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CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

            Government has done a lot toward improving the standard of small and medium scale business in Nigeria through the establishment of many ministries parastatals and agencies.  In Nigeria small scale business are falling due to some problems, like poor funding, poor infrastructural development, high taxation and others. Small and medium scale business have come to stay in this country and to some extent have increased the standard of living and economy of this country.

            Government has implemented a lot of programme and equally set up some agencies in Nigeria like the small scale industry credit scheme (SSICS).  The National Economic reconstruction fund (NERFUN) Central Bank of Nigeria (CBN), the Nigeria Export and Important bank (NEXIM), the work bank facility for the Small and Medium Scale Enterprises loan (SMEX LOAN), the National Directoriate of Employment (NDE), the Small and Medium Enterprises Development Agencies of Nigeria (SMEDAN).

            All this agencies are effort made by the government to reduce the effect of poverty in Nigeria.  But the fact still remain that some of this agencies are not doing what they are meant to do due to corrupt practices, favoritism and untrained personnel that work in those parastatals.

            Our small and medium enterprises when compared with the outside world, has a lot of discrepancy in terms of maturity, level and standard.  What we call big business in this country are been regarded as small business in other countries.

            Therefore, it will be of great interest that the government not only set those agencies but they should also provide capable and competent hands that will man it, discipline those that are corrupt and make it possible for small and medium scale business to excel in Nigeria.

            From the above study, economic analysts all over the world agree that output performance in the less developed countries is rather disappointing with little or no hope of appreciation, to a level that would engender self-reliance.  This was precisely because the major indices of economic performance rather looked downwards.  The index of manufacturing output posted losses in real terms with the bleak consequences in employment generation.  On a macro scale, the effect was disastrous with failures in macro economic planning.

            The experience in developing countries with large scale industry was worsened by financial shortage and fraud, as a result of which gigantic projects were abandoned.  In addition, the technological gap existing between the developed therefore agreed and obvious that the “big-push” theory of large scale industry cannot of finance, technology and manpower availability.

            The concentration of large industrial concerns in the urban cities has long been criticized because of the rural urban drift which has generated imbalance between the rural and the

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