ABSTRACT
This
research work examines and analyses the nature of small and medium scale
enterprises as a bases for economic development of Nigeria using Benin City as
a case study. The first part of the research work is theoretical back ground of
the study where the research problem and the research aims and objectives are
stated. Also included in this part is the research hypothesis, being that,
small scale enterprises form the basis for economic development of Nigeria. The
second part of this research which is the literature review tackles the
operational definitions and characteristics of small scale enterprises. It also
examines the various sources of fund available for small scale enterprises
which include equity and debt. The research further explains the importance of
small scale enterprises and their contributions to economic development of
Nigeria, ranging from employment generation, revenue to the government and so
on. The problems faced by small scale enterprises were also highlighted. In the
empirical study, the researcher sampled and selected table water enterprises in
Benin City with the aim of testing the hypothesis earlier stated. Based on the
empirical results and findings, small scale enterprises are recognized as an
important reservoir for economic development of Nigeria. The last aspect of
this research work draws up the summary, conclusion and recommendations.
CHAPTER
ONE
1.1 INTRODUCTION
This research attempt
to analyze the impact of small and medium enterprises as an industrial
development strategy in Nigeria, using table water enterprises as a case study.
Small
and medium scale enterprises (MSMEs) have been widely acknowledged as the
spring board for sustainable economic development. In particular developing
countries including Nigeria, have since 1970s shown increased interest in the
promotion of small and medium scale enterprises for three main reasons, the
failure of the past industrial policies to generate efficient self-sustaining
reliance approach to development and recognition that dynamic and growing MSMEs
can contribute substantially to a wide range of developmental objectives.
These objectives include efficient use of
resources, employment creation, mobilization of domestic savings for
investment, encouragement, expansion and development of indigenous
entrepreneurship and technology as well as income distribution etc.
Experience
over the years as shown that small and medium scale enterprises are fundamental
to the development of many nation and is
regarded as one of the most important process of attaining self-
reliance, economic independence, the provision of goods and services,
employment, income distribution and many other factors for the overall
improvement of the welfare of the populace.
A
small scale industry can be defined by the criteria of project cost, capital,
cost, turn-over by the employee etc. The Nigerian Federal and State Ministry of
Industry And Commerce have adopted the criterion of value of installed fixed
capital to determine what a small scale industry is. In this respect, the value
have varied from N 60,000.00 in 1972, N 159,000.00 in 1975, N 250,000.00 in
1979, N 500,000.00 in 1986, to a fixed investment of not more than N
2,000,000.00( Two million Naira) in 1992. This figure is exclusive of building
and subject to government determination and land prevailing objective of public
policy.
Small
scale industries in Nigeria can be categorized into urban and rural
enterprises, in a more formal way; they can be called organized and unorganized
industries. The organized industries
have paid employees with a registered office while the unorganized industries
(small scale) are mainly made up artisans who work in open space, operating in
temporary wooden workshop or structure. The unorganized small scale industries
rely mostly on apprentices or family members and mostly employ low rate or not
salary paid workers. However, generally in Nigeria, the major activities
involved in the small scale industrial sector include; soap and detergent,
fabrics, textile and leather, local blacksmith, tinsmith, ceramic, clothing and
tailoring, timber and winning, brick and cement, food processing, wood
furniture, beverages, bakeries, electronic repairs, phone call centers,
chemical based product and mechanics,
rental service and hairdressing.
The
development of small scale industries is an essential element in the growth
strategy of most economics and hold particular significance to Nigeria. Small
scale industries not only contribute significantly to improve living standard,
they also bring about substantial local capital formation and achieve high
level of productivity and capability from the planning stand point. Small scale
industries are increasingly recognized as the principal means for achieving
equitable and sustainable industrial diversification and dispersal. In Nigeria,
small scale industries account for well over half of the total share of
employment, sales and value added.
Therefore,
it has be agreed by both developed and developing countries in the world that
small scale industries are significant instrument for generating economic
growth, capable of promoting not only stable industrial structure but also a
satisfactory balance partial distribution of industries.
With
over 150 million people in Nigeria, productive farmland, rich varieties of
mineral deposits, Nigeria should be a haven for small scale industries. The
human and natural resources base is a significant feature that gives the
country a specific status in the continent. However, just like other countries,
Nigeria is witnessing a rapid population growth and this contrast with the less
than average rate of development in communication, technological and social
infrastructure. These problems constitute hindrance to the development of small
scale industries which is a very important sector that will enhance the
contribution of the private sector and provide the critical building block for
industrialization and sustainable economic development.
Furthermore,
with the dismantling of trade and other barriers, the world has been
transferred into a global village. Consequently, the small industries in
Nigeria are struggling to survive under intense and competitive environment,
both domestic and international. In view of this, there is an urgent need to
provide the required enabling environment for the development of small scale
industries, so that they could adequately play the role expected of them in economic
transformation. Such role include the mobilization of domestic savings for
investment, appreciable contribution to gross domestic product, increase
investment, increase harnessing of local raw materials, employment generation,
significant contribution to poverty reduction effort through sustainable
livelihood and enhancement in personal income, technological development and
export diversification. This can be made possible through responsive industrial
policy and government overall economic development strategies that will ensure
the collaboration of all development partners and the effective coordination
and utilization of economic resources.
1.2
STATEMENT OF THE RESEARCH PROBLEM
Small
scale industries are most common form of business in Nigeria and this is very
significant to the economic development of Nigeria. The aim of any economy
(either industrialized or non-industrialized) depends largely on how well
organized the small scale industries are. Looking at the standard and practice
of small scale industries in Nigeria, taking table water factories in Edo state
as a case study, they (small scale industries) seem to be stagnant, less
adventurous than that of the developed countries. This study is projected
towards providing answers to some of the question such as:
i-
Are small scale industries necessary and
important tools for economic growth and development?
ii-
To what extend has small scale
industries help in enhancing self- reliance, productivity and employment
generation?
iii-
What are the factors negating the promotion
of small scale businesses in Nigeria?
1.3
OBJECTIVES OF THE STUDY
The
main objective of the study is to examine the impact of small scale enterprises
on the development of Edo state with
reference to Edo state table water enterprises. It tends to find out the
following:
·
To investigate the factor responsible
for the failure of small scale enterprises in Nigeria.
·
To find the problems associated with
small scale enterprises in Nigeria.
·
To suggest a way out and technical
difficulties normally encountered by small scale industries.
·
To enlighten or make prospective
investors aware that there is a lot of assistance in form of soft loan and
advice to any prospective and potential business man or woman who want to
establish a small business
1.4
SCOPE OF THE STUDY
The
scope cover all aspect of small scale
enterprises, the role of small scale industries in facilitating economic
development of the country, the peculiar problems small scale industries face
the most, being management problem and access to finance and various role of
government to ensure improvement in their performance.
However, for the
purpose of this research work, Edo state table water industry is used as a base
for the survey.
1.5
SIGNIFICANCE OF THE STUDY
The
role of small scale enterprises in the economy cannot be over emphasized. It is
the life blood of the economy of developing countries like Nigeria. There are
more than a million of unemployed people in Nigeria, the public sector
(government) alone cannot absorb these unemployed people or solve the problem
of unemployment.
In
views of this, this research is thus, necessary because it can be used as a
means of enhancing and promoting individual participation in small scale
enterprise or business in Nigeria through providing useful information about
the nature of small scale industries. It may also serve as reference guide for
those who want to venture into small scale business and thus be self-employed
if the enabling environment is provided.
This research will also
serve as a reference guide for those who want to undertake further studies on
small scale industries.
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