CHAPTER ONE INTRODUCTION
1.0
BACKGROUND TO THE STUDY.
In recent time, the
fortune of small scale and medium scale Industries attracted the attention of
government world-wide and thus has been the focus of general interest and
research, especially in developing Countries due to the importance of small
scale and medium scale Industries.
Their importance cannot
be over emphasized as they constitute a whole virile vehicle for the generation
of vast production of outputs and job creation. They are also act as catalyst
for restructuring and diversifying the productive base of an economy and for
the Industrial economy and for the Industrial economy take-off and growth of
such an economy. The small and medium scale Industries are seen to hold the key
to future expansion of the Industrial sector.
In Nigeria, evidence
has shown that in 1986, small scale and medium scale Industries accounted for
70% of all firms, employing millions of Nigerians (first Bank of Nigeria
report, 1987). By the end of 1979, over 80% of all establishments licensed
under the factory act were small and medium scale Industries (Onwuala, 1987).
This made the importance of this economic unit to be unelectable.
Small scale and medium
scale Industry in its widest sense implies the urgent response to the
challenges of developing countries, of which Nigeria is not an exception. Small
and medium scale Industries should be practiced with due regards to the
importance of available local raw materials in its environs because the
challenges facing small and medium scale Industrialist are enormous.
The importance of small
and medium scale Industries to the economic development of any country, whether
developing or developed, have been widely acknowledged and acclaimed. They are
considered as there stimulate to private ownership and entrepreneurial skills,
generate employment, promote industrial dispersal and rural- urban migration.
Clive carpenter (2001),
said that across the world, small businesses are crucial for economic growth,
poverty alleviation and wealth creation.
Uayatudeen (2001) said
that across the world, small businesses have such a crucial role to play in the
development of an economy and that cannot be ignored. According to William and
David, most firms and small and medium scale Industries are compared with
companies that economist usually study. But economists have concentrated on
large scale Industries. The leading textbooks in economics have title
discussions on small and medium scale business or entrepreneurs.
The partial
combinations of small and medium scale Industries on the Nigerian economy are;
creation of wealth, poverty eradication and employment generation as
encapsulated in the national economic empowerment development strategies
(NEEDS)
However small and
medium scale Industries are bedeviled by numerous challenges which have
hampered its development and growth and also its combination to national
development. To this end, government has instituted various programs to address
the challenges and constraints facing small
and medium scale
industries growth. The
programs and institutions
Include:
a.
Setting
up and founding of industrial estates.
b.
Establishment
of national directorate of employment (NSE)
c.
Establishment of the Nigerian bank of
commerce and industry (NBC), the national economic re-construction fund
(NERFUND),the Nigerian Industrial bank (NIDB) which has merged in to one agency
in the bank of industry, the world assisted small scale enterprises loan scheme
(SNEX), the Nigerian export and import bank (NEXIN) etc.
d.
Setting up a small and medium scale
enterprises development agency of Nigerian (SMEDAN); an agency which Co.
ordinates development in small business sector.
Unfortunately, all these
formal credit schemes have not been able to adequately address the fundamental
problems which have constrained small scale enterprises access to credit; and
any other enterprise establishing a small and medium scale industry requires
capital to take off survive and eventually expand.
Nigeria’s major
manufacturers prod cigarettes, textiles and clothing, soaps and detergents,
footwear, wood products, motor vehicle parts, chemical products and metals
while small and medium scale manufacturing engage in leather making, poultry
making and wood carving. The smaller industries are often organized in craft
guides involving particular families who pass the skill from generation to
generation.
People have lived in
what is now known as Nigeria since at least 9000BC, evidence indicated that
since at least 5000BC, some of them have practiced settled agriculture. In the
early (centuries (AD), kingdoms emerged in the drier northern savanna,
prospering from trade with north Africa. At roughly the same time, the western
and southern forested areas yielded city- state and looser federations
sustained by agriculture and coastal trade.
Note:
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