flfe

R e TR YA

 

while the secondary criteria are ranked in the following order of
importance:

(a) employment

(b) location

(c) industrial linkage

(d) budgetary impact

(e) investible surplus.

It is immediately apparent that as operational guidelines these
criteria are of little value. In what way can primary criterion (a) be
said to differ from secondary criterion (¢) assuming that the
N.D.C.’s prime objective is NOT to maximise profit outflow over-
seas? What meaning can be attached to national cost/benefit if it
is not commercial profitability adjusted for the social valuation of
foreign exchange effects, employment, linkage, location and
budgetary effects? The secondary criteria are therefore implicit in
primary criterion (b). Furthermore how much weight is to be at-
tached, in money terms, to the ‘social’ considerations? As Penrose
has put it: ‘In weighing these criteria in any given case the dif-
ficulty of course lies in the nature of the ‘trade-off’; how much to
sacrifice employment to improve industrial linkages, or location to
increase investible surplus, etc.’*® But this is not a difficulty which
can be resolved at the level of the individual parastatal; the weight
to be attached to each criteria must be determined nationally and
applied uniformly to all investment decisions in the economy. The
real power of such criteria in the planning process lies in their
being used to rank alternative projects in a consistent manner and
this cannot be done if the weights are not specified or if each in-
vesting body is applying a different set of weights.

So far the Planning Ministry and the sectoral ministries have
failed to produce investment or more generally, spending criteria
of any sort. Parastatals have therefore been left to analyse projects
as best they could. As a result there has been little if any ranking
of projects within parastatals and almost no ranking of projects
between parastatals and government. The allocation of resources
has therefore been extremely arbitrary and if any criterion has
been used at all it has been that of commercial profitability. The
situation is, however, changing and the recent budget and balance
of payments problems have been instrumental in bringing about a
greater concern for the way in which investment allocations are
made; but this concern has not gone as far as the formulation of

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