THE EFFECTS OF INADEQUATE INVESTMENT ON THE DEVELOPMENT OF ENUGU STATE

By

Author

Presented To

Department of Accountancy

TABLE OF CONTENT

TITLE PAGE

APPROVAL PAGE

ACKNOWLEDGEMENT

DEDICATION

TABLE OF CONTENT

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

1.2 STATEMENT OF PROBLEM

1.3 PURPOSE OF THE STUDY

1.4 SIGNIFICANCE OF THE STUDY

1.5 SCOPE AND LIMITATION OF STUDY

1.6 DEFINITION OF TERMS

CHAPTER TWO

2.1 MEANING OF INVESTMENT

2.2 IMPORTANCE OF INVESTMENT

2.3 WHEN INVESTMENT IS ADEQUATE

2.4 WHEN INVESTMENT IS INADEQUATE

2.5 HOW INADEQUATE INVESTMENT AFFECT ECONOMIC DEVELOPMENT

CHAPTER THREE

FINDINGS, RECOMMENDATIONS AND CONCLUSION

3.1 SUMMARY OF FINDINGS

3.2 RECOMMENDATIONS

3.3 CONCLUSION

BIBLIOGRAPHY

CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

Investment could be explained as the act of producing goods and services which are not for immediate consumption or the making of business venture into an unknown area with the intention of reaping the benefits in future

To achieve this, money and manpower are required, net national income(NNI) have to be devoted to it, there will be also effective planning in order to utilize our savings and if all this works out then investment will be successful. On the other hand, if the gain from goods already produced cannot equate favorable with the interest paid on the borrowed money either due to inflation or otherwise one get a failure. There after capital employed and the returns are not expected to be proportional generally and all these will be due to planning.

For Enugu state Government, to invest means that their total production must exceed total consumption so that the different will be invested. Though, throughout history, investment has been the primary responsibility of private business, the government has however, in recent times became a very important investor.

The effect of inadequate investment in the economy of any society should not be over - emphasized. The most really cause for this inadequate investment is attributable to economic recession.enugu state in particular has been effected by the inadequate investment occasioned principally by economic recession write its spill over effects. what then is the solution to this problem? What can we do to get rid of this harmful economy condition in the shortest period to enhance the economy development of Enugu state? The Keynesian theory with suitable modifications provides a useful solution to this problem. He recommended a substantial increase in the volume of investment during a period of recession in other to restore the economy to prosperity. This increment in the volume of investment will be achieved if we apply the concepts of savings, consumption and investment.

1.2 STATEMENT OF PROBLEM

MAJOR PROBLEM: this study entitled "the effect of inadequate investment on the economic development of Enugu State" attempt on the economy, the effect and implications of inadequate investment on the economic development of Enugu State.

SUB - PROBLEM: to eradicate this inadequate investment in Enugu State, we have to understand the following:

1. objectives of investment

2. basis for enhancing adequate investment

3. industrialization

4. savings

5. Awareness of the inadequacy on investment and the causes.

6. Sector of the economy mostly affected.

7. What problems effect the effective implementation of investments in Enugu State.

8. What are the reactions of the Enugu State Government towards this inadequacy of investments and economic development, thereafter?

9. to evolve or recommend how to adequately finance investments. The research will there fore focus on these dimensions in the analysis of the study.

1.3 PURPOSE OF THE STUDY

Enugu state like any other state in Nigeria has been in many years of economy recession and has not show any sign of recovery. This economy recession has resulted to untold hardship and sufferings to both the indigenes of the state and those resident in the state. These sufferings which falls in the standard of living of the people, high rate of unemployment among school leavers, retrenchment and retirement in the state civil servant and public services, breakdown of many state owned companies with those still surviving producing below installed capacity, lack of adequate provision of essential commodities to the people of Enugu state, unpayment of workers salaries and other entitlements for months, breakdown of socisl facilities, and among others. All these problems are due to the inadequate investment in Enugu state which could have increase the production of goods and services and hence leads to the economy growth and development of Enugu state.

Thus, the purpose of this study precisely is to:

1) Having identified the effects of the inadequate investment on the economy development of Enugu state, suggest ways of ensuring more and sustained investments in the state by creating a better and conducive climate for investment for both local and foreign investors.

2) Determine or identify limitation of problem to adequate investment and solutions.

3) To point out the effective ways of implementing and managing such basic economic adjustment strategies.

4) Suggest ways of encouraging the concept of savings, consumption and investment

5) Suggest ways of enhancing the economic development of Enugu state.

1.4 SIGNIFICANCE OF THE STUDY

If all or some of the problems responsible for the inadequate investment are tackled, the inhabitants of Enugu state will definitely show a sign of relief and positive results will be achieved to certain extent.

Also, in the long run, the economy of the state must have recovered or been revived and set on the path of faster economic development. This study will be of paramount significance to the society and mostly to those in business and to students in school of financial studies of higher institutions who are intending to carry out research on investment appraisal.

The study will also give potential investors insight into the nature of investment via decision in risk viability and yield. It will also emphasizes on the need of investing in rural areas and thereby increasing their standard of living of the rural dwellers and enhance their general development

It will also enable the government of Enugu state to put priority or investment and industrialization of the state because of its effects on the overall development of the state.

Finally, it will enable the researcher to have an indepth knowledge of the study. However, the significances of the study are by no means exhaustive.

1.5 THE SCOPE AND LIMITATION OF HE STUDY

Enugu state, which was created in 1991, was use as a scope of study by the researcher. It was the total number of seventeen local government formally, but currently created more thirty - nine making it a total of fifty - six due to its vastness.

This study may not be complete if the researcher did not mention some of the limitations that were encountered during the aforementioned scope. Some the factors that posed a problems to the study includes: time constraint, finance, the uncooperative attitudes of some of the respondents and the unavailability of the relevant data needed for this study.

The period that was left to the researcher to carryout the survey was too short as a result the relevant data needed for this research was haphazardly collected.

Further more, the finance that was at the disposal of the researcher was too meager and restricted the researcher in visiting some of the remote areas of town, that attracts high transport fares.

In addition, in most areas visited, the respondents complained of lack of time to attend to the researcher and requested the researcher to come back at a later date.

Finally, the uncooperative attitude of some of the respondents which is the refusal of reaching to the favorable areas to collect relevant facts needed by the researcher. Some even refuse to answer the question which the researcher ask them. all this contributed in making the researcher not getting the relevant information needed for this study.

1.6 DEFINITION OF TERMS

INVESTMENT: This is the creation of goods and services which are not for immediate consumption.

POTENTIAL INVESTORS: They are people that are capable of developing their society through the means of investment.

ECONOMIC DEVELOPMENT: This is the process whereby there are changes in the economic and social super structure of the society i.e an improvement in the production techniques and in the consumption choice of the average citizens and in the health of the citizens.

LOCALIZATION OF INDUSTRY: This means the concentration of industries in a particular areas or locality.

ESSENTIAL COMMODITIES: This is the valuable things needed mostly by the society, Enugu state in particular, in order to increase their standard of living.

RECESSION: This is a period when there is reduction in the economy of a country, with also reduced trade and industrial activities and many people unemployed.