The Role Of The Federal Government Of Nigeria In The Promotion Of Small And Medium Scale Enterprises In Nigeria

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The Role Of The Federal Government Of Nigeria In The Promotion Of Small And Medium Scale Enterprises In Nigeria


Abstract


This study is on the role of federal government of Nigeria in the promotion of small and medium scale enterprise in Nigeria. The total population for the study is 200 staff of Dangote group of company, Lagos state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up production managers, human resource managers, senior staff and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


Chapter One


Introduction

1.1 Background of the Study

Small scale business constitutes an important component of the Nigerian industrial sector. The importance of this sector cannot be over emphasized, especially in a typical developing country like ours where the level of youth unemployment is rising beyond control. Hence small scale industries generate employment opportunities per unit of capital investment because they are generally more labour intensive which are more capital in nature. A large scale industry that cost N20million for instance, may employ a mere 70 (seventy) workers or less. Where as a small scale industry that cost just N150,000 (one hundred and fifty thousand naira) may employ about 20-30 workers. Small scale business specialized in the production and marketing of various products and services ranging from food, beverages, drinks/sachet water, cosmetics, spare parts and many others.

Kilby (1969) acknowledge the diversity of terms of the degree of specialization and division of labour and the quantity of raw materials and output and the character of markets being served by small scale businesses. As a result the bulk of Nigerian business falls within the small scale business which account for over 80% of the number of enterprises in the country. (Ekunna 1992 Pg.160)

Several number of small scale business are successful while other fail or are staggering for survival due to poor background management, lack of qualified manpower, poor capital base, lack of marketing research and appropriate technology and credit rating among banks and other lenders. These problems continue to militate against the establishment, survival and growth of small scale business in Nigeria. Although successful government in Nigeria have been emphasizing on the importance of small scale business and have established institutional support agencies to facilitate industrialization. However, small scale business still operate in uncertainty and are faced with serious obstacles, this raises the questions of whether the federal government is actually up to the responsibility in the promotion of small scale business in Nigeria.


1.2 Statement of the Problem

In today’s globalized world, entrepreneurship has assumed greater significance in the acceleration of economic growth and provision of economic facilities. According to SMEDAN, in the business sector, there is an overwhelming ratio of microenterprises in the MSME sub-sector in the country. It also estimated that more than 80% of MSMEs do not survive beyond the first five years of existence because of a variety of issues that include but not limited to tough and inclement business environment (SMEDAN, 2012). In view of the critical role which these enterprises play in the economy, their mortality rate as reported above presents a huge concern to policy makers and governments. Based on the number of MSMEs in the country, it is expected that Nigeria should easily meet its essential needs, notably in the area of employment generation, poverty alleviation, economic and industrial growth. But the reverse currently is the situation as a country now parades a population with adverse unemployment, poverty and lack of growth. While the officially reported rates of GDP well exceed population growth, the pace of poverty reduction and job creation does not. This implies that the number of a young person’s thrown into the labour market and those living below the poverty line has continued to grow.


1.3 Objective of the Study

The main objectives of this study are to evaluate the impact of federal government in the promotion of small scale business in Nigeria. This study will specially seek to achieve the following:

  1. To evaluate the marketing challenges facing small scale businesses.
  2. To identify the sources of funds to the activities of the industry.
  3. To find out the extent of government involvement in promoting the activities of the business.
  4. To bring to light the contribution of the industry to the development of national diploma in marketing.
  5. Finally, it is my hope that the students of marketing and others in related discipline will find this study very informative and useful tool in their respective studies.

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: there are no marketing challenges facing small scale businesses
    H1: there are marketing challenges facing small scale businesses
  2. H02: there are no sources of funds to the activities of the industry
    H2: there are sources of funds to the activities of the industry

1.5 Significance of the Study

The significance of this study lies basically on its contribution to knowledge and its benefits to individual and organization. The current economic crises in Nigeria have deciminated the growth of infant industries and encourage the establishment of similar business venture in both small and large scale proportions. Although successful governments have vowed to support individuals and group initiatives in the establishment of small scale businesses. The current state of most small scale business in Nigeria is a far cry particularly when structural adjustment programme (SAP) was introduced, which brought about the problem of devaluation of the naira and the scarcity of foreign exchange of raw materials from abroad which has adversely affected production unit especially under a depressed economy. This study is an attempt to evaluate the role of government in the promotion of small scale business in Nigeria as a country


1.6 Scope and Limitation of the Study

The scope of the study covers the role of federal government of Nigeria in the promotion of small and medium scale enterprise in Nigeria. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.


1.7 Definition of Terms

The following terms and abbreviations used in the extended essay are defined below:

  • (SSICS) Small Scale Industries Credit Scheme
  • (SME) Small and Medium Enterprises
  • (NIDB) Nigerian Industrial Development Bank
  • (NERFUND) National Economic Reconstruction Fund
  • (NDE) National Directorate of Employment
Small scale enterprise:

Apart from size, it is a type of business that is self initiated, largely self financial, closely self managed and is of relatively small in size when considered as part of the industry.

Management:

Is the part of loaning organizing, directing and motivating others so as to enhance productivity with maximum utilization of available resources and achieving the organizational goals or objectives.

Resources:

These are the primary inputs that needs to be put together into function before the proper management activities really take place. These activities include; men, materials , money and machines.

Enterprises:

This is one of the fundamental principles of management that is concerned with the division of labour and assigning of responsibilities with authority for the well being of business unit


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

The Role Of The Federal Government Of Nigeria In The Promotion Of Small And Medium Scale Enterprises In Nigeria


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