CHAPTER ONE

INTRODUCTION

1.0     BACKGROUND OF THE STUDY

Small-scale industries have been in existence since time immemorial. They are earliest form of business that the early men use to get their needs, basically food, cloths and shelter. They exchanged what they had for what they wanted. It was latter on that large-scale business started to emerge and they are now found in a large number, in every country of the world.

However, small-scale industries still form a dormant part of business enterprises particularly in developing nations, which includes Nigeria. In recent years, since the adoption of the economic reforms program in Nigeria (1986), there have been a device switch of emphasis from the grandiose capital intensive large-scale industrial project to small and medium scale enterprises linkages for rapid sustainable industrial development based on the philosophy of input substitution. Small-scale industry is an industry whole total project cost excluding cost of land but including working capital above #1million but does not exceed #10million. However, in most developed countries and the newly industrializing countries of the world, Small and Medium Enterprises (SME) are generally defined on the basis of number of people employed to take account of Small and Medium Enterprises (SME) labour intensive characteristics

At independent in 1966, Nigeria economy was mainly agrarians industry plays a vital role in economic development in fact, it provided the brightest hope for generating sustained growth employment improved spinning and investment.

1.1     AIMS AND OBJECTIVES OF THE STUDY

This project has been designed to serve as an aid to the understanding of the roles played by small-scale enterprises to the development of Nigeria economy and also to suggest effective possible ways of improving small-scale enterprises in Nigeria so as to feel the contribution of small-scale industries. The following are considered to be the basic objectives of the aims or the study:

(i)               To examine the activities and contributions of small-scale industries.

(ii)             To identify the need for improving the small-scale industries.

(iii)          To identify problems associated with small-scale industries.

(iv)           To provide with useful suggestions and solutions how to improve small-scale industries in an economy.

IMPORTANCE

v It will help an individual to know the necessary requirement need in setting up small-scale industry.

v An individual will be able to know what appropriate types of business ownership one should choose.

v It will help an individual to identify the various problems associated with small-scale industry.

v It will provide useful suggestions and solutions on how to improve small-scale in an economy.

1.2             THE SCOPE OF THE STUDY

The research carried out covers Federal ministry of Small and Medium scale industry Abuja. The research could have been successful but unfortunately, the minister for the Federal ministry of information went out with the Director for the Federal ministry of Small-scale industry in order to conduct an interview for new employee of NBC, which is a bank under the ministry of (SSI). Later a member of staff of the industry gave a note on the promotion of small scale and medium scale enterprises as a strategy for Nigeria economic development.

1.3             STATEMENT OF PROBLEMS OF STUDY

Despite the achievement recorded in the Small-scale Enterprises (SSE) sub-sector, we are mindful of the fact that we need to further address certain issues in order to match or even surpass those recorded by developed and the newly industrializing countries of this world. These issues includes:

(a)    Inadequate infrastructural facilities: both the Federal and State government are currently intensifying their programmes to provide industrial estate layouts and technology for promotion of SME.

(b)    Lack of inter and intra sectorial linkages: as at now, there are low level of linkages between the cottage industries and Small-scale Enterprises (SSES) ministry has conducted studies and recommendation of the studies are currently being appraised.

(c)    Poor managerial capacity: since 1986, the Federal Government has been exposing our small and medium scale industries to training through various entrepreneurship development programme like EDPI working- for yourself programme.

(d)    Lack of stable and generally acceptable definition for small and medium enterprises: such tends to question the basic policy under which activities and programmes an SMES evolve.

1.4             SIGNIFICANCE OF THE STUDY

I hope this extended essay will be of a greatz significance to an organization as suggestion which shall be given in this study will go a long way in assisting them to improve on small scale management. The study will also help those who want to start small business especially in rural areas.

1.5     LIMITATION OF THE STUDY

Small-scale business is not easy to define as viewed casually due to certain reasons, which are stated below:

(i)               The term Small medium and large relatively differs from industrial countries to country and they’re no unique or universally accepted definition of these terms.

(ii)             It is also important to recognize that the definition change over a period of time and depend to a large extent or countries level of development. For example, “what large scale is in the 1950s may be regarded as small-scale today.

(iii)          Different parameters are used in defining small business. Among the yard stick used are asset value. Turnover rates number of employees and size within the industries. However, examples find it difficult to give a single sentence in defining Small business that could be accepted universally. Reference to the British committee that was set up in 1969 to enquire on Small firms. They found it difficult to agree on a single definition that will cover manufacturing, whole selling and retailing industries thus, the committee used eight (8) definitions for various groups which ranged form 200 employees for manufacturing under 50 turn over for retailing 5 vehicles or less for transport.

1.6     DEFINITION OF KEY TERMS

Small – Scale Industries: This can be define an industry with a total capital employed of at least N 1.5 million, including working capital but excluding cost of land, or a labour size of 11 – 150 workers.

Development: Can be seen as a process of acquiring new ideas and skill process of Acquiring new ideas and skill for the purpose of achieving individual growth and societal advancement. Thus development involves a complex of mutual related economic social and political changes. 

Quality and Standard: Small entrepreneur are generally unaware of the importance of standard and quality. They may not have the facilities for and knowledge about standard.

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