ROLE OF SMALL BUSINESS IN POVERTY ALLEVIATION
CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
In this period of globalization, through world trade it is well recognized that private sector development has an important role to play in poverty alleviation (Bagetic & Sanogo, 2005; Tavis, 2016; Volchik et al., 2021; Mayorova et al., 2021; Bužavaitė et al. 2019). Micro, small and medium enterprises is a very important sector in Nigeria economy and it is stipulated in the Nigeria strategy for Growth and Poverty Reduction as a crucial towards addressing the concerns and aspiration of the Nigeria vision 2020 (Nwaba, 2011). Nigeria has been the center of trade for many centuries. Nigeria depends on commercial activities for economic growth and most of them are engaged in the small scale business as the major means of earning their income particularly on agricultural sector, fishing sector and other business. These sectors contribute significant towards the reduction of poverty and unemployment. In Nigeria before revolution people were more engaged in micro, small and medium enterprises as artisans and other activities in urban areas. In rural areas SMEs engaged people in agricultural activities and business involving agriculture products and other consumable. After the 1964 revolution, the Government initiated a number of SMEs enterprises for the manufacture of nails, garment, cooking utensils, electrical wires, soaps and other products.
The SMEs in Nigeria create job opportunities among the low skilled people and therefore hold the key to employment creation and income generation (Maina, 2014; Iorun, 2014; Udoko-Aka, 2015). In the mid-1970s SMEs were engaged in cooperative activities especially for women groups (Ogundele, 2012). In 1984 the business started to build its root after the announcement of Free Trade (Trade Liberalization policy) and this was the initiation for small Scale Enterprises. Various investments have been approved and a large number of Small Scale Enterprise (SMEs), commercial farming and even manufacturing firms were established by natives and foreigners (Sule, 2014).
Consequently, the need for this research work is very important. The majority of enterprises in Nigeria fall within this category. SMEs accounts for over 70 percent of employment in Nigeria, with the potential of employing more and also has a large potential of reducing poverty in our economy (Sule, 2014; Otokiti 2002).
The small and medium enterprises (SMEs) are supervised by various ministries in depending on its nature of operation. Those ministries are: Ministry of Trade, Industry and marketing, Ministry of community, woman and children, Ministry of Labour, Economic empowerment and cooperatives and Nigeria chamber of commerce and industries. SMEs activities are in the form of batik making, antiques, handcraft works, medicine soap making, oil milling and other tourism articles involved in trades which include purchasing and sales of goods and agricultures. Long chains of this type of business are located at many places in South west Nigeria. Most of them are owned by individual and other by family or groups. These enterprises create many job opportunities to the people of Nigeria especially the youth from different gender. The main objective of small enterprises is profit making and enabling people to improve their income through this kind of business (Anyanwu, 2004).
1.2 STATEMENT OF THE PROBLEM
The level of poverty that this country is in now demands that this poverty alleviation mechanism intended to be an emergency, to address some of the most urgent social concerns of the Nigeria’s vulnerable groups, such as the poor, widows, orphans, the disabled, the urban poor, the urban displaced (like the 300,000 Lagos Maroko inhabitants that that were forcibly removed by the military, and the victims of the previous and the present religious disturbances.) The rural poor, the environmental refugees of the Niger-Delta people and the erosion prone Akwa Ibom people, the old age people and the retrenched civil –servants and others who are affected due to the economic down-turn occasioned by mis-management and the subsequent economic reforms. These groups of people need urgent attention. They should not be left to their fate for their fate is in Nigeria. Infact, poverty makes people compromise on moral values or abandon moral values completely. Poverty has created frustration, loss of hope, prospects of living, something to live for and disillusionment about morality because criminals are living best. In order words, poverty is a cause of corruption while corruption is a cause of quench of poverty and loss of moral values.
1.3 OBJECTIVES OF THE STUDY
The objectives of these studies are:
1. To access the role of small business in the Nigeria economy
2 To access the impact of small business in poverty alleviation in Nigeria especially in Lagos.
3 The study will also assess the extent of awareness on the part of the poor towards the role of small business as a mechanism in alleviating poverty.
4. Also, whether business has help to change the problems hitter to plagued the poor in Lagos and the country at large or not.
5. To ascertain whether there is any positive and significant relationship between business and poverty alleviation in Lagos.
1.4 RESEARCH QUESTIONS
These questions are:
1. What is poverty alleviation all about?
2. Why is the role of small business necessary on poverty alleviation in Nigeria and Lagos in particular?
3. Has small business impact on the poor positively or negatively?
4 How has this poverty alleviation programmes been implemented?
5. Is there areas where this poverty alleviation programme can be strengthen?
6. How sure are we that small business do help in alleviating poverty in Nigeria and in Lagos? Answer to these questions and more will provided us the much needed information on the study and to be appreciating the study.
1.5 RESEARCH HYPOTHESES
Ho Small business has no positive impact on poverty alleviation in Nigeria and in Lagos.
Hi Small business has a positive impact on poverty alleviation in Nigeria and in Lagos in particular.
Ho There is no significant relationship between small business and poverty alleviation in Lagos and Nigeria as a whole.
Hi There is a significant relationship between business and poverty alleviation in Lagos and Nigeria as a whole.
1.6 SCOPE OF THE STUDY
This research is aimed at assessing the role of small business in alleviating poverty in Nigeria, a case study of registered SMEs in SMEDAN in Lagos state, for it to be eradicated successfully, people business or the other so as to improve their standards of living. Therefore, the scope of these study will not go beyond Lagos, Nigeria.
1.7 SIGNIFICANCE OF THE STUDY
The importance of this study cannot be over emphasized. Business on it own plays significant role in the social by making goods and services available within the Nigerian economy. Therefore, an economy is made up of business activities that are consciously set up and directed at providing want satisfying goods and services, thereby help to reduce poverty in the lives of those who engaged in the activities. Any research is always beneficial to various interest groups within the economy. This research will be beneficial to government can help the poor by granting loans and subsides so that they can start small scale business to better their lives. It will also help the government in formulating economic policies. This research will also help the poor to identify the class of business activities they should embark upon. The study will create awareness among SMEs in Lagos by engaging in economic activities. This research will by extension enable the micro-finance institutions to realize the need to provide loans to the people at grass root for investment. Above all, this research will be of immense benefit to the reading public and researching students who will wish to carry out further study on this topic and related ones a sit will form a reference point for them.