Academic journal article Journal of Financial Management & Analysis


Academic journal article Journal of Financial Management & Analysis


Article excerpt

An important characteristic of developing countries is the fact that the 'minority-rich-people-oriented' development with support from the developed countries through multinational corporations and their related financial institutions present rosy picture of the countries distorting the facts of real life based on grossly inadequate and manipulated data obtained not from official sources but from their own cooked-up sources (based on selfish motives) resulting in the deliberate and distorted flow of funds from them to keep their tight-grips on the developing countries and turn them into contractor-operated rather than manufacture-oriented countries as long as circumstances permit. To cite examples:

It is a mystery how the western world (which is the traditional source of the funds) feels that Nigeria is a rich Country. On the other hand, the World Bank, by Its very appreciative (rather Utopian) and misleading assessment of the Nigerian economy (whereby industry is said to contribute 37 per cent and agriculture 23 per cent to the GNP (especially knowing fully well that Nigeria's manufacturing is heavily import-oriented, whose share in the GNP is a meagre 7 per cent - - based on Nigerian official sources - - lends support to the fact that this bright picture of the economy of Nigeria is attributed to the contribution and stronghold of multinational corporations in Nigeria. It is a paradox how the World Bank has managed to obtain these data when the Country's apex bank (the Central Bank of Nigeria) has found it hard to obtain data on various sectors of the Nigerian economy.

M. R. Kumara Swamy, A Financial Management Analysis of Loan Administration in the Nigerian Economy: Guest Lectures delivered at the Inservice Training Course on Credit Administration: University of Nigeria: May 1984).

Relying on these unreliable and Utopian assessment of the Nigerian economy by the western world, and presumably realising the weak data base in the economy, the Federal Ministry of Finance in their document, Guidelines on External Borrowing by the Federal Government or State Governments and Parastatale under Federal Government Guarantee has this to say:

Bilateral loans are usually soft loans with subsidised interest rate and long repayment periods. . . such loans are now a thing of the past for Nigeria since the western world, which is the traditional source of the funds, feels that Nigeria is now a rich country and as such should no longer benefit from such loans which are meant for the least developed countries.

From a different perspective, the statement by a noted financial management specialist, Kumara Swamy possessing an indepth knowledge of countries in the Middle East, Africa and the western world are highly pertinent to recall;

It is a sad commentary, although very true, that there has been undue, unwanted-cum-growing interference - - employing uncivilised, unacceptable, barbaric and illegal gimmicks as unwarranted military attacks by industrialized (advanced/developed) countries - - in the territorial techno-economic-cum-political leadership and intellectual (academic) sovereignty of developing countries which may be christened Barbaric Imperialism causing billions of dollar worth of man: machine: and material-losses coupled with political turmoil which no peace loving countries would support and such cruel and heinous acts lead to structural techno-economic and financial maladjustments overtime. Financial economists based in developed countries (North) - - without possessing an indepth knowledge of developing countries (South) - - prescribe most-unsuitable, highly theoretical and inappropriate structural adjustment programmes (SAPs) as solutions to ease development tension in developing countries which would, in turn and overtime, lead to structural maladjustment problems and secular stagnation and derail the engine of 'organic' economic' development' in the Schumpeterian sense.

M. R. Kumara Swamy, Foreword, Journal of Financial Management and Analysis (July-December 2005)

Let us view the present day techno-economic problems faced by the developing countries from a practical perspective. …

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