Back to: Social Studies Primary 5
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RESOURCES DEVELOPMENT
Meaning of Capital
Capital is wealth in the form of money or other valuable possessions owned by a person or organization from which future income can be derived. This may include the land, car, and the money to start a business.
Sources of Capital
Capital can be acquired by institutions and organizations in different ways.
Ways by which Government raise Capital
- Taxes: Government raise capital primarily through taxes, duties and book. Tax is simply the money paid by individuals to government according to their income and business people pay according to their profit. Government collect tax from individuals and businesses through the Federal Inland Revenue Service (FIRS).
- Levies: It is the extra amount paid on goods and service to government as tax. Eg Value Added Tax (VAT).
- Loans: Money borrowed by government from international organizations like International Monetary Fund (IMF) and World Bank for special projects.
- Donations: Money given to government by other countries and big companies to execute its projects.
- Grants: Money given by other countries to assist a country in completing big projects.
- Revenues: Money realized by government from sales of resources like cocoa, crude oil to other countries.
Ways by which Individuals raise Capital
- Savings: Money set apart for use in the future.
- Loans: Money borrowed from banks, individuals or cooperative society.
- Institutions: Money raised from religious institutions or Non-Governmental organizations (NGO).
- Donations: Money donated by organizations, philanthropists (rich individuals), etc.
Uses of Funds By the Government
Government funds are used to provide social services such as
- Education: Building of schools as well as basic education for children.
- Health: Building of hospitals and health centres with drugs for the people.
- Pipe–borne Water: Providing good drinkable water for the people.
- Housing: Building of houses and estates for people to buy or rent.
- Electricity: Provision of electricity to all cities, towns and villages.
- Good roads: Building and construction of roads, bridges, culverts, drainages, canals for the people.
- Payment of Salaries: Salaries of government workers like teachers, police and armed forces personnel are paid by the government.
Uses of Funds By Private/Individual
- Establishment of Industries: Funds are used by individuals to establish industries which produce some of the things that we use.
- Buying of properties: Funds are used by individuals to buy properties like cars, houses, lands, among others.
- Provision of social services: Groups or individuals can use their funds to build hospitals and schools for community use.
- Buying of Shares: Individuals buy shares from companies with their funds which makes them part of the owners of the company.
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