It is because so much depends on the
economy of a country that it deserves to be studied and restudied. Infact for
the proper understanding and evaluation of an economy. It is Important and
evaluation of an economy is structured.
Economic structure is defined by Ojo
(2002) as the analytical framework around which a country economy takes its
shape or form. For example, in a human body, we have the head, eye, nose, leg,
hand and head each parts having its function and defined relationships with
other parts and the body as a whole, similarly, in an economy, we have the main
sectors such as agriculture, manufacturing, distribution, transport and
communication each sector has to functions are relationship with other sectors.
The whole economy and the sectors taken together from the structure of an
economy[1].
It is in this light that Anyanwu,
Oyefusi et al (1997) sees the structure of an economy as involving those
underlying characteristics of an economy which constitutes the economy
patterns, states, and components/sectors. Which affects or determine its
behaviour and performance. To CBN (2002). The structure of an economy may be
viewed as the basic organs and process of reaching decisions as to how production
and distribution of an economy may be undertaken Todaro (1982) defines the
structure of an economy as the organizational, Institutional, and social
framework of any economic system including the nature of resources ownership
and control while Ukwu (2004) looks at structure of an economy as understanding
who are the stakeholders? Who are the owners of economic resources? Who are the
controller and decision makers? Who does what in the economy? What are the
Institutions through which the stakeholders act and are acted upon.
Economic Structure/System
Economic system refers to the
Institutional Framework within which economic activities are carried on. Every
human society is faced with the same fundamental economic problem of scarcity,
which is reduced to the fundamental questions of what, how and for whom to
produce? Different countries resolve these question differently scarcity
requires that available resources be utilized efficiently. This cannot be
attained without determining the best Institutional framework within which the
above questions can be resolved No two institutional framework are exactly the
same. This means that there are many types of economic systems as they are
nations in the world[2]. However economic system can be classified
broadly into two namely traditional and Modern economic system.
The Traditional Economy
An economy
is defined in terms of the total and composition of its economic activities. An
economy is referred as being traditional when its economic activities is barely
sufficient for the subsistence of the community hence a traditional economy is
most times referred to as subsisitence economy. In a traditional economy,
tradition is the primary force that governs economic activities. In such
economies long established norms, customs, culture and tradition resolves the
question of what, how and for whom to produce
Features of a Traditional Economy
1. Each family unit produced almost
everything it need
2. Existence of co-operative exchange of
goods and services (barter economy)
3. Little or no trade with the outside
world, hence people needs were simple/Ltd variety of article.
4. Mass production are not an important
feature of the traditional economy.
The Modern Economy
The modern
economy refers to economic activities characterized by modern method of
organization with clear cut division and specialization of labour, use of money
as a medium of exchange, and extensive use of capital which results in large
scale production and efficiency.
Features of a modern economy
* Division and specialization of labour
* Extensive use of money
* Extensive use of capital goods
* Technical progress
* Mass or large scale production
For a
modern economy there are three major methods of decision-making and resources
allocation. These are;
The market Economy
In the
market economy, economic agents seeking their own self-interest interact
voluntarily among themselves and resolve the problem of what, how and for whom
to produce through the social mechanism of the market the production,
distribution and consumption relations are governed by the institutional
arrangements constituting the market for individual commodities, which are
regulated by prices and profits determined by the impersonal forces of demand
and supply referred to by Adam smith as the Invisible hand”. Agiobenebo (1999).
The market economy is also referred to as the capitalist economy because it
emphasizes private ownership and control of factors of production. Therefore,
productive assets are in the hands of individuals whose major objectives are
profit maximization.
The market
economy is characterized by
* A system of property Rights
* Inheritance
* The concept of consumer sovereignty
* The invisible hand
* Competition
* Market and prices
* The entrepreneur
* Limited government Intervention
* The profit motive.
The command Economy
The command
economy which is also called the centrally planned or socialist economy places
the ownership of all factor of production except labour on the state. The state
owned and controlled factor of production on behalf of the citizen so that the
decision about what, how and for when to produce are made by the government for
the citizenry.
Features of command Economy
* Public ownership of means of
production
* Limited role of consumers sovereignty
* The visible hand
* Government is the entrepreneur
* Quotas and Rationing of coupons
* Co-operation instead of competitions
The Mixed economy
A mixed
economy is a mixture of the market/capitalist economy and the command/socialist
economy. Under the mixed economy, Private ownership of factors of production
exist side by side by public ownership participation and regulation of economic
activities.
Features
of Mixed Economy
* Existence of market and prices
* An active private sector
* Strong capitalist tradition
* Economic Development and planning
* Joint ownership of certain project.
For a
modern economy there are three major methods of decision-making and resources
allocation. These are:
The Market Economy
A mixed
economy is a mixture of the market/capitalist economy and the command/socialist
economy. Under the mixed economy private
ownership of factors of production exist side by public ownership participation
and regulation of economic activities.
Features of mixed economy
* Existence of Markets and prices
* An active private sector
* Strong capitalist tradition
* Economic freedom ad control
* Economic Development and planning
* Joint ownership of certain project
Differentiation of economic systems
An Economic
system is a set of ownership, resources allocation output distribution,
incentives and decision-making arrangements that a society was to solve the
economy problem of what, how and for whom to produce.
Economic
system can be differentiated on the basis of;
* Ownership mechanism
* Allocation mechanism
* Incentive system and mechanisms
* Level of decision-making
* Type of decision-makings
* Institutions
* Ideology
The Economy
of a nation forms the basis of its progress
Reasons for the study of structure of an Economy
* Building a theory of economic systems
and their fxus and development.
* Recognizing problems and deficits in
existing economic systems
* Improve knowledge of the economic
systems
* Find answers to the question: How can
economic system be improved.
* Develop a models of good or optional
economic systems. Be improved.
* Develop a models of good or optional
economic systems.
* Show ways to improve and reform
existing systems
* Giver proof for the advantages of one
system over another
* Explain differences in the fxuing of
alternative economic systems, which can be generalized as explanation of
differences in the functioning of different institutional arrangements.
Economic System
A mechanism of tackling the him
problems of scarcity and choice. Because economic resources are Ltd relative to
society’s demand for goods and services. Some means of allocating resources
between alternative ends is required.
In modern world, three basic a
locative mechanism performs this function.
1. Private enterprises Economy-resource
are allocated through Markets.
2. Centrally planned Economy- resources
are allocated by the state
3. Mixed Economy-resources are allocated
both by the state/Economy
Private-enterprises Economy/free-market
economy/capitalism
Under this
economy system the means of production are privately held by individuals and
firms. Economic decision making is highly decentralized with resources being
allocated through a large No of goods and service markets. The market
synchronizes the decisions of buyers and sellers and by establishing on
Equilibrium price determines how much of goods and services will be produced
and sold.
Critics of Private enterprise
Economy argues however that market-based economy may not fully respond to the
Dd of buyers where supply is in the hands of powerful suppliers. It cannot not
ensure the provision of Public goods for which no market exists. That it can
leads to gross inequalities in Income distribution.
Centrally planned economy/command economy
Under this
economic system economic decision-making is centralized in the hand of the
state with collective ownership of the means of production (Except labour) it
is the state which decides what goods and services are to be produced in
accordance with it centralized national plan. Resources are allocated between
producing units, and final output, between customers by the use of physical
quotas. The believe is that collective ownership of FOP by the people for the
people is preferable to a situation in which the ownership of the Fop is in the
hands of the capitalist class who are able
to exploit their elite position to the detriment of the population at large.
State control of FOP enables the economy as a while to be organized in
accordance with sue centralization. Critics of State owner enterprises system argues, flatiron practice, they tend to be
captured and corrupted by powerful state officials and that their top level
bureaucratic structure regulations a highly inefficient organization of
production and insensitivity in what construction actual
Mixed Economy
Under this economic
system some goods and services are supplied by private enterprises, and other
typically basic infrastructure goods and services such as electricity, postal
services, water supply are provided by the state. The mixed economy is
characteristic feature of most present day developed and developing countries
pure or totally private enterprises economics and centrally planned economics
being rarely encountered. The precise mix of private enterprise and state
activities to be found in particular countries doe vary substantially between
these 2 extremes and is very much influenced by the political philosophy of the
country concerned.
The entire structure should be
properly examined to see where things have gone wrong and prescribe necessary
corrections
Nigeria is not a
nation. It is a mere geographical expression. There are no Nigerians in the
same sense as they are ‘English’ Welsh or French. The word Nigeria is
merely a distinctive appellation to distinguish those who live within the
boundaries of Nigeria
from those who do not (Awolowo (1947) path
to freedom’ Faber and Faber.
·
Sixty years age there was no country called Nigeria.
What is now Nigeria consisted of a number of large and small communities all f
which were different in their outlook and benefits. The advent of the British
and of western education has not materially communities have not knit
themselves into composite unit. (Awolowo, during the debate on the motion for
Nigeria independence).
·
There are various national or ethnical groups in the
country. Ten such groups were recorded in the 1931 census as follow
·
Hausa*Yoruba*Igbo*Falani* Kanuri* Ibibio*Tiv*Edo*Nupe
and *Ijaw.
·
According to
Nigeria handbook eleventh edition, there are also a great number of smaller
tribes too numerous to enumerate separately whose combined total amounts to
4,683,944.
1.
It is a mistake according to Nsirimob (2001) to
designate them ‘tribes’. Each of them is a nation by itself with many tribes
and clans. There is as much difference between them as there is between German,
and English and between Russians and Turks.
2.
In Nigeria, the language differs. The only means of
communication between the ethnic groups is English language their cultural
backgrounds and social outlooks differs greatly and their indigenous political
institutions have little in commons.
Size
· The largest country of West Africa, the size of
France, Britain and the Nether lands combined. Is by for the most populations
country on the African continent with 50% greater population than Egypt”
Nigeria is
geographical expression, we are brought together by our colonial masters
without due regard to our desire or otherwise to live together. It would have
been better if we had been allowed to come together on our own.
[1] Ojo
(2002) a level economics textbooks for West Africa
autonoje press. Ibadan
[2]
Agiobenebo T.J (1999) Introductory microeconomics, theory and application.
Markowitz centre for Research and Development
Portharcourt.