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EFFECT OF SMALL SCALE INDUSTRIES ON NIGERIAN ECONOMIC DEVELOPMENT

CHAPTER ONE

1.0     INTRODUCTION

It is an undisputable fact that Nigeria of the pre-independence era was predominately small scale in its productions and marketing activities. Industrial revolution brought about a shift from the orthodox trade by barter to a more sophisticated marketing system where consumers satisfaction becomes the ultimate goal of the most businesses. Thus small scale business becomes the next option since they stood a better chance of offering a more  personal relationship with customers as well as socio economic satisfactions of societal needs. Unfortunately the   over concentration on t he oil sector which Nigeria  hoped will boost economic growth led to the negligence of the small scale industries until economic depression set in during  the oil boom period. This and other factors led to the   quest for private participation in the various economic sectors through the Small Scale Industries especially in the present civilian government where the Industrial Development Centres (IDCS )  have  embarked upon a loan scheme  for small business to enhance their contribution to national economic development.

The question now is, will small scale contributes to  nation’s economic  development? One might wonder if this will be  realistic, but  it is quite obvious that Nigeria as a  country developing very slow due to economic dependency of the country. It therefore becomes apparent that the way out of the problem lies within Nigeria. What are found in Nigeria are basically the large scale operations which have given the most contributions to the economy of the developed nations across the globe. One would therefore questioned the backwardness of small scale business to government negligence of the small industries. Nevertheless the immense contributions of small scale industries in terms of increased industrial  output job creation, improvement of standard of livening and general economic development  has reawakened  government interest  and support on these small scale industries.

1.1     HISTORICAL BACKGROUND OF THE CASE STUDY

It is against this background that the next generation computers  was  established  on the 15th February 2000 to boost the computer industry without which Nigeria economy development cannot be fully achieved. The firm which started with capital base of one Hundred Thousand Naira  (N100,000) with the owners as the manager and no  organizational structure deals with booth computer  hardware and software. The services rendered by the organization include Typing, photocopying, internet services, computer assembling supply and installation of computers maintenance and training of manpower through apprenticeship. The firm has so far been able to meet the needs of business organization’s and individuals within Kaduna North.

Nextgen computers as it is popularly know has  over three hundred (300)customers patronizing the  business today and they have ten 10 trainees which is the maximum number accepted by the firm in order to  ensure they are given adequate and standard training and a lot of students have   graduated from the school since inception. Each apprentice pays some  amount of money. Those on certificate course pay five thousand Naira (N5,000), while the  diploma course worth twelve thousand naira (N12,000.00), the mode of payment can be  done instalmentally. The certificate course is   under  taken for a period of  six months while the diploma course  takes a period of one year  for completion. Finally  the firm is still at its growth stage and it  trying its best  to improve and expand its  cervices so as  to contribute greatly to Kaduna and   subsequently Nigeria as a  whole.                      

1.2     STATEMENT OF GENERAL PROBLEMS

Small and enterprises are everywhere in every sector and are seen in every community. However Nigeria has witness the proliferation of small business aimed at increasing industrial output and subsequent economic growth and development through the efficiency of  small scale  enterprises.  There are some questions however that should be asked where answers could suggest solutions to the problem under study. What is the relationship between small scale industries and standard of living of Nigeria businessmen and entire  populace? Is there a positive correlation between small scale industries and economic development? What is the position of the small scale enterprises under the computer  industry? Are there problems associated with  operation of both hardware and software? How do business  owners asses the success or otherwise? Does the success of the small scale industries rest only on the activities of small scale enterprises or it also depends on some macro economic variables in the environment? Does the success of next generation computer academy guarantee Nigeria’s economic development? Or is there more to that? These questions among others form the foundation upon which the research  is built.

1.3     OBJECTIVE OF THE STUDY

The purpose of this research is to assess the EFFECT OF SMALL SCALE INDUSTRIES TO NIGERIA’S ECONOMIC DEVELOPMENT, other objective include:

i. Assessing the possible problems which could hinder small business success.

ii. Why some small business succeed

iii. Assessing the size and composition of small business, their marketing, financial, legal and management aspect government intervention an other environmental factor  which  are likely to affect the small scale  industries. Suggested solutions would be made necessary after drawing conclusions from the above.

1.4     SIGNIFICANCE OF THE STUDY

The research is beneficial to policy makers, Next Generation Computer Academy and the general public in view of the following revelations.

. To policy makers the  research will acquainttem with the joy and frustration.

. To Next Generation Computer Academy it will expose the strength and or weaknesses of their operations.

. To general public the research will serve as an asset to students especially those who intend to be come self employed, lecturers and other researches particularly in marketing accountancy and business studies.

1.5     SCOPE OF THE STUDY

The study is restricted to small scale business in the computer industry in Kaduna North and covers the operations of next generations computer academy from year 2005 till date.

1.6     LIMITATION OF THE STUDY

Given the economic hardship in the country and prevailing cost of living it was not easy to meet up with the financial requirements of the study. Time indeed was another major consideration with too many things to met up within a short space of time preparation for test and examination. In administering the questionnaires, the respondents were quite cooperative but some of the respondents have to fill under close  supervision to avoid irrelevant answers especially where the questions were open ended. Another limitation that applied to this study is the fact that the study focuses on Next  Generation computer alone and the sample for the study restricted to Kaduna North Local  Government area only. It is however hoped that these characteristics of customers be further confirmed in other areas within the country to enable a comprehensive  review of some of the recommendations.

1.7     HYPOTHESIS

Ho: The small scale industries do not contribute significantly to Nigeria’s economic development    

Hi: The small scale industries do contribute significantly to Nigeria’s economic development    

1.8   DEFINITION OF TERMINOLOGIES (CONCEPTS)       

SME = Small and Medium Scale Enterprises

INDUSTRY = collection of undertaken’s generally not under one control but connected with the same economic activity or similar ones.

SSI = Small Scale Industry

PAP = poverty Alleviation   programmes

EDP = Entrepreneur Development programme

NDE = National Directorate of Employment

CNP = Cross National Product

Apprentices = Those who are on the job training.

EEC = Europe Economic Community

NIDB = Nigeria Industrial Development Bank

ICON =Investment Corporation of Nigeria

UNIDO = United Nations Industries Development Organization

IDC = Industrial Development Centre

NACRDB = Nigeria Agricultural Cooperative and Rural Development Bank

NBCI = Nigeria Bank for Commerce and Industry

NERFUND = National Economic Reconstruction Fund

SSICS = Small Scale Industries Credit scheme

FMB= Federal Mortgage Bank

LGA = Local Government Areas

FIRM = Refers to individuals factories, shops, mines etc or a number of them grouped together.