Contribution Of Small-Scale Business To National Economic Growth And Development
This study analysed the contribution of small-scale business to National Economic Growth and Development in the Country. It also paid attention to the foundling of these enterprises. Whereas failure of the large-scale import department assembly to propel the country into a satisfactory course of industrialization necessitate the demagnification of strategy to embrace the promotion of small-scale enterprises achievement under the new strategy has not been adequate with expectations of the stated objectives which were economic growth and development through the mobilization of available local resources, employment generation and industrial dispersal as well as mitigation of rural urban migration.
Some selected bakeries were used in Ikom Local Government Area, Cross River state and questionnaires were administered in order to extract information on this project. The objectives of the study includes to identify the roles of Small-scale business operations in the development of the Nigeria economy and to evaluate the problems the encountered in the establishment of small businesses. Some literature were reviewed in relation to the topic with the themes and sub themes of the study. However, in research methodology, the researcher used some instruments for data collection.
These instrument s emanated from both the primary and secondary source of data. The data collected were analyzed, grouped into frequency, computed and arranged in tables for easy references. The statistics tools for analysis are the simple percentage and chi-square technique. These techniques were appropriately applied at 5% level of significance. The result of the study shows that Small-scale business operation plays a vital role in the growth and development of Nigerian economy despite the various problems the encounter in the establishment of small businesses. Some recommendation were also made based on the results of the findings.
Table Of Content
- Title Page
- Table of Content
- 1.1. Background of the Study
- 1.2. Statement of the Problem
- 1.3. Objective of the Study
- 1.4 Research questions
- 1.5 Hypothesis of the study
- 1.6 Significance of the Study
- 1.7 Scope and Limitation
- 1.8 Definition of Terms
- 2.1. Meaning and Concept of Small-scale business operation
- 2.2. Basic Characteristics of Small Scale Enterprise
- 2.3. Types of Small business
- 2.4. Sources of Fund to Small Businesses
- 2.5. Government Influence on Small-scale business operations
- 2.6. The Role of Small Scale Business
- 2.7. Problems of Establishing Small-scale business operation in Nigeria
Research Methodology and Design
- 3.1. Research Design
- 3.2. Sample Size Used
- 3.3. Instrument for Data Collection
- 3.4. Population of the Study
- 3.5. Validity and Reliability of Instrument
- 3.6. Method of Data Analysis
Presentation of Data
- 4.1. Data Presentation and Analysis
- 4.2. Testing of Hypothesis
Summary of Findings, Recommendation and Conclusion
- 5.1. Summary of Findings
- 5.2. Recommendations
- 5.3. Conclusions
1.1 Background To The Study
The contribution of small –scale business in fostering economic growth and development has been well articulated in different areas of this study .the specific attention on them based on their expected impact and potential contribution on broad and diversified production base, as well as their accelerative effect in achieving macro objectives pertaining to full employment, income distribution and the development of local technology. They are particularly most conducive for diffusion of management skills and emulation of indigenous entrepreneurship overtime.
Small business provides financial opportunity and a chance to develop wealth. It is a place where creative, motivated individuals can use their talents and expertise to the fullest, because it provides satisfying carecrs and job opportunities and its also the back bone of the market economy of the word. Every big business starts as a small business, and it started with an entrepreneur (small business), who at first, earns little or no profit. It was the new ideas of small business that brought about Ekene Dili Chwkwu Transport, the FAN Milk, Nnewi “Tokumbo” parts, and even the many commercial banks in Nigeria. Untried ideas become annulations that become concepts that changed the business world. And so it goes. Small business is the basis for the economic well being many developed nations including USA/Japan.
Entrepreneurship is what makes a small business successful. Entrepreneurship occurs when an individual develops a new venture, a new approach to an old business or idea, or a unique way of giving the market place a product or service by using resources in a new way under conditions of risk. Small business triumphs and entrepreneurship are closely related to it. It is difficult to separate them.
The unemployment situation in the country coupled with the new government instinctive towards easing social tensions among unemployed youths, through the programme of the National Directorate of Employment (NDE), were intended to lure a lot of unemployed Nigerians, including graduates into self determination through self employment. Graduates and school leavers are now realizing that government and the established private companies are not ready to come to their aid directly, through paid employment due to the dividing state of the economy. Short of the alternatives, Nigerians including our graduates are therefore launching themselves into various small-scale business ventures, such as cottage soap and cosmetics production, fairing, restaurants, fast food, publishing, writing, block making, garri processing, food processing, refuse disposal, taxi driving, cleaning services, weaving, baking tailoring, advertising and other sam business venture which depends mostly on local raw materials. The determination to succeed is also fast becoming the order of the day.
Government has been playing appreciative tole in promoting the survival and growth of small-scale enterprise in recognition of them flexible and adaptive nature as well as their re-generative power in promoting economic growth and development. Government also encourage people to establish their own small business so as to reduce the problem of unemployment in the country and also reduce the problem of importation of goods, moreso, to produce exportation products.
Government in believing that a dynamic and growing small manufacturing sub-sector can contribute significantly to the implementation of a wide range development effectives, has thus enunciated various policies to encourage their proliferation and make them veritable engines of growth and development. In the third and for the development plans and the on-going three years rolling plan, priority has been accorded industrialization with greater emphasis on small-scale enterprises. The basic activities of government policies as maintained in the monetary and fiscal policy measures, are to improve the financing and other supportive services of small-scale business by expanding and improving access to credit and infrastructural facilities, reducing their production costs, boosting their profitability, enhancing their survival and growth capacities as well as expanding their contributions to non-oil exports by making their products competitive in the export markets.
Hardly could any major industry succeed without the services of small-business enterprise. The major goals of any profit oriented business is to make profit. A company will make more profit if statistics it’s customers need better them the competitors. There fore in the contribution of small-scale business, bakeries would produce what the customers want and by sodoing they maximize profit and only bakeries that are effective and efficient can satisfy customers needs. In reality, it is possible to run a business without profit for a time, but it is not possible for to survive for one day without customers. Customers are the central theme of any business. Without a total commitment to them, contribution to economic growth and development will have limited and brief effects.
1.2. Statement Of The Problem
There have been criticisms about the bakery industries in the way they render services to their customers. i.e. they do not see the customers as king lot in terms of national output and employment. Moreover, Nigeria has various policies on small-scale enterprises in recent National development plan and also in the structural Adjustment programme (SAP). The researcher wants to carryout a research on what bakeries do and the role they play in economic growth and development the resucher also wants to have an idea base either to support all the sources about the poor impression people have on how to improve their production so as to contribute effectively in national economic growth and development.
Bakeries can do a more individualized jobs for customers and thereby attract them on the basis of specialty product quality and personal services rather than on the impersonal of price or mass production of largely identical business. Based on the above, the need for studying this topic is to show the effectiveness of small-scale business in national economic growth and development.
1.3. Purpose Of The Study
The importance of small scale business in the promotion of economic growth and development has always been at the forefront of development strategies. However, many developing countries have failed to adopt this strategy owing to their belief that it is a relatively show process of industrialization which may not be very compatible with their desire to “catch up” with the industrial countries. This along with the relative availability of foreign exchange (particularly through foreing grants and export of basic commodities) in the early days of independence has encourage many of those countries to follow a different mode of industrialization for transition from a largely gravision society to a modern industrial sector including Nigeria, adopted import substitution strategy of industrialization aimed mainly at producing domestically consumer goods that were erstwhile imported. These strategy of industrialization often requires continuous dependence on major suppliers over-seas for the provision raw materials and spare parts needed for uninterrupted production in these industries. Therefore, the aim of this study is to know:
- To assess the importance of the identified roles of small scale enterprises in the growth and development of Nigerian Economy.
- To determine whether or not the Nigerian small scale enterprises make use of all the credit facilities available to them and the reasons for the stand they take in relation with their initial capital.
- To consider the nature and level of financial assistance desired by them and compares it with the already available forms of assistance desired by them and compares it with the already available forms of assistance.
- To determine the problems encountered by small scale businesses in the development of the economy.
- To suggest ways by which these problems could be tackled in order to improve the financial condition of the small scale businesses and boost their source of their raw materials generation.
- To ascertain whether or not government policies have been favourable to the establishment of small scale enterprises especially as it concerns power supply.
1.4. Research Questions
- What is the importance of the identified roles of small scale enterprises in the growth and development of Nigerian Economy?
- Does the Nigerian small scale enterprises make use of all the credit facilities available to them and the reasons for the stand they take in relation with their initial capital?
- What is the nature and level of financial assistance desired by them and compares it with the already available forms of assistance desired by them and compares it with the already available forms of assistance?
- What are the problems encountered by small scale businesses in the development of the economy?
- What are the possible ways in which these problems could be tackled in order to improve the financial condition of the small scale businesses and boost their source of their raw materials generation?
- Has government policies been favourable to the establishment of small scale enterprises especially as it concerns power supply?
1.5. Hypotheses Of The Study
- Ho: Small scale has no role in the development of the Nigerian economy.
- Hi: Small scale has a role in the development of the Nigerian economy.
- Ho: Government policies have not been favourable to the establishment of small scale enterprise in Nigeria.
- Hi: Government policies have been favourable to the establishment of small scale enterprise in Nigeria.
1.6. Significance Of The Study
This research work is very significant especially being that the Cross River State Government is posed to transforming the state from her present civil service status to a private sector driven economy.
In doing this, it is pertinent to consider the role of small scale business operation in the economy development of the state.
The study is thus important because of its potentiality in the development of the small business sector which has been characterized as the “man carrier of development and the engine of social and economic growth” in Nigeria.
The study will also help in identifying why people don’t go into small –scale enterprise despite its numerous advantages. It will also find our problems encountered while running the business. The study will help government identify areas requiring attention, thus stimulating government into proper directing of loans and incentives to improve upon existing ventures. It will also provide useful guide for prospective entrepreneur that wish to choose self-employment as a career. And finally, it will serve as secondary data for subsequent studies by a prospective researcher.
1.7. Scope And Limitation
The scope of this study i.e small scale enter pries is very wide it had to be carried out in all small-scale industries in Nigeria. The study is therefore limited to bakeries industries in Enugu Urban because of time and material resources to see to the whole nation. The researcher wishes to state here that this work is to assess the impact of small-scale industries in the economic development of Ikom Local Government Area.
The Ikom Local Government Area comprise of Ofutup, Akperabong, Nde, Yala, Abayoung, Nta, Nnam, and Ikom four corners.
In this regard research is prompted by the perennial shortages of food to sufficiently feed the teaming population of Ikom Local Government area. Though the communities have vast areas of rich farm land and verities of farm crops, they severely suffered object poverty.
They lack capital to purchase modern farming implement to dig deeply into the sub-strata of their supposedly rich soil form our findings, we can conclude that the inability to adapt the modern scientific method of farming, lack of capital to purchase modern agricultural equipment, non-availability of trained technocrats non-orientation and utilization of the target population of Ikom Local Government Area.
1.8. Definition Of Terms
Can be defined as the sum total if all organized efforts by which people engage in commerce and industry providing goods and services needed to maintain an improve the standard of living and quality of life to which each aspire glass and Sleede (1975:5)
Management is the process of designing and maintaining an environment in which individual working together in group efficiently accomplish selected aims.
3. Small-Scale Business
It is one which is owned managed and condoled by one or two persons.
Decision making is influence by the family has an undifferentiated organization structure is relatively small shares of the market and employees than 50 (fifty) people 9 Osaze (1986)
It is the person who co-ordinates all the other factors of production namely land, labour, capital and combine then for productive uses Lawal (1982)
The united nations define development as a country or countries whose initial economic condition has been more or less static for a long time to generate and sustain an annual increase in its Gross National Product (G.N.P) at rates perhaps 6-7% but when viewed as an individual it implicate increases and capacity greater freedom creatively self discipline responsibility and material well being however, the realization aspect of 2personal development depend on the state of society Hanson (1977).
Summary Of Findings, Conclusion And Recommendation
This research work “contribution of small-scale business to national economic growth and development” was conducted with the use of questionnaire to sample the opinion of bakery owners and customers on what impact has small scale enterprises in the development of the Nigerian economy.
5.1 Summary Of Findings
The preceding analysis has revealed that small scale business has a vital role in the development of the Nigerian economy and through their wide dispersal. They should provide an effective means of mitigating rural urban migration and resources utilization. And this also will contributes in strengthening industrial linkages by producing intermediate products for use in large enterprise in Nigeria. The researcher also finds and showed that government tax policies have not been favourable in the establishment of small scale enterprises in Nigeria. Government should know how it will be amending some of these tax policies they feel is affecting the establishment of small business in order to encourage more people into venturing into it. Government should also encourage the growth of small business by giving them the necessary assistance as regards to fund raising and equally advice them on how to utilize it effectively.
Hardly can any major industry succeed without the services of Small-scale business operations. The relative strength of their importance varies from one industry to another. The role of small scale businesses in the development of the Nigerian economy cannot be over-estimated. Firstly, the continuing growth in the economy of any nation depends to a large extent on the start ups of small businesses, which depends on locally fabricated machinery and local raw material inputs. Secondly, it is a considerable solution to balance of payment problems resulting from less dependence on imported inputs and also serves as a training school for the indigenous entrepreneurs and provides grounds for the acquisition of skill for a large number of workers.
The researcher after discussed the findings and conclusions recommended that the small scale business contributes in strengthening industrial linkages by producing intermediate products for use in large enterprise in Nigeria.
The researcher also showed that government tax policies have not been favourable in the establishment of small scale enterprises in Nigeria for many years now. So government should know how it will be amending some of these tax policies they feel is affecting the establishment of small business in order to encourage more people into venturing into it. Government should also encourage the growth of small business by giving them the necessary assistance as regards to fund raising and equally advice them on how to utilize it effectively.
Also, small businesses should form mergers; by this their capital would be placed in a better position when dealing with lending institutions. Their tax burden will not be heavily felt again.
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