The Impact Of Small And Medium Scale Enterprises Development On Youth Empowerment In Nigeria

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The Impact Of Small And Medium Scale Enterprises Development On Youth Empowerment In Nigeria


Abstract


This study was carried out on the impact of small and medium scale enterprises development on youth empowerment in Nigeria. The study was limited to Kaduna metropolis. Other problems in realizing the objectives of government‘s empowerment to small and medium scale enterprises are unregulated competition and inconsistencies in policies and programmes. The major data collection instrument to be use is the questionnaire. It will be structured with a four point likert scale to determine responses to the objective of the study. At the end of the study it was observed that, resources available for empowering SMEs in the Nigerian economy may not be considered adequate, that stringent regulatory controls of government on SM Es may affect their growth and development, that inability of SMEs to loans and other financial assistance may cause their failure, that absence of research and development on the activities of SMEs may affect their growth and development. it was therefore recommendations that, every effort should be given to discourage the difficulties of access to funds set aside for SMEs by financial institutions or the direct loans occasionally extended to them by the government by way of empowerment for sustainable development, regular training and retraining should be provided, for SMEs to reduce the perennial problems of inadequate managerial capacity and poor quality services and products. To this regard, facilities should be adequate for training and developing the human resources (managers) needed in translating business in the right question in an empowerment for sustainable development.


Chapter One


Introduction

1.1 Background to the Study

Small and Medium Scale Enterprises are sub-sectors of the industrial sector which play crucial roles in industrial development (Ahmed, S. 2006). Following the adoption of Economic reform programme in Nigeria in 1981, there have been several decisions to switch from capital intensive and large scale industrial projects which was based on the philosophy of import development to Small and Medium Scale Enterprises which have better prospects for developing domestic economy, thereby generating the required goods and services that will propel the economy of Nigeria towards development. It is base on this premise that Ojo O. (2009), argued that one of the responses to the challenges of development in developing countries particularly, in Nigeria, is the encouragement of entrepreneurial development scheme.

Despite the abundant natural resources, the country still finds it very difficult to discover her developmental bearing since independence. Quality and adequate infrastructural provision has remained a nightmare, the real sector among others have witnessed downward performance while unemployment rate is on the increase. Most of the poor and unemployed Nigerians in order to better their lots have resorted to the establishment of their own businesses. Consequently, Entrepreneurship is fast becoming a household name in Nigeria. This is as a result of the fact that the so called white collar jobs that people clamor for are no longer there.

Even, the touted sectors (Banks and companies) known to be the largest employer of labour are on the down-turn following the consolidation crisis and fraudulent practice of the high and mighty in the banking sector. The companies of course are folding up as a result of erratic power supply, insecurity and persistent increase in interest rate which has lead to high cost of production and undermines profit making potentials of companies operating in Nigeria. As a result of banking sector practices and continuous folding up of companies, a lot of Nigerians are thrown into unemployment which inevitably detriment the economic situation of the country.

Since the office jobs that people desire are no longer there for the teeming population, and few ones that succeeded in getting the jobs are thrown out as a result of the factors identified above, the need for the government and the people to have a rethink on the way-out of this mess became imperative. Hence, the need for Small and Medium Scale Enterprises (SMEs) became a reality as a means of ensuring self independent, employment creation, import substitution, effective and efficient utilization of local raw materials and contribution to the economic development of our dear nation (Nigeria). All the aforestated benefits of Small and Medium Scale Enterprises cannot be achieved without the direct intervention of the government and financial institutions. Over the years, a number of policies have been formulated by the government with a view to developing Small and Medium Scale Enterprises. The Nigerian government under the then leadership of Chief Olusegun Obasanjo promulgated micro-finance policy and other regulatory and supervisory framework in 2005.

The research will therefore examine the impact of small and medium enterprise development on youth empowerment in Kaduna metropolis.


1.2 Statement of the Problem

There has been stunted growths and sluggish development in the small and medium enterprises (SMEs) regardless of increasing targeted government assistance streamlined to benefit firms operating in this sector. There were several policies in the past which gave priorities to entrepreneurship development, indicating the trust in government policy in support of SMEs. The government of Nigeria identified entrepreneurship development as a major thrust to achieve economic development through SMEs growth and development.

This made Nigerian government both at National and State as well as local government to prioritize small and medium enterprises development initiatives by. As such the prioritization of the small and medium scale by government at different level is echoed in almost every policy document.

For example in the industrial development policy in vision 2020, the Nigeria aim is to promote and support small and medium enterprise as they are viewed as an important engine for employment creation and economic growth. Although the government of Nigeria has been advancing targeted support in marketing, management and finance and worse still others collapsed. Egbe (2004) in this regard rated Nigeria as having one of the lowest small and medium scale sector share of employment in the world, when 250 employees was considered the yard stick in the definition of small and medium scale enterprise. Targeted government assistance has been observed to play a pivotal role in starting, growing and medium scale enterprise in Nigeria, (Beck, 2005; Zainab, 2008; Herbert 2008 and Atino, 2001). Although some entrepreneurs in SMEs have received both financial and non financial assistance, many are still small or are facing viability problems. In Nigeria, the SMEs sector is facing to contribute meaningfully to the national economy as was experienced elsewhere when governments advanced target support. Targeted government support to SMEs was found to translate into economic development in countries like Indonesia where SMEs accounted for 98% of employment creation and growth with Japan and Thailand having their SMEs contributing 81% and 78% to gross domestic product (GDP) (Okoh, 2009).

This contrast has promoted the researcher to carryout a study to investigate the impact of small and medium scale enterprise on youth empowerment in Kaduna. As well as to find out the forms of government support render to small and medium scale enterprises in Kaduna.


1.3 Research Questions

The following questions were formulated to guide this research,

  1. Is there any significance relationship between government empowerment and growth of small and medium scale enterprises?
  2. Are the human and material resources required for executing government policies (empowerment) to small and medium scale enterprises adequate?
  3. Could illiteracy or inaccurate information or knowledge about empowerment of government to SMEs cause set backs to then capabilities in performance?
  4. Are the factors for enabling environment to small and medium scale enterprises mutually exclusive for their growth through empowerment?
  5. What are the effects of frequent changes in government policies on empowering SMEs activities in an economy?
  6. Could unregulated competition slow down or cause waste of resources of small and medium scale enterprises even on empowerment?
  7. What arc the impact of inadequate technological education on small and medium scale enterprises on the development and growth of such businesses?

1.4 Objectives of the Study

The central objective of the study is to examine the impact of small and medium scale enterprises development on youth empowerment in Kaduna Metropolis.

Other objectives of the study include;

  1. To determine the adequacy of science and technological facilities empowered to operators of small and medium scale enterprises.
  2. To identify the training facilities (including research) provided for small and medium scale enterprises in the form of empowerment.
  3. To assess strategies built by government through empowerment in meeting resources (finance and non-finance) requirement of small and medium scale enterprises for sustainable economic development.
  4. To investigate how the variables of enabling environment could be optimally combined as empowerment in meeting expectations of small and medium scale enterprises.
  5. To identify control measures taken by government in an empowerment against wasteful competition by small and medium scale enterprises.
  6. To makes recommendation based on the findings of the study.

1.5 Research Hypotheses

Based on statement of the problem and objectives of the study, the following hypotheses are formulated;

Hypotheses I
  • Ho: Empowering small and medium scale enterprises does not result to sustainable economic development and growth.
  • Hi: Empowering small and medium scale enterprises results to sustainable economic development and growth.
Hypotheses 11
  • Ho: The enabling environment as empowered by government or her agents for small and medium scale enterprises does not make them (SMEs) successful.
  • Hi: The enabling environment as empowered by government or her agents for small and medium scale enterprises makes them (SMEs) successful.
Hypotheses III
  • Ho: The adoptions and use of technological infrastructure as empowering tool does not determine the profits making ability of small and medium scale enterprises.
  • Hi: The adoptions and use of technological infrastructure as empowering tool determines the profits making ability of small and medium scale enterprises.

1.6 Significance of the Study

The study will be beneficial to entrepreneurship development; as such Kaduna state government can utilize the findings of the research as a basis for policy formulationas regard entrepreneurship development.

The study will also contribute to the existing knowledge on entrepreneurship development.
It is also worthy to note that the study can be used as a basis for further research, as the research can be used as a spring board for further research as well as a good reference material to students undertaking similar research.

To the government, this study will immensely assist her to plan and develop the sectors of an economy through empowerment and regulatory controls given to the small and medium scale enterprises. In other words. government could be adequately positioned to optimally expend her resources and gain revenue through policies and programmes initiated and executed in small and medium scale enterprises. Occasionally, government benefits in a way of revenue generating through imports and exports by small and medium scale enterprises.

To small and medium scale industries, they are empowered through this research to learn new skill/capabilities by adjusting to the trends towards the development and growth of their businesses and the economy. In other words, the small and medium scale enterprises could develop and grow in marketing, production of goods and services, agriculture, science and technology, finance and information. Through this study, small and medium scale enterprises could begin to do things, which ordinarily they could not do. Training and development of work force of SMEs arc enhanced. This study also is capable of correcting certain anomalies likely to come up following efforts of small and medium scale enterprises for development and growth. Thus, strength and weaknesses, opportunities and threats are discovered and used for the advantage of developing and improving small and medium scale enterprises.

To management practitioners, this study will make them keep abreast o[ new developments and techniques in the practice of empowering the development and growth of small and medium scale enterprises for sustainable economy. In this process, they could serve their clients better and efficiently.

To the academics, this study will form basis for further studies and sustains an existing knowledge on the subject matter.


1.7 Limitations of the Study

The study is limited to Kaduna metropolis, as it will be difficult to cover other part of the state due to the duration of this study.

For the fact that a survey study was used as the research design as well as the questionnaire as the research instrument, it is not certain if the same result would be obtained if other designs and instruments were used.

Besides, another limitation is that the respondents could have either over exaggerated or understate their responses while scoring the items in the questionnaire. Also the nonchalant attitude of some of the respondents could affect the validity of their response to the questionnaire. This limitation should be taking cognizance of other researches conducting similar studies.


1.8 Scope of the Study

The study covers an empirical examination of the effect of small and medium scale development on youth empowerment in kaduna metropolis. The study also identifies the practical approaches use in developing entrepreneurship as well as the problems militating against entrepreneurship development. The study is limited to Kaduna metropolis. The study covers a time from 2006 to 2011.


1.9 Definition of Operational Terms

Certain concepts and variables to be use in this study need be defined for clarity and comprehension. However, those not defined under this chapter will be treated in the course of the study.

Terms for Definition include;

Small and Medium Scale Enterprises:

These are enterprises with small capital outlay and limited number of employees in its operations. They are private initiatives aimed at developing resources in small scale within an economy, and in the process earned sonic profits.

Government Business Empowerment:

This consists of the different provisions given by government or her agencies to businesses aimed at improving by empowering their production of goods and services.

Proficiency:

This is expertise delivery of services to a third party. It could be described as knowledge, skills and behaviour needed for effective performance. In this study, it could come from the government, business owner to .each other or customers.

Performance:

Manner and success in the execution of a work. It is a measure based on the expected results and standards.


Chapter Five


Summary of Findings, Conclusion, Recommendations and Suggestions for Further Studies

5.1 Summary of Findings

This study investigated the impact of small and medium scale enterprises development on youth empowerment in Nigeria.

Selected SMEs in Kaduna Metropolis. Efforts were made to assemble as much as possible data sufficient to achieve a rational conclusion. In the course of the study several findings were made. The major ones were:

  1. That, resources available for empowering SMEs in the Nigerian economy may not be considered adequate
  2. That stringent regulatory controls of government on SM Es may affect their growth and development.
  3. That inability of SMEs to loans and other financial assistance may cause their failure.
  4. That absence of research and development on the activities of SMEs may affect their growth and development.
  5. That information technology play significant role in the practice of empowerment programme for SMEs in Nigerian economy.

However, a summary of the research hypotheses show the following:

  1. That empowering small and medium scale enterprises does not result into sustainable economic development and growth
  2. That the enabling environment as empowered by government other agents for small and medium scale enterprises does not make them (SMEs) successful. That the adoption and use of technology infrastructure as empowering tool does not determine the profits making ability o[ small and medium industries.

5.2 Conclusion

The results of the tests showed that the data obtained and responses differ from the expected outcomes. As such, hypotheses tested had the nulls as accepted and the alternatives rejected.

Based on this consideration and the fact that there are inadequacies in the size, operations and objectives of small/medium- scale enterprises, hence variation in their contributions and empowerment for stainable development in Nigeria. The study encouraged that quality services delivery be adopted. and practice by organizations (SMEs) to facilitate transitions and efficiency which could be the result of an empowerment programme. It has, therefore been established that a timely and accessible resources be made available to SMEs through government institutions as an empowerment programme. However, the study revealed that every encouragement in the form of enabling environment (empowerment) be provided by government to SMEs to accelerate economic growth and development. This is because SMEs as engine of development of an economy require regular assistance and control for optimal performance. Similarly, it should be noted that small and medium scale enterprises accordingly may not be able to work efficiently unless supported by information technology, government corporate firms and international agencies. The study examined empowering of small and medium scale enterprises in Nigerian economic development. In doing this, some relevant literature was reviewed showing discussions of authors and other contributors of articles on empowerment of small medium enterprises (inadequate infrastructures, government rigid laws and policies, competltwn from multinationals, non existing of enabling environment, etc.) of small and medium scale enterprises.

Thus, chapter two specifically discussed the following; the origin of SMEs in Nigeria, the concept of SME defined, SMEs role in Nigerian economy, financial requirement of SME in Nigeria, objectives and targets of SMEs policy, regulatory controls and assistance of SM E, etc.


5.3 Recommendations

This research work has the following recommendation to make;

Every effort should be given to discourage the difficulties of access to funds set aside for SMEs by financial institutions or the direct loans occasionally extended to them by the government by way of empowerment for sustainable development.

Regular training and retraining should be provided, for SMEs to reduce the perennial problems of inadequate managerial capacity and poor quality services and products. To this regard, facilities should be adequate for training and developing the human resources (managers) needed in translating business in the right question in an empowerment for sustainable development.

The enabling environment by government to small and medium scale enterprises should always be complete in any particular circumstance. In other words, transport, electricity, water, communication; educational infrastructure, etc should be available or adequate in all times on any small and medium scale enterprises empowerment for sustainable development.

Hostility in an operating environment (by government, or communities) should be discouraged to make the effects and expectation of small and medium scale enterprises realistic in for sustainable development empowerment for sustainable development..

Subsidies should be given to SMEs by concern organizations to reduce their high costs of energy, which are imported for use in manufacturing. In other words, costs of installation and use of technology in small and medium scale enterprises should be made affordable for sustainable development. + Standard in services and production by SMEs should always be in conformity with local and international demands for sustainable economic development.
Unregulated competition and inconsistencies in policies and programmes of SM13s should be regulated and control by government and her agents in an empowerment ‗or sustainable development.


5.4 Suggestions for Further Studies

Sequel to the problem encountered on the course of this research study, the researcher feels obliged to make the following recommendations to serve as a guide for further research on the subject of this study;

If the research is to be conducted solely for the purpose of academic exercise, the time required for completion and submission should be considered in approving the topic to enable a more work to be carried out by the researcher.

Considering the reluctance of respondents in releasing data for the research study, management of organizations should assist in appealing to the respondents to cooperate in releasing information for studies.

The researcher is of the opinion that more research could be carried out on empowerment of public organizations to allow for comparison.


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