1.      INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Histories of various developed countries have shown that industrial revolution had been the main cause for their economic survival. Their great financial strength have come principally through the acquisition of industrial and technological power. Small – scale industries undisputedly constitute the bedrock for any meaningful industrial development and for the acquisition of this industrial and technological power.

 Without exception, all big industrial organization be they multi – national or indigenous, started in a small way. Small scale industrial set – ups abound, but most of them are buying and selling outfits. Considering the economic situation in the country, the entrepreneurs in the state, now more than ever need to branch out into some other areas outside buying and selling. One would appreciate the fact that one can make quicker and more money by buying and selling. But this is only for a short term investment in the production of goods (manufacturing), though it has a longer payback period ensures a longer lasting profit. This could not only be a safer investment for the entrepreneur in the long run, but it is also a sure way of providing employment for our teeming high school and university graduates.

The Nigerian economy in the last two decades has passed through various stages. From the oil boom era of the seventies to the period of wasteful spending and painlessness of the early eighties and the present economic down turn. 

One must appreciate the fact that the survival of the sole proprietor in the Nigerian economy today would depend of his initiative, drive and quick adaptation to the environment. The age of “buy, buy, buy” and “sell, sell, sell” is permanently over in this country. The sole proprietor must appreciate this fact and more to study the economy and develop interest in some manufacturing no matter how small the scale, so as to be sure of the survival in today or future Nigeria.

Most traders especially if Imo state origins who are seeing the writing on the wall of destiny are gradually investing in industries and where necessary, are working with foreign or indigenous experts to make the enterprise successful. There are in this state numerous Engineers, Accountants, Economists and other people in other fields who possess the intellectual ability to set up an industry but hardly find the necessary fund to do so.

Ezinihitte Local Government Area on which the research work is based, is one of the local government area of Imo state. It is stated on the Eastern side of the state and lies on the boarder axis between Abia and Imo state. Ezinihitte local government is made up of various Autonomous communities with a total population of about six hundred thousand people. A greater percentage of the people are engaged in Agriculture while others are engaged in trading as well as traditional and industrial activities such as pot moulding, basket and mat weaving, hair dressing. Others are block moulding, Bakery, poultry, soap making, food processing e.t.c. Most of those activities are small scale establishments and sole proprietorship and partnership oriented.

A good number of people have shown their concern over the development of Ezinihitte local government area and Imo state in general. People like Engr. Roy Umenyi who had carried a study of this nature, discovered a lot of bottle – necks in the development of the local government in question. Such studies also revealed that answers to poor development of the area could be found largely on the insufficient investment in industrial activities. This has struck the mind of the project writer to carry out a research into the problems militating against the establishment and development of small scale industries in Ezinihitte local government area.