THE EFFECT OF INFRASTRUCTURAL DEVELOPMENT ON THE ECONOMY OF UYO LOCAL GOVERNMENT AREA 2007-2018
BACKGROUND OF THE STUDY
Part of developments in any local government is widely held to be infrastructural. Infrastructural development, in a simplistic sense connotes the increase and improvement in industries and production processes leading to greater output of goods and services as well as the welfare of the entire citizenry (Akpapan, 2018).
In Uyo L.G.A infrastructural development has taken a central place in the various development plans or programmes with the ultimate goal of breaking the vicious circle of poverty and under development. Inspite of the lofty development plans, which focused on infrastructural development in Uyo L.G.A, the L.G.A is still lagging behind when compared with some of its contemporaries in the league of states in Nigeria (Ntekim, 2017).
However, with the burst in natural resources, Uyo L.G.A was viewed to have reached the turning point and set forth in the path to economic growth and industrial development. Contrary to expectation, Uyo L.G.A is apparently lagging behind its aforementioned contemporaries. There seems to be some missing links in the path to infrastructural development attempts have been made to explain the rather paradox; one key factor seems to the recurring and to which the backwardness in our infrastructural development have been attributed to. This of course is due to lack of sufficient capital (Ukpong, 2016).
Infrastructural development involves massive and intensive Investment in Capital Stock i.e. Stock of productive assets. Since these represent long-term investment, it is thus expedient to source for the appropriate finance to meet the nature of investments financial institutions like banks are saddled with the important role of financial intermediation by mobilizing and channeling fund towards productive capacity generation and expansion (Ebebe, 2014).
Between 2007, when the Uyo L.G.A started experiencing development and 2018, Uyo L.G.A has witnessed an exponential increase in the numbers of banks (commercial and merchant). Naturally, the same burst was expected in the level of savings and amount of loanable funds available for investment in the industrial sector that world take the economy out of the doldrums it would be an over-simplistification to assume an equal proportional relationship between the numbers of banks and availability of loan able funds for infrastructural investment (Ikpat, 2018).
To what extent have Bank been able to fulfill this all important role? It is widely held that banks in Nigeria have not performed adequately well in providing finances for infrastructural development. The banking sector is narrow and lack the depth that are critical in improving infrastructure and creating the conditions that are congenial for private sector participation in the infrastructural and industrial development processes. Akwa Ibom State Government, under the leadership of Obong Victor Attah, was able to establish a number of development strides to aid infrastructural development one of such stride was the establishment of investment and industrial promotion council tagged AKIIPOC. The Akwa Ibom investment and industrial promotion council, AKIIPOC is a statutory body established by an act of parliament of Akwa Ibom state house of Assembly (Akpapan, 2018). Owing to lack of adequate socio, economic facilities in Uyo L.G.A, it became imperative that in order for the state to undergo social and commercial transformation, the establishment of AKIIPOC was necessity.
1.2 STATEMENT OF THE PROBLEM
Like every other L.G.A, Uyo L.G.A faces numerous infrastructural challenges. Its unique set of challenges can therefore incorporate: very low per capital income, absolute poverty, inadequate infrastructural facilities, including water supply, unemployment, Urbanization poorly equipped laboratories and libraries and shortages of health services institutions. It is this sort of negative situation inspite of abundant natural and human resources that has warrant the investigation of the ways and means of financing the infrastructural facilities particularly in the Uyo L.G.A (Ntekim, 2017).
Adequate infrastructural facilities are necessary for the overall development of every sector of the economy. In the wake of liberalization and globalization. Its presence and importance for the proper growth of small and medium enterprises cannot be underestimated inspite of all this, the small and medium scale enterprises are constantly facing the problem of infrastructural bottlenecks, which restrict their day-to-day business operations as well as their future growth prospects infrastructure needed by entrepreneurs includes all kinds of transportation facilities like railways, waterways, roads and airways (Ukpong, 2016). Lack of any of these can cause serious damages to the firm’s value chain process, that is to the production consumption and distribution of the product of small and medium entrepreneurs, who already face problems of lack of finance, inadequate marketing facilities, technical obsolescence etc some of the major problems face by small scale entrepreneurs are: inadequate infrastructural facilities create the problem of acute shortage of basic raw materials, especially those that are scarce and needed to be imported from distance place, needed by small and medium scale entrepreneur or enterprises (Ebebe, 2014).
Small and medium enterprises in Uyo L.G.A finds it difficult to distribute their product to the markets located at far off places because of incomplete construction or non-existence of basic roads. Lack of proper airways and waterways facilities also restrict the growth prospect of those medium/ small scale firms whose target market are located abroad. Shortage of power supply, due to which they are unable to make full utilization of plant capacity. Most of them find it difficult to install their own power generating plants. Hence, small medium scale entrepreneur continued to face the problem of infrastructure bottlenecks in terms of presence of inadequate transportation facilities, lack of funds etc (Ikpat, 2018).
Looking at the state of infrastructure today, there is the need to querry on the level of tax compliance by business and individuals. To this end, not a few tax experts are of the view that the only way to give back to businesses is by improving the state of infrastructure in Uyo L.G.A which will help their business grow, because an improve infrastructure system reduces firm operational cost which then improve or increases profit margin. Without doubt the need for improve infrastructure cannot be over emphasized. For instance, non utilization of tax proceeds contributes to losses entrepreneurs face in their businesses resulting from poor infrastructure. Ordinarily investors and manufactures are supposed to leverage on the services provided by government to facilitate their operations.
1.3 OBJECTIVE THE STUDY
The general objective of this study is to examine the effect of infrastructural development on the economy of Uyo Local Government Area (2007-2018)
Specific objectives of this study are:
i. To find out the problem of infrastructural development on the economy in Uyo L.G.A.
ii. To examine the sources of revenue that could be channeled to the provision of infrastructural development in the L.G.A.
iii. To highlight the priority areas of infrastructural development in the face of scarce resource and
vi. To find out the ways and means of minimizing the problem of infrastructural development on the economy.