ECONOMie DEVELOPMENT AND PLANNING
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Submitted in partial fulfilment of the reguirements for the degree of Master of Arts in Economie Development and Planning at the African Institute for Economie Development and Planning, has been read and approved by:
Chief Superviser
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CHAPTER 1 INTRODUCTION 1.1
1.2.
1.3.
1.4.
1. 5.
1.6.
The .Economy
The Problem.Setting
Objectives and Hypothesis to be Exarnined
Methodology and Major Analytical Issues
Sources of Data and Limitations Major Ernpirical Issues
CHAPTER Il - LITERATURE REVIEW
2.1 2.2.
The classical Location Theory and its Limitations
Location Theory and Regional Planning CHAPTER I I I - PATTERNS OF INDUSTRIAL LOCATION
3 .1.
3.2.
3.3.
3.4.
Objectives and Strategies of Industrialization
Factors of Location
The Informal Sector and Small Enterprise Location
Role of Industry in the Economy CHAPTER IV - THE REGIONAL HANUFACTURING STRUCTURE
4 .1.
4.2.
4.3.
Analysis of the Spatial Frarnework Analysis of Manufacturing
Concentration
Analysis of Manufacturing Specialization
Pages
1
3 5 6
7 8
10
10 14 27
27 33 42 56 65
65 79 100
CHAPTER V - SUMHARY, CONCLUSIONS AND POLICY PERSPECTIVES 111
APPENDIX I APPENDIX II APPENDIX III APPENDIX IV BIBLIOGRAPHY
5.1. Summary and Conclusions 111
5.2. Policy Perspectives. 115
121 124 126 128 129
Every time we import goods that we could manufacture if all the conditions were available, we are continuing our econoic dependence and delaying our industrial growth. It is just these conditions that we are planning to provide - to build up our body of knowledge, techniques and skills, and to make us more self- confident and self-sufficient, to push towards our economie independence.
DEDICATION
KWAME NKRUMAH
"Africa Must Unite" (1983)
This thesis is dedicated to my two sons Gideon Jr. and Maada Peter.
ACKNOVLEDGEMENTS
I acknowledge with .thanks the Institute for admitting me to this two-year Masters Degree Programme in Economie Development and Planning. I also thank the Government of Sierra Leone and the Ministry of Industry and State Enterprises for nominating me for this programme and the United Nations Development Programme (UNDP) for its sponsorship.
I am deeply grateful to my principal superviser Professer Philip Quarcoo whose close supervision led to the successful completion of this thesis. I also thank my alternate supervisors, Professors Mohamed Haddar and Giovanni Spaliviero for their assistance in defining the scope of this study. My thanks also go to Samuel I. Odoteye, the Chief Librarian at IDEP and the Library Staff at CODESRIA Dakar, for their valuable assistance in the Library.
My grateful thanks are due to all ethers who helped me during my research, especially the Staff of the National Industrial Development and Finance Organisation (NIDFO) and the Central Statistics Office (Sierra Leone) for providing me all the available data I requested. Lastly, I wish to thank my wife Jilo, for her cooperation and understanding during my absence from home. I am nevertheless responsible for all mistakes, omissions and other short commings contained in this study.
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Eco n 0 rn i c st ru ct ure Sie~
LeoneLatest available figures ;;
Macroeconomie lndlcators 1985 1986 1987
GDP at factor cost le mn8 4,310 6,353 M,40s
Real GDP growth8 % -2.5 -4.0 -2.0b
Consumer priee Inflation oh .76.7 80.9 !=1-8.1
Population mn 3.66. 3.75 3.85
Exports fob $ mn 115.1 232.3 51.0
lmports cif $ mn 166.7 240.6 1~.8
Current account $mn (defic.if.s) 16.6 ·127.6 26.4
Reserves excl gold $ mn 10.8 13.7 6.3
Total external debt $ mn 560 621 752
External de,bt service ratio 0h 12.6 40.0 6.8
Diamond pr.oduction '000 carats 338 328 314
Exchange rate (av) le per $ 4.73 8.40 ~1).77
February 26, 1990 le118.7 per $
Orlglns of GDP 1986/878 Components of GDP 1986/878
.
%of total• Agriculture, forestry & flshlng 41.3 · Prlvate consumptlon Minlng & quarrylng 11.6 Public consumptlon
Manufacturlng 4.1 Gross flxed capital forMation ·
Construction 2.3 Change ln stocks
Services & other 40.7 Experts
GOP at factor cost 100.0 lm ports
GDP at market prlce.s
Principal exports 1987 Prlnclpallmports 1987
$mn
Rutile 46.5 Machlnery & transPQti:equipment
Dlamonds 34.8 Food, drink & tobacco
Bauxite 23.3 Other manufactures
Coco a 21.5 Fuels & lubricants
Coffee 17.8 Chemicals
Main destinations of exports 1988 Main orlglns of Impe r:s 1988
o/o of total
Belgium 16.5 UK
USA 15.9 West Germany
West Germany 12.2 Nigeria
UK 7.6 USA
1988
.a
ob34.3 3.95 106.1 166.9 5ob 7.4 727 28.8
31.25
1989
-2.sb 54.7c
6s.od 86.6d
3.1e
59.94
o/o of total 82.3 6.2 9.6 1.0 13.0 -12.1 100.0
Smn 41.9 27.8 24.2 17.4 12.0
o/o of total 14.4 10.6. 10.6
9.7
a Year ending June 30. b ElU estlmate. c Year on year, first quarter. d Jan•1ary-June. e November.
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>o:urce: Culled from the Econpmfst. Intelligence Unit, Country Report NO 1
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ABSTRACT
This study attempts to analyse the patterns of industrial location in Sierra Leone with a view to measure the extent of the effects of the existing industrial location policy on the spatial structure of manufacturing in Sierra Leone. It tends to confirm that the current industrial locational imbalance is partly a result of the import-substitution strategy which was adopted by the government in the years following political independence in 1961.
An empirical analysis of manufacturing in Sierra Leone over degree of industrial locational
the spatial structure the period revealed a
imbalance indicating
of high that Government's efforts to disperse manufacturing activity outside the Freetown Area has so far met with little success. In particular the shift-share analysis revealed that the sharp decline in industrial employment (of 2092 jobs) was mainly due to ineffective national industrial policies and the deteriorating macro-economie climate. With the exception of the Southern province, all the regions are shown to benefi t from locational advantages and the Northern province is identified to have the highest manufacturing growth rate. The wide disparities in regional development and the
increasing importance of small and medium-scale industries are well doèumented in the Statistics.
The study also reveals that the bi- and tri-polar relationship between the towns of Bo and Kenema on the one hand and those of Makeni, Port Loko and Magburaka on the other, respectively makes them zones of potential growth points in the rural periphery.
The specialization analysis demonstrates that the food, beverages and tobacco, wood and wood products industries are the manufactu- ring activities that are best represented at the regional level.
It also reveals that the western region is specializing in riationally declining or slow-growing industries.
On the whole it is recommended that a thorough overhauling is required in the approach towards locational concentration of industry in Sierra Leone. In particular, it is argued that whenever i t is though t tha t this concentra ti on is non-optimal or inequitable, policy makers should operate with both incentives and infrastructure provision. Although the latter may be more costly that the former, it would be more consistent with the development objectives for which industrial location policies are maintained.
If the current industrial location policy is allowed to continue operating in an unmodified manner there is real danger that, ins tead of correc ting the non-optima li ty of indus trial location, this policy will add further to the distortions.
CHAPTER I
INTRODUCTION
1.1. THE ECONOMY
Sierra Leone is one of the 26 African countries which belongs to the United Nations list of 36 least developing countries [LDC] of the world. The country is richly endowed with a variety of na tural resources including diamonds, gold, bauxite, rutile, iron ore, chromi te, coco a, coffee, piassava, territorial waters teeming with fish, abundant sunshine and rainfall, a land area that is 88 per cent fertile and cultivable, a population of only 3. 7 million (1985) and a well educated elite. Yet with a heavy debt burd en, no external financing and very low export earnings, the economy has become almost unmanageable.
The GNP has been declining in real terms at an annual average rate of 2.5 per cent and the rapid expansion of domestic debt has contributed to inflation and a weakening of the external position of the country. The distribution of income is more highly skewed for the urban region, with a Gini Coefficient of 0.60, than for the rural region of which the Gini coefficient is 0. 32.
During the past five years, the exchange value of the local curren-
~y has depreciated by over 2000 per cent. The persistent growth in imports in the face of falling revenues from exports has resulted
in large scale current trade deficits on the balance of payments which in 1988/89 stood at Le 56m. Widespread activities in the parallell market for currencies have eroded the Central Bank' s capacity to satisfy the demand for foreign exchange in recent years.
Recognising the need for correcting the economie imbalances the government bas been endeavouring to implement an Economie Recovery Programme. In the 1986/87 budget the government accepted and implemented most of the IMF proposed structural adjustment programme which included the introduction of a "floating" exchange rate, the elimination of government subsidies on rice and petroleum, the liberalization of trade and increase in producer priees. In November 1987, an Economie Emergency programme was in troduced to help combat smuggling and hoarding of currency and essential goods.
According to the new mining policy, the mining companies are now expected to pay all royalties in foreign exchange to the government and to also utilize 60 per cent of their export earnings through the official banking system. It is hoped that under the new Economie Liberalization Programme the State Enterprises (altogether about 40) will either be privatised or made commercially viable. The goal, ultimately, is for Government to withdraw from these as it believes the private sector is better- placed and better-equipped to run them.
1.2. THE PROBLEM SETTING
A prevalent trend in African countries is the development of prosperous and rapidly growing ci ties of single urban-industrial centres, while other regions remain vast, neglected and backward.
It has been realised ·that large parts of these regional disparities have arisen because of the "single-minded" devotion to the goal of economie growth with little or no concern for the social and spatial consequences of economie decisions. As the problems of locational maladjustment continue to increase, the need for a comprehensive planning on a regional basis is also
being realised. Throughout the developing world,
increasingly the spatial distribution of population and industry is increasingly viewed as a major development issue.
In most developing countries industry has concentrated in few locations, usually metropolitan areas. Small-scale industries are mostly dispersed activities catering to local markets with a limi ted degree of mechaniza ti on per establishment and per pers on employed. The concentrated industries are medium and large-scale establishments catering to a wider are~; they tend to be capital- intensive rather than labour-intensive.
Sierra Leone, like · most of other LDCs increasingly sees industrialization as a necessary element in its efforts to reduce external-oriented dependence and to find jobs and improved living standards for its people The excessive concentration of
indus trial investm-ents in the capital ha·s contributed to weaken the peripheral regions, which represents the major portion of the territory of Sierra Leone.
The process of economie development in its geographical setting requires growth at different rates in different areas. A glanee at the economie map of Sierra Leone will reveal that a distinct feature in the economie geography of the country is the polarization of economie activities within the regional territory.
The imbalance between the regions of the country is characterized by pronounced inequality of development and aggravated by marked emigration, particularly of young people moving to the capital area. At various times since the first national population census in 1963, the government of Sierra Leone has explicitly recognised the existence of such regional problems as high industrial unemployment rates, declining industries in the rural areas, outward migration to the urban cities, overdependence on a small number of occupations, rural unemployment and transport difficult- ies.
Until recently, action dealing with these problems has mostly been in the form of separate programmes aimed at relieving congestion in the urban communities and restructuring rural areas.
For instance, the 1983 Development of Industries Act provides specifie incentives to encourage industries to be located outside the Freetown Area.
investment results
However, in wasting
inefficient regional allocation of of scarce re sources. Similarly ,~
inefficient plants _ operating in unsuitable locations require subsides which are a further drag on the national budget. This study attempts to establish the basis for applying more vigorous criteria to the determination of regional .investment choices. More specifically this study provides a contribution to understanding the pattern and problems of industrial location in Sierra Leone and an analysis of the various strategies which the government can formulate in the implementation of an effective industrial location policy.
1.3. OBJECTIVES AND ECONOMIC HYPOTHESIS TO BE EXAMINED
With the above problem setting in mind, the study will aim at analysing the efficacy of the existing pattern of industrial location in Sierra Leone. It will specifically address itself to the following objectives:
1. To analyse the spatial pattern of industrialization and settlement systems.
2. To identify the regions of manufacturing concentra- tion and specialization.
3. To explore in manufacturing the possibility of formu- lating a comprehensive industrial location policy for Sierra Leone.
In brief, the· study will seek to· analyse the structure and extent of diversification of industrial growth points in the regional provinves of Sierra Leone. Moreover, it will attempt to quantify the degree of regional concentration and specialization of manufacturing activity and an examination of the measures which can, if implemented, influence a more regional diversification of industries.
1.4. METHODOLOGY AND MAJOR ANALYTICAL ISSUES
The methodology for the study is bath qualitative and quantitative. The qualitative aspects will describe the spatial hierarchy of settlement systems with a view to describing the pattern and structure of the industrial network in the national
territory~ The quantitative aspects would analyse and measure the degree of manufacturing concentration and specialization in the regional provinces. Similarly it will also attempt to discern and explain differences in levels of industrial development among regional terri tories based on a campo si te of social and economie indicators.
The next chapter focuses on a brief literature survey of the development of location theory and its relevance to regional planning in developing countries. Chapter 3 discusses the patterns and role of industrializa tian in Sierra Leone wi th a view to examining sorne of the most important empirical and analytical issues relating to Sierra Leonean industrial location. Chapter 4,.
which forms the. core of the study, initially examines the hierarchial structure of Sierra Leone's settlement systems with a view to identifying regions of growth and linkage potential for possible indus trial location. Using industrial .employment statistics for. the period 1981 to 1986, various indices are used to measure the degree of.manufacturing concentration and in particular the "shift-share analysis" is used to measure changes in the spatial location of manufacturing. As regards manufacturing specialization, location coefficients and the diagonal weighted- matrix are used to determine the manufacturing branches that are
best represented at the regional level.
~
The final chapter summarises the major findings and policy implications of the study as well as a conclusion.
1.5. SOURCES OF DATA AND LIMITATIONS
Industrial information in Sierra Leone is widely dispersed, inadequately recorded and released. The Ministry of Industry and State Enterprises has still to develop a system for organizing the flow of industri_al information required for industrial planning, industrial management and the formulation of industrial policies.
Implicitly, the data collected for this study are subject to the short-comings mentioned above. Notwithstanding these problems, industrial employment statistics at both the national and regional levels were obtained from diverse sources such as a) Central Statistics Office, b) Ministry of Industry and State Enterprises,,
c) Public-Sector . agencies engaged in. the field of industrial development or concerned with the economie and industrial situation of the country, d) ministries and agencies of government engaged in the development of the primary sectors of the economy such as agriculture, forestry, fishing and mining.
1.6. MAJOR EMPIRICAL ISSUES
One of the key empirical issues concerns the labour intensity and extent of spatial concentration of industrial activity in the national territory. Do large-scale industries, for example, possess a higher concentration index than small-scale industries? Moreover, are small-scale industries more labour- intensive and geographically distributed than large-scale industries? The answers to these questions will be useful in guiding those formulating industrial and employment policies in Sierra Leone.
A second important empirical issue relates to the degree of regional specialization of industrial activity. Given the output objective and the apparent relative scarcity of capital, are the regional industrial growth-rates above or below the national industrial growth rate? The findings relating to these particular issues will indicate the extent to which space and regional territorial characteristics must be incorporated in a national industrial location policy.
A final empirical issue of -major - importance is an examination of regional socio-economic characteristics to identify fast growing regions from slow growing or declining regions. The answers will a id the national polie y makers to und ers tand the territorial implications of economie programming and investment strategies.
CHAPTER 2
LITERATURE REVIEW
This chapter presents a survey of existing literature on industrial location and evaluates the contributions made by various authors to the development of the theory. The first section briefly analyses the classical location theory and discusses its limitations and unsuitability for developing economies while the second section evaluates sorne of the various strategies and approaches to the location of industry in space.
2.1. THE CLASSICAL LOCATION THEORY AND ITS LIMITATIONS
Loca tien theory is one of the most frui tful approaches to the study of regional economie development. It refers to the body of economie theory which analyses the forces that determine the location of economie activity, and seeks to explain and predict the spatial pattern of the location of economie agents. Two approaches, beth of which are of concern to regional development planning, are normally distinguished. in location analysis. The classical location theory primarily concerns the location decisions of the firm by providing a basis for indi vidual proj ec t and programme location. The ether, generally latter approach, deals with locations as a system of spatial relations by providing the analytical framework for a normative ordering of the space economy.
For the regioné!-1 developer there· are three aspects to the term "industry location". The first deals with a determination of what was and is the industrial composition of the region and what is behind the past and potential changes in this composition. The second deals with what was and is the regional distribution of various industries and what locational or other factors are behind the changes in this distribution. The third deals with all that is involved in bringing about the location of a particular industry in the region and in estimating and analysing the impact of a new or expanding industry in the regional economy.
The analysis of the classical location theory is structured around three approaches as follows:
a) the least cost approach, which attempts to explain location in terms of the minimization of factor costs.
b) market area analysis, where there is more emphasis on the demand or market factors.
c) the profit maximization approach, which is the logical outcome of the other two above.
Alfred Weber (1909) expounded on the pioneering works of Von Thünen (1826) and Launhardt (1882) through his "locational
tria~gle" method to become the first person to work out a comprehensive theory of industrial location. His model has been criticized mainly for its assumption of perfect competition which
disregards the influence of location oh the demand for a firm' s output.
Consequently, Augustus Lësch's Analysis (1954) of demand influences on industrial location represented the first attempt at a general equilibrium approach to location theory. He realised that the optimum location is the place of maximum profits, where revenue exceeds cos ts by the largest amount, but by assuming no spatial variations in the distribution of factor inputs, Lësch elimina ted spa ti al cos t varia ti ons and input supply. Moreover, Lësch's assumptions of no locational interdependence between firms has been ho tl y cri ticised by sever al theoris ts such as Hotelling and Greenhu t ( 1956) who have argued tha t in the typical modern oligopoly structure, a major determinant for an individual firm is the location and market of like firms.
Building on the pioneering works of Thünen, Weber, Los ch, Palander and others, a number of economists and geographers have extended the analysis to apply to a wide range of problems by synthesizing the theory with other fields of economies. In particular, outstanding credit belongs to Isard and Leotief (1952) for pointing out the relativity of locational factors and the need to give a dynamic basis to the theory of location. In recent years, however, concern has turned to national regional development. Increasingly the question of a location of a factory is being considered as a project by a government agency rather than as a profit-making venture by a private corporation.
The classical location theory is ill-suited to developing economies and many of its assumptions do not apply to the conditions prevailing in developing countries. By assuming complete information and predictability and unlimited managerial and technical man power, the theory ignores the s tronges t factors influencing location in developing countries. Moreover, the theory is for the most part static and assumes that events happen in an instant, whereas actually time places a crucial role in location in developing countries1.
In general, the principal differences in the problem of location between developed and developing countries are due to the amount of available information which involves an element of uncertainty, the knowledge of opportunities, of technical and managerial capaci ty, of supply and other factors. In a broader sense, the problem can also involve the movement of goods and ideas.
Although each of the several theoretical approaches to the complex problem of industrial location has contributed to the general body of the theory, alternative approaches and problems do exist. Sorne economists have argued that the dynamic process of location will tend to disequilibrium in that economie activity will tend to become more and more concentrated at certain locations2.
1 See United Nations, (1968; p.32)
2 See Perroux's Growth Pole Theory (1950) and Myrdal's cummulative causation models (1963; p. 13).
In this way developmen.ts in location theory have been related to development in the theory of the firm where alternatives to profit maximiza tion have been analysed. In particular there are the problems of formulating a general theory of programming group industrial locations for a whole territory or regional unit and the problem of locational inter-dependence. Moreover, very little work has been done in using the principle of location to analyse the pattern of employment activity on the regional territory. Current and future research are being directed to these issues.
2.2. LOCATION THEORY AND REGIONAL PLANNING
Decentralization policies are being adopted by several governments to promote regional balanced development as well as achieving sorne social and political goals. Peter Townroe (1984) contends that congestion in cities due to pressures of urban growth that have in turn led to agglomeration economies is today a major focus for the decentralization process in developing countries.
Numerous studies have therefore indicated that meaningful economie growth and decentralization policies in developing nations are sorne wha t inseperable. Frequently the key-stone of such policies has been a strategy for the decentralization of the manufacturing industry. Although it is generally believed, and rightly so, that spatial disparaties in the levels of development among African countries is a direct legacy of colonial rule, the fact remains that only a few African governments have yet implemented committed and comprehensive decentralization policies.
In this regard Mabogunje (1965) ~entends that a large part of these regional disparities have arisen because of the "single- minded" devotion to the goal of economie growth with little or no concern for the social and spatial consequences of economie decisions. This situation has been the case historically in colonial countries of ·the developing world because many colonial governments and post independence regimes concentrated investments in infrastructure and productive activities in the largest cities especialy in the national capital. For instance Gugler and Flanagan (1978; p. 40) observed in their study that "anyone who ventures beyond (the national capitals) to the vast expanse of West Africa is stunned by the disparity between the concentration of resources in the capital cities and the neglect that is the fate of rouch of their hinterlands".
In an analysis of the failure of twenty-five years of indus trial decentralisa ti on po licy in Peru, K. P. James on ( 1979;
p.55) discovered that a close examination of the actual structure of many of the programmes indicated that a more likely purpose was the consolidation of regional support for the central government without any substantial decentralization of industry. He concluded that for meaningful decentralization to occur, there must be a complete assessment of strategies and a movement away from tradi tional approaches. The need in rouch of Africa now is to alloca te inves trnents in services, f acili ties, infrastructure and productive activities in a pattern of "decentralized concentra-
tion", tha t is, in set tlemen t wi th sufficient concentra ti ons of
people and a hinterland market large enough to be able to support them economically and efficiently.
John Friedmann's experience (1963; p.9) in North-East Brazil wi th development planning discovered many gaps and weaknesses in accepted planning concepts and techniques which is an evidence of failure to conceive of development as a dynamic process. He contended that the lack of success from various planning efforts for many decades was attributable to inefficient administration and political irregularities - a contention which was later acknow- ledged by the Brazilian government.
Although decentralization is not a quick-fix for the management problems of developing countries, its guarded utility is justified. Decentralization must be viewed more realistically, however, not as a general solution to all of the problems of under- development, but rather as one of a range of administrative or organizational deviees that may improve the efficiency, effectiveness and responsiveness of various levels of government under sui table candi tians. This conclusion is warranted by the number of cases in which small but .clear-cut improvements have occured as a re sul t of decentraliza ti on programmes. Indonesia 1 s Provincial Development Programme, Morocco's local government reform, efforts to decentralize in Thailand and Pakistan and other cases show percetible improvements in resource distribution, local participation, extension of public services to rural areas, project
identification and · im_plementation and · generation of employment (Rondinelli et al 1984; p.4).
The growth pole (or growth centre) approach is one of a variety of spatial development strategies that has been tried in many developed and sorne developing countries by state planners to promote rural development and regional growth. The French economist Perroux (1950) is generally credited with initiating these concepts in his theory of growth (development) peles (pôle de croissance) which he defined in relation to abstract economie space.
The growth pole concept of spatial development suggests that by investing heavily in capital-intensive industries in the largest urban centres, governments in developing countries can stimula te economie growth that will spread outwards to generate regional development. Investment in industry at the growth pole would be the "engine of development" for agricultural and commercial activities. Perroux's growth pole thus corresponds to the leading sector of the economy, the dominance of which is expressed through backward and forward linkages to the manufacturing sector of the spatial economy, but linkages between firms are not considered with respect to geographie location. He was primarily concerned with the process of growth as reflected in the appearance and development of new activities, in ether words, growth among firms and industries and their interactions rather than the spatial pattern of economie activity or the geographie implications of
economie growth -and inter-industrial - shifts (Hermansen, 1972;
p.21). Thus for a growth centre strategy to achieve the objective of regional development there must be a high degree of deliberateness in the planning programme for the sequential location of economie activities (Mabogunje, 1971). This calls for an industrial location policy which also has to consider the linkage relationships that may exist between existing industries.
The application of the pole concept and its related body of concepts has not been very successful and many critics, especially La tin American reviewers, _ have cri ticised the concepts on
ideological, theoretical, political their present state of development
and prac ti cal grounds. In the growth-pole and growth- centre concepts leave much to be desired because they provide no guidelines as to how to implement the ideas embodied in them, particularly so with respect to employment generation. Mayer (1977:25-95) contends that "the pole (or centre) is expected to develop a network of forward and backward linkages wi th new and existing industries", but it is doubtful whether the application of the theory through the setting up of large scale industries alone can provide adequate employment within the "pales environment".
This approach seems to be supported by sorne writers. Misra (1972; p.141-168) for instance, has attacked the over emphasis placed on industrial development as the basis for a growth-centre strategy, although he agrees that industrial development is a major contributor to economie growth. He sugggests that, in the socio~
economie context of deyeloping countries growth centres should not serve only as indus trial centres, but should also be allocated various growth centres whose economies may be dominated not by any
"leading or propulsive" industry, but rather by "a wide range of functionally unconnected small-scale activities which have developed together without any growth industry stimulating the process". Consequently, Santos (1975) in his two-circui t urban economie madel notes that the growth pole theory takes into account only the "upper circuit" consisting of the modern sector and has little relevance to the "lower circuit", or traditional sec tor consisting of non-capital-intensive industries, servicing and trading.
Where growth-pole policies were tried in developing countries - mostly in Latin America and Africa - they generally failed either to promote the economie growth of the cities selected as pales or of the regions in which the growth pales were promoted.
Hansen (1982; p.1) argues that the "trickling dawn of modernization has not reached the poor, especially in rural areas, or else has yielded to them no more than marginal benefits". He concludes that
"the optimistic view that economie growth would result in a convergence of regional per capita incarne has not been supported by evidence". In another situation Richardson (1978; p.135) in his assessment of "growth pole" policies argues that "experience has shawn that this type of strategy is doomed to fail at least as an instrument of spatial development" because the urban enclaves it
usually creates are -not beneficial to a large majority of people living within the growth poles or in rural areas surrounding them.
Despite these criticisms the attraction of the growth pole and its related concepts to spatial development planning is still strong, largely because these concepts can be combined with other space-organizing concepts, such as the central place theory and the diffusion models, to provide a theoretical framework within which spatial development efforts could be organised. This applies especially to investments and the distribution of infrastructure.
Following Perroux' s work, at tempts have be en made by such authors as Myrdal, Hirschman, Bondeville, Kaldor and Friedmann to incorporate space into Perroux's original idea, and this has given ri se to the concept of growth centre and i ts rel a ted body of concepts. The growth-pole concept has been related to other spatial theories such as the central place theory and the notion of innovation and diffusion of growth impulses through the urban hierarchy.
The tradition of cumulative causation models of which Myrdal (1963; p.13) was one of the earliest and most influencial proponents seem to argue well for analysis of regional growth differences in low income countries. His main thesis was that once sorne areas in an under-developed economy have developed ahead of -~ others, the divergent pattern bec ornes self-sus taining because of the incraasing advantages of producing in the fast-growing region~.
Kaldor (1970; p.340) writes that the· "principle of cummulative causation --which explains the unequal regional incidence of industrial development by endogenous factors resulting from the process of historical development rather than by exogenous differences in "resource endownments"-is an essential one for the understanding of the diverse trends of development between regions".
In another view John Friedmann (1972), who emphasized centre-periphery relations argued that the core regions dominate the periphery due to their higher capacity for innovative change.
Similarly A.O. Hirchman (1958) emphasized the inevitability of inter-regional inequality of economie growth and urged that development strategies should concentrate on relatively few sectors rather than on widely dispersed projects.
Methods of analysis and planning for regional allocation and location of investments have been developed that provide a process and framework for regional development that can be adapted to the needs of African governments wishing to pursue an investment strategy of decentralized concentration. These methods and techniques include regional income measures, shift-share analysis, location quotients, measures of spatial concentration, association and distribution and indices of economie development (Bendavid-val, 1982)
The urban functi?ns in rural development [UFRD] approach to regional spatial analysis provides a way of identifying the settlements where investments can be sited more effectively and efficiently and of integrating the rural and urban sectors of regional economies. It is based on the assumption that settlements of various sizes and functional characteristics and especially smaller rural service and market centers can and do play important roles in regional and rural development, but that in most developing countries the settlement system may not be well enough articulated and integrated to allow these centers to perform their potential functions effectively.
Thus UFRD is a method of quickly gathering and analysing information about the spatial distribution of functions among settlements within a region. It provides a profile of a region to help technical and sectoral planners distribute investments more equi tably and efficiently. Because i t is primarily a descriptive macroanalysis of a region, it must be refined and supplemented with more detailed · social, technical and economie studies before specifie location decisions can be made by government agencies and priva te inves tors. For tha t reas on i ts most important role is often to help planners ask more refined and more detailed questions about alternative locations for and distribution of their investments, rather than to provide comprehensive or detailed solutions to regional development problems. In the case of settlement systems analysis, the primary methods found useful are the Guttman scales and scalograms which rank settlements in an are~
by their function-al- complexity based on the number and types of functions that are located within them (Rondinelli, 1985).
In applying sorne of these methods and techniques in the Bicol River Basin of tha Philippines, the regional profile indicated clearly that the basin's high level of poverty resulted largely from its physical isolation and low levels of national investments in the social services and physical infrastructure that are needed to increase agricultural productivity (Rondinelli, 1980a and 1980b). The results of the scalogram done in Bicol, Potosi (Bolivia) and regions in Burkina Faso and the Cameroons were used to classify settlements into levels of functional complexity (and levels of development) to determine the diversity of and association among functions within the regions and to discern the distribution of services, facilities, and infrastructure among settlements. In his s tudies in Thailand and the Philippines, Voelkner (1978) found that scalograms can produce results that are strongly correlated with those of more complex and sophisticated factor analysis for which reliable and quantitative data may not exist or can be collected easily. Thus E.A. Johnson (1970) argues that the "varied hierarchy of central places bas not only made possible an almos t complete commercializa tion of agriculture but facilitated a wider spatial diffusion of light manufacturing, processing and service industries ••• (and provided) employment of a differentiated variety" in most countries with more advanced economies.
With rega~ds to methods and · techniques of measuring industrial specialisation, research findings undertaken by P.
Sargant Florence (1948) and Hildebrand and Mice (1940-47) led to the formulation and elaboration of the localization and location coefficients respectively which denote the tendency of an industry towards dispersion or concentration. Similarly, Jones (1940) and Lesser (1951) of the United Kingdom working on industrial structure analysis pioneered the shift-share analysis which compares the causal relationship between industry structure and regional growth.
J.O.C. Onyemelukwe (1984; p.136) applied the location quotient index technique to show the state of affairs in the manufacturing sector of Nigeria's 19 states over the period 1963 to 1975 and used total population as a reference variable. His findings show that only 3 out of the 19 states, including Lagos, had location quotients of more than Unity.
above with an index of 13.51 --justifying industrial core of Nigeria.
Lagos clearly s tood its position as the
In another situation, Adegbola (1978) carried out a shift and share analysis of the Nigerian manufacturing industry for the period 1971 to 1973 and indicated that Lagos had the bulk of the additional employment of 54.3 per cent. He further observed that the strategy of state creation and the subsequent upgrading of each state capital helped very much to raise the industrial potential and attraction power of the rural hinterland.
