THE ROLE OF THE FEDERAL GOVERNMENT OF NIGERIA IN THE PROMOTION OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA
Small scale business constitute an important
component of the Nigerian industrial sector. The importance of this
sector cannot be over emphasized, especially in a typical developing
country like ours where the level of youth unemployment is rising
beyond control. Hence small scale industries generate employment
opportunities per unit of capital investment because they are generally
more labour intensive which are more capital in nature. A large scale
industry that cost N20million for instance, may employ a mere 70
(seventy) workers or less. Where as a small scale industry that cost
just N150,000 (one hundred and fifty thousand naira) may employ about
Small scale business specialized in the
production and marketing of various products and services ranging from
food, beverages, drinks/sachet water, cosmetics, spare parts and many
Kilby (1969) acknowledge the diversity of terms of the degree of
specialization and division of labour and the quantity of raw materials
and output and the character of markets being served by small scale
businesses. As a result the bulk of Nigerian business falls within the
small scale business which account for over 80% of the number of
enterprises in the country. (Ekunna 1992 Pg.160)
Several number of small scale business are successful while other
fail or are staggering for survival due to poor background management,
lack of qualified manpower, poor capital base, lack of marketing
research and appropriate technology and credit rating among banks and
other lenders. These problems continue to militate against the
establishment, survival and growth of small scale business in Nigeria.
Although successful government in Nigeria have been emphasizing on the
importance of small scale business and have established institutional
support agencies to facilitate industrialization.
However, small scale business still operate in
uncertainty and are faced with serious obstacles, this raises the
questions of whether the federal government is actually up to the
responsibility in the promotion of small scale business in Nigeria.
- OBJECTIVE OF THE ESSAY
The main objectives of this study is to evaluate
the impact of federal government in the promotion of small scale
business in Nigeria. This study will specially seek to achieve the
- To evaluate the marketing challenges facing small scale businesses.
- To identify the sources of funds to the activities of the industry.
- To find out the extent of government involvement in promoting the activities of the business.
- To bring to light the contribution of the industry to the development of national diploma in marketing.
Finally, it is my hope that the students of
marketing and others in related discipline will find this study very
informative and useful tool in their respective studies.
- SCOPE OF THE STUDY
As the title of this essay indicates, the study
focuses its attention to federal government support to small scale
business enterprises in Nigeria, it causes various policy, guidelines,
direct and indirect financial assistance and other programs and
initiatives designed to promote this vital sector of the country.
- SIGNIFICANCE OF THE ESSAY
The significance of this study lies basically on
its contribution to knowledge and its benefits to individual and
organization. The current economic crises in Nigeria has deciminated the
growth of infant industries and encourages the establishment of
similar business venture in both small and large scale proportions.
Although successful governments have vowed to
support individuals and group initiatives in the establishment of small
The current state of most small scale business in Nigeria is a far
cry particularly when structural adjustment programme (SAP) was
introduced, which brought about the problem of devaluation of the naira
and the scarcity of foreign exchange of raw materials from abroad
which has adversely affected production unit especially under a
This study is an attempt to evaluate the role of government in the
promotion of small scale business in Nigeria as a country.
- DEFINITION OF TERMS
The following terms and abbreviations used in the extended essay are defined below:
- (SSICS) Small Scale Industries Credit Scheme
(SME) Small and Medium Enterprises
(NIDB) Nigerian Industrial Development Bank
(NERFUND) National Economic Reconstruction Fund
(NDE) National Directorate of Employment
- Small scale enterprise: Apart from size, it is a type of
business that is self initiated, largely self financial, closely self
managed and is of relatively small in size when considered as part of
- Management: Is the part of loaning organizing, directing and
motivating others so as to enhance productivity with maximum
utilization of available resources and achieving the organizational
goals or objectives.
- Resources: These are the primary inputs that needs to be put
together into function before the proper management activities really
take place. These activities include; men, materials , money and
principles of management that is concerned with the division of labour
and assigning of responsibilities with authority for the well being of