they must live in poorly lighted and badly heated or cooled homes, and
labour without the benefit of powered machines, while also cooking with polluting fuels such as wood and animal
dung.
Due to their subsistent existence, the poor might regard any cash payments for modern energy services as “luxury”.
Yet, expanding access to modern energy services can alleviate drudgery in the lives of the poor who need energy for
basic services such as cooking, lighting, heating, refrigeration, communication, and information. Besides, the poor
also need energy to power productivity-boosting equipment that improves their income-earning capabilities. In
particular, enhanced access to energy services is important for improving agricultural productivity, not just in terms
of volume of crops grown, but also in post-harvest value-added activities such as drying, processing, conservation
and timely transportation to markets, all of which require energy.
(ii) Income Growth

Energy consumption shows a strong correlation with national income, so that countries with higher income are also
those with higher energy consumption. Economic growth creates employment and raises incomes. Essentially, most
economic activity would not be possible without energy as a critical input, and these include the small and medium-
scale enterprises (SMEs) that constitute the primary source of new jobs for the poor. Hence, the type of economic
growth that creates jobs and raises incomes depends on greater and more efficient use of energy.
(iii) Health and education

Modern energy services enhance the delivery of key social services. For example:
(a) electricity makes it possible to refrigerate vaccines, operate medical equipment, and provide
lighting after sunset in health clinics;
(b) in homes, electricity helps to improve children’s educational attainment, even where its use is
limited to a single light bulb;
c) energy for pumping and treating raw water makes it possible to provide clean water in
Communities; and
d) for poor people everywhere, access to modern energy services frees time for productive ventures, education, and
leisure-time that would otherwise be spent collecting traditional fuels or in much less productive manual labor.
(iv) Gender Dimension

Health access, education attainment, and productive activities of women and children are very sensitive to the
availability of modern energy services. Modern cooking fuels free women and children from the burden of
collecting and carrying large bundles of firewood over long distances and from exposure to harmful fumes from
primitive cooking stoves. Improved lighting makes it possible for adults and children to relax and have
entertainment after the end of their daytime activities; it also provides a better learning atmosphere for children
beyond the hours of sunset. Moreover, electricity enables both women and men in poor households to engage in
activities that generate income—by providing lighting that extends the workday and powering machines that
increase output beyond subsistence levels.
32
The lack of modern fuels and electricity also reinforces gender inequalities. Many of the poorest
households are headed by women — due mainly to the loss of a male bread winner. Women and girls who are
responsible for fuel gathering and cooking are in such situation disproportionately burdened by lack of access to
modern fuels and electricity. In addition to the time spent gathering fuels, most traditional staple foods involve a
large amount of threshing, de-husking or grinding, which is mostly done through female labour in the poorest
households and regions due to lack of access to mechanical power. Many girls are withdrawn from school to attend
to such domestic chores, which have significant negative effects on their educational and economic chances. Energy
services such as heat for cooking and power for food processing are, therefore, particularly important for women and
girls.
ENERGY POVERTY
The energy dimension of poverty-energy poverty may be defined as the absence of sufficient choice in accessing
adequate affordable, reliable, high quality and environmentally benign energy services to support economic and
human development. The number is staggering: in Nigeria about 70 million people (54.4% of Nigerians) are without
clean, safe cooking fuels and electricity and must depend on traditional biomass sources (NBS, 2009) Increased
access to such energy services will not, in itself, result in economic or social development; but lack of adequate
energy inputs can be a severe constrain on development.
Universally accessible energy services in the form of renewable energy resources that are adequate, affordable,
reliable, of good quality, safe and environmentally benign are therefore a necessary condition for sustainable
development and poverty reduction.
ENERGY AND SUSTAINABLE DEVELOPMENT

Sustainable development entails the adoption of production and consumption patterns that meet the needs of the
present without jeopardizing the goals of future generations. Every country’s economy can be described as an
integrated energy system that consists of streams of energy-producing and energy-using activities. Energy is central
to practically all aspects of sustainable development. Energy is central to the economy because it drives all
economic activities. This characterization of energy directs our attention to its sources in nature, to activities that
convert and re-convert this energy, and finally to activities that use the energy to produce goods and services and
household consumption. Traditionally, energy is treated as an intermediate input in the production process. This
treatment of energy’s role understates its importance and contribution to development. All economic activities and
processes require some form of energy. This effectively makes energy a critical primary factor of production. Given
the state of technological advancement in the economy, capital and labor perform supporting roles in converting,
directing and amplifying energy to produce goods and services needed for growth and poverty reduction.
Energy thus plays a critical role in social and economic transformation. Lack of access to energy places severe
constraints on national development resulting in sub-optimal outcomes where poor people are often the greatest
losers. Energy services are essential ingredients of all three pillars of sustainable development — economic, social
and environmental. And economies that have replaced human and animal labor with more convenient and efficient
sources of energy and technology are also the ones that have grown the fastest. No country in modern times has
succeeded in reducing poverty substantially without adequately increasing the provision and use of energy to make
material progress. Indeed, by not ensuring a minimum access to energy services for a broad segment of the
population, economic development of developing countries such as Nigeria beyond the level of subsistence has
proven to be a real challenge.
Emphasis on productive uses of energy services is important in helping people out of poverty. At the national level,
energy propels economic development by serving as the launch pad for industrial growth and, via transport and
communications, providing access to international markets and trade. Reliable, efficient and competitively priced
energy supplies also attract foreign direct investment — a very important factor in boosting economic growth in
recent times.
At the local level, energy facilitates economic development by improving productivity and enabling local income
generation through improved agricultural development (irrigation, crop processing, storage and transport to market)
and through non-farm employment, including micro-enterprise development. As an indicator of local recognition of
the importance of energy for businesses, Nigerian manufacturers, who were asked to rank the constraints on their
33
firms’ activities, identified power breakdown and voltage fluctuations as their top two problems (ECN 2008).Recent
developments in Ghana’s energy sector buttress this point (Ashong, 2001).
Energy also has strong and important links to the environment. Many energy sources are drawn directly from the
environment, requiring sound management for these sources to be sustainable. Furthermore, energy use affects the
environment. Emissions from fossil fuels, for example, reach beyond the local and national levels to affect the
global environment and contribute to climate change. The poorest people often live in the most ecologically
sensitive and vulnerable physical locations. These areas may be the most affected by the predictable effects of
climate change such as increased frequency of extreme events— such as floods, drought, rising sea levels, and
melting ice caps. The risks facing poor people are often increased by the unsustainable use of biomass resources by
themselves or others — although more often by the latter group who exploit these resources for commercial
purposes.
Use of renewable natural resources combined with efficient supply and use of fossil fuels with cleaner technologies,
can help reduce the environmental effects of energy use and help Nigeria and other developing countries grow their
economies while also replacing existing, inefficient polluting fossil fuel technologies that pollute the environment.
Much as this may seem enticing, the issue of affordability particularly in respect of the poor cannot be taken for
granted. As a complementary measure, careful management of energy resources is important to promote economic
growth, protect ecosystems and provide sustainable natural resources.
POTENTIALS OF RENEWABLE ENERGY RESOURCES IN NIGERIA.

Nigeria is endowed with large amount of renewable natural resources of which when fully developed and utilized
will lead to poverty reduction and sustainable development.
HYDRO POWER
Aliyu and Elegba (1990) indicated that the country is at least; reasonably endowed with large rivers and some few
natural falls.
The Rivers, Niger and Benue with several tributaries constitute the Nigerian river system which offers some
potential renewable source of energy for economically viable large hydropower development. In addition, several
scores of small rivers and streams also exist within the present split of the country into eleven River Basin
Authorities, some of which maintain minimum discharge all the year round.
Although construction costs of hydropower are high, the zero fuel cost and low maintenance cost make hydro
generation of any size generally a competitive investment in the mix generation of an electric power system
(Cassedy and Meier 1988).
SOLAR ENERGY RESOURCES

According to Bala et al (2000), Nigeria is endowed with an annual Average daily sunshine of 6.25 hours ranging
between about 3.5 hours at the coastal areas and 9.0 hours at the far northern boundary. According to him, Nigeria
receives about 4.851x1012 kWh of energy per day from the Sun. These huge energy resources from the sun already
have a range of applications with various degrees of technical and economic feasibility. This will find application as
power supplies to the village and decentralized single dwelling for lighting, refrigeration, direct drive, water
pumping systems, and communication equipment.
With health care being extended to remote rural dwellings solar power supplies for remote clinics and hospitals will
be of increasing importance.
WIND ENERGY.
Globally, Nigeria is located within low to moderate wind energy zone. Ojosu and Salawu (1990) on their
comprehensive nation wide study on wind energy availability and potential in Nigeria appraised the wind energy
potential and utilization in Nigeria.
For suitable geographical regions and landscape, wind power generation readily finds application for stand alone
operational mode. This is most applicable to remote sites, where costs of transmission and distribution from the grid
34
are prohibitively high. Such remote sites in Nigeria are often agricultural, wilderness and small village locations
with needs for electricity, even if supplied intermittently. In hybrid pumped storage scheme, feasible wind power
generation will find further useful application for water pumping and agricultural purposes.
BIOMASS/BIOGAS
The biomass resources of Nigeria can be identified as wood, forage grasses and shrubs, animal waste arising from
forestry, agricultural, municipal and industrial activities as well as aquatic biomass.
Plant biomass can be utilized as fuel for small scale industries. It could also be fermented by anaerobic bacteria to
produce a very versatile and cheap fuel Gas, i.e. biogas. With fair cost of implementation, the specific units have
good prospects for house holds, farms and livestock.
Akinbami et al (2001)’s assessment indicated that in Nigeria, identified feedstock substrate for an economically
feasible biogas programme includes water lettuce, water hyacinth, dung, cassava leave, urban refuse, solid
(including industrial) waste, agricultural residues and sewages. With increasing urbanization and industrialization,
the annual Municipal solid waste (MSW) generated will continue to increase. Biogas production may therefore be a
profitable means of reducing or even eliminating the menace and nuisance of urban wastes in many cities by
recycling them.
GEOTHERMAL POWER
The useful conversion of natural heat from the interior of the earth to heat building and generate electricity is an
application of geologic knowledge and engineering technology. The idea of harnessing the earth’s internal heat is
not new. As early as 1904, geothermal power was developed in Italy utilizing dry steam and natural internal heat.
Geothermal energy is now being used to generate electricity in Russia, Japan, New Zealand Mexico, Iceland and
USA (Loftness, 1979).
Development of geothermal energy resource is yet to commence in Nigeria. (Adegbuyi et al, 1990). It is however
noted that potentials for Geo-pressured systems and hydrothermal systems, may be available in some of the Nigeria
Basins e.g. Benue through the Niger Delta (Adegbuyi, 1989, Adegbuyi et al 1996)
OTHER RESOURCES
Presently, the potentials of some of the resources like waves, tidal and ocean thermal gradients still remain
unqualified (Garba and Bashir, 2002)
LIMITATIONS TO THE DEVELOPMENT OF RENEWABLE ALTERNATIVE ENERGY RESOURCES IN

NIGERIA
The development of renewable/alternative energy resources in Nigeria has been limited by a number of factors,
which include:
A. Cultural Religious and Traditional Issues: - Rejection of new energy may sometimes arise from cultural
taboos. Certain new energy involves known taboos in certain part of the World e.g. the use of human
excreta in Biogas production in some parts of Africa.
B. Technology: - Apart from solar thermal and Biogas technology, the required technology to develop and tap
other forms of renewable energy technologies is lacking in Nigeria. Most of the technologies are being
imported thereby escalating the already high investment cost.
C. Inadequate Funds: - Lack of funds thwarts the development of new energy resources. Public funds are
limited and the absence of any serious private sector participation in the development and dissemination of
the technology poses a serious barrier to renewable energy technologies.
D. High Cost of Energy Infrastructure: - Small scale hydropower, central and residential solar photovoltaic
technologies, etc have not penetrated Nigeria’s energy supply systems, because of their relatively high
investment cost.
E. Political Factor: - Centralization is a problem, for new fuels are usually scattered and produced on a
relatively small scale. There is also the preference for advanced technology in developing countries. Also
political zeal to implement desirable energy options is a major limitation, because of political interest.
35
F. Low Level of Public Awareness: - Public awareness of renewable energy resources and technologies in
Nigeria and their benefits, both economically and environmentally are generally low; thus, hampering the
development, application and dissemination of renewable energy resources and technologies in the national
energy market.
RECOMMENDATION
i. There is need for private sector participation and funding of renewable energy research and development in
Nigeria.
ii. Development partners such as DFID, UNDP, UNICEF, WORLDBANK etc. should be involved in the
sponsorship and provision of loan for sustainable development and utilization of renewable natural
resources. Developing countries such as India, Tunisia, Morocco, Indonesia and Mexico have benefited
immensely from these partners in their solar energy projects.
iii. Since the lack of access to affordable, clean and convenient energy is strongly linked to poverty, it is
recommended that a comprehensive resource survey and assessment be carried out to determine the total
renewable energy potential in the country as well as identify local conditions and priorities in various
ecological zones.
iv. Government at all levels should make adequate provision for research grants in renewable energy resources
to make production cheaper and generation more efficient.
v. The development of renewable energy technologies is linked to many other sectors such as agriculture,
small scale industrial enterprises and poverty alleviation, it is recommended that, renewable energy related
projects have a greater likelihood of success if implemented in accordance with activities in these sectors to
ensure sufficient demand for the energy services providers.
vi. Recognizing that current flow on renewable energy technologies is inadequate, it is recommended that
demonstration projects on various renewable energy forms be widely established; so that the performance
and efficiency with which services are delivered can be sensitized.
vii. Entrepreneurship and managerial skills development training programme and technical courses in
renewable energy technologies with a view of creating self employment and developing Energy Service
Companies (ESCOs), providing services to rural areas be introduced.
CONCLUSION
Renewable energy resources if fully developed and utilized can be a veritable tool for poverty reduction and
sustainable development in Nigeria. Poverty reduction is undoubtedly one of the highest ranking issues in the policy
strategy of the Nigerian government. For this objective to be actualized, government must harness the potentials of
renewable energy resources that are abundant in various geographical zones of the country. Given due consideration
to both the technical, political and economic viability of its application, renewable energy can be utilized to meet the
challenges posed by the present energy crisis.
Therefore, measures must be taken by the government at all levels to make adequate policies in effective
exploitation, management and utilization of our renewable energy resources in order to reduce dependence on fossil
fuel. This will go a long way in providing opportunities for the less privileged and result in income generation and
improved standard of living.
REFERENCES
Adegbuyi, O., A.A. Fadipe and M.A. Rahaman,(1990) Hot Dry Rock (HDR) Geothermal Energy Resource
Potentials in Nigeria. J. Geothermal Sci. Technology, 1, 1-9
Adegbuyi, O (1989) Geothermal Energy Resource Potentials of the Nigeria-Cameroon Region. West Africa, Proc.
Of 11th Geothermal Energy Workshop of New Zealand, Auckland University. Pp. 134-146.
Adegbuyi, O., O.S. Ajayi and I.B. Odeyemi (1996) Radionuclide Contents and Hot Dry Rock Geothermal Resources
Potential of the Crystalline Rocks in Ikogosi Warm Spring Area of Southwestern Nig. J. Agric. Sci. Tech., 3, 14-21
Akinbami, J.F.K., Ilori, M.O., Oyebisi, T.O., Akinwumi, I.O. and Adeoti, O.(2001), ‘Biogas Energy use in Nigeria:
Current status, future prospects and policy implications’, Renewable and Sustainable Energy Review, 5, 97–112.
36
Aliyu, U.O. and Elegba, S. B. (1990). Prospects for Small Hydropower Development for Rural Applications in
Nigeria. Nigerian Journal of Renewable Energy, 1,74-86.
Ashong, Samuel N. (2001), Macroeconomic Framework for Poverty Reduction Within the Context of Debt Relief:
The Case of Ghana, Paper Presented at WIDER Development Conference on Debt Relief Helsinki, Finland.
Bala, E.J., Ojosu, J.O. and Umar, I. H. (2000). Government Policies and Programmes on the Development of Solar-
PV sub-sector in Nigeria. Nigerian Journal of Renewable Energy, Vol. 8, No. 1&2, pp. 1-6.
Cassedy, E.S. and P.M. Meier, (1988)Planning for Electric Power in Developing Countries in the Face of Change,
Planning for Changing Energy Condition, Energy Policy Studies, University of Delaware, Newark, DL, Transaction
Books.
Central Bank of Nigeria Annual Reports and Statement of Account, 1985
Council for Renewable Energy, Nigeria, “Nigeria’s Electricity Crunch” available at www.renewablenigeria.org
Department of Petroleum Resources, (2007) Nigeria, available at www. DPR. gov. ng.
Energy Commission of Nigeria, Report of survey of energy utilization in the informal sector: A case study of the
FCT, Federal Ministry of Power Technical Report No.ECN/EIS/001/08,September,2008
Garba, B and Bashir, A.M. (2002). Managing Energy Resources in Nigeria: Studies on Energy Consumption Pattern
in Selected Rural Areas in Sokoto State. Nigerian Journal of Renewable Energy, Vol. 10 Nos. 1&2, pp. 97-107.
Loftness, R.L. (1979), Energy Handbook, VRN Publication USA, pp. 622National Bureau of Statistics (2009),
Poverty-Nigerians, (Current Evidence) National Policy Dissemination Workshop on Poverty and Inequality in
Nigeria, 30th August, Lagos.
Ojosu, J.O. and Salawu, R. I (1990). Wind Energy Development in Nigeria. Nigerian J. Solar Energy, Vol. 9, pp.
209-222.
UNDP (2004), Human Development Report, United Nations, Geneva, Switzerland

Nnaji, C.E.,
National Centre for Energy R & D, University of Nigeria, Nsukka,
E-mail: nnajidal@yahoo.com
37
NIGERIA AT 50: THE SEARCH FOR POLITICAL LEADERSHIP.
S.M. OMODIA
Department of Political Science and Public Administration, Adekunle Ajasin University, Akungba- Akoko,
Ondo State, Nigeria
E-mail: ostephenm@yahoo.com
ABSTRACT
This paper through the unobtrusive method discusses political leadership in the Nigerian State
in her five decades of political independence .The argument of the paper is that the Nigerian
State has manifested more of political rulership as a result of the governmental processes that
have to a great extent been exclusive of the people. The paper further unfolds that the effect of
rulership has been political instability, institutional fragility and poor democratic culture in the
Nigerian body-politic. The paper therefore concludes that the Nigerian State is in need of
integrative political leadership for the consolidation of the present democratic process through
a functional linkage between the politicians and the governed in order for the people to serve
as vanguard of democracy.
KEYWORDS: democratic experiment, democratic norm, ethnicization, Integrative leadership,

political instability, political party.
INTRODUCTION
The pattern of political leadership to a great extent determines the political stability of a state. History no doubt has
witnessed the emergence of political thoughts and philosophies designed towards altering political systems and
governance as a result of political leadership. Examples abound in theoretical postulations of John Locke and Jean
Jacque Rousseau among others (Mukherjee andRamaswamy,2007).While John Locke’s argument against absolute
monarchism serve as the justification of the removal of or dethronement of King James 2 based on his despotic and
obnoxious governance, Rousseau’s social contract theory on the other hand, served as the propelling force for the
entrenchment of the 1789 Rights of man in France (Appadorai,1975).
In the Nigerian State, political leadership has manifested itself in various forms and pattern depending on the era .In
the pre-colonial days, political leadership was based on the cultural orientation of the different ethnic nationalities
that later emerged as the State .For instance, the centralized political\administrative pattern was visible in the
Hausa- Fulani section of the North with enormous powers exercised by the traditional rulers .In the west, the system
though centralized the power of the traditional ruler was restricted because of institutional checks, while in the larger
section of the East it was mostly a segmentary pattern in which political leadership was exercised by the leadership
of the different classes and structure of the society(Azelama,2010).
From this basic background, it is important to emphasize that unlike the western states of France and England in
which political leadership witnessed a social change and transformation designed towards empowering the people as
the focus of governance(Omodia 2006;Omodia 2007), in Nigeria, alterations in political governance during
colonialism and after attainment of political independence were designed to achieve selfish ends either by the
colonialist, the indigenous politicians and military dictators that tasted political power(Omodia,2004). Thus,
successive administrations in Nigeria have continued to embark on political reforms aimed at entrenching
responsible and responsive political leadership vis-a-vis lasting democratic governance in Nigeria.
As a matter of fact, the experiment has witnessed the adoption of zoning system in the sharing of sensitive political
offices, enlarging the political space to accommodate the active participation of retired military officers in Partisan
politics, reforming the electoral system among others. It is however important to state that unfolding events
especially in the political scene have shown that political experiments in Nigeria over the decades have been
cosmetical because: (1) no meaningful political transformation can take place with the exclusion of the people in the
process. (11)The same elites designing the change for the empowerment of the people are the ones resisting the
same process and change.
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S.M. OMODIA: Continental J. Social Sciences 3: 38 - 43, 2010
To be able to vividly understand the above stated assertions, this paper in addition to the introduction is
sectionalized into; the nature of political leadership under colonialism, the civilian administration up to the aborted
third republic, the military and political leadership in the present democratic dispensation.
Political Leadership under Colonialism

Colonialism is the political domination of a state by another. It involves the total control of a state machinery of the
power which include determining wealth creation and allocation of resources. The political domination of Africa
states by colonialists after a long presence was basically propelled by the factor of resource exploitation
(Rodney,1972). As a result, the pattern of governance was fashioned towards the realization of this objective and not
principally for providing political leadership.
However in the Nigerian state, colonialism could be viewed from two active phases of political governance. The
first phase is the phase of political governance by the British colonialist through the traditional institution (Crowder
1968; Oronsaye 2009). This was characterized by rulership because the British officials controlled and determined
public policies and such policies were cosmetically foisted on the people by traditional elites .Thus, the people
including the traditional elites were excluded basically from the process of rule making and this affected the level of
political maturity and the imbibing of democratic norms needed for a functional democracy that was later introduced
through constitutional concessions by the British.
The second phase is the phase of the involvement of the educated elites in nationalist activities(Adigwe,1979) .In
this phase, the British colonialist although comfortable with traditional political arrangement in that the system was
conforming to resource exploitation, though with little resistance from sections where traditional political
institutions were altered to be compatible with the centralized form; the trend in world politics especially after the
second world war favoured the principle of self determination. As a result, the educated elites where accommodated
in the governmental process, first through the adoption of the elective principle in the 1922 Clifford constitution and
later the 1951 Macpherson Constitution which led to the formation of more political parties: the Action Group(AG)
and Northern people’s Congress(NPC) in 1951.(Azelama,2010).
The implication of the above is that party Politics became ethnicized as AG was to the west, NPC to the North and
the Nigerian National Democratic Party (NNDP) that was created in 1923 and which later transformed into the
National Council of Nigeria Citizens (NCNC) in 1944 was to the East. However, it is important to emphasize that
unlike what was obtainable in the first phase, the educated elites provided some form of political leadership because
the political parties though ethnic based, served as a tool for political socialization and recruitment, interest
articulation, interest aggregation, political communication as well as getting the people involved in the process of
rule making, implementation and adjudication. This phase witnessed the widening of the political space for political
participation though under the direction and dictates of British colonialists.
From this perspective, one could vividly argue that although some form of political leadership were provided by the
educated elites but such leadership no doubt fell short of functional democratic norms as a result of sectionalism in
politicking for the control of political power, poor political culture as a result of political distortions by British
political domination, politics associated with spontaneous reactions on the part of the people with the attendant
problem of social disorder rather than reactions emanating from informed ideas.
Political Leadership under Civilian Regimes

The First and Second Republic
In the first republic, sectional party politics, poor political leadership, chaotic situations arising from spontaneous
reactions became more manifest. This is because the above stated attributes were made to be submissive to the
shared interest of acquiring political independence by the politicians under colonialism. After the attainment of
political independence, politics and political leadership became characterized by sectional interest, thuggery,
bitterness, suspicion, political disorder among others (Omodia 2003; Aper 2008).
In other words, the mutual suspicion between the North-South and intra South-East and West became more manifest
and thus, political leadership though provided, but it was regionally based. This above fuelled the termination of the
republic with chaotic situation witnessed in the western region which led to the declaration of a state of emergency
39
in the region. This is coupled with the crisis associated with the 1963 census, the 1964 and 1965 elections which
culminated into the 1966 abortion of the republic (Ademoyega 1981; Nwosu, Olaniyi and Oladele 1998).
As regard the Second Republic attempt was made to register political parties that were nationally based in terms of
spread. As a result, five political parties were registered to contest for political offices in the general elections of
1979.These were: the National Party of Nigeria (NPN), the Unity Party of Nigeria (UPN), the Nigeria People’s Party
(NPP), the Great Nigeria people’s Party (GNPP) and the Peoples Redemption Party (PRP). It is however important
to state that, of all the five political parties, the NPN turned out to be an elitist cadre based national party based on
spread and achievements in polls, while other parties manifested ethnic spread ( Kurfi, 1983; Yamma, 2008).
The above scenario was an improvement on what was obtainable in the First Republic in terms of party politics and
political leadership in that political leadership in the republic was regionally determined and felt by the people.
However, the sharp difference between the First and Second Republic could be attributed to the balkanization of
federal regional structure by the military in favour of multiple State structures (19) that were economically and
administratively weak and depended on the centre.
Conversely, the growing influence of the NPN in areas considered to be the stronghold of the parties that were
viewed by indigenous politicians as synonymous to the stronghold of other party leaders which date back to regional
politics of the first republic no doubt served as impediment to the nationalization of the party system. For instance,
the so called ‘landslide’ victory of the NPN in capturing the States of Bendel and Oyo which were formally of the
UPN, Anambra State formally of the NPP- the home state of the leader of the party Dr. Nnamdi Azikiwe and
Gongola, formally of the GNPP in the 1983 Gubernatorial elections snowballed into political pandemonium and
state of anomie as a result of accusations of electoral rigging by the opposition parties against the ruling NPN as the
victories occurred in the stronghold of opposition Parties which date back to the colonial days(Yamma,2008).
The Aborted Third Republic.

However, in the aborted third republic, the objective of providing a functional national party leadership rather than
the ethnicization of the process, led the military administration of Ibrahim Babangida to adopt a two party system in
the Social Democratic Party and the National Republican Convention (NRC) (Opara, 2007). This experiment was
successful in the sense that ethnic party politics was checked especially with the defeat of the NRC Presidential
Candidate- Alhaji Bashir Tofa in his home State Kano and some other Northern States by Chief M.K.O Abiola, the
SDP Presidential candidate (Opara , 2007), a feat that changed the political orientation of the Nigerian state up to
date.
On the other hand, the fragile nature of the political institution became manifest especially with the annulment of the
Presidential election by the military administration of Babangida and the acceptance by the political parties of their
willingness to re-contest the presidential seat. This was believed to be a function of the emerged structure of the
parties in that they were created by the government and thus not deeply rooted in the people.
Military Rule
Military administration in the political governance of Nigeria has been characterized with the militarization of the
political process based on the following attributes:
-Suspension of the constitution.
-The governance through decrees and edicts.
-Curtailment of civil liberties and fundamental human rights.
-Exclusion of the people in the political process of policy initiation and implementation which is often limited
to the prime movers of coups.
-The seizure of power through force- Coup d’état.
-Appointment of civilians into political offices for the purpose of legitimizing the government.
-Seizure of power based on custodian factor or as corrective regimes.
The above attributes had characterized military administrations in Nigeria and by implication negates the principle
of political leadership in that the political process excludes the people. In other words, system or governmental
survival under military dictatorship in Nigeria was never anchored on the political power of the people but basically
on the concept of ‘custodian theory’ and ‘corrective regime’ which often fade with time and therefore leading to
40
political instability in form of counter coup d’état. Examples could be cited with the regimes of Yakubu Gowon
which utilized the custodian theory first for power acquisition by emphasizing on the indispensability of federalism
in the Nigerian state, which the lronsi government undermined in favour of unitarism and which the Gowon’s
government felt propelled its intervention for the purpose of sustenance (Adigwe,1979). The second was the
utilization of the same theory for power consolidation especially as regard the need to maintain an indivisible
Nigerian geopolitical entity that was threatened by the Eastern region.
Example of the use of the concept of ‘corrective regime’ was also associated with military regimes of Buhari and
Babangida. While the Buhari government purported to have taken over power from Shagari’s government in the
second republic as a result of economic mismanagement, corruption, misappropriation of funds to mention but few,
the Babangida’s government was said to have been propelled by the deviation from the mission that necessitated the
birth of Buhari’s government(Olagunju,Jinadu and Oyovbaire 1993). .
The import however of the above scenario is that military government especially in the Nigerian Sate was
characterized by a high level of political fragility or instability because successive regimes tend to be destroyed by
the same ills they claim necessitated their intervention especially with the lack of moderating capacity of the people.
The Fourth Republic.

The background of political leadership in the Nigerian State both under civilian regimes and military dictatorship
indicate a scenario where political instability persisted in the Nigerian body-politic as a result of the utilization of
ethnic politics as a tool for corruption, poor political leadership, instituting fragile political institutions, the
manifestation of political norms that were antithetical to democratic survival (Omodia,2009). Thus, the challenge of
the present republic vis-à-vis democratic survival is the injection of functional democratic orientation and norms into
the Nigerian people in order to serve as vanguard of democracy and good governance. This based on past
observation could only be achieved in an atmosphere of party centred nationalism rather than ethnicization.
The Nigerian state therefore of the Fourth Republic, especially with the registration of more than fifty political
parties is an indication that party politics is so weak. In addition, the existence of a dominant political party, the
People’s Democratic Party (PDP), a truly national party is also an expectation that: (I) the party should be able to
provide a truly national political leadership for the Nigerian state. (2) The party representatives both in its
emergence and policies should be guided by national sentiments and democratic tenets.
However, unfolding events in the Nigerian body-politic between 1999 and date shows the manifestation of intra
ethnic party politics in the Nigerian polity, especially through the zoning system. For instance, the two parties that
fielded candidates in the presidential election of 1999, the PDP and the All People’s Party (APP) zoned the
presidential seat to the South; this witnessed the emergence of southern presidential candidates-Chief Olusegun
Obasanjo of the PDP and Chief Olu Falaye of the APP( Egwemi,2007). This could be seen as simply a device of
ethnicizing party politics both at the intra and inter party level, unlike in previous republics where it was majorly at
inter party level .On observational basis what accounted for the above scenario is that, while the formation of
political parties especially in the First and Second Republic were associated with charismatic leadership of the
leaders, in the Fourth Republic such charismatism does not exist as parties were either formed by group or
association without clear cut influence.
It is indeed needful to state that the lack of clear-cut influence among politicians and the emergence of the zoning
system may have worked thus far because the present democratic experiment could be said to have survived more
than other experiments of the other republics. However, unfolding events in the Nigerian polity shows that the
present system is so fragile because of the personalization of leadership especially by the political representatives. In
other words, charismatic leadership of the past republic was important in ensuring party discipline and supremacy
especially in terms of carrying-out party manifestoes. For instance, the implementation of the party programme of
free education in UPN controlled States under the political leadership of Chief Obafemi Awolowo (Bello,2008). In
the present situation, party representatives in government especially the President and Governors are automatically
the leaders of the party in their states and the nation. The implication therefore is that, the party system is
characterized by indiscipline, the seizure of the party structure by the political leaders and blind loyalty to persons
rather than the party.
41
The above have characterized party politics and political leadership in the Nigerian state. The scenario no doubt is
antithetical to democratic survival in Nigeria. It therefore shows that the emergence of very powerful party
representatives at the expense of party control could lead to the demise of the zoning system for selfish and class
interest. As a matter of fact, the present democratic experiment of the fourth republic has survived up to a decade not
as a function of zoning but the resolve of Nigerians to perfect democracy in Nigeria through long lasting experience.
This is because the so called zoning is not embedded in the people who are supposed to be drivers of democracy.
Rather, it is designed by the elites for elitist interest in that the products of such system are often not accepted to the
people but foisted on them through electoral rigging.
CONCLUSION
The position of this paper is that if the present democratic experiment of the Nigerian Fourth Republic is to stand the
test of time, there is need for a transformed and integrative leadership that would serve as a drive for socio-economic
and political development. In other words, the idea is that the development of the citizenry through political
participation would snowball into maturity and self believe not only needed for democratic development, but also
for socio-economic development.
REFERENCE
Ademoyega, A. (1981). Why We Struck. Ibadan: Evans Brothers Nigeria Limited.
Adigwe, F. (1979). Essentials of Government for West Africa. Ibadan: University Press.
Appadorai, A. (1975) The substance of Politics. London: Oxford University Press.
Aper, J.O (2008). political attitudes, political manipulation and election in Nigeria: the role of politicians and
security agents In: S.M Omodia (ed.) Managing Elections in Nigeria (P.29) Keffi: Onaivi publishing
Azelama, J.U. (2010). Nigeria Constitutional development from the Nigeria Council to 1963 republican Constitution
In: J.U. Azelama (ed.) Nigerian Government and Politics. (Pp.25-32) Benin City: Ever Blessed Publications.
Bello, K. (2008) Ideological Bankruptcy in the Political Ppractice of Nigeria: Genesis Magnitude and
Consequences. Keffi: AMD Designs and Communications.
Crowder, M. (1968). West Africa Under Colonial Rule. Benin City: Ethiope Publishing Corporation.
Egwemi, V. (2007). The people’s democratic party and the emergence of a dominant party system in Nigeria.
NASHER (52): 90-97.
Kurfi, A. (1983). The Nigerian General Elections 1959 and 1979 and the Aftermath. Ibadan: Macmillan.
Mukherjee, S. and Ramaswamy, S. (2007). A History of Political Thought. New Delhi: Pretence-Hall.
Nwosu, N.I., Olaniyi, J.O. and Oladele S.O. (1998). Introduction to Constitutional Development in Nigeria. Ibadan:
Sunad Publishing Limited.
Olagunju , T. Jinadu, A. and Oyovbaire, S. (1993). Transition to Democracy in Nigeria. Ibadan: Spectrum Books.
Omodia, S.M. (2003). State and conflict managemnet in the Nigerian fourth republic: a. case democracy or for good
governance. Nasarawa Journal of Humanities 1 (1): 170-175.
Omodia, S.M. (2004). Elitist hedonism and democratic survival in Nigeria. The Nigerian Academic Forum. 7(3): 52-
56.
Omodia, S.M. (2006). Political leadership and democratic survival in the Nigerian fourth republic. Indian Journal of
Multidisciplineary Research. 2 (2): 282-288.
42
Omodia, S.M. (2007). Governance and democratization in Africa. The Social Sciences 2(1): 124-138.
Omodia S.M (2009). Elections and democratic survival in the fourth republic of Nigeria. Journal of Pan African
Studies 3(3): 35-42.
Opara, B.A. (2007). June 12 1993 Presidential Election. Abuja: Subavic International.
Oronsaye, A.O.(2009) Tradition and trends in Nigeria public administration In: R.F. Ola and D.A Tonwe (eds.)
Nigerian Public Administration (Pp 23-32) Lagos: Amfitop Books.
Rodney, W. (1972). How Europe Underdeveloped Africa. London : Bogle - L’over ture Publication
Yamma, Y.A. (2008). Elections in post colonial Civilian regimes in Nigerian In: S.M. Omodia (ed.) Managing
Elections in Nigeria (Pp. 18-27) Keffi: Onaivi Publishing.

43
THE IMPACT OF POLITICAL SOCIALIZATION ON POLITICAL PARTICIPATION – A NIGERIAN VIEW

POINT
Oko Ugwu1 and Oguud Felicia Mgbo2

1
Department of Public Administration, Akanu Ibiam Federal Polytechnic, Unwana, Afikpo – Ebonyi State and
2
Department of General Studies, Akanu Ibiam Federal Polytechnic, Unwana, Afikpo – Ebonyi State
ABSTRACT
Socialization is a complex process through which individuals learn, assimilate and internalize
the customs, norms and culture of the society, and from values that are acceptable to the
society. The paper will examine the role of political socialization in the formation of political
opinion and participation in the political system. The paper further exposes the negative impact
which the Nigerian kind of Political socialization has on the political culture and by extension,
on the participation of the individual in the political system. The paper identifies also the
various factors that affects political participation of the individuals in the country.
KEYWORDS: Society, political system, culture, Nigeria, public opinion, socialization
INTRODUCTION
Public opinion is grounded on values. People acquire their values through socialization – a complex process through
which individuals become aware of their environment, culture, and form values, every society seeks to be self
sustaining, self preserving, and self developing. They do these by preserving those cultural values that make them
unique. The process of socialization is one way by which the culture of a people is preserved because it involves the
transmission of these culture from one generation to another. The process of socialization prepares the biological
being to fit into the society and prepares him for the roles he is to play and providing him with the necessary
foundation of behavioural patterns, beliefs and values that will make him suitable for integration into the society.
This we must point out, ensures the continuity of the society and its values or culture.
From the above, one will understand that socialization provides a being with the necessary ingredients needed to
participated in the activities of the larger society. By including moral values, behavioural patterns, habits and
culture, socialization prepares a person as “rite of passage” to face societal challenges and participatory mien within
his environment. Thus, participation could be social, civic, religious or political. This paper is intended to show how
political socialization can affect a person’s political participation using Nigerian insights. Using Nigeria as a point of
departure, tells a story of the kind of political participation occasioned by the unfortunate political culture contrived
by the ruling elite in Nigeria.
Conceptual Clarification
For ease of understanding, we consider it very important to clarify issues in this paper. This is by way of bringing
out in clear relief the implications of the two major concepts central to the paper. The concepts are political
socialization and political participation.
Political Socialization
Like we said earlier of socialization, public opinion is grounded on political socialization which itself is a complex
process through which individuals become aware of politics, learn political facts, and form political values (Berry
and Goldman 1989). Many scholars have defined political socialization variously but all seem to agree that the
process of political socialization which is an endless thing involves the transmission of a people’s groups or
society’s political culture from generation to generation. Thus Almond and Verba (1963) defines political culture
as a people’s predominant beliefs, attitudes, values, ideals, sentiments and evaluation about the political system. It is
this political culture that political socialization transmits.
The world itself is a learning process. It is in a state of flux, therefore learning and by extension, socialization is a
continuous process that terminates only in death. Easton and Denis (1969) have also defined the concept as those
developmental processes through which persons acquire political orientations and patterns of behaviour. Some
practical personal illustrations may be very pertinent here. Remember your earliest encounter with a political figure
44
Oko Ugwu and Oguud Felicia Mgbo: Continental J. Social Sciences 3: 44 - 49, 2010
say a commissioner or your earliest memory of a governor. Now consider your earliest knowledge of political party
and party politics. What influenced you to identify with a political party if you did? What of the atomic bomb? How
did you first learn about it? You may have probably remembered that it goes back to your childhood days. Political
socialization and socialization in general starts from childhood.
There are different patterns of political socialization. Thus, behaviouralists have attempted to distinguish by using
four analytical categories which are related. These include: Agencies; Process; Time-span, and Change. Agencies
refer to the medium via which socialization will germinate. Included here are both the primary and secondary
agencies, etc. The family is regarded as the dominant agent of socialization. There is an extreme angle to the issue of
socialization and this refers to the process. Process sis of two kinds, , latent and manifest processes. Latent aspect of
socialization is always associated with the primary agency which the manifest is associated with the secondary
agency. The time span of socialization refers to an individuals formative years . The concept of change refers to the
structural consequences of socialization on the political system. Change here could either be systemic or non-
systemic.
Political Participation
Many people hold strongly albeit wrongly that political participation is all about voting in an election. Far from this
because there are other forms of participation, and sometimes they are more effective than voting. There are
conventional and unconventional participation ( Berry and Goldman 1989). Government ought to be run by the
people. This is the democratic ideal in a nutshell. But how much and what kind of citizen’s participation are
necessary for democratic governance? Champions of direct democracy believe that if citizens do not participate
directly in government affairs, making government decisions among themselves, they should give up all pretence of
democracy. Voting in an election is however central to the majoritan of government, but it is not the only means of
political participation. Having said all these, we can now attempt a definition of political participation.
Political participation refers to “those actions of private citizens by which they seek to influence or to support
government and politics (Milbrath and Goel, 1977). This definition embraces the two types of participation –
conventional and unconventional forms. Conventional behaviour is the behaviour that is acceptable to the dominant
culture in a given situation. Thus plastering campaign posters on public buildings is conventional; writings slogans
on walls is not. Voting, and membership of a political party are examples of conventional political participation;
staging sit-down strikes in public buildings and thuggery are examples of unconventional political participation.
Violent protest is unconventional. Political participation is a dependent variable as a result of variations in the
socialization pattern of individuals. These include the extent or level of participation. The level or extent of
participation has been classified by Milbrath and Goel (1977) to comprise the gladiatorial – involving public and
party office holders, electoral candidates, and strategists. The transitional refers to contributors – monetary and
attendees of patty meetings and infact party identification; and the spectatorial which are emblem carrying people,
canvassers, etc.
Impact of Political Socialization on Political Participation

This paper is devoted to finding how the socialization process in the political system affects an individual’s
participation in the political system. In other words, we would want to expose how this complex process impacts on
the political participation of the individual do affect or impact on the individual’s nature and level of political
participation. No two people are influenced in precisely the same way. Each individual experiences a unique process
of political socialization and forms a unique set of political values. Since political socialization is the transmission of
political culture, the later must be at issue here and must be central to this paper. We therefore need to investigate
the place of political culture in political participation.
The Impact of Political Culture

Political socialization has been identified as the transmission of political culture from one generation to another. If
one must investigate the interplay of politics and socialization in political participation, the best place to commence
is from the ‘area’ of political culture.
Political culture according to Almond and Verba (1963) is a people’s predominant beliefs, attitudes, values, ideals,
sentiments and evaluations about the political system. Almond and Verba further classified political culture into the
45
broad categories using as a justification the level of participation and consciousness. The first category they called
parochial political culture. People in this category do not have specialized knowledge, feelings and judgment about
the system, structures, roles, personnel and output. They hardly make any input in the system and expect virtually no
output from the political system. This kind of situation occurs in primitive traditional societies, suberu observed.
The second category is the subject political culture. Here, members of the political system are aware of a specialized
governmental or political authority and are affected by the output of this political authority. Inspite of this
awareness, their relationship to the political system is essentially passive.
The third and last category is the participant political culture. Here the members of a political system are explicitly
and actively oriented to both the input and output aspects of the system and are affected by the output of the political
system. The members also tend to be oriented towards the operation of the political system. One can find this in
many of the established or consolidated liberal democratic countries. From the foregoing, one can deduce that one’s
participation in the political system is conditioned or influenced by the inherent political culture in the system. Some
countries no doubt have more participatory culture than others, in which case they are more enthusiastic and proud
in their institutions and are more effective in the role they place (Jackman, 1987)
Political culture per se does not account for political participation but when this culture is transmitted through the
process of socialization, it can then impact on political participation. How does it do this. it is the ‘how’ that we are
trying to address in this paper. In order to ascertain the impact of political socialization on political participation, we
would direct our attention to certain variables while also bearing in mind the role of some socialization agents in the
political participation of the individual.
Age Dimension of Socialization

As many scholars as a number of studies have established the various positive relationship that exist between age,
political interest, and political participation. Crittenden (1963) has established this causal relationship between age
and political interest which in turn lead to active political participation. Neuman (1986) has also observed the
linkage of political sophistication to age-related increases in political participation and argued that political
sophistication was the product of three stages of socialization, viz – early, adolescent, and adult. According to
Neuman, in early socialization, the family is important; formal schooling and sex role is associated with adolescence
socialization while in the adult phase, group participation, income and age play important roles. The underlying
proposition here is that political participation tend to increase with age.
Civi Competence
This is knowledge and habits of knowledge acquisition relevant to politics. The assumptions here is that those who
posses’ greater civic competences are more likely to participate in politics and as a result are able to make
discriminatory judgment. John Strate (1989) argues that the acquisition of civic competence is partly an age-related
process.
Agents of Socialization
Agents of socialization impinge on political participation because the family as a primary agent influences the child.
It is not surprising that most people link their earliest memories of politics to their families. Moreover, when parents
are interested in politics, they influence their children to become more politically interested and informed. This is
perhaps why in Nigeria, children of the old politicians tend to continue making waves in politics even after their
parents have passed on. The present issue of Dr. Bukola Saraki, Governor of Kwara State who is protégé of the
second republic senate leader Dr. Olusola Saraki; Senator Udo Udoma, Mrs. Abiola Dosumu, who are children of
Justice Udo Udoma and Chief M.K.O. Abiola respectively are valid examples of this type of participation
occasioned by the family tradition. In Imo State, Barr. Tonny Anyanwu who was a member of the House of
Representatives between 1999-2003 is the son of Senator Tonny Anyanwu. A Senator in the second republic. One of
the most politically important things that many children learn from their parents is party identification. This is
learned in much the same way as religion. School itself influences political participation. Students learn to get
involved in politics by vying for offices in their various clubs. Moreover, education gives one the leverage in
political participation. The media also play important roles in socialization, hence participation. Some people are
motivated into party identification and membership an a result of the party’s manifesto and sweet jingles on radio
and television
46
Parents’ Socio-Economic Status (SES)

Political socialization starts in the family and infact all forms of socialization. This can only indicate that the status
of a family will definitely affect the children’s socialization and by implication, their participation in politics.
Participation, it has been established correlates closely with an individual’s socio-economic status (ESE). The higher
one’s SES, the greater the likelihood of active participation in politics. Little wonder the Nigerian political scene has
almost been over run by the nascent and emergency millionaires and fraudsters (a.k.a. 419 } For one, the motivation
is there. politics anywhere but more especially in Nigeria involves a lot of stakes including monetary stakes,
especially at the level of participation. This makes it more prone to participation by people with higher SES. Verba
and Nie (1972) have included education, occupation and income and several civic attitudes which are bought to
explain the association between SES and participation. In general terms, the high socio-economic status (SES)
families participate more in politics than the lower ones and since the SES of the parents determine the SES of the
children therefore the children’s orientation is influenced by using their parent’s SES to place them in the setting
that forester’s civic involvement and competence.
Sex Dimension to Political Socialization

An important element in the relationship between political socialization and political participation is the different
ways the political socialization of the sexes affect their participation. There are differences in the socialization of the
sexes because the early socialization of children has long emphasized the public roles of males and the private roles
of females (Jennings 1983). This goes a long way to explain why men have higher participation level in politics than
women. In Northern Nigeria, and among core Moslems, it is almost a taboo for women to involve in politics at
whatever level. The trend is gradually changing but complete participation of women in politics in the Northern
Nigeria can never be realized given the predominant Islamic tenets in the north.
Other Parental Factors

There are factors associated with parents that can influence the political life of the children. These include:
a. The parent’s civic orientation and knowledge. This influences the children’s interest in politics either way
of negative or positive.
b. Parents’ active participation in politics. This also influences the children. Politics is “infectious”, and the
“virus” will definitely infect the children of parents that are actively involved in politics more than those
with parochial or subject political orientations. Again, through the process of imitation, children of
politically active parents adopt the stand of their parents. Children are here motivated to follow the
footsteps of their parents. Such people like the Awolowo’s, Kuti’s, Nwodo’s, Mbadiwe’s in Nigeria, and
the Ghandi in India, the Kennedy in the United States of America are valid examples. Children from such
families are also motivated by the challenge to maintain the family reputation and political tradition.
Political Climate and Political Participation

The political climate and environment of a nation can produce either positive or negative effect on political
participation. A child who is socialized in the climate of political thuggery, acrimonious rivalry, political
assassinations and political contests fraught with election rigging and vituperations will tend to develop negatively
or entirely discouraged participation. “Politics” is a dirty game” is a slogan people have come to identity with
politics and politicking over time. This tends to discourage people from participation. Some are socialized with
equating politics with lies – this tends to produce alienation.
Generally, unhealthy political climate discourages political participation. In Nigerian, the June 12 psychotic
melodrama has produced a lot of apathy to political activities in Nigeria. A lot of people still find it hard to believe
in the sincerity of any transition programme in Nigeria. This has succeeded in reducing active political participation
including voting in election. A valid case is the Nigeria political climate which has become a mirage by the actions
of the hegemonic Peoples Democratic Party (PDP) in elections in Nigeria. Elections in Nigeria has turned to
selection and electoral fraud perpetrated by the PDP has made people loose faith in elections. Presently, people do
not have faith in elections any longer. The PDP has become satanically hegemonic and devilish in their approach to
politics in Nigeria. This has created a climate of fear and understandable distaste for politics. Apathy is the principal
estuary of that sea of socio-political maladjustment of which the PDP is the source. A situation where a state
Governor elect polled 230,000 votes to win an election is deplorable. The point to be drawn here is that the political
environment (climate) itself is a socializing agent and it is capable of impacting either negatively or positively on
47
political participation. Every human being is a product of his environment. This goes to show that one’s
environment is important in building his person. Today, the PDP has succeeded in creating a legion of political
thugs and criminals who now believe that elections must be hijacked and have been socialized in the act of
intimidation of political opponents including possibly elimination of political opponents and perceived political
threats. A charged atmosphere as in the case of Western Regional crisis of 1962 can dampen one’s interest in
politics. The worst is the charade called the 2007 election which is comparable in intensity only to the criminal
annulment of the June 12, 1993 Presidential election in Nigeria.
CONCLUSION
We have tried so far to identify the impact of political socialization on political participation. We have succeeded in
establishing that the way a child is socialized, and the environment definitely impacts on his political participation.
We identified certain factors which induce participation. They include political culture it is true that the political
culture of a place or society is central to this process. It has no direct bearing on political participation. This is
because political culture itself is latent as culture as a whole. It is through socialization process that these culture are
generically transmitted to produced effect. Therefore, it is the transmission of culture (socialization) that enhances
participation.
While accepting culture and socialization as being central to our investigation, we also identified other factors that
enhance political participation. They included: Age, Civic competence, Socio-economic status, Sex and other
parental factors like parents’ civic orientation and active participation and involvement. We also identified the
general political climate and environment of politics as having a bearing on political participation. We still conclude
that the Nigerian political culture of fraud, violence, thuggery and irresponsible deceit has created an unfortunate
political situation and a jaundiced system in the country.
REFERENCES
Almond, G. and S. Verba (1963) The Civic Culture Princeton: Princeton University Press.
Crittenden, J. (1963) “Ageing and Political Participation” in Western Political Quarterly Vol. 16, pp 323 – 331
Easton, D. and J. Dennis (1969) Children in the Political System: Origins of Political Legitimacy. New York:
McGraw-Hills Inc.
Jackman, R.W. (1987) “Political Institution and Voter Turn Out in the Industrial Democracies” in Western Political
Quarterly
Janda, K. J. M. Berry and J. Goldman (1989) The Challenge of Democracy: (2nd edition) New Jersey: Houghton
Mifflin Company
Jennings, K.M. (1983) “Gender Roles and Inequalities in Political Participation: Results from an 8 – Nation Study”
in Western Political Quarterly Vol. 36, pp. 346-385
Milbrath, L.W. and M.L. Goel (1977) Political Participation. Chicago: R. and McNally.
Neuman, W.R. (1986) The Paradox of Mass Politics: Knowledge and Opinion in the America Electorate.
Cambridge Mass: Harvard University Press.
Strate, J.M. (1989) “Life-Span Civic Development and Voting Participation” in American Political Science Review.
Vol. 83, No. 2 (June), pp. 443
Seberu, Rotmi (1999) Lecture, University of Ibadan.
Verba, S. and N. Nie (1972) Participation in America New York: Herper and Row.
48

Oko Ugwu
Department of Public Administration, Akanu Ibiam Federal Polytechnic, Unwana, Afikpo – Ebonyi State
49
DEVELOPMENT OF A PSYCHOMETRIC INSTRUMENT TO MEASURE WORK LIFE BALANCE
V.M. Rincy and N. Panchanatham

Department of Business Administration, Annamalai University, Annamalainagar – 608 002, Tamil Nadu.
ABSTRACT
Contribution of the service sector to the national economy of India has been considered as an
important factor in the determination of the national GDP and over the last few decades the issue
of work-life balance (WLB) especially among the service sector employees has been receiving
increased attention. Even though some scales are available for the measurement of WLB, they
do not exactly fit into the societal and familial concepts existing in the Indian society.
Therefore in the present work, a 42 items four factor instrument is developed for measuring the
WLB of employees working in the service sector. The data needed for the development of the
scale was collected from 375 employees working in the various categories of service sector. Kaiser-
Meyer Olkin test and Bartlett’s test were conducted to check the sampling adequacy and
sphericity of the data and the dimensions (factors) were resolved through factor analysis. The
WLB measurement scale was found to be having high reliability and validity with dependable
Cronbach alpha values. Attempts have also been made to discuss the implications of measuring
the WLB of the employees in human resource management.
KEYWORDS: Work life balance, WLB scale, Psychometric instrument, Service sector employees
INTRODUCTION
In the present scenario of globalization and economic liberalization accompanied by recession and layoff, two
cardinal domains in the lives of an employee is work and personal/family life. Moreover, the present day society
throughout the world has witnessed dramatic changes in the concepts about work and family life over the past few
decades due to the technological advancements and improvements in living conditions. These changes and
advancements quite often lead to interference, conflict and competing demands between the expectations of the work
place and personal needs at home (Lambert et al., 2006). As a result, the subject of work life balance (WLB) has
received wide spread publicity and has been subjected to an increasing number of investigations in different parts of the
globe (Clark, 2000; Fisher, 2001; Greenhaus et al., 2003; Mathew and Panchanatham, 2009; 2010). Various workers
have defined WLB in different terms. Kofodimos (1993) considered WLB as “finding the allocation of time and
energy that fits your values, making conscious choices about how to structure your life and integrating inner needs
and outer demands and involves honoring and living by your deepest personal qualities, values and goals”. Clark (2000)
and Greenblatt (2002) presented comparatively simpler and practical approaches to WLB. While the former defined
WLB as satisfaction and good functioning at work and at home with a minimum role conflict, the latter proffered
WLB as the absence of unacceptable levels of conflict between work and non work demands. Greenhaus et al.
(2003) have defined WLB as the extent to which an individual is equally engaged in and equally satisfied with
his/her work and family role. Whatever be the context, balancing work and family domains is increasingly
becoming a difficult task for various employees and they are concerned about the boundary between their work and
non work lives (Hochschild, 1997; Mathew and Panchanatham, 2009). A critical analysis of the literature reveals a number
of consequences and antecedents to WLB issues including health issues (Sparks et al., 1997; Tregaskis et al., 1998),
dependent care issues (Zedeck, 1992; Kossek et al., 2001; Hardy and Adnett, 2002) and even positive spillover
between the two domains (Pieterse and Mostert, 2005; Rost, 2006).
Due to the increased importance of the topic, various instruments were developed to measure the WLB of different
target groups in different contexts. These scales include those developed by Fisher (2001), Greenhaus et al. (2003), Hill
et al. (2004), Huffman et al. (2004) and Hayman (2005). Majority of them were developed on the basis of the western
societal and work concepts. Most of these instruments are having good validity and reliability in the societal
contexts in which they were developed. However, as the etiquettes, customs, values of the society, nature and concepts
of the family structure and organization in India are somewhat different from that of the western and European countries;
there are some practical difficulties in directly applying these WLB instruments in Indian context. Further, to the best of our
knowledge, no precise WLB measurement tool has been developed in the Indian context. Therefore, the present work is an
attempt to develop a compact instrument to measure the WLB of employees in the service sector of India, which
50
V.M. Rincy and N. Panchanatham: Continental J. Social Sciences 3: 50 - 58, 2010
contributes a major share to the national GDP (Shah and Agrawal, 2008). Further, based on the data available we
propose the following hypotheses
H1: Intrusion of personal life into work (IPLW) and intrusion of work into personal life (IWPL) are negatively related to
WLB.
H2: Work enhancement by personal life (WEPL) and personal life enhancement by work (PLEW) are positively
related to WLB.
METHODOLOGY
Sampling and data collection
The data needed for developing the WLB scale were collected from a sample population consisting of employees
working in the service sector in India (Table 1). The various areas of service sector covered in the present study
include education, healthcare, finance and insurance, civil administration, law and order, public transport and
tourism and hospitality. A random (probabilistic) sampling method was adopted and a total of 610 employees were invited
personally or by e-mail/letter to take part in the survey. Questionnaires were either given directly or sent by post/e-
mail to all the 610 employees. Out of 610 questionnaires distributed only 375 duly filled up questionnaires were returned
and the response rate was 61.5%. The minimum sample size needed for the study was determined by following
Hamburg (1985) and was found to be 229 (N = 375, margin of error = 5%, confidence level = 95%).
Development of the measuring instrument (work-life balance scale)

As a preliminary step, in-depth interviews were conducted among 40 employees belonging to the various areas
(already mentioned) of service sector in India. Open ended questions and semi-structured interview formats were
used to assess the various dimensions (factors) coming under the WLB of service sector employees. Empirical data
generated from these exploratory analyses were coded and mind mapped in an iterative manner until four major
dimensions were clustered using dendrogram method. Finally, 46 statements belonging to the four dimensions
(factors) and addressing the issues of WLB were developed based on literature review and qualitative research. The
content validity ratio of each item (statement) in the scale was calculated following Lawsche (1975) and was found
to be more than 0.55. Further, in order to increase the validity and reliability of the instrument as well as to ensure its
appropriateness, the statements were subjected to two phases of pilot tests conducted with 20 people each composed
of human resources professionals, academic experts and the progressive employees of service sector industry.
Table 1. Demographic profile of the respondents

Category %
Below 25 22.2
25 – 35 30.4
Age
35 – 45 32.3
Above 45 15.1
Below 10,000 11.1
10,000 – 20,000 28.1
Income
20,000 – 30,000 31.5
Above 30,000 29.3
Below graduation 20.2
Graduation 25.8
Education
Post graduation 27.6
Above post graduation 26.4
Male 53.6
Gender
Female 46.4
Married 69.3
Marital status
Single 30.7
Finally, the questionnaire used for this study consisted of two sections. White the former was designate to reveal the
socio demographic details of the respondents (Table 1), the latter contained 46 statements (Table 2) designed to
measures the WLB of the employees. The reliability of the instrument was estimated using Cronbach alpha
51
coefficient (Cronbach, 1951). Scoring was done on a seven point scale 1 = never, 4 = some times, 7 = always). The
overall value of the instrument was considered as the WLB index and was taken as the dependent variable for
determining the directions and magnitudes of the various dimensions in the WLB scale.
Statistical analysis
The 46 items pertaining to WLB of service sector employees (Table 2) were factor analyzed using principal
components analysis with varimax rotation method (Table 3), to determine the underlying dimensions (factors) and
their appropriateness. Kaiser-Meyer Olkin (K.M.O) measure of sampling adequacy and Bartlett’s test of sphericity
of the instrument were conducted to test the fitness of the data. The relationship between dimensions and WLB was
determined by Pearson’s correlation analysis (Table 4). The directions and magnitudes of associations between the
factors and WLB were tested through regression analysis (Table 5).
Findings and discussion
Profile of the respondents

All the respondents were service sector employees employed in India. A summary of the socio demographic profile
of the respondents is presented in the Table 1.
Table 2. Mean ratings of work life balance scale (N = 375)

Item Items Mean SD
No.
1. I cannot concentrate in my work due to the dependent care issues at home 5.44a 0.96
2. Due to the role overload at home, I am physically tired to discharge my work 5.43 0.97
responsibilities
3. The stress originating from my personal/family life make me unable to concentrate 5.42 1.01
on my work
4. Many a time I have to postpone things at work due to demands on my time at home 5.41 0.98
5. I could have concentrated more in my work, If I were free from the family burden 5.40 0.99
6. I find it too tired to perform my works after discharging all my personal/family 5.40 0.99
responsibilities
7. My work suffers as I am mentally worried about my dependents issues at home 5.38 1.02
8. The needs and demands of my family members interfere with my work related 5.39 1.01
activities
9. I cannot discharge my duties properly at the work place due to my personal/ family 5.38 0.99
problems
10. Due to my pre-occupation with societal activities, I find it difficult to complete 5.38 0.99
work in time
11. Due to increasing work demands, I have to postpone/neglect many of my 5.31 0.99
personal/family needs
12. The stress originating at my work drastically diminishes the happiness of my family 5.28 0.99
13. As I am busy with my work, I cannot give proper care and attention to my children 5.28 1.00
14. As I have to spent more time in my work domain I often fail to fulfill my family 5.28 0.98
responsibilities
15. The demands arising from my work make my personal life stressful 5.27 0.98
16. I face difficulties in personal life due to my profession/work 5.26 0.99
17. Due to the non-cooperative nature of the co-workers, I face difficulties in personal 5.26 0.99
life
18. The rigid and non supportive nature of my supervisors make my family life a 5.25 1.00
difficult one
19. My spouse feels uncomfortable due to my preoccupation with the work 5.25 1.01
20. Due to my work lead, I fail to give proper attention to my dependent at home 5.24 1.02
21. In view of the nature of my work, I find it increasingly difficult to take care of my 5.23 0.99
older parents/in laws
22. I find it difficult to manage my personal and family life and work demands 5.22 0.98
Table 2. Contd…
52
Item Items Mean SD

No.
23. The tiresome demands of work do not allow me to lead to personal life that I like 5.22 0.99
24. I come home from work too late to look after the family roles 5.21 1.01
25. I have health issues arising due to the increasing work demands 5.20 1.01
26. I do not have proper sleep due to my busy work schedule 5.19 1.03
27. My work makes me too tired to look after my personal/family obligations 5.18 1.01
28. Quite often I have to miss out important family/social functions due to my pre- 5.18 1.00
occupation with the work
29. My job keeps my personal/family life enjoyable 1.83 1.00
30. My work provides me enthusiasm and happiness to pursue my personal/family roles 1.82 0.99
31. My work contribute to the positive development of my personality 1.81 0.99
32. My work gives me ample opportunities to get rid of the tensions arising from the 1.79 0.99
personal/family life
33. My exposure and interactions at work help me to provide proper care to my dependents 1.76 1.02
34. My work schedule helps me to plan and execute my family activities regularly 1.72 1.01
35. The culture and punctuality at work help me to do my personal/family role properly 1.62 1.01
36. My family life gives me energy and better mood to perform my duties at work 1.58 1.04
places
37. My family responsibilities and experience make me punctual and responsible at 1.58 1.04
work
38. The experience of managing my family provide me better skill at work 1.57 0.98
39. Due to the supportive nature of my family members, I am able to relieve tensions 1.56 1.05
originating at work
40. The family life increases my self esteem at work 1.53 0.98
41. The interaction and concepts prevailing in the family life makes my relationship 1.52 0.99
with my supervisions and coworkers more cordial
42. My personal/family life helps me to be more dedicative and sincere at work 1.52 0.94
43. My supervisors and co-workers have a difficult time in accommodating my work 1.21 1.00
schedule
44. The experience I gained at work makes me a better parent/spouse 1.18 1.02
45. My personal/family life has helped to improve my interpersonal skills in the work 1.17 1.01
place
46. My work/profession has no role in miseries I, suffer in my personal life 1.07b 1.01
Note: Seven-point scale was used for rating the WLB instrument ranging from 1 = never, 4 = some times to 7 = always;
a = the highest mean among all items; b = lowest mean among all items.
Mean ratings of the items in the work life balance scale

Among all the items, “I cannot concentrate in my work due to dependent care issues at home” was rated highest with a mean
score of 5.44 and the statement “my work/profession has no role in the miseries, I suffer in the personal life” scored the lowest
mean of 1.07 (Table 2), which implies that employees have accepted that their work (profession) as well as personal (family)
life have played important roles in their WLB. The result of the K.M.O. measure was 0.829 and that of Bartlett’s test
of sphericity was 2507.01 at 0.000 significance level. These findings suggest the appropriateness of use of the factor
analysis. Out of the 46 items (Table 2), three (item nos. 44, 45, 46) were extracted as their factor loadings were less
than 0.5 and item no. 43 was deleted to increase the reliability of the construct and to improve the Cronbach alpha
score (see foot note of Table 3). Finally the remaining 42 statements constitute the four dimensions of the scale are
represented in the descending order of the factor means in Table 3.
Ten statements were loaded in factor 1 (IPLW) with reliability alpha at 0.97 and an overall factor mean of 5.41
(Table 3). This factor was negatively pursued in the WLB scale. Majority of the respondents opined that they were
experiencing intrusion of personal life into work very frequently or always. Eighteen statements were loaded into
the factor 2 (IWPL). The Cronbach alpha was 0.98 and the factor mean was 3.47 (Table 3). This factor was also
negatively pursued and the increased permeability of the work-family boundary was evident from the responses of
the respondents. Interference from the work domain in the family life was reported as a common phenomenon by
53
vast majority of the respondents and thereby causing work-family imbalance. Seven statements were loaded into the
factor 3 (WEPL) with an alpha value of 0.81 and a factor mean of 1.76 (Table 3). Work enhancement by personal
life is an ideal situation for service sector employees as it implies that the moral support given, experience gained
from and affection expressed by the family/society could exert a bonding force to maintain a better quality at work
in their organization. Factor 4 (PLEW) comprised of seven statements with reliability alpha of 0.97 and an overall
factor mean of 1.55 (Table 3). This section emphasized the importance of positive vision and attitude at the work
place, a good work culture and a better work environment. These initiatives could provide better inputs to the
personal life of the employees.
Table 3. Factor analysis with varimax rotation and reliability test of work life balance among service sector
employees (N = 375)
Item No. Factor
Factor Cumulative Cronbach
(as given in name& factor Eigen value Variance %
loading variance % alpha
Table 2) mean
1 0.95
2 0.93
3 0.93
Intrusion of
4 0.93
personal life
5 0.92
into work 18.19 41.34 41.34 0.97
6 0.91
(IPLW)
7 0.89
5.41
8 0.88
9 0.86
10 0.79
11 0.98
12 0.98
13 0.97
14 0.96
15 0.87
16 0.81
17 0.74
Intrusion of
18 0.73
work into
19 0.73
personal life 11.60 26.36 67.7 0.98
20 0.73
(IWPL)
21 0.68
4.99
22 0.68
23 0.68
24 0.67
25 0.66
26 0.65
27 0.65
28 0.64
Table contd…
54
Item No. Factor

Factor Cumulative Cronbach
(as given in name& factor Eigen value Variance %
loading variance % alpha
Table 2) mean
29 0.84
30 0.81 Work
31 0.78 enhancement
32 0.64 by personal 7.852 17.85 85.54 0.81
33 0.68 life (WEPL)
34 0.66 1.76
35 0.65
36 0.86
37 0.85 Personal life
38 0.85 enhancement
39 0.82 by work 2.46 5.61 91.16 0.97
40 0.79 (PLEW)
41 0.62 1.55
42 0.61
Note: Seven point scale was used for rating the indicators ranging from 1 = never,4 = sometimes to 7 = always.
Statements “my work/profession has no role in the miseries I suffer in the personal life” (IWPL), “my supervisors
and colleagues have a difficult time in accommodating my work schedule” (IPLW) and “my personal/ family life
has helped to improve my interpersonal skills in the work place” (WEPL) were deleted as factor loadings were <
0.5. The statement “the experience I gained at work makes me a better parent/spouse” (PLEW) was deleted after
internal reliability test get maximum Cronbach alpha for the factor PWE.
Correlation and regression analysis

Correlation analysis (Table 4) revealed significant negative correlations between IWPL and WLB as well as IPLW
and WLB. On the contrary WEPL as well as PLEW were having significant positive correlations with WLB. Linear
regression analysis (Table 5) was conducted using the total sum of the statement (WLB index) as the dependent
variable and the four dimensions as dependent variables. The results indicated that IWPL (β = -0.149) and IPLW (β
= -0.100) are significant negative predictors of WLB and thereby supporting H1 that IWPL and IPLW are negatively
related to WLB. On the contrary, WEPL (β = 2.557) and PLWE (β = 1.938) are significant positive predictors of
WLB. Therefore H2 received full support from the data as hypothesized indicating 50.8 percentage of variance
(adjusted R2 = 0.508, F = 97.67, p < 0.001, Table 5).
Table 4. Correlation matrix of various dimensions (factors) with the over all work-life balance
M ± SD WLB IWPL IPLW WEPL PLEW
WLB 81.19 ± 47.33 1
IWPL 8.91 ± 6.00 -.204** 1
IPLW 41.01 ± 15.38 -0.334** 0.074 1
WEPL 37.61 ± 18.20 0.656** -.105* -0.311** 1
PLEW 36.93 ± 17.12 0.673** -0.98* -0.323** 0.996*** 1
Note: IPLW = Intrusion of personal life into work; IWPL = intrusion of work into personal life; PLEW = personal life
enhancement by work; WEPL = work enhancement by personal life; WLB = work life balance; * Significant at 0.05
level; ** Significant at 0.01 level; *** Significant at 0.001 level
Various workers have developed different instruments to measure the WLB of employees in different contexts and
Reiter (2007) has given a precise review on various available scales. Even though most of these scales are having
sufficiently higher levels of alpha coefficients, there are some practical difficulties in adopting these scales in their
original forms in measuring the WLB of service sector employees in India. The difficulties encountered range from
the nature of sample population, their working situation, familial concepts, to the societal setup in which the scales
developed. The situation becomes more complicated in view of the peculiarities of Indian society and familial life.
Indian society still remains largely as a male dominated patriarchal one with close family bondages, where joint
families and extended families are prevalent. Even though more and more women are taking up paid jobs outside the
55
family boundary, they are generally accorded household duties and the responsibility of looking after the family in
addition to their paid work. Similarly, the trend of both husband and wife becoming earning members of the family
are also becoming prevalent in the Indian society and thereby adding to the woes of work life balance. Irrespective of the
various horizontal and vertical social developments, the Indian society basically remains the same by retaining and
cultivating the age-old cultural and society etiquettes and strong family bandages, where altruism is rather considered as a
duty within the family. Looking after the older members of the family along with the young ones, educating the
children and catering to the needs of various members of the family; are rather considered as prime concerns and
cardinal duties of the spouses/earning members in addition to their personal needs and paid work functions.
Similarly the multifaceted developments and various advancements taking place in the industrial world, the new
found concepts of work, work culture and work place (Khatri and Budhwar, 2000; OECD, 2004) in the context of
the peculiar familial and societal responsibilities and personal needs of the service sector employees in India have
resulted in the ever increasing phenomenon of work life issues and imbalances in their lives. Therefore it deemed fit
to develop a concise instrument to measure the WLB of service sector employees in India. For developing the scale,
the works of Fisher (2001), Greenhaus et al. (2003) and Hayman (2005) have been thoroughly consulted and many
of the ideas are utilized.
Table 5. Regression analysis of work-life balance with its dimensions

B SEB β Significance
IWPL -1.177 0.289 -0.149 0.000
IPLW -0.307 0.119 -0.100 0.000
WEPL 2.08 0.346 2.557 0.000
PLEW 1.579 0.345 1.938 0.000
2
Note: R = 0.717; R2 = 0.514; R = 0.508; F = 97.67; p < 0.001; IPLW = Intrusion of personal life
into work; IWPL = intrusion of work into personal life; PLEW = personal life enhancement by work; SEB
= standard error beta; WEPL = work enhancement by personal life; WLB = work life balance; B
= unstandardised beta value; β = standardized beta coefficient.
In the present study the factor analysis procedure employed the principle components method for extraction with
varimax option, which ultimately yielded four factors. All the retained four factors are having eigen values greater
than one (>1) and factor loadings more than 0.5. This is in accordance with the report of Hair et al. (2005) that
factors having eigen values higher than 1.0 and factor loadings greater than 0.5 can be retained in the instrument.
After the verification of the dimensionality, the reliability of the constructs was assessed using Cronbach alpha
coefficient and resulted in alpha scores more than the minimum threshold value of 0.7 (Cronbach, 1951). The final
Cronbach alpha for the four factors are in the order IPLW = 0.97, IWPL = 0.98, WEPL = 0.81 and PLEW = 0.97.
The reliability estimates and factor loading schedule of the items finally resulted in a four factor instrument for
measuring the WLB of service sector employees with a total of 42 items. In order to critically assess the interface
between work and personal/family life in the Indian context, more statements have been included in IWPL and
IPLW sections of the present questionnaire than the other available scales. Similarly, the scale developed in the
present study has provisions to extensively measure the positive spillover (enhancement) in both the directions
namely toward work and personal life.
Finally, the four factors, 42 items instrument developed in the present study is intended to measure the WLB status
of service sector employees. The instrument possesses acceptable validity and reliability. The scale not only
explores the WLB level of the employees but also could give insights about the employees’ perceptions and
concepts about WLB. These insights could be utilized by the organizations to develop WLB provisions and
programmes. It may also be utilized as an effective tool to monitor the impact and effectiveness of WLB
programmes implemented by the organizations, which in turn could help the policy makers and human resource
managers to take corrective measures if necessary. This study adds to the existing literature on WLB and provides an
opportunity to more critically analyse and understand the crossover between the work and life domains of employees.
56
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V.M. Rincy
Department of Business Administration, Annamalai University, Annamalainagar – 608 002, Tamil Nadu.
Email : rincy1020@gmail.com
58
DIVIDEND POLICY, LIQUIDITY CONSTRAINTS AND FIRM INVESTMENT IN NIGERIA: AN EMPIRICAL

ANALYSIS
S.E. Samuel and D.O. Gbegi

Department of Accounting, Kogi State University, Anyigba
ABSTRACT
This study appraised the importance of dividend policy of firm investment and liquidity
constraints in Nigeria. To enable an empirical comparison of the findings, a critical review of
related literatures was carried out. A survey research method used for the study and the data
employed was derived from the annual publications of financial institution in Nigeria. The
analytical tool used in analysis data obtained for the study is regression analytical tool. The
empirical results reveal that investment has a significant effect on the dividend policy of firms
in Nigeria. More so, liquidity has effect on dividend policy firms in Nigeria but not significant.
KEYWORDS: Dividend, Investment, Liquidity, Earnings per share, Cash ratio, Dividend per
share
INTRODUCTION
The topic of dividend policy is one of the most enduring issues in modern corporate finance. This has led to the
emergence of a number of competing theoretical explanations for dividend policy (Al-Malkawi, 2007). This has
attracted a lot of controversies and many academic interests (Samuel and Inyada, 2010; Li et al., 2006; Gordon,
1959). Dividends are not just an outcome of a firm payout policy; they reflect a complicated combination of
investment strategy, financial decision and private information (Miller and Rock, 1985). From managerial
perspective, dividend can serve as a tool to mitigate agency problem by digesting extra free cash flows (Jensen,
1986), or to signal to the market that only good quality firms afford to pay dividends (Bhattacharya, 1979). On the
other hand, from the investors’ prospective, dividends are beneficial since they represent a regular income stream
which will enhance self-control by avoiding any irrational trades (Shefrin and Statman, 1984).
Focusing on the implications for dividends, Higgins (1972) later found that dividends varied positively with
earnings but negatively with investment. Dhrymes and Kurtz (1967) found that a firm’s desire to maintain stable
dividends may hamper investment by reducing internal funds available for capital expenditure. Furthermore, their
results suggest that investment needs have an influence on dividends, with greater investment reducing dividends
payment as predicted by a residual policy (Elston, 1995; Alli et al., 1993; Keown et al., 2002). Devereux and
Schiantarelli (1989) and Bhattacharya (1988) point out that without explicitly modeling the dividends policy of the
firm, it is not possible to tell which firms constrained by their earnings. In line with the above findings, what then is
the major determinant of dividends policy? Does working capital has any effect on dividend policy in Nigeria?
The objective of this study is to appraise the importance of dividend policy on firm investment and liquidity
constrains in Nigeria. Specifically, this study attempted to:
i. Examine the effect of investment on dividend policy of firms in Nigeria.
ii. Examine the effect of liquidity constraints on dividends policy of firms in Nigeria.
The null hypothesis formulated and tested for the study are:
i. Liquidity constrains has no significant effect on dividend policy of firms in Nigeria.
ii. Investment has no significant effect on the dividend policy of firms in Nigeria.
LITERATURE REVIEW
Researchers on corporate dividend policy have over the years followed two divergent paths. Some researchers have
followed a behavioral approach by survey the opinion of corporate managers in order to gain insight in to the factors
they consider most important in determining their firms’ dividend policy (Musa, 2009). Studies in the category
include the works of Baker et al. (1988), Farrelly et al. (1986), Baker and Farrelly (1988), Pruit and Gitman (1991),
Baker and Powell (1999 and 2001) and Mainoma (2001). These studies found that different managers at different
times attach varying importance to the factors that influence a firm’s dividend decision.
59
S.E. Samuel and D.O. Gbegi: Continental J. Social Sciences 3: 59 - 64, 2010
Some researchers on the other hand followed a normative approach and developed and empirically tested various
mathematical models in order to explain the dividend policy of firms. Lintner [1956] was the first researcher to
develop and test the partial adjustment model of dividend. His model suggests that change in dividends is a function
of the target dividend payout multiplied by the speed of an adjustment factor. This is expressed mathematically as:
DIVt = a + bpEPSt + (1-b) DIVt-1 + et
Where DIVt is next year’s dividend, a is the intercept; b is the speed of adjustment of current dividends to the target
(and lies between zero and one), p is the target payout ratio, EPS is earnings per share in the next year, DIVt-1 is the
previous dividend, while e is the error term. Several other empirical works in both developed and emerging
economies have tested the modified version of Lintner’s model after refining and restating the models or after
extending it. These include the works of Darling (1957); Brittain (1964); Oyejide (1976); Dhameja (1978); Crum et
al. (1988); Simons (1994) and Adelegan (2000).
According to Black (1976); Dempsey, Laber and Rozeff (1993); Litzenberger and Ramaswamy (1982); Brigham
and Gapenski (2002) and Van Horn (2001), the relationship between cash dividend announcements and share prices
is not obvious. The announcement of cash dividends signals information to investors that include the company’s
efficiency such as the profitability, liquidity and investment opportunity (Hansen, et al., 1994; Miller, 1999; Black,
et al., 1995; DeAngelo and DeAngelo, 1990 and Alli et al., 1993). Dividends may also serve as a mechanism to
reduce cash flow under management control, and thus help to mitigate the agency problems (Al-malkawi, 2007).
Reducing funds under management discretion may result in forcing them into the capital markets more frequently,
thus putting them under the scrutiny of capital suppliers (Rozeff, 1982; Easterbrook, 1984).

A survey research method was used for the study. The data employed in this study was derived from the annual
publications of financial institutions in Nigeria. Though, relevant literatures including periodicals and journal
articles giving clues on dividend policy, investment and liquidity constraints also provide veritable data for the
analysis. The methodology was empirical as it implores statistical tools in analyzing data obtained for the study. The
analytical tools used in analyzing the data collected for the study is regression analytical technique. It has the
potential of predicting the values of the dependent variable given values of the independent variables (Martin and
Firth, 1983). The population of the study consists of all staff of financial institutions in Nigeria quoted on the
Nigeria Stock Exchange (NSE). A systematic sampling technique was used to select twenty financial institutions in
Nigeria.
Model Specification
The models built for the purpose of analysis for this study are as follows:
(i) DPS = a + βCR + ε
(ii) DPS = a + βEPS + ε
Where DPS is dividend per share, an indicator representing dividend policy; CR is cash ratio, an indicator
representing liquidity and EPS stands for earnings per share. This is an indicator representing investment. a is the
intercept of the regression line; β is the partial coefficient associated with independent variable and ε is the
stochastic error term.

Table 1 and Table 2 show the model summary and coefficient of the dependent and independent variable used to
determine the effect of liquidity constraint on dividend policy of firms in Nigeria via SPSS package (version 17.0).
Table 1: Model Summary

Adjusted Standard Sig.
Model R R Square R Square Error of Estimate
1 0.072 0.005 -0.071 0.55065 0.799
60
Unstandardized Standard
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 0.651 0.199 - 3.275 0.006
CR 0.033 0.126 0.072 0.260 0.799
Table 1 and Table 2 above show the correlation between liquidity constraint and dividend policy. The correlation
shows a positive relationship between the variables. In table 1, the value of R, coefficient of correlation, is 0.072.
This indicate a positive but weak relationship between the dependent and independent variable while the coefficient
of determination, R2 is 0.005 which mean that about 99.5% of the dependent variable is accounted for by the
independent variable and the remaining 0.5% is accounted for by the other variable. In table 2 the regression
coefficient is 0.033 and the t statistic is 0.260. The level of significance is 0.799; that is 79.9% significant level. That
means 20.1% confidence interval which means that it not significant because it’s less than 95% confidence level and
more than 5% significant level.
Therefore, the null hypothesis which states that liquidity has no significant effect on dividend policy is hereby
accepted. Though, there exist a positive relationship but it is not significant.
Table 3 and Table 4 show the model summary and coefficient of the dependent and independent variable used to
determine the effect of investment on dividend policy of firms in Nigeria via SPSS package (Version 17.0).
Table 3: Model Summary
Adjusted Standard
Model R R Square R Square Error of Estimate Sig.
1 0.706 0.498 0.460 0.39103 0.003
Unstandardized Standard
Coefficients Coefficients
Model B Std.Error Beta t Sig.
1 (Constant) 0.60 0.202 - 0.298 0.771
EPS 0.317 0.088 0.706 3.594 0.003
The result in Table 3 shows that the value of correlation coefficient 0.706. This is a positive but moderate correlation
between the dividend policy and investment of firms in Nigeria. The coefficient of determination is 0.498, that is,
49.8% which mean about 50.2% of the dependent variable (dividend) is accounted for by the independent
(investment) and the remaining 49.8% is accounted for by other variables. In table 4, the coefficient of correlation
(beta) is 0.706 and regression coefficient is 0.317. The coefficient of correlation shows a positive relationship but
moderate while the t statistics is 3.594. The significance level in Table 3 and 4 is 0.003 which is 0.3%. This mean
99.7% confidence level. This mean it is significant because it is less than 5% significant level and more than 95%
confidence level. Therefore, the null hypothesis which states that investment has no significant effect on the
dividend policy of firms in Nigeria is hereby rejected.
CONCLUSION
This study provides preliminary empirical evidence suggesting that financial decisions of Nigerian firms are not
independent. It examined the effect of liquidity constraints and investment on dividend policy of firms in Nigeria
specifically limited to financial institutions. Based on the results of the study, it can be deduced that the study is
consistent with the findings of Mainoma (2001); Alli et al. (1993); Simons (1994); Crum et al. (1988) etc. This
study provides additional evidence that investment, liquidity has effect on dividend policy of firms in Nigeria.
61
Secondly, there is a positive relationship between dividend policy and liquidity but it’s not significant. Investments
have significant effect on dividend policy of firms in Nigeria.
ACKNOWLEDGEMENT
We are thankful to the following persons who have criticized, and encouraged us in bringing this paper to its present
state. Even though time constraint would not permit us to list their names, we must express our gratitude to Mr.
Abdullahi Sani Rufai, Dr. Achua, Dr. Ajachukwu, Dr. R.U. Oka, Mr. Olukontu, Mr. Audu, Mr. Inyada, Mr. Simon,
Mr. Ezugwu, Mr. Edogbanya, Mr. M.M. Usman, Mr. Obinna Emmanuel, among others. God bless you all.
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Alli, K.L., Khan, Q.A., Ramirez, G.G. (1993). “Determinants of Corporate Dividend Policy: A Factorial Analysis”
The Financial Review, 28, 523-547.
Al-Malkawi, H.N. (2007). Determinants of Corporate Dividend Policy in Jordan: An Application of the Tobit
Model. Journal of Economics and Administrative Sciences, 23 (2): 44-70.
Baker, H.K., Farrelly, G.E. and Edelman, R.B. (1985). “A Survey of Management Views on Dividend Policy”
Financial management, 14 (3): 75-84.
Baker, H.K. and Farrelly, G.E. (1988). “Dividend Achievers: A Behavioral Look”Akron Business and Economic
Review, 19 (1): 115.
Baker, H.K. and Powell, G.E. (1999). “How corporate Managers Views Dividend Policy” Quarterly Journal of
Business and Economics, 33(2):17-27
Baker, H.K. and Powell, G.E. (2001). “Factors Influencing Dividend policy decisions Of NASDAQ firms”
Financial Review, 36 (3):780
Bhattacharya, S. (1979). “Imperfect Information, Dividend Policy, and ‘The Bird In the Hand’ fallacy” Bell Journal
of Economics, 10, 159-270.
Bhattacharya, S. (1988). “Corporate Finance and the Legacy of Miller and Modigliani” Journal of Economic
Perspective, 2, 135-147.
Black, F. (1976).”The Dividend Puzzle” Journal of Portfolio Management 2(2): 5-8
Black, H.R., Ketcham, D.C. and Schweitzer, R.(1995). “The Direction of banks Holding Company Stock Prices to
Dividend cuts or omission” Mid-Atlantic Journal of Business, 31(3):217-231
Brigham, E.F. and Gapenski, L.C. (2002). Financial Management: Theory and Practice (10th Ed.) United State:
Thomson Learning Inc
Brittain, J.A. (1964): “The tax Structure and Corporate Dividend Policy,” American Economic Review, 54(3): 272.
Crum, R., Jensen, D. and Ketz, E. (1988). “An Investigation of Management Dividend Policy Model and Cash flow
Measures” working Paper, The Pennsylvania State University, p.25
Darling, P.G. (1957). “The Influence of Expectation and Liquidity on Dividend Policy” Journal of Political
Economics, 60(3):209
Dempsey, S.J., Laber, G. and Rozeff, M.S. (1993). “Dividend policies in Practice: Is There an Industry Effect?”
Quarterly Journal of Business and Economics, 32(4):3-13
62
DeAngelo, H. and DeAngelo, L. (1990). “Dividend Policy and Financial Distress: An Empirical Investigation of
Troubled NYSE Firms” Journal of Finance,45, 1415-1431
Devereux, M. and Schiantarelli, F. (1989). “Investment Financial Factors and Cash flow Evidence from U.K. Panel
Data” National Bureau of Economic Research.
Dhameja, N.L. (1978). “Corporate Dividend Behavior with Special Emphasis on Growth and Controlled
Companies” Unpublished Doctoral Disertation, Indian Institute of Management, Ahmedabad, p.25
Dhrymes, P. and Kurtz, M. (1967). “Investment, Dividends, and External Finance Behaviour of Firms” In R. Ferber
(ed.), Determinants of Investment Behaviour, National Bureau of Economic Research.
Easterbrook, F.H.(1984). “Two Agency-cost Explanations of Dividends. The American Economic Review,
74(3):650-659
Elston, J.A. (1995). US Tax Reform and Investment: Reality and Rhetoric in the 1980s. Ash gate Publishing,
London, England.
Farrelly, G.E., Baker, H.K. and Edelman, R.B. (1986). “Corporate Dividends: Views Of the Policy Makers”. Akron
Business and Economic Review, 17 (4): 65
Gordon, M. (1959). “Dividends, Earnings and Stock Prices” Review of Economics And Statistics, 41, 99-105.
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Regulated Electric Industry. Financial Management, 23(1):16-22
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7(2):1527-1541
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(9th Ed.) New York: Prentice Hall.
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For Doing So?: Analysis Based on a Questionnaire Survey of Non-state Owned Listed Companies in China”
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American Economic Review, 46(2), 97-113.
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Unpublished Doctoral Dissertation, Ahmadu Bello University, Zaria p.98.
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1051.
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Major U.S. Firms”. Financial Review, 26(3): 237.
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Economics, 13, 253-282.
Simons, K. (1994). The relationship Between Dividend Change and Cashflow: An Empirical Analysis” Journal of
Business and Financial Account, 21(4):577
Van Horne, J. (2001). Financial Management and Policy (12th Ed.) New York: Prentice Hall

S.E. SAMUEL
Department of Accounting, Kogi State University, Anyigba
E-mail: aglowsun@yahoo.com
64
APPLICATION OF GOAL PROGRAMMING MODEL FOR BUDGETING IN RIVERS STATE UNIVERSITY

OF SCIENCE AND TECHNOLOGY , PORT HARCOURT.
Maxwell, Awoingo A.
Department of Mathematics and Statistics, Rivers State College of Arts and Science, Rumuola, Port Harcourt.
ABSTRACT:
The purpose of this study is to apply goal programming model for budgeting in Rivers State University of
Science and Technology, Port Harcourt. The aspiration of this work is to increase or decrease the amount
budgeted to five(5) different objectives (goals), these are personnel cost, overhead cost, capital
expenditure, revenue (internal generated) and total budget. The simplex method (Big M) was used to solve
the weights goal programming model formulated for the collected data. The application of the simplex
method by TORA package gives the following results in billion Naira as: the optimum solution is Z = 16
- .55, X1 = X2 =+0 , X3 = 4. 06, -d1 = 2.02,
- +
d2 = 1.70, d3 = 0.25, d4 = 3.57 and d5 = 0 .
Based on the results obtained it was found that the optimum value
( Z = 16 .55) satisfied all the goals except goal 4 which is revenue goal.
KEYWORDS: Annual budget; Aspiration level; Budget document, Multiple goals; Optimum result,
Personnel cost.
INTRODUCTION
Budgeting is a complicated task that requires cooperation among functional units in any higher institution. It is an
important area in the administrative setting of any university. It is a detailed plan indicating the activities which a
unit, department or the entire university intended to carry out at a particular time in future.
Budget document goes beyond mere plan, therefore, it could be said that all budgets are plans but plans are not
budget. Budget is a financial tool used in gathering information Duncan (1996).
According to Duncan (1996) a budget is a plan expressed in quantitative and money terms and it can include some
or all income, expenditure, and the capital to be employed. The aim of this study is to increase or reduce the
amount of money budgeted or allocated to five (5) different objectives (goals): Personal cost, overhead cost,
capital expenditure, revenue and total budget in Rivers State University of Science and Technology , Port Harcourt.
In order to formulate ( design) an effective budgeting model, a good understanding of the institution budgeting
processes is a must. Although , such budgeting model exists in the university , it is not properly structured due to
the presence of multiple objectives (goals). A formal decision analysis that is capable of handling multiple goals
through the use of priorities is the goal programming model.
Goal programming is an extension of linear programming (LP) which is a mathematical tool to handle multiple
objectives. Ignizio (1978); affirmed that goal programming is a relatively new tool that has been proposed as a
model and approach for the analysis of problem involving multiple objectives.
The basic approach of goal programming (GP) is to establish a specific numeric goal for each of the objectives,
formulate an objective function for each 1objective and seek a solution that minimizes the (weighted) sum of
deviation of the objective functions from their respective goals.
Dade (1981), designed a goal programming model and used it for revenue budgeting. He pointed out that the
concern with the process and of budgeting has regulated the revenue constraint to a position co-equal with variable
.
Taha (2003); said that goal programming technique is for solving multiple objective models and the aim is to
convert the original objective into a single goal.
65
Maxwell, Awoingo A: Continental J. Social Sciences 3: 65 - 70, 2010
Chowdery and slomp (2002); considered goal programming as an appropriate, powerful and flexible technique for
decision analysis of the troubled modern decision maker who is burdened with achieving multiple objectives under
complex environmental constraints.
Winston (1994); defined Goal programming as the technique used to choose among alternatives.
Sundaram (1978); affirmed that goal programming combines the logic of optimization in Mathematical
programming with the decision makers desire to satisfy several goals.
Du, Acharya and Sahu (1982); developed a goal programming model and applied it for budgeting in the production
area, they considered the following constraint as a mathematical programming model;
∑ aij xj ≤ bi , (i = 1,2,3, .. m. j = 1, 2, 3 .. n )
Xj are decision variables
aij are the decision variable coefficients.
bi are the right hand side elements.
Brief History Of The Institution

Rivers State University of Science and Technology. Port Harcourt, is the premier University of Science and
Technology in Nigeria. The Institution was formerly known as Rivers State College of Science and Technology and
was upgraded to University by the Rivers State Government in the year 1980.
Currently, the University has seven Faculties, Forty-Three Departments. Four Institutes, a Post Graduate School,
standard library and Medical Sciences Department. There are Administrative Blocks. Exams and Record Office.
Admissions Office and the Bursary Department.
The Bursary consist of Audit Unit, Student Accounts unit and Staff Salary and Emoluments Unit.
The Institution is financed by the Rivers State Government. It is also funded from donations by Corporate bodies
and individuals.
This study is determine by the annual budget requirements that can help in planning for the future and development
of the institution.

The purpose of this study is to applied goal programming model for budgeting in Rivers State University of Science
and Technology, Port Harcourt.
The data for this study were previous budgets of the University from 2008 - 2010, collected from Rivers State
Ministry of Finance,
Port Harcourt.
The weighted goal programming model is of the form:

++ -
Minimize Z = Σ ( Wi d + Wi d-i ).
i∈m
Subject to :
n 2.1
- +
Σ (aij xj + di - di ) = bi
j =1
66
di, di, xj ≥ 0. ( i = 1,2,3….m j = 1, 2, 3 … n )

Where di and di = deviational Variables.
Xj = decision variables.
-
aij = decision variable coefficients.
Wi and Wi = non-negative constraints representing relative weights.
PRESENTATION- AND ANALYSIS OF DATA.

The data (previous budgets) collected in billion Naira are shown in Table 1
TABLE 1: The data (previous budgets) collected in billion Naira
ITEM Amount Budgeted in Billion Naira / year
2008 2009 2010 Total
Personnel cost 0.982 1.009 1.361 3.352
Overhead cost 0.065 0.068 0.073 0.206
Capital expenditure 0.025 0.614 0.432 1.071
Revenue (Internal 1.105 0.2 0.6 0.905
generated)
Total Budget 1.178 1.891 2.465 5.534
Source: from Rivers State Ministry of Finance, Port Harcourt.
The budget of the University from 2008 - 2010 and the assigned weights are shown in Table 2.
TABLE 2: The budget of the University from 2008 - 2010

ITEM Amount Budgeted in Billion Naira / Assigned weights
year Total
2008 2009 2010 Wi
Personnel cost 0.982 1.009 1.361 3.352 6
Overhead cost 0.065 0.068 0.073 0.206 2
Capital 0.025 0.614 0.432 1.071 4
expenditure
Revenue ( 1.105 0.2 0.6 0.905 10
Internal
generated)
Total Budget 1.178 1.891 2.465 5.534 8
The Weights were chosen regarding the relative importance of each goal. The determination of the specific values
of the weights is subjective.
Aspiration Level ( Target value) of the Goals

The goals statements of the budget of the institution are;
Goal 1: Raise personnel cost (salary and allowances of staff) by at least N 3.5 billion per annum.
Goal 2: Reduce overhead cost by at most N 2 billion per annum.
Goal 3: Raise capital expenditure by at least N1.5 billion per annum.
Goal 4: Raise revenue ( internal generated) by at least N6billion per annum
Goal 5: Reduce the total budget by at most N10 billion per annum.
The determination of the target values is subjective. Anyone can use values different from the above used values and
obtains different solution.
The Goal programming model formulation.

Let X1 = amount budgeted for the period 2008.
67
The goals can be stated mathematical as follows:

0.982X1 + 1.009X2 + 1. 361X3 ≥ 3.5 ( personnel cost constraint).
0 . 0.65X1 + 0.068X2 + 0.073X3 ≤ 2 ( overhead cost constraint)
0.025X1 + 0.614X2 + 0.432X3 ≥ 1.5 ( capital expenditure constraint)
0.105X1 + 0. 2X2 + 0. 6 X3 ≥ 6 ( Revenue constraint)
1.178X1 + 1.891X2 + 2.465X3 ≤ 10 ( Budget Constraint)
X1, X2, X3 ≥ 0
Conversion of Goal Programming Model to Linear Programming Model

[ +
Let di = amount by which we numerically exceed the goal.
Let di = amount by which we numerically under the goal
+ -
di and di are referred to as deviational variables.
Let Z be the-sum of deviation from the goals.
Applying the weighted goal programming model, the goal programming formulation can be stated mathematically
as follows:
+ - + + -
Minimize Z = 6d1 + 2d2 + 4d3 + 10d4 + 8d5 ( objective function) (1)
Subject to :
-
0.982x1 + 1.009X2 + 1.361X3 + d1+ - d1 = 3.5 (2)
-
0.065X1 + 0. 068X2 + 0.073X3 + d2 - d2+ = 2 (3)
- +
0 . 025X1 + 0.614X2 + 0.432X3 + d3 - d3 = 1.5 (4)
-
0.105X1 + 0 . 2X2 + 0 . 6X3 + d4 - d+4 = 6 (5)
-
1.178X1 + 1.891X2 + 2.465X3 + d5 - d+5 = 10 (6)
- - + - + -
X1, X2, X3, d+1, d1, d2+, d2,- d3+, d3, d4, d4, d5, d5 ≥ 0.
The application of the simplex Method ( M. Method) by Tora package in solving the linear programming model
formulated gives the optimum solution below;
68

Title: goal programming .
Final iteration No. 8
Objective Value = 16 . 55
Variable Value Obj Coeff Obj Val Contrib
x1: 0.00 0.00 0.00
x2: 0.00 0.00 0.00
x3: 4.06 0.00 0.00
d1+ 2.02 6.00 12.13
d2 + 0.00 0.00 0.00
d3+ 0.25 4.00 1.01
d4+ 0.00 10.00 0.00
d5 + 0.00 0.00 0.00
d1 - 0.00 0.00 0.00
d2- 1.70 2.00 3.41
d3 - 0.00 0.00 0.00
d4- 3.57 0.00 0.00
d5 - 0.00 8.00 0.00
-
The optimum result ( value) is Z = 16. 55, since it is not equal to zero. This implies that at least one of the goal is
not met. The optimum value satisfied all the goal except goal 4 which is the revenue goals.
+
The deviational value from the personnel cost goal is d1 = 2.02, this means that the personnel cost goal target of
N3.5 billion is below the personnel cost goal by 2.02. that is the actual amount that should be budgeted for
personnel cost is 5.07. The deviational value from the overhead cost goal is d2 = 1.70, this means that the overhead
cost goal target of 2.00 exceeded the overhead cost goal by 1.70. That is , the actual amount that should be
budgeted for overhead cost is, 0.3.
The deviational value from the capital expenditure goal is d3 = 0.25, this implies that the capital +expenditure goal
target of 1.5 is below the capital expenditure goal by 0.25. That is the actual amount that should be budgeted for
- is 1.75. The deviational value from the revenue (internal generated ) goal is d4 = 3.57, this
capital expenditure
implies that the revenue goal target of 6 is exceeded by 3.57. That is, the actual amount that should be budgeted for
revenue is 2.43, conversely, the budget
- goal of the university of at most 10, billion naira target is not violated
because d5 = 0. Therefore the minimum budget of the university is 16. 55 in 2011.
CONCLUSION.
In this study, the goal programming model formulated for the collected data from 2008 - 2010, was converted to
linear programming model. The simplex method (Big M) was used to solve the linear programming model
formulated
-
The application of the simplex method (M Method) by Tora package gives the optimum result as Z = 16.55 billion
Naira. Based on the result obtained, It was found that the optimum result satisfied all the goals except goal 4 which
is the revenue goals. The deviational value from the revenue goal is 3.57 billion Naira. That is , the8 actual revenue
goal should be 2.43 billion Naira. Since the optimum result is Z = 16.55 billion Naira, therefore, the budget of the
Institution should be 16.55 billion Naira and this amount should cover all their needs.
RECOMMENDATIONS
On the basis of the finding of this study, the following recommendations are made:
1. The state Government should fund the institution adequately.
2. Budgeting should base on -new technology.
3. The budget should be properly managed and utilized by the institution.
4. Timely and active budget monitoring team of the state Government should monitor the budget.
5. Further research on this study should be carried out.
69
ACKNOWLEDGEMENT.
I am thankful to my student Mr. Festus Harry who is a staff of Rivers State Ministry of Finance, for his help in
getting the data for this work.
REFERENCES:
Chowdery, B. V. and Slomp, J. (2002): Production Planning under Dynamic product Environment : A multiple
Goal programming Approach. European Journal of Management and Organization, 1:1-12.
Dade, C. (1981): Revenue Budgeting: A Decremental application, P.I. Jerry Mccaffery, Indiana University,
Bloomington, pp 1-3.
Duncan, W: (1996): Budgeting and budgetary control. Prentice Hall, pp 1-3
Du, P.K, Acharaya, D. and Sahu K.C. (1982): A chance constrained goal programming model for capital budgeting.
Journal of Operational Research Society; 33 (7): 635.
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Decision Sciences, 9 (7): 93 - 106.
Sundaram, R.M. (1978); An application, of good programming technique in metal cutting. International Journal of
Production Research. 16: 375 - 382.
Taha, H.A. (2003); Operations Research: An Introduction, Seventh edition , Prentice - Hall Inc. New Delhi, India,
pp. 347-351.
Winston, W.L (1994); Operations Research, Applications and Algorithms. Third edition Durbury Press, Belmont,
California , pp. 772-775.

70
ENTREPRENEURSHIP AND SELLING: A REVIEW.
Raheem Shefiu.
Centre For Entrepreneurship Development (CED), Yaba College of Technology, Yaba. Lagos.
ABSTRACT
This paper reviews entrepreneurship. It does not exist without the ct of selling being factored into relevance.
The nation's economy can only be revamped by producing and selling more of our products both locally and
abroad to earn the foreign exchange needed to grow the economy. In the paper, relationship between
selling and entrepreneurship, stages involved in selling and secrets of selling were highlighted. It was
concluded that…for the economy of the country to quantum leap, selling must be the cornerstone of all
entrepreneurial activities. Entreprenuership does not exist without the act of selling being factored into
relevance. The nation's economy can only be revamped by producing and selling more of our products both
locally and abroad to earn the foreign exchange needed to grow the economy.
Selling involves communicating the benefits of a product or service to the prospective consumers with the
intent of taking a purchase decision. It involves prospecting, pre-approach, approach, close and follow-up.
The salespeople must be conscious of what the customer likes or dislikes in them to be able to sell and
consequently make profit for the organization. They must also know the secrets of increasing sales.
Buying and selling sustain entrepreneurial effort. The entrepreneurs are the catalyst of change needed to
take Nigeria's economy to the next level of prosperity in the realization of the objectives of vision 2020.
KEYWORDS: market, economy, entrepreneurship, consumers, commodity, producers, nation
INTRODUCTION
Life is brought to an end without entrepreneurship. Man continues to live because his needs are met through the
process of entrepreneurship. It is the sine-qua-none of our existence.
Man needs food to survive provided by an AGGLOPRENEUR. His other wants are satisfied by the
MERCHANTPRENUERS, CO-PRENUERS AND SERVICEPRENUERS. These wants or needs of man are
produced, sold and bought in the market.
The consumers are made happy when they have an avalanche of commodities and services to buy. People buy
because of the utility to be derived from such a commodity or service arising from emotional or rational reasons of
purchase.
The economy of every nation is brought about by the market activities of the consumers and the entrepreneurs
(producers). These activities cannot take place without selling what the people are willing and ready to buy. An
economy cannot grow without the creation of new ventures by the entrepreneurs. Truly, economies and lives perish
without entrepreneurship.
The entrepreneurs scan the environment for the identification of gaps within the economy to be filled or needs to be
met leading to the production of commodities and rendering of services to be bought by the consumers.
Therefore, it is the aim of this paper to show that the concept of entrepreneurship is a nullity without an
understanding of a key role played by selling in making whatsoever has been produced by the entrepreneurs
available to the final consumers.
What happens when the entrepreneurs produce and there are no consumers to buy?
It is no exaggeration to state that WITHOUT SELLING, THE PROCESS OF ENTREPRENUERSHIP IS
STILLED.
This has become a truism. Entrepreneurship is aborted or halted without selling.

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Raheem Shefiu: Continental J. Social Sciences 3: 71 - 76, 2010
The "abortion" of the process of entrepreneurship spells doom for a nation's economy. The entrepreneurs must
produce. The consumers will buy what has been produced given that such a product or service possesses utility
(satisfaction). When this happens, it engenders economic growth and development leading the breakage of the
vicious cycle of poverty consequently the people live life in abundance.
Nigeria's economy will be in doldrums without selling its crude oil to the United States of America (USA) and
United Kingdom (UK), cassava pellets to the Republic of China and other agricultural products in addition to the
solid minerals in the global market place.
NIGERIA EXPORTS TO THE UNITED KINGDOM INCREASES

"Nigeria's export recorded a significant growth of about 436 percent this year according to the British High
Commissioner to Nigeria, Bob Dewar. He said that the rate of investment by the United Kingdom government has
continued to grow in the last few years with exports increasing by 30 percent in 2008 and by 23 percent in the first
five months of 2009" (Bassey, 2009)
He said that export services amounted to about £1.3 billion last year while export from Nigeria was just over £200
million, much of which went into importation of refined petroleum products. He went further to say that exports like
cocoa are down by 74 percent this year despite a revival in the industry.
There are opportunities for new exports if the economy can diversify in a way that encourages entrepreneurs to
have confidence in new opportunities, not least into commercial agriculture (large and small scale) and new value
added products, he said.
ENTREPRENUERSHIP AND THE ENTREPRENUER DEFINED.

Innocent Akhuemonkhan(2005):Entreprenuership is the process through which new organizations come into
existence. It is a human creative action that builds something of value from practically nothing (Innocent, 2005)
Richard Cantillon (Circa 1730): Entrepreneurship is defined as a self employment of any sort. The entrepreneurs
buy at certain prices in the present and SELL at uncertain prices in the future. The entrepreneur is a bearer of
uncertainty.
Frank Knight (1921): Entrepreneurs attempt to predict and act upon changes within the MARKET.
Joseph Schumpeter (1934): The entrepreneur is the innovator who implements changes within the MARKET by
carrying out new combinations which include the following:
1. The introduction of a new good or quality thereof.
2. The introduction of a new method of production.
3. The opening of a NEW MARKET.
4. The conquest of a new source of supply of new materials or parts.
5. The carrying out of reorganization of any industry.
Israel Kirziner (1977): The entrepreneur recognizes acts upon MARKET opportunities.
Innocent Akhuemonkhan (2005): The entrepreneur is a person who has the ability to identify and evaluate business
opportunities in the environment, he gathers resources to take advantage of the business opportunities and also
initiate an appropriate action to ensure success.
He also enumerated the functions of an entrepreneur as follows:

1. He searches for and discovers new information.
2. He translates new information into new MARKETS, techniques and goods.
3. Seeks and discovers economic opportunity.
THE NITTY-GRITTY OF SELLING

Everyone lives by selling something: Life is nullity without selling. Every occupation that involves making contact
with the people involves selling.
72
Lawyer, Accountants, Bankers, Engineers, Architects, Lecturers, Politicians, Managers and others who perform
sales related activities whether or not they acknowledge it get involved in the act of selling.
Selling exists in the relationship of man with GOD. He provides (sells) your needs and you reciprocate (buy)
through offerings, thanksgiving and, praise-worship. It does exist between husband and wife. A man searches for the
qualities he wants in a woman, if he finds, he buys through an offer for marriage. The woman sells through her
consent of love, given that the man possesses utility i.e he possesses what she likes in a man.
SELLING DEFINED:- It means the communication of the benefits of a product or service to those who need or
want it, in order to elicit a purchase decision (Eniola, 2004)2
It is a subset of marketing irrespective of the organizational structure and social stratification. It brings about the
creation of awareness, interest and the stimulation of a desired action about a product or service.
THE TYPES OF SELLING: These include the following;

1. Personal Selling: This is a variant of selling that concerns itself with a two-way flow of communication
between a buyer and a seller, often a face to face encounter designed to influence a person's or group's
purchase decision.
2. Relationship Selling:- This has to do with the process of building ties with the customers based on their
needs over time.
3. Conference Selling:- This involves a sales person and the other company resource people meeting with the
buyers to discuss problems and opportunities.
4. Seminar Selling:- This has to do with the company team conducting an educational programme for the
customer's technical staff, describing the state of the art developments in the company.
THE CONCEPT OF EXCHANGE AS THE CORNERSTONE OF SELLING

The concept of exchange is the backbone of selling. When you sell, something of value must exchange hands
between the seller and the buyer.
This means that people must give up something to receive something they would rather have.
The conditions necessary for an exchange to take place include the following:
1. There must be at least two parties (Buyers and Sellers)
2. Each party must have something the other party values.
3. Each party must be able to communicate with, the other party and deliver the goods or services sought by
the other trading party.
4. Each party must be free to accept reject the other's offer.
5. Each party must want to deal with the other party.
DEPLOYMENT OF SELLING AS A POTENT TOOL OF PROFITABILITY BY AN ENTREPRENEUR

Building buyer - seller relationship is the hub of selling.
It should be noted that much of a sales person's work occurs before meeting with the customer and also continues
after the sales itself.
The personal selling process consists of the following stages;

1. Prospecting: This is the search for and qualification of potential customers. The LEAD is the name of a
person who may be a possible customer, or PROSPECT. The QUALIFIED prospect is that individual who
can afford to buy the product and he is also a decision marker.
2. Pre-Approach: Once a sales person has identified a qualified prospect, the preparation for the sales
begins with the preapproach which involves obtaining further information on the prospect.
73
It also involves deciding on the best method of approach knowing how the prospect prefers to be
approached, what the prospect is looking for in a product or service.
3. Approach:- It involves the initial meeting between the sales person and the prospect where the objectives
are to gain the prospect's attention, stimulate interest and build the foundation for the sale
presentation and the basis for a working relationship. The objective of sale presentation is to convert a
prospect into a customer by creating a desire for the product or service. The three major presentation
formats include STIMULI RESPONSE FORMAT, FORMULA SELLING FORMAT AND THE NEED
SATISFACTION FORMAT.
HANDLING OBJECTIONS DURING SALES PRESENTATION

Objections are excuses for not making a purchase commitment or decision. Techniques can be used to deal
with objections in a courteous, ethical and professional manner. These techniques include the following:
i. Acknowledge and Convert the Objection: This technique involves using the objection as a reason
for buying e.g. A prospect says the price is high. Yes, the price is high because of its finest
quality.
ii. Postpone: This technique is used when the objection will be dealt with later in the presentation.
iii. Agree and Neutralise: The sales person agrees with the objection, then shows that it is
unimportant.
iv. Accept the Objection: When the objection is valid, let the prospect express such views, probe for
the reason behind it and attempt to stimulate further discussion on the objection.
v. Denial:- When a prospect's objection is based on misinformation and it is clearly untrue. It is

wise to meet the objection head on with a firm denial.
vi. Ignore the Objection: This technique is used when it appears that the objection is a stalling
mechanism or is not important to the prospect of Technology.
4. Close: This stage involves obtaining a purchase commitment from the prospect. This stage is the most
important and the most difficult because the salesperson must determine when the prospect is ready to buy.
5. Follow-Up: The selling process does not end with the closing of a sale. Professional selling requires
CUSTOMER FOLLOW- UP. It is equated with courtship and marriage. The sale consummates the
courtship then the marriage begins.
It includes making sure that the customer's purchase has been properly delivered, installed and the
difficulties experienced with the use of the item addressed.
TABLE 1: THE OBJECTIVES OF THE STAGES OF THE PERSONAL SELLING PROCESS

STAGE OBJECTIVE
Prospecting Search for a qualified prospect.
Preapproach Gather information and decide on how to approach the prospect.
Approach Gain the prospect’s attention, stimulate interest and make a transition to the
presentation
Presentation This involves the conversion of a prospect into a customer by creating a
desire for the product or service.
Close Obtain a purchase commitment from the prospect and consequently make
him a customer.
Follow-Up Ensure that the customers are satisfied with the product or service.
Source:Eniola,V.O(2004).Principles Of Selling.
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WHAT CUSTOMERS LIKE IN SALESPEOPLE

The customers like the following in salespeople;
1. He must be mannered. A salesperson must be polite, sincere and must be alert to the needs of the
customers.
2. He must possess a skill for a good sales presentation. He must be clear, audible, concise and well prepared.
3. Time Awareness. He must keep appointments and also punctual. Punctuality they say is the sole of usiness
i.e. He must be businesslike.
4. He must be knowledgeable about his product, company and customers.
5. He must be sensitive to needs. He must always listen to the customers and not trying to sell where there is
no need.
6. A salesperson must be smart, fresh and clean in appearance. This must be in accordance to a
particular working environment.
WHAT CUSTOMERS DISLIKE IN SALESPEOPLE

The customers dislike the following in sales people;
1. They dislike unpreparedness of the salespeople.
2. When a salesperson becomes arrogant, nosey, disrespectful and insincere.
3. Customers are not happy when salespeople don't keep appointments, irrelevant chat, talking too much or
any other forms of time wastage.
4. They dislike untidiness in appearance and also strong breath from smoking.
5. Customers do not tolerate being pushy or aggressiveness on the part of the salespeople.
6. A. salesperson integrity lies in the amount of knowledge or information he possesses. Therefore, a
salesperson who does not know product details, availability, prices, terms etc. losses his integrity before a
customer.
FIVE SECRETS TO INCREASE YOUR SALES

These include the following:
1. If the product you are selling is something your prospect can hold in his hands, get it into his hands as
quickly as possible. Get the prospect into the act. Let him feel it, weight it, admire it.
2. Don't stand or sit alongside your prospect. Face him while you are pointing out the important advantages of
your product. This will enable you to watch his facial expression and determine whether and when you
should go for the hit.
3. Talk with prospects who won't talk with you. When you can get no feedback to your sales presentation, you
must dramatise your presentation to get him involved.
4. Prospects who are themselves sales people and prospects who imagine they know a lot about selling
sometimes present difficult selling obstacles, especially for the novice. Simply give your sales presentation.
Then, wait a few seconds, just looking at him and waiting for him to say something. Then, start packing up
your sales materials as if you are about to leave. He will quickly ask you, why?
5. Remember that in selling, 'time na money'. Therefore, you must allocate enough time to each prospect.
Learn to quickly get your prospect interested in and wanting your product.
CONCLUSION
The nation's economy cannot be revamped without entrepreneurship. The actions of the entrepreneurs in an
economy bring about selling and buying.
The people of this country cannot survive without the goods and services sold to them by the entrepreneurs.
Therefore, entrepreneurial efforts in Nigeria must be intensified at all fronts inorder to keep people alive and
consequently avoid the dangers of hunger and starvation that could bring about the disintegration of our beloved
country.
75
Nigeria must survive. Its survival lies in our people embracing the culture of entrepreneurship that will make things
to be bought available thereby improving standard of living and also increasing life expectancy.
REFERENCES
Bassey Udo{2009): Nigeria’s Export to Uk up by 436 Percent. NEXT Newspapers. Money on Page 30. Wednesday
9, September, 2009.
Eniola, V (2004).: Principles of Selling. Dee-Sage Nigeria Limited, Lagos.
Innocent Akhuemonkhan (2005): Enteprise and Enterprise Culture. Centre for Entrepreneurship Development, Yaba
College of Technology,.
Nwathie Onyebuchi-Ibeya(2004): Five Secrets to Increase Your Sales. Entrepreneur. Daily Independent Small
Business Series (019).
Email: financialgatewayweekly@yahoo.co.uk
Raheem Shefiu (2004): Lecture Notes on Selling. Rufus Giwa Polytechnic (Dimas Study Centre) Agege, Lagos,
2004.

76
A DECADE OF DEMOCRATIC SURVIVAL: IMPLICATION FOR THE NIGERIAN POLITICAL PROCESS.
S.M. Omodia
Department of Political Science and Public Admin, Adekunle Ajasin University, P.M.B.001 Akungba-Akoko,
Ondo-State, Nigeria, West-Arica.
E-Mail: omodiastephen@gmail.com
ABSTRACT
This paper unfolds the dynamics and pattern of democratic governance in the Nigerian Fourth Republic
which started in 1999. The paper through the use of Almond and Verba’s conception of political culture
discusses the political process through an analysis of the concept ‘citizenship’ and ‘system capability’. The
argument of the paper is that the political system manifest weak regulative and distributive mechanisms,
coupled with poor political participation – factors which have been discussed to be dysfunctional to the
survival of the system. Thus, the paper recommends major political reforms at the level of parties to enable
for internal party democracy and the restructuring of electoral bodies to enable for their independence and
to check unlawful interference from politicians.
KEYWORDS: Citizenship, distributive capability, militarization, political leadership, political

manipulation, system capability, regulative capability.
INTRODUCTION
The operation of representative democracy in Nigeria became more manifest and fashioned towards the modern
style as a result of colonial interest in which democracy as a political system was not initially designed to be
beneficial to the indigenous Nigerians, but, to serve as divisive mechanism between the educated elites and the
traditional elites to the benefit of British colonial domination. This was coupled with the vision by the British to
institute a political system that will persistently facilitate the exploitation of the Nigerian State even after the
attainment of political independence.
The above point could best be understood by looking at the evolution of democracy vis-à-vis the working of the
system in Nigeria, it would be recalled that the elective principle of 1923 introduced party democracy in the
Nigerian body-politic through the implementation of the 1922 Clifford Constitution which only restricted party
democracy to two cities in the South – Lagos and Calabar, while the North was legislated for through proclamation.
The implication is that the Nigerian State was designed to manifest geographical divide between mass-elite,
especially with the income qualification of one hundred pounds for political participation in the Clifford
Constitution and fifty pounds for political participation in the Macpherson Constitution of 1946 (Crowder 1968,
Nwosu et al 1998).
Thus, geographical politicking and primitive monetization of the democratic process have continued to play a major
role in Nigeria’s democracy to the disadvantage of the process. This no doubt has snowballed into a scenario where
the Nigerian State has been characterized by political instability with negative impact on democratic norm and its
process (Crowder 1968, Duddley 1982, Omodia 2003, Opara 2007). Conversely, with the unfolding events of the
Nigerian Fourth Republic where civil rule seem to have survived the fragility of the political process than past
republics, it is therefore indispensable to unfold the implication of such survival on Nigeria’s democratic process.
To be able to achieve this objective, the paper in addition to this introductory section, is sectionalized into:
theoretical framework, identifying the impediments to democratic survival in the past, understanding democracy in
the fourth republic, putting forth recommendations for a viable democratic process and concluding remarks.
Theoretical Framework
Almond and Verba’s conception of political culture is no doubt indispensable as a theoretical tool and framework
for unfolding the Nigerian democratic system of the fourth republic. This is not only because democratic norm and
principles in Nigeria for the past one decade has not been static, but dynamic, in the sense that the focus is on a
greater integration of the people as part and parcel of the political system rather than the age long divide between
government and the governed which over the years have characterized the political culture of the Nigerian State.
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S.M. Omodia: Continental J. Social Sciences 3: 77 - 82, 2010
This is also coupled with the understanding that democracy and democratization is associated with the concept of
economic development, poverty eradication, good governance among others (Omodia 2007a), which could be
achieved and sustained in an atmosphere of democratic stability that is embedded in behavioural patterns that are
functional to the system. Thus, the need for political behaviour or political culture to transform from primitive stage
to an integrative form through enhanced political awareness both on the part of government officials and the
governed.
This transformational process has been captured by Almond and Verba (1963) in their typology of political culture
as:
(i) Parochial Political Culture – The conception here is that the citizens tend to either be unaware or have a
dim understanding of the existence of government and its structure, the resultant effect of which is poor
political participation on the part of the people. That is, the governmental process is not people- centred.
(ii) Subject Political Culture – A subject political culture is that in which there is a gap between the
government and the governed just like what is obtainable in parochial. The major difference however is
that in the case of subject culture, the people are aware of government and its structure, but such awareness
is restricted to the perception of non participation in governance on the part of the people.
(iii) Participant Political Culture – This type of culture just like the name suggest focuses on a vivid
understanding of governmental machinery and the active participation of the citizenry in the governmental
process.
As earlier stated, the justification for the use of Almond and Verba’s theoretical conception as a tool of analysis,
notwithstanding the criticisms of western orientation and years of existence (Ake 1982, Nwoko 1988), is
anchored on the drive by nation-state on participatory governmental system as an integral part of good
governance. This no doubt is shared by the Nigerian state.
From the above background therefore, the question that comes to mind is: to what extent is the Nigerian democratic
system of the fourth republic propelled by a participant political culture? This question is no doubt indispensable
considering the fact that one of the major impediments to political stability in Nigeria is the wide gap that tends to
exist between government officials and the masses in successive regimes.
Impediments to Democratic Survival in the Past Republics
The factors that served as impediments to democratic stability in the past republics in Nigeria could be said to be
multi-faceted. However, this paper is focused on the two central factors of poor political leadership and
militarization of governance.
(1) Poor Political Leadership – Although this factor especially in the first republic was a function of colonial
domination as a result of the bourgeosification of the process of elite recruitment by the colonial masters which
made the emergent leaders not to be focused and primitive in the utilization of power (Omodia 2003, Dauda 2006).
Primitive political governance persisted after the first republic irrespective of regime type (military or civilian) with
the obnoxious accumulation and utilization of national wealth for selfish and class interest. Thus, it has been argued
that there is hyphen and buckle between poor political leadership and political instability (Omodia 2004, Omodia
2006, Omodia, 2007b, Wilmot 2007) which have manifested in form of abortion of republics through coups and
counter coups.
However, the consternating scenario is that poor political leadership persisted even after coups that brought about
military regimes as corrective governments. Thus, the questions that come to mind are: (1) why did military
regimes in Nigeria become associated with poor political leadership considering that it constituted one of the factors
they sought to correct? (2) Why has civil government failed to learn from the mistakes of the past in terms of
unfocused leadership? In answering the first question, Dinneya (2006) identified three main factors as propelling
military interventions: these are: (1) the lack of clearly defined national interest (2) the nature of post colonial
military (3) poor electoral process and constitutional authority. He therefore argued that the military do not possess
the structure and orientation to serve as a corrective regime because of its institutional values which are antithetical
to democratic norms (Dinneya, 2006).
78
Civilian regimes on the other hand, have not been able to learn from the mistakes of the past because of such factors
as poor political culture, poverty, the utilization of political power for creating economic base among others. The
result is poor political leadership snowballing into a state of topsy-turvy which is hygienic or serve as a justification
for the termination of the system by hasty and ambitious military officers (Ibaba 2007, Yamma 2008). A typical
example could be found in the abortion of the Nigerian Second Republic in 1983 and to a great extent the aborted
Third Republic.
2. Militarization Effect – The effect of long years of military dictatorship in the Nigerian body politic has
created distortions in democratic values, lack of submissiveness to people’s will, the lack of connect between the
people and the government in terms of political participation. These ugly features characterizes civil governance in
Nigeria in that there is a wide gap between the people and the political process as regards political participation.
From the above perspective, the notion of the militarization of civil governance is viewed as a mechanism for
governmental rather than for system survival. This involves the utilization of the military to check spontaneous civil
reactions from the public as a result of their inability to access the governmental process. Thus, governmental
support is not anchored on the people but on the use of force. This to a great extent portrays such a civilian regime
as weak and lacking the capability to govern the State which the military often tend to use to its advantage.
Conversely, while this paper is of the conception that the factors associated with political instability in the past could
be said to be multi-faceted, the point however is that, if political leadership had been well focused and not distorted
by greed, selfishness, corruption, personal ambition among others and the democratic process deeply rooted in the
people rather than in militarization and thuggery, perhaps other factors would have been so minimal to threaten or
subvert democratic stability in Nigeria.
Democracy in the Fourth Republic
The focus here is that, if the factor of poor political leadership and militarization served as impediments to
democratic survival before the fourth republic, what is the scenario in the fourth republic? To be able to unfold the
scenario, this section discusses democracy in the Nigerian Fourth Republic from the perspective of citizenship and
system capability.
Citizenship – The concept citizenship here is synonymous with equality. It is viewed from the perspective in which
citizens could be said to have equal access to the political process in terms of political rights and participation. The
questions here are: are Nigerians discriminated against especially as regards contesting for elective political offices?
What is the nature of the discrimination and what implication does it have on the level of political participation?
On observational basis the political process is operated in such a way that there are restrictions in political
participation especially in contesting elective offices. This is often expressed or manifested in form of geographical
restrictions or through the monetization of the process which favours the rich. As regard geographical restriction,
the 1999 transitional presidential election was restricted to the South in term of contest, when both the Peoples
Democratic Party (PDP) and All Peoples Party (APP) fielded candidates from the South. The same scenario was
repeated in 2007 when the major political parties fielded Northern candidates in line with the concept of power shift.
The implication therefore is that the emergence of quality leadership is compromised and it thus aid the mutual
suspicion that exists between the North and the South, which is definitely not hygienic for democratic survival. The
situation is worse-off in intra-State or in federating units where appointments tend to be zoned and persons
discriminated against for belonging to a section of the State or outside it. This situation to a great extent has
threatened the corporate existence of the Nigerian State, especially with the development in Plateau State which
snowballed into the Jos 2001 ethno-religious crisis and the eventual declaration of a state of emergency.
As regard the restrictions on the part of the poor masses in terms of political participation based on the manipulation
of the political process by the rich, the political process of the fourth republic is such that without huge financial
backing political office aspirants cannot contest for elective posts, thereby, restricting political contest to the rich.
The process is also designed in such a way that money bag politicians could subvert the will of the poor electorate
through electoral rigging with the support of the officials of the electoral body, the security agents and even with the
collaboration of opposing party agents, especially when money is involved (Aper, 2008).
79
In other words, most Nigerians are shut out of the democratic process as contestants because they do not have the
means (money) to contest, and at the same time, shut out as electorate because their votes are designed not to count
if they do not favour pre-determined candidates. The effect is that governmental representatives in most cases are
foisted on the people by the process which tend to be unfair and creates politics of bitterness and thus, making the
system a fragile one (Omodia, 2007c).
The second point for measuring the performance of democracy of the Nigerian Fourth Republic from the perspective
of this paper is the system capability. By system capability, the focus is on the performance of the democratic
system in terms of regulative and distributive mechanisms. In other words, the questions that come to mind are: (1)
to what extent has the system been able to institute acceptable democratic norms as part of the political behaviour of
the Nigerian people? (2) What are the practical benefits of democratic governance to Nigerians especially after a
decade of uninterrupted civil governance?
As regard acceptable political norms, there is no doubt that political party is one of the political institutions saddled
with the function of providing functional political education in a competitive party democracy has a lot to play in
this regard. Conversely, unfolding events in the Nigerian Fourth Republic has shown that the parties are not well
instituted to perform functional political education as a result of their elitist nature and lack of ideological base
(Bello, 2008).
In addition, such regulative institution such as the police, the electoral body, and the judiciary which are supposed to
be politically neutral have also been involved in dysfunctional politicking that have marred the credibility of the
democratic process. While the activities of the police and the electoral body to a large extent tend to serve as tool for
political manipulation by the party in power (Aper, 2008), the judiciary in some cases have been able to defend the
political will of the people in states like Edo, Ondo, Anambra to mention a few and thus portraying itself as an
institution of hope for reforming democratic behaviour.
From the background of restricted access into the political process, coupled with poor regulative mechanism for
acceptable democratic norm and practice the question as earlier stated is, of what benefit is a decade of enduring
democracy to the Nigerian State? While it could be stated that the Nigerian State is still bedeviled with the
problems of poor service delivery in the area of roads, power supply, health facility among others (Ntalaja 2000,
Oluwi 2009), the fact however is that, ten years of uninterrupted democratic experiment is providing Nigerians with
the opportunity of talking electoral representation and thus focusing on the need for electoral reform as a way of
strengthening democracy. That is, Nigerians now believe that the solution to socio-economic problems lies in
democratic stability by focusing on the need to institute appropriate electoral reforms that would make governance
to derive power from the people rather than providing opportunities for the emergence of corrective military regimes
that were disappointing in the past.
In addition, enduring democratic process in the Nigerian Fourth Republic is also providing the Nigerian State the
opportunity to break-off from a militarized orientation to emphasizing on the rule of law, appreciating the workings
of the democratic organs and process as one which is consultative and embedded in accountability, transparency and
checks and balances where the organs and tiers of government must be partners even in disagreement on issues.
Towards a Viable Democratic Process

In order for the democratic process of the present republic to practically impact on Nigerians, there is need for a
genuine reform of the process in which the system would be built and sustained by the people through an elite-mass
integrative mechanism. This could be done in a holistic form through the following means:
(a) Political parties are internally reformed to embrace internal democracy and in which functional political
participation start at that level through inputs made in the selection of party candidates, genuine
mobilization based on party ideology and programme as well as making the people to be stakeholders of
parties through financial contributions rather than being hijacked by the money bags. This no doubt will
create equal access into the process.
(b) The present electoral reform should be restructured in such a manner that will be responsive to the need of
the people by allowing for separation of powers between the politicians in power and the electoral body. In
80
other words, in addition to security of tenure, the office of the Chairman of the Independent National
Electoral Commission (INEC) and the Resident Electoral Commissioners of the State Independent
Electoral Commission (SIEC) should be occupied through a career structure that allow a professional
career officer of the electoral bodies to aspire to the top through merit, hard work, and career achievement
rather than through politicization which has proven to be hampering electoral neutrality.
CONCLUSION
The major difference between democracy and any form of dictatorial government is that while dictatorship as a
regime type is protected through the use of force, the survival of democracy is anchored on its protection by the
people. Thus, the need for a functional democratic socialization process that would serve as bedrock of Nigeria’s
democracy and not the dragging of Nigerians by a few into a process that is non-integrative.
The point therefore is that, there is hope that the present democratic experiment in Nigeria would impact positively
on the people both economically and politically if the process is integrative.
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Social Sciences 3: 1 - 6, 2010 ISSN: 2141 - 4265

THE EFFECT OF COMPANY INCOME TAX ON DIVIDEND POLICY OF FINANCIAL INSTITUTIONS IN

S.E. Samuel and S.J. Inyada

Company Income Tax in Nigeria: Nature and history

Meaning and Types of Dividend Policy

MATERIALS AND METHODS

RESULTS AND DISCUSSION

Table 1: Regression Summary

Model R R Square Std Error of the Sig. F Change

Source: SPSS Output File

Unstandardized Coefficients Standardized

Source: SPSS Output File

Encarta Dictionaries (2009). Redmond, WA: Microsoft Corporation

Hutchinson, R. (1995). Corporate Finance. Cheltenham: Stanley Thorne Ltd.

Received for Publication: 12/04 /2010

INFORMAL SAVINGS MOBILIZATION AND INVESTMENT: A CASE STUDY OF ROTATING SAVINGS

KEYWORDS: informal, Saving, Mobilization, investment. Intervention, grassroots.

The Specific Objective Include:

MATERIALS AND METHOD.

Other information collected includes.

RESULTS AND DESCUSSION

* Source: Field survey, 2009.

Table 3: Frequency distribution of purpose loan/credit obtained

Table 4: Frequency distribution of respondents by mean Level of income

Condition for Giving Loan to Rural Dwellers by ROSCAs

Purpose of Loan/Credit Obtained

THE INCOME LEVEL OF RESPONDENTS

This are depicted in Table 5, 6,7and 8.

Dr=(r-1) (-1), (4-1) (2-1) = 3, ∝ =0.05 x2 t=7.815

Df=3, ∝=0.05, x2t=7.815, x2c=9.515

CONCLUSION AND RECOMMENDATION

development. Cambridge/Ma/USA. Massachusetts Institute of Technology, Centre for Internal Studies.

Received for Publication: 12/04 /2010

To examine the socio-economic characteristics of households in the study area.

RESULTS AND DISCUSSION

Table 1: Socio-economic characteristics of households

Source: Field survey data, 2010.

Influence of socio-economic and demographic factors on household water consumption

Table 2: Influence of socio-economic and demographic characteristics on household water consumption

Table 3: Sources of water in Ibadan South West Local Government

Water usage pattern

Water storage facilities

Table 5: Water storage facilities

Table 6: Distance to source of water

Household characteristics and water access

Table 7: Number of children involved in water collection

Gender composition of water carriers

Table 8: Gender composition of water carriers

SUMMARY AND CONCLUSION

Joanne G. (2000); Global Environment Outlook. 2000. UNEP.

Received for Publication: 12/04 /2010

REHABILITATION OF JUVENILE DELINQUENTS: IMPLICATIONS FOR COMMUNITY DEVELOPMENT

KEYWORDS: social menace, social disorder, correction, and participation

Validation and Reliability Instrument

Table 4: Relationship between juvenile delinquency and community peace

Based on the above findings the following recommendations are made:

Juvenile delinquency (http://en.wikipedia.org/wiki.juvenile_delinguency.) (Assessed 22/05/2010)

Youth at the United Nations (http://www.un.org/esa/socdev/unyin.juvenile) (Accessed 19/5/2010)

Received for Publication: 12/06 /2010

THE ROLE OF RENEWABLE ENERGY RESOURCES IN POVERTY ALLEVIATION AND SUSTAINABLE

KEYWORDS: renewable energy, energy, poverty, sustainable development, Nigeria

THE ENERGY-POVERTY NEXUS.