TIPS ON MAXIMISING CAPITAL FOR NATIONAL DEVELOPMENT
Capital to every entity has always been an essential factor for establishment and growth. Without it entities struggle for sustenance. This may include not being able to meet the demands of the market and not thriving in a competitive world.
Insight of the subject of capital as a factor for growth particularly limited. Basic economics teaches capital as a factor of production among land and labour. Capital has over the years been often described as money but knowledge and practice of this age has moved far from that. It now has types which include – human, social, infrastructural, institutional, security, information and financial capital. In considering these forms of capital, in the context of a nation, we will nexus them to their influence on national development.
Human capital
This relates to the extent to which every individual in a nation is realising their potential. It includes the advancement of individual skill, knowledge, talent and ability that influences personal, social and economic wellbeing. The underlying factor here is capacity development with consistency. Thus the growth of a nation can be measured by its human capital development.
Social capital
The quality of relationships amongst a diverse citizenry in a country with link to standards of mutuality and trust also plays a huge role in national development. Social capital is simply trust, which ultimately enhances other types of capital. This has the capacity to enhance speedy growth with less suspicion as it reduces corruption and crime. The main values of social capital have been described as trust, value system, sense of community and solidarity.
Infrastructural capital
It is a no brainer to contend with the possibilities proper infrastructure brings to a economy. Infrastructures such as power, transportation, friendly environment, government policies and laws influences development of enterprises and facilitation of growth. Commerce may survive without adequate infrastructure but will certainly boom with the provision of such. Also the cost of running business and individual sustenance is minimized. The absence of infrastructure can and has hindered growth across Africa, and in the 21st century the onus is on African government and the private sector to ensure the provision of necessary infrastructure that will spur the economy.
Institutional capital
This may be described as the guide of the nation which regulates the socially and culturally permissible behaviour that should be followed. Institutions dictate and enforce compliance on activities within the nation – consciously and unconsciously. The absence of this will create chaos in all areas of national existence. as the efficacy of institutional capital ensures that the objectives of projects, programmes and policies are met.
Security capital
This may be viewed in two perspectives – regime of government with sustainable policies on the one hand and physical security of the state on the other. Both local and foreign players in the economy are either skeptical or encouraged by policies of the government. It may also take the form of a government sustaining the progressive policies of previous administration(s). This should be based on objective test rather than subjective.
Physical security of the environment is a capital that cannot be overlooked. People and ventures thrive more in a secure environment. It cannot be overemphasised what a nation like Nigeria has lost to insecurity problems.
Information capital
This asserts information as an intrinsic value which can be shared and leveraged on to enhance growth. It means sharing information is sharing power. It enables the exchange of knowledge for advancement. Information capital emphasises decision making based on best available option. No individual, organisation or nation will function better than the level of information it is exposed to.
Financial capital
We have saved the big dog for the last. Financial capital, which is mostly been perceived as the only capital, is the money available for ventures to invest in products or services in sectors of the economy. The availability of financial capital makes ideas handy and thrive. This may extend to available credit facilities from financial institutions with special emphasis on fair interest rate. Other forms of capital mentioned will function at their optimum when financial capital meets them working effectively and efficiently in an economy.
In this era, capital transcends money. Nigeria, and indeed other African countries need to maximize all forms of capital towards national development. All of these forms of capital are important but I like to emphasise attention to Human, Social and Institutional capital. These are the major drivers of development in any nation. They have multiplier effect on the nation with the presence of all others.
Leading the maximum utility of capital as a veritable tool for national development should be led by the government. Some corporate organisations practice the use of capital beyond money and it has translated into development and growth. But for capital of all forms to have far reaching effect on the nation, all hands must be on deck and ultimately, national development will become a national experience.
This work was published in http://www.ventures-africa.com/2013/04/maximising-capital-for-national-development/
Olusola Akinyemi Esq.
President
Joseph Initiative Ltd/Gte
olusola.akins@gmail.com
08077726199
