THE ROLE OF SMALL SCALE ENTERPRISES IN THE DEVELOPMENT OF NIGERIAN ECONOMY

By

EPURE GBANAIBOLOU TARI

Presented To

Department of Accountancy

ABSTRACT

This research work on the role of small scale enterprise in the development of Nigerian Economy was born out of the desire of the researcher to contribute in his own little quarter towards the exposition of the role played by small scale enterprise.

The specific attention of small scale business is based on their impact and potential contribution on broad and diversified production base, income distribution and development of Nigeria.

To this end, the researcher after the general introduction of the topic in chapter one, made a thorough reviews of some related literatures and carefully selected headings and also methodology of the study gave the detailed methods and processes applied in carrying out the research work in chapter two, while in chapter three, all the primary data collected was presented in tasks and analysed using simple percentage (%). And she finally rounded up the study with a thorough presentation of the findings, summary, recommendation and conclusions.

TABLE OF CONTENT

TITLE PAGE II

APPROVAL PAGE III

DEDICATION IV

ACKNOWLEDGEMENT V

ABSTRACT VII

TABLE OF CONTENT VIII

CHAPTER ONE

INTRODUCTION 1

BACKGROUND OF TE STUDY 1

STATEMENT OF THE STUDY 4

PURPOSE OF THE STUDY 6

SIGNIFICANCE OF THE STUDY 7

DEFINITION OF TERMS 8

SCOPE AND LIMITATIONS 9

IMPORTANCE OF THE STUDY 10

CHAPTER TWO

LITERATURE REVIEW 12

CONCEPT OF SMALL SCALE 13

ENTERPRISES

CHARACTERISTICS OF SMALL SCALE BUSINESS 15

PROBLEMS ENCOUNTERED BY SMALL SCALE INDUSTRY 17

REMEDY TO THE PROBLEMS OF THE SMALL

SCALE BUSINESS 19

GOVERNMENT POLICIES IN PROMOTING

SMALL SCALE BUSINESS 20

RESEARCH METHODOLOGY 21

INSTRUMENTS USED 22

RESEARCH DESIGN 22

DATA COLLECTION 23

CHAPTER THREE

SUMMARY OF FINDINGS 24

CONCLUSIONS 29

CHAPTER ONE

1.0 INTRODUCTION

Small scale enterprises have always been an intrinsic part of our industrial organizations. These small scale industries occupy a significant place in the industrial sector of Nigeria.

Histories of various developed countries have shown that industrial revolution has been the principal cause of their economic survival. small scale industries indisputably constitute the bedrock for any meaningful industrial development and for the acquisition of this industrial and technological.

In fact, it is out of the problems of large scale industries that government have decided to promote small scale as a strategy for economic development.

Fortunately, small scale enterprises have a good prospect in that they are high blood of the society, and as such are unavoidably necessary. The principal economic importance of small scale enterprises lies in their respectiveness to change and since their change is what is required, if economic growth is resumed. It is desirable that more rather than power resources should be channeled into small business.

BACKGROUND OF THE STUDY

After about two decades of adopting an industrialization strategy and large scale enterprise mostly of this assembling plants, Nigeria has achieved only a fragile industrial development.

The large scale industries which were set up seemed to be capital equipped and technical manpower have continued to be largely imported. As a result of this triple objectives of setting up the plants, achievement of high level local values, foreign exchange savings, and acquisition of transferred technology have not materialized. For example, the assembly plants, material sourcing instead they are more or less systematic foreign guzzlers with neither the will nor the capacity to transfer any meaningful technology beyond the primitive type in response to these weakness of large scale business, government has sought to promote small scale enterprises ass strategy for achieving economic development in Nigeria.

small scale enterprises have potentials worth gunning for promoting. Self-reliance is the developing economy of Nigeria. But, this particular sector has no fully development plan (1964-1974). Both the federal and state governments were to actively support and promote the development of small scale industries as creation of employment opportunities of rural urban migration and more even distribution of industrial enterprises in different parts of the country. These were to be achieved through complementary assistance to small scale enterprises in financial management and technical aspects. The main vehicle designated for administration of the incentives were the industrial development centre (IDC) and the states small scale industries Credit Scheme (S.S.I.C.S)

In subsequent years after 1974, the institutional arrangement and structure of the programme were modified while the objective to appraise the successes achieved and to proper opinion on how to come to terms with the problems of promoting small scale industries which arise from back of technical and managerial expertise as well as inadequate finding and poor state of infrastructural facilities.

STATEMENT OF THE PROBLEMS

In 1972, direct investment in industries in Nigeria has been loop-sided with more foreign participation in industrial formation. This pattern of investment does not favour the Nigeria objective of achieving a diversified and self-reliant economy. Also, a consideration of the ling term dimension covered by this study, it is not unrealistic and technological to achieve that identified Nigerian economic and technological dilemma. This will persist, even more intensified in the future as a result of indiscriminate open door policies within an undelineated context of mixed economy. This prognostic, if correct could make it mandatory to envisage and adopt another strategy different from the one aiming at simple indigenization. Development to salient ingredients of which are formulations of development policies and strategies very same policies and strategies on the other hand by the Nigerians themselves.

Government incentives in industries have previously been directed to public investment, neglecting private initiatives. But a diversified and self-sufficient economy must take into consideration the importance of private sector in capital formation.

Also, it is note worthy that government policies through self-reliance has remained insufficient. Indigenization policy was weak because it did not ensure greater private sector participation in Nigeria enterprises. It is not worthy that after indigenization policy re-enacted in 1976, the government controlled leading interest, having more than 50li ownership in most of the indigenized enterprises in pursuing development, there is the problem of synchronizing self-reliance policy formulation and implementation. In fact, small scale enterprises suffered a great deal.

1.3 PURPOSE OF THE STUDY

This research work will look into various economic development of he country. It will also study how small scale enterprises have helped in promoting economic self-reliance development in Nigeria. Other objectives include:

v to examine the importance of small scale enterprises as well as the problems facing it and possible solutions.

v To examine the extent to which small scale industries have contributed in solving the problem of unemployment in the country, and other problems which cannot be anchored through large scale enterprises.

v To find out what roles government and financial institutions should play towards alleviating the infant mortality of small scale enterprises in the country.

1.4 SIGNIFICANCE OF THE STUDY

This research work arose from the pressing concern regarding the unsatisfactorily establishment of small scale enterprises in developing countries like Nigeria. In view of this, it is a fact that this study would be beneficial to a number of individuals and firms. There is need to note that every large scale industry started in a small way.

Small scale industry speeds up the development and growth of an economy. As a result employment opportunities to people are assured. This study would benefit the industrialists in particular, since it will reveal them the possible problems of small scale industry which can cause poor industrial development and the reasons for it. In fact, mortality of the industries under study.

It is felt that business consultant would benefit from this study since it would benefit firms them a clear insight into the problems of small scale enterprises and possible solutions. Students of business administration would find it useful, since it cuts across the aspects of business establishments. The study would equally provide a basis for further studies into aspects of industrialization.

1.5 DEFINITION OF TERMS

Small Scale Industry: there is no universally accepted definitions of small scale industry it differs among countries and individuals. This arises from the differences in industrial organization of countries at levels of economic at levels of economic development in parts of the same country. But for the interest, of this study, small scale businesses are "those investing not more than N500,000 excluding the cost of land but including working capital.

Industry: an economic organization that employs both economic, technical and human resources to produce goods and services.

Entrepreneur: a person who organizes, controls and directs the process and as such bear the attendant risks.

Working capital: this implies the difference between assets and current liabilities.

Liquidity: this simply denotes having enough funds at hand to set off or offset debts when they fall due.

Limited liability Company: A company that the shareholders liabilities are limited to the number of share they invest in the company is the event of liquidation (winding up).

1.6 SCOPE AND LIMITATION OF THE STUDY

Scope: this study is limited to Enugu; this is a result of proximity. The researcher therefore covers the following areas:

Trading - hawking, retailing and wholesaling.

Food processing - palm oil, mini-mill, rice milling, garri processing, etc. what happens in Nigeria is that some of the above mentioned business activities are preferred by businessmen because they are less risky and have high and quick rate of returns on investment. Entrepreneurs are advised to go into production because it holds the key to industrialization and economic development.

LIMITATIONS

The commencement of the research was delayed because of internal problems in the country. Such as transportation problem, as aa result of the scarcity.

The project was delayed as a result of uncooperative attitude of some small scale enterprise owners in giving out information because of their lack of understanding of the aim of the study. Lack of materials (journals and text books) and proximity nature of the topic contributed to a limited review of literature.

1.7 IMPORTANCE OF THE STUDY

It is the belief of the researcher that this project paper will greatly help and guide those entrepreneurs who intend to establish small scale industries in the country. It will also help those who may want to carry out research in this field, particularly on this topic or related topics.

The importance of the study resides in the fact that this research will help in correcting some misguided opinions from various entrepreneurs about the nature of the business.