The Role Of Small-Scale Business Operations In The Nigerian Economy

Project and Seminar Topics with material for Banking and Finance

Abstract

This research work was designed to determine the role of Small-scale business operation in the development of Nigeria economy. Some selected enterprises 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 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.

Chapter One

Introduction

1.1. Background of the Study

Small scale enterprise are the fulcrum for the development of any economy whether developing or developed the reason being that a larger bulk of the people engage, in this form of business especially in developing economic such as the cross river state government has in the recent time made.

Collaborative efforts with commercial banks and other development institution to create windows of special funding for the sector, in the last five years of a good number of financial institution have opened shop in Calabar as at last count there are not less than 40 bank branches in the state with more of them still coming up the whole essence of their presence is to facilitate and offer support to the private sector in growing the economy of Cross River State (CR SEEDS) 2006 MS M6) it is pertinent to define small scale business in order to offer an understanding of this study Osaze (1989) defined small scale business as one owned managed and controlled by one or two persons, with family influence in decision making and a relatively small share of the market and Nigeria bank for commerce on industry (NBCI) regards small scale business as these investing not more than N500,000.00 excluding the cost of land but including working capital CR SEED (2011 153) defined small scale business as those with the total investment of between N100,000 and one million exclusive of land but including working capital.

Akinrodoye (1982) defined business as the sum total of the organized efforts by which people engage in commerce and industries providing goods and server needed to maintain and improve the standard of living and quality of life to which each of us may aspire, Toung (1977:36) reports that president Richard Nixon of the United States of America during the small business week in 19th century.

Provision of extension services meeting the training needs of small scale industrialists and provision of technical and management assistance of small scale business operation in Cross River State as it in other part of the developing world has a free entry and excite, it is relatively easy to start a small scale business very quickly also could it go into oblivion if it is not properly managed yet no economy can dispense with this form of business for many obvious reason.

Cross River State has a current estimated population of about 30 million for year 2004 with an average annual growth rate of 29% (Obtained from the 1990 national census figure) out of this estimated population about 40% (representing 1.2 million) are engaged in small scale business operation.

It is noteworthy that most of the small businesses in Nigeria are sole proprietorship and partnerships.

1.2. Statement of the Problem

The role of small scale business operation in the economic development of cross river state is very unique and remarkable, however, there are series of problem, which impair it progress and occasionally cause such as business to get stagnated and even go into extinction this research work is intended to highlight all such problems.

Poor management is seriously affecting the operation of small scale industries.
Recruitment of unqualified personnel’s to manage small-scale industries.
Lack of adequate capital and credit facilities for growth.

1.3. Objectives of the Study

The objective of this research work is to serve as a guide to researcher in gathering relevant data. The research objectives are as stated below:

To assess the importance of the identified roles of small scale enterprises in the 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 scaleenterprises in the 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

Hypothesis one

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.

Hypothesis two

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 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.

The researchers choice of Ikom four corners as a case study of Cassava, Yams, Poultry and Fishery farms at Ikom Local Government Area, Cross River State.

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

1. Business

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)

2. Management

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)

4. Enterprise

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)

5. Development

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).

Chapter Five

Summary of Findings, Conclusion and Recommendation

This research work “The role of small-scale business operation in the economic development” was conducted with the use of questionnaire to sample the opinion of traders 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.

5.2 Conclusions

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.

5.3. Recommendations

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.