Objectives of Planning:

a) To maximize the utilization of economic resources: The resources of any nation are not always enough for her use. In this wise, resources must be allocated in such a way that they achieve maximum utilization of them. It is through the proper allocation of their resources that nations can accelerate their pace of economic development.

b) To correct the imperfection of the market system - The market system in reality is not perfect and therefore allocation of resources which occur under perfect competition model does not happen. There is therefore the need by government to interfere to ensure efficient allocation of resources

c) To bridge the gap between private cost and social cost, and private benefit and social benefit. Under perfect market, there may be a divergence between social and private cost on one hand and social and private benefit on the other. This occurs as a result of the existence of externalities (benefits provided to or costs imposed on third parties as a result of the production or consumption of goods or services). Because of external benefits many projects which are needed may not be profitable under pure market system in which all investment decisions are left to the private individuals. The level of investment may fall below the social optimum because private investors ignore external benefits and supplementary benefits of projects in calculating the prospective returns of their investment.

d) To ensure balanced growth: Planning may be used to ensure balanced growth for all sectors of the economy. By this there will be uniform growth and provision of complementary services and intra sectoral linkages.

e) To attract foreign investment - Developing Plans are used as a means of attracting foreign investment or foreign aid. Foreign government and international organizations giving grants and loans need to be satisfied that the finance they provide wil be put to good use. Private investment will also be encouraged by realistic plans showing the extent of economic growth that is expected to be attained. Donor countries are therefore interested in well coordinated plans to direct investment funds.

f) To match the available resources with the desired goals: The complementary nature of some investment decisions make for planning. The viability of one project may be conditioned upon another project. For example, the development of the agriculture sector may the require setting up of irrigation projects and a special transport facility for carrying fresh vegetables, fish etc between the farms and the market places. In this wise, planning may be used to coordinate these activities.