CHAPTER ONE

INTRODUCTION

1.3  BACKGROUND OF THE STUDY

Since Nigeria’s independence in 1960, all the National

Development Plans (1962-1985; 1986-1990, 1991-2000; 2001-2010) had laid emphasis on strategies of government led industrialization through the encouragement of local manufacturing industries (Ile, 2001). This was in recognition of the leading role the small-scale industrial sector was expected to play in the industrialization strategy of the government as well as the overall development of the economy. The South-East part of Nigeria, which is the area for this study is a major commercial and industrial nerve centre in Nigeria.

According to the Anambra State Handbook (2002), one of the special characteristics of Nigeria South-Easterners are the immense resourcefulness of its people who carry on the most animated business relationship with people everywhere

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in Nigeria. As Oyemelukwe (2009) puts it, though the rich human resources of the area are not in question, perhaps nowhere is the tenacity of the people more evident than in the vigorous struggle for personal achievements. Indeed, the Igbo philosophy of individualism has over the years encouraged the preponderance of small-scale business enterprises in the South-East of Nigeria, (Apkala, 2007). The experience from India, China, South Korea and Singapore, Perhaps account for the belief in business and government circles that the “surest route to industrialization is through small-scale business sectors”, (Okoye, 2011). To this end, the government of Nigeria and those of the South-East States have over the years designed several schemes to assist private entrepreneurs.

Indeed, Nigeria’s fourth National Development Plan (1981-1985) stressed the importance of economic growth especially in the non-oil sector and greater local participation in the ownership and management of productive enterprises.

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Poor infrastructural facilities had always been the bane of many business in Nigeria, especially in the South-East. Kpakol (2012), used descriptive analysis to corroborate the views of some authors by arguing that poor and inefficient electricity supply has adverse implications for industrial development in the South-East of Nigeria. Over the years, the fortunes of small-scale industries have dwindled around Nigeria, especially in the South-East and as some writers put it, this may in no distant future lead to the total extinction of this class of business given the prevailing unfavorable conditions existing in the sector, (Ikeme, 2007). Available statistics show that over 70% of small-scale industries in the study area (the South-East of Nigeria where this level of business is predominant) die within five years of establishment (Idemobi, 1992). The problem of this study, therefore is to locate what could be responsible for this high rate of failure and what can be done to ameliorate the situation.

1.4  STATEMENT OF THE PROBLEM

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Small-scale industries in the South-East have been recognized for the contributions they make to the growth and development of the Nigeria’s economy. In the south-east of Nigeria, these enterprises constitute the majority of companies in the private sector and account for about 55% of total employment and about 50% of industrial output.

In carrying out this study, some problems were identified among which are:-

Poor infrastructural facilities which had always been the major impediment to businesses in the south-east of Nigeria. Okoye (2011), used descriptive analysis to corroborate the views of those authors by arguing that poor and inefficient electricity supply has adverse marketing implications for the industrial development in the south-east of Nigeria. Also, there tends to be inefficient distribution system as a marketing problem militating against the smooth running and speedy growth of small-scale industries in the south-east of Nigeria, and most of their products and services are of poor quality, which accounts for low patronage from customers.

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Furthermore, for the fact that small-scale industries lack marketing orientation, they do not care to advertise their goods and services. Small-scale industries do not engage in marketing research, and Nigerians prefer imported products and those products produced by large-scale industries to those manufactured by small-scale industries. Small-scale industries lack adequate marketing structures which is an impediment to its field sales operations.

1.3  OBJECTIVES OF THE STUDY

The broad objective of the study is to critically examine the problems which could lead to non-sustainability of small-scale industries in the South-East of Nigeria, but more specifically, the study intends to:

i.            Examine the effect of the poor state of infrastructure on the development and sustainability of the sector;

ii.           Examine the effect of insecurity on the field sales operations of small-scale industries.

iii.         Examine the effect of lack or poor access to finance, especially from banks.

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iv.         Determine the effect of managerial problems on the operations of small-scale industries.

1.4  RESEARCH QUESTIONS

The study was guided by the following research questions:

i.            To what extent can the poor state of infrastructural facilities impede the development and sustainability of small-scale industries in the South-East of Nigeria?

ii.           Does insecurity pose any serous challenge to the marketing problems of small-scale industries in the South-East of Nigeria?

iii.         To what extent can lack or poor access to finance, especially from banks constitute a hindrance to the sustainability of the marketing of small-scale industries in the South-East of Nigeria?

iv.         To what extent can you determine the effect of managerial problems on the operations of small-scale industries?

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