The Growth Of Indigenous Firms In Nigeria Problems And Prospects

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The Growth Of Indigenous Firms In Nigeria Problems And Prospects


This research was embarked upon to gain institute into growth of indigenous firms in Nigeria. This is specifically an attempt to investigate the impart of indigenous firms among others. The objective are not only to acquaint equitable growth for indigenous firm and also to cheek the problems and prospects and to equally highlight its relevance among indigenous firms review of relaxed literature and theoretical framework also is arranged in logical sequence for the purposed of this study secondary sources, this data was analyzed using simple percentage and chi square. The researcher also found out that the growth of indigenous firms also affects the scope-economic growth of our economy. It is clear to note that indigenous firms have create impact on the country economy through export promotion financial institution and industrialization development strategies.

Finally, the summary of findings conclusion and recommendation where not left out, they are expected to serve as a basis for further researchers.

Chapter One


1.1 Background of the Study

One of the major economic backwardness of the most third world countries like Nigerian is the over prolonged sojourn of private foreign investment in them the predatory, exploitative orientation and activities of foreign monopoly capital, it inherent tendency to resist and hamper local industrialization and to perpetuate mercantile capitalism and its determination and deliberate efforts to retard the growth of indigenous entire partnership all this have heavily influenced Nigeria economic history for well over a country.This foreign dominance of commercial activities in Nigeria was made possible by restrictive practices employed by the established merchant firms. It is important to note that commercial banking is a major source of credit (capital) was solely owned and controlled by foreign elements their policies were made to wards satisfying the needs of foreign enterprise, indigenous enterprisers merely subjected on the crumbs that fell on the table (Ezeigwe J.O) Nigerian government in the 1950s operated mainly an open door policy which attempted to lure foreign investors into the country.After the civil war, experiences showed that the issue of indigenous participation in the Nigerian economy once can be re-opened the dubious roles played by foreign investor at various stages of the civil war and the acute shortage of essential commodities at the same period and the spiraling inflationary trend that followed post war reconstruction and reliabitation programmers had contributed to inform the government that there was the necessity to allow the indigenes of Nigerian and government a hand in deciding their economic tune. The government was further persuaded by radical agitation of the politicians and the masses to do something about their economic difficulties.Nigeria remains a major industrial country in the West African sub-region and Africa south of the Sahara. Although, few studies have focused on manufacturing activities within the country, most of these have largely focused on some aspects of manufacturing especially at the regional level, small-scale industries and local crafts. Perhaps, SchatzlAyeniMabogunje studies on the spatial pattern of manufacturing provide a good starting point on detailed studies of manufacturing in Nigeria. The consensus is that manufacturing is concentrated in a few cities, and especially the state capitals. These concentrations have usually been explained in terms of specific principles of industrial development. With little attention given to the emerging pattern despite the changing phases of manufacturing and industrial development policies. From mere crafts works in the earliest time to valorization of raw materials through import substitution to local sourcing of industrial raw materials in recent times. In addition, the absence of heavy industries and car manufacturing has militated against effective transfer of technology hence the heavy investment in manufacturing has led to a relative neglect of other sectors of the economy, especially agriculture. There is the general low level of interindustry linkages While several studies on production subcontracting have been conducted in the western world, especially the United States of America and Great Britain, studies on industrialization in Nigeria, have largely focused on the examination and analysis of single components of industrial activity or the spatial distribution and development of manufacturing industries. Other studies have focused on the nature and characteristics of small-scale industries and some behavioral aspects of manufacturing at the regional level. In some cases, explanations have been offered in terms of factor endowments. As a precursor, this paper presents a holistic view of the industrial development of Nigeria with particular emphasis on to the spatial pattern, the temporal trend, and the extent to which industrial development in the country has been influenced by contemporary globalization of industrial activities. Globalization here is viewed with specific reference to industrial production subcontracting, an emerging strategic industrial production technique integrating the world industrial development. Contemporary thinking in industrial geography and especially in a globalizing economy places a lot of emphasis on inter-industry linkages, and especially networks of production subcontracting in the development of industrial activities and the economy as a whole.

1.2 Statement of the Problem

A number of problems have been identified as being responsible for the backwardness and retardation in the general growth of Nigerian indigenous firms the persistent set back in the growth of the indigenous firms have been assumed to center on the followings inequality of capital, poor technological man power deficiency, mass illiteracy, management incapability and marketing in competency (National) and internationally) etc. there are many move that form the core problems of the growth of our indigenous firms. It is the intention of the researcher therefore to take a critical examination of the internal and external factors affecting the growth of our indigenous firms. There is a general contention that the rate of growth of our indigenous firms, especially since the pushing aside of the aliens, has been show. This statement in the growth of indigenous firms in Nigerian. Problems and prospects will be misestimated and possible recommendation given as to the solutions.

1.3 Objective of the Study

The prime objective of this research is let the prospective indigenous entrappers embrace and the acquainted with the problems and prospects of the growth of indigenous firms with a view to solving those problems that hamper the economic growth of their firms.

This will be done by the use of data collected to find out.

  1. Whether private participation in economic actionist especially the indigenization decree has been on the increase.
  2. Whether the economy of Nigeria was bitter managed in the hands of the foreigners than now that it is managed by Nigerians.
  3. Whether the existing firms were vial
  4. To whether the future of Nigerian lies in export or self-reliance.

1.4 Research Hypotheses

The following research hypotheses were formulated by the researcher to aid the completion of the study;

  1. H0: private participation in economic actionist especially the indigenization decree has been on the decrease
    H1: private participation in economic actionist especially the indigenization decree has been on the increase.
  2. H0: the economy of Nigeria was better managed in the hands of the foreigners than now that it is managed by Nigerians
    H2: the economy of Nigeria was better managed in the hands of the Nigerians than in the hands of foreigners

1.5 Significance of the Study

The researcher will pin point the capital requirements of the Growth initiating factor which at times have been typically beloved to be very small. Therefore the significance of this study is as follows

  1. To identify the problems that is being faced by indigenous firms in Nigerian.
  2. To render possible solutions to the problems for use by the indigenous firms many in Nigerian.
  3. To examine the affairs of some public establishments and the activities of officers in terms of investments, capital formation and cost control.

1.6 Scope and Limitation of the Study

The scope of the study covers the growth of indigenous firms in Nigeria problem and prospect, but in the cause of the study, there are some factors that limited the scope of the study;

Time Constraint:

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

Inadequate Materials:

Scarcity of material is also another hindrance. The researcher finds it difficult to long hands in several required material which could contribute immensely to the success of this research work.

Financial Constraint:

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

1.7 Operational Definition of Terms


Means the sole right to trade on a particular goods or services.


This means wealth or property that can be pleased to produce more wealth.


Means group of persons or organizations that Investing a business venture.


The production principles and distribution of goods and services and the development of wealth.


This means the persistent and continuous rise in prices and wages caused by an increase in money supply and demand for goods and resulting in a fall in the value of money.


Means business company or an organization.


Person involve in trade or commerce.


That parts or branch of a particular area of activity especially of a country’s economy.

1.8 Organization of the Study

This research work is presented in five (5) chapters in accordance with the standard presentation of research work.

  • Chapter one contains the introduction which include; background of the study, statement of the problem, aim and objectives of study, research questions, significance of study, scope of study and overview of the study.
  • Chapter two deals with review of related literature.
  • Chapter three dwelt on research methodology which include; brief description of the study area, research design, sources of data, population of the study, sample size and sampling technique, instrument of data collection, validity of instrument, reliability of instrument and method of data presentation and analysis.
  • Chapter four consists of data presentation and analysis
  • While chapter five is the summary of findings, recommendations and conclusion.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to examine the growth of indigenous firms in Nigeria problems and prospect.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges encountered by indigenous firms in Nigeria.

5.2 Summary

Haven completed the study, the researcher is of the opinion that from literature reviewed and analysis made that indigenization policy is a deliberate government policy aimed at replacing foreign investors and personnel in certain industries with indigenes or the natives of a country that is, excluding foreign participation in certain productive activities. This is different from nationalization which means taking over the ownership of an organization. Usually owner by a foreigner or foreigners., with nationalization foreigners could still be employed in the firm involved but with indigenization, the natives become the only personnel both in administrative and subordinate capacities, that is, indigenes becomes the only participants in certain economic ventures as this will go a long way in expanding the scope of indigenous companies and eliminate capital flight.

5.3 Conclusion

The researcher conclude that In developing economies, the survival of indigenous businesses has aroused global attention through series of interventions to offer micro loans to sustain small businesses. But, there remains the bane of industrialization which continuously ravages developing economies. In Nigeria, most of the small businesses operate as retailers, selling cheap imports from Asia. By implication, Nigeria has remained a consumer economy from the late nineteenth century, where finished from Europe constituted colonial commerce. The recent trade relations with Asians have continued to make Nigeria a place for ‘investment’ geared towards retailing. Invariably, the manufacturing sector rarely evolved meaningfully despite the indigenization policy

5.4 Recommendations

Haven completed the study, the researcher suggest that export promotion industrialization should be on specific items which Nigeria has comparative advantage. Industrial policy should be properly conceived and carefully implemented. Human capital development should be given priority in the country, with education especially sciences and technical education properly funded for skill development. To sustain industrialization in Nigeria, manufacturing production should begin to focus on the production of capital goods. Government should make conscious and deliberate efforts to negotiate and acquire available technology in the world in specific areas. The acquisition of technology should be a national issue and not a local firm affair. There should be massive public investment in the provision of electricity, roads, rail system and other infrastructure.

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