CHAPTER ONE

INTRODUCTION

1.1.    BACKGROUND OF THE STUDY

The small and medium scale enterprises (SMEs) have been generally acknowledged as the bedrock of the industrial development of any country. Apart from the numerous goods and services, they provide a veritable means of large scale employment as they are usually labour intensive. (Yerima et al 2007). In developing countries, Nigeria have since the 1970’s shown increased interest in the financing and promoting small and medium scale enterprises from three main reasons.

They also provide training grounds, for entrepreneur even as they generally rely on more on the use of local materials. Osaba, (2004) says that, the distribution of goods has continued to be the only viable and reliable option for development, growth and survival of any economy. The work explore the role and contribution, constraints and prospects of the small as it contributes to the growth and development of the Nigeria economy, and the government efforts, internal and external support. (SMES) have been full recognized by government and development experts as the main engine of economic growth and major factor in promoting private sector development and partnership (Adeusiyi, 2007). Ajakaiye (2003) state that the central bank of Nigeria (CBN) has initiated a project for baseline economic studies to develop in integrated information system for SMEs to foster better implementation of small and medium industries equity investment scheme (SMES). Federal government has facilitated SMEs by established National Association of Small and Medium Industries (NASSI), Central for management development (CMD), Fund for Small Scales Industries (FUSSI). This is because of her concern for the survival of the SMEs. SMEs in Nigeria can be categorized into urban and rural enterprise. The former can be sub-divided into organized and unorganized enterprise. The organized ones tends to have paid employee with a registered office whereas the unorganized category mainly made up of artisan who work in open space temporary wooden structures, or at home and employ little or in some no salaries workers (Lied Holm and Mead, 2000, World bank, 2002).  The owner of SMEs are people of average means with specialized or no specialized skill, therefore, because of financial constraints, location of market, managerial skills, lack of information etc they are unable to meet their target objective. As a result, efficiency and productivity are low, due to hard condition which Nigerian are facing, SMEs has failed. As a result we cannot relax about the situation.

1.2.    STATEMENT OF THE GENERAL PROBLEM

The gross under-development of Nigerian economy is as a result of inadequate industries in Nigeria and manufacturing of the existing one’s owing to poor implementation, supervision and execution of government policies and programmes, subject to corruption and lack of appropriate machineries for later implementation. The government (both at state and federal level) at various intervals has initiated policies measures to encourage the development of the small scale industries. Some of these policies included the operation feed the nation (OFN) of 2012, the Green Revolution of 2003, the National Directorate of Employment (NDE) of 2009 and others. All these geared towards assisting the firms technically, financially and managerially. Given that industrial development has been so slowly generally in Nigeria, and that government has been doing something positive to increase the industrial base of the country; the researcher therefore is challenged to prove whether or not a small and medium firm will lead to quick industrial development in Plateau State and Nigeria in general. The researcher will find out why most government industrialization and mobilization policies inaugurated in the past, failed to achieve grass root industrialization and mobilization among Nigerians and also how to address the problems of entrepreneurship facing small scale industries in Nigeria and Plateau State in particular.

1.3.    OBJECTIVES OF THE STUDY

The major aim of this study is to examine the impact of small scae enterprises on industrial development in Nigeria. Other general objectives of the study are;

1.  To examine the importance of small scale enterprises to economic development in Nigeria

2.  To examine the major challenges to small scale enterprises in Nigeria.

3.  To examine the prospects of small scale enterprises in Nigeria.

4.  To determine the influence of small scale enterprises on industrial development in Nigeria.

5.  To assess the effort of government in ensuring the development of small scale enterprises.

6.  To determine the need for industrial development in Nigeria.

7.  To recommend ways of supporting small scale enterprises in Nigeria.

1.4.    RESEARCH QUESTIONS

1.  What is the importance of small scale enterprises towards economic development in Nigeria?

2.  What the major challenges to small scale enterprises in Nigeria?

3.  What are the prospects of small scale enterprises in Nigeria?

4.  What is the influence of small scale enterprises on industrial development in Nigeria?

5.  What are the efforts of government in ensuring the development of small scale enterprises?

6.  What is the need for industrial development in Nigeria?

7.  What are the ways of supporting small scale enterprises in Nigeria?

1.5.    RESEARCH HYPOTHESES

Hypothesis One

H0: There is no significant influence of small scale enterprises on industrial development in Nigeria.

H1: There is a significant influence of small scale enterprises on industrial development in Nigeria.

Hypothesis Two

H0: There is no significant influence of small scale enterprises on economic development in Nigeria.

H1: There is a significant influence of small scale enterprises on economic development in Nigeria.

1.6.    SIGNIFICANCE OF THE STUDY

This study would be of immense benefit towards the development of small scale enterprises and eventual industrialization in Nigeria. The study would also benefit students, researchers and scholars who are interested in developing a further study on the subject matter.

1.7.    SCOPE OF THE STUDY

This study is restricted to small scale enterprises and industrial development in Nigeria using small scale enterprises in Plateau state as a case study.

1.8.     LIMITATION OF THE STUDY

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).

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.

1.9.    DEFINITIONS OF TERMS

This section defines related concept used in this research.

Small Scale Enterprise: an enterprise with a labor size of 11-1000 workers or a total cost of not more than 50 million including working capital but excluding cost of land (Sule, 2009:207). Medium Scale Enterprise: An industry with a labor size of between 10-300 workers or a total cost of over 50 million but not more than 200 million including working capital but excluding cost of land (Clifford, 2004:85).

Business: business includes any trade, industry, professional and any occupation carried on for profit Jerome (2014:2).

Growth: According to Anyanwu (2003:300) growth refers to an increase in output as a result of bank loans invested in small and medium scale business.

Constraints: A hindrance of business not forwarding or not prospering.

Enterprises: It means any establishment engaged in production, repairs or services to satisfy human wants and make room for profits.