The Timaru Herald WEDNESDAY, AUGUST 15, 1945. Developing West Africa

Timaru Herald, Volume CLVIII, Issue 23279, 15 August 1945, Page 4

The Timaru Herald WEDNESDAY, AUGUST 15, 1945. Developing West Africa

VVITH the publication last March of the Xigerian Government's ■ Preliminary Statement on Development Planning in Nigeria” it is possible, states the Economist. to form some idea of the strategy which mav be employed in West Africa in application for assistance under the Colonial Development and V. elfarc Act. Under the Act of 1901 expenditure in the colonies was provided for at the rate of £5.000,000 annually for 10 rears. Funds up to that annual amount not expended reverted to the Treasury. But under the new Act £120,000,000 are provided over the 10 years beginning in 19,16; up to £17,000,000 may be spent in any one year, and sums up to that amount not spent may be carried over into the next and subsequent years. Thereby, an important element of elasticity is introduced into the Act, for expenditure can be planned so as to have the greatest effect on each colony’s national income and to coincide with the availability of men and materials Io carry into effect the various development schemes. Capital investment assisted by the Colonial Development and Welfare Fund can now be used as a flexible instrument of long-term economic policy. The Nigerian Government has made an attempt to fit applications for assistance under the Act into a lime schedule based on certain assumptions. Apart from the question of whether the schedule can be adhered to, the layout of the programme and the accompanying explanations should serve as a model for the other West African Governments which are all faced with very similar post-war problems. The difficulties involved in planning capital outlay under the Act of 19)0 were seen in the Gold Coast development plan of 1911. Ihe fact that Governments could rely on obtaining funds in only limited and approximately equal amounts each year over 10 years was no doubt a factor in the Gold Coast s emphasis on the major role to be assigned in post-war development to its surplus of some £4,256,000 accumulated over the last few years. The Colonial Development and Welfare Fund was to be applied to for assistance only for a few specific schemes, fixed provisionally at £1,075,000. Applications were not related to a time schedule, nor was there, in the published programme, any discussion of the role which carefully timed capital investment might play in the expansion of the Gold Coast’s national income on various hypotheses regarding the trend of exports and imports over the next 10 years or so. Net such an approach to the problem is of the greatest importance if the four colonies are to deal with the problem of transition from war to peace satisfactorily. From the Nigerian statement on planning it would appear that the Government has taken into account certain broad facts regarding the possible trend of Nigeria’s economy over the next decade. These can be expressed in general terms and apply to each of the four colonies in much the same degree. During the war large numbers of men have joined the armed forces, and have saved money or have given their dependants separation allowances which have had to compete with increased labourers’ earning for a litnitcj supply of pricecontrolled consumer goods. Purchasing power has therefore been pent up. This purchasing power will help to stimulate activity inside the colony and to attract increased imports as controls are removed. Increased imports of machinery and of materials can also be expected as a result of the development schemes. To balance this, the colony must rely on an expansion of exports and on receipts from foreign loans, including assistance from the Colonial Development and Welfare Fund. This state of affairs may last for some time after the end of the Japanese war. Once wartime jobs and demobilisation are finished with, prov ided that capital investment has been on a large enough scale and that exports can be maintained to a reasonable extent. Nigeria's internal economy may be able to like up the slack.

The salient features of the Nigerian plan may be briefly sketched. The whole scheme, portions of which have still to be worked out in detail, is to cover the years 1945 to 1960, but attention is focussed at present on the years 1945 to 1955. Development expenditure over this period is to be between £35,000,000 and £40,000,000. Schemes already submitted from this total arc to receive £6,598,000 from the Colonial Development and Welfare bund as already approved in London. Clearly, this is only a beginning, and further extensive demands will be made on the Fund later. Assistance from the Colonial Development and Welfare Fund is to be concentrated, as* far as possible, into the early years to stimulate Nigeria s internal activity sufficiently for it to finance the later stages of the schemes by increasing its external indebtedness in the London capital market. A substantial part of the money for development is to go into improved communications and hydro-electric installations, two key plans for opening up the trade of the territory. The order of priority of the schemes and the outline of the strategy of finance have thus been arranged. The detail of the tactics can be left flexible to take account of changing circumstances.