Effect Of Small Scale Industries On Nigerian Economic Development

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Effect Of Small Scale Industries On Nigerian Economic Development

Chapter One

1.0 Introduction

It is an undisputable fact that Nigeria of the pre-independence era was predominately small scale in its productions and marketing activities. Industrial revolution brought about a shift from the orthodox trade by barter to a more sophisticated marketing system where consumers satisfaction becomes the ultimate goal of the most businesses. Thus small scale business becomes the next option since they stood a better chance of offering a more personal relationship with customers as well as socio economic satisfactions of societal needs.

Unfortunately the over concentration on t he oil sector which Nigeria hoped will boost economic growth led to the negligence of the small scale industries until economic depression set in during the oil boom period. This and other factors led to the quest for private participation in the various economic sectors through the Small Scale Industries especially in the present civilian government where the Industrial Development Centres (IDCS ) have embarked upon a loan scheme for small business to enhance their contribution to national economic development. The question now is, will small scale contributes to nation’s economic development? One might wonder if this will be realistic, but it is quite obvious that Nigeria as a country developing very slow due to economic dependency of the country. It therefore becomes apparent that the way out of the problem lies within Nigeria. What are found in Nigeria are basically the large scale operations which have given the most contributions to the economy of the developed nations across the globe. One would therefore questioned the backwardness of small scale business to government negligence of the small industries. Nevertheless the immense contributions of small scale industries in terms of increased industrial output job creation, improvement of standard of livening and general economic development has reawakened government interest and support on these small scale industries.

1.1 Historical Background Of The Case Study

It is against this background that the next generation computers was established on the 15th February 2000 to boost the computer industry without which Nigeria economy development cannot be fully achieved. The firm which started with capital base of one Hundred Thousand Naira (N100,000) with the owners as the manager and no organizational structure deals with booth computer hardware and software.

The services rendered by the organization include Typing, photocopying, internet services, computer assembling supply and installation of computers maintenance and training of manpower through apprenticeship. The firm has so far been able to meet the needs of business organization’s and individuals within Kaduna North.

Nextgen computers as it is popularly know has over three hundred (300)customers patronizing the business today and they have ten 10 trainees which is the maximum number accepted by the firm in order to ensure they are given adequate and standard training and a lot of students have graduated from the school since inception. Each apprentice pays some amount of money. Those on certificate course pay five thousand Naira (N5,000), while the diploma course worth twelve thousand naira (N12,000.00), the mode of payment can be done instalmentally. The certificate course is under taken for a period of six months while the diploma course takes a period of one year for completion. Finally the firm is still at its growth stage and it trying its best to improve and expand its cervices so as to contribute greatly to Kaduna and subsequently Nigeria as a whole.

1.2 Statement Of General Problems

Small and enterprises are everywhere in every sector and are seen in every community. However Nigeria has witness the proliferation of small business aimed at increasing industrial output and subsequent economic growth and development through the efficiency of small scale enterprises.

There are some questions however that should be asked where answers could suggest solutions to the problem under study.

  1. What is the relationship between small scale industries and standard of living of Nigeria businessmen and entire populace?
  2. Is there a positive correlation between small scale industries and economic development?
  3. What is the position of the small scale enterprises under the computer industry? Are there problems associated with operation of both hardware and software?
  4. How do business owners asses the success or otherwise?
  5. Does the success of the small scale industries rest only on the activities of small scale enterprises or it also depends on some macro economic variables in the environment?
  6. Does the success of next generation computer academy guarantee Nigeria’s economic development? Or is there more to that?

These questions among others form the foundation upon which the research is built.

1.3 Objective Of The Study

The purpose of this research is to assess the EFFECT OF SMALL SCALE INDUSTRIES TO NIGERIA’S ECONOMIC DEVELOPMENT, other objective include:

  1. Assessing the possible problems which could hinder small business success.
  2. Why some small business succeed
  3. Assessing the size and composition of small business, their marketing, financial, legal and management aspect government intervention an other environmental factor which are likely to affect the small scale industries. Suggested solutions would be made necessary after drawing conclusions from the above.

1.4 Significance Of The Study

The research is beneficial to policy makers, Next Generation Computer Academy and the general public in view of the following revelations.

  1. To policy makers the research will acquainttem with the joy and frustration.
  2. To Next Generation Computer Academy it will expose the strength and or weaknesses of their operations.
  3. To general public the research will serve as an asset to students especially those who intend to be come self employed, lecturers and other researches particularly in marketing accountancy and business studies.

1.5 Scope Of The Study

The study is restricted to small scale business in the computer industry in Kaduna North and covers the operations of next generations computer academy from year 2005 till date.

1.6 Limitation Of The Study

Given the economic hardship in the country and prevailing cost of living it was not easy to meet up with the financial requirements of the study. Time indeed was another major consideration with too many things to met up within a short space of time preparation for test and examination.

In administering the questionnaires, the respondents were quite cooperative but some of the respondents have to fill under close supervision to avoid irrelevant answers especially where the questions were open ended. Another limitation that applied to this study is the fact that the study focuses on Next Generation computer alone and the sample for the study restricted to Kaduna North Local Government area only.

It is however hoped that these characteristics of customers be further confirmed in other areas within the country to enable a comprehensive review of some of the recommendations.

1.7 Hypothesis

Ho; The small scale industries do not contribute significantly to Nigeria’s economic development

Hi; The small scale industries do contribute significantly to Nigeria’s economic development

1.8 Definition Of Terminologies (Concepts)


Small and Medium Scale Enterprises


Collection of undertaken’s generally not under one control but connected with the same economic activity or similar ones.


Small Scale Industry


Poverty Alleviation programmes


Entrepreneur Development programme


National Directorate of Employment


Cross National Product


Those who are on the job training.


Europe Economic Community


Nigeria Industrial Development Bank


Investment Corporation of Nigeria


United Nations Industries Development Organization


Industrial Development Centre


Nigeria Agricultural Cooperative and Rural Development Bank


Nigeria Bank for Commerce and Industry


National Economic Reconstruction Fund


Small Scale Industries Credit scheme


Federal Mortgage Bank


Local Government Areas


Refers to individuals factories, shops, mines etc or a number of them grouped together.

Effect Of Small Scale Industries On Nigerian Economic Development

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Effect Of Small Scale Industries On Nigerian Economic Development


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