CAUSES OF FAILURE OF SMALL-SCALE INDUSTRIES IN NIGERIA
The aim of this research work is to highlight the problem facing small scale industries in Nigeria. I have briefly in the introduction examined the definitions and roles of small scale industries in Nigeria and problem facing them I have also endeavored to offer a feasible solution to these problem. This study has been divided into five main chapters. Chapter 1 I discussed briefly the importance of industrialization in fact growing economy.
Like Nigeria were highlighted. Chapter two tries to draw attention to the views of different writers, scholars as well as seasoned and expressed their opinion on the cause of failure of small scale industries. Chapter three covers research design and methodology. Chapter four covers instrument for data analysis, presentation and interpretation and chapter five covers summary of findings, conclusion, recommendation or implication for further studies. Based on the findings the researcher recommend that on the issue of finance, that adequate provision of capital find should be made to small-scale industrialists in the state so as to prevent their business in the state so as to prevent their business from being stifled at birth.
TABLE OF CONTENTS
Title page . . . . . . . . . . . i
Approval/certification page. . . . . . . . ii
Dedication. . . . . . . . . . . iii
Acknowledgement. . . . . . . . . . iv
Abstract .. . . . . . . . . . . v
Table of content . . . . . . . . . . vi
1.1 background of the study . . . . . . . 1
1.2 statement of the problem. . . . . . . 4
1.3 objective of the study. . . . . . . . 5
1.4 Research question... . . . . . . . 6
1.5 significance of the study. . . . . . . . 7
1.6 scope of the study.. . . . . . . . 8
1.7 limitation of the study. . . . . . . . 9
REVIEW OF RELATED LITERATURE
2.1 The predominance of small-scale industries Nigeria . . 13
2.2 Government Policies for Promoting Small-Scale
Industries. . . . . . . . . . 14
2.3 Contribution to national economy . . . . . 15
2.4 Problem of small-scale industries . . . . . 17
2.5 Nigerian Association of Chambers of Commerce
Industries, Mines and Agriculture (NACCIMA) . . . 36
2.6 Corporate Affairs Commission (CAC) . . . . . 41
2.7 Industrial Development Center (IDCs) . . . . 42
2.8 National Economic Reconstruction Fund (ERFUND)
Now Bank of Industry . . . . . . . 44
2.9 Nigerian Industrial Development Bank (NIDB) . . . 47
2.10 The People’s Bank of Nigeria (PBN) Now NACRDB. . 49
RESEARCH DESIGN AND METHODS
3.1 Research Design . . . . . . . . 53
3.2 area of study . . . . . . . . . 53
3.3 Population of the study . . . . . . . 54
3.4 sampling method . . . . . . . . 54
3.5 Research instrumentation. . . . . . . 55
3.6 validity and reliability of research instruments . . . 56
3.7 sources of data. . . . . . . . . 57
3.8 Method of investment . . . . . . . 57
4. 1 Presentation and Analysis OF Result. . . . . 58
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Summary of Finding. . . . . . . . 76
5.2 Conclusion . . . . . . . . . 79
5.3 Recommendations.. . . . . . . . 80
Bibliography/Reference . . . . . . . 83
Appendix A. . . . . . . . . 85
Appendix B . . . . . . . . . 86
1.1 Background of the Study
In Nigeria various criteria are use for its definition. The small-scale industries in 1973 defines, such enterprise as those having investment capital, (ie land, building, machinery, equipment and working capital of up to
N 60,000 and employing not more than 50 persons).
But according to the federal ministry of commerce and industry to the Nigeria bank for commerce and industry (NBCI) in 1981/82 (for the purpose of the revolving loan scheme for industries. Such enterprise where regarded as those costing not more than
N 500,000) including the cost of land but excluding working capital.
At a recent workshop on industries hold at the administrative staff college of Nigeria (ASCON) Badagry, participants agreed that a small-scale industry should be defined as an enterprise whose cost does not exceed
N 750,000 (total cost excluding land). ASCON wants this definition to remain in force until 1990.
Therefore, in 1972 the Nigeria enterprise promotions decree other wise known as industrialization decree was promulgated.
The decree was aimed at affording Nigerians greater participation in economic activities especially in industrial sector of the economy, this sector in this organization-industries in Nigeria are principally concentrates in some part of the country like we have in Enugu and places in Nigeria including some local government areas that have a number of units engaged in transitional industries and it is estimated that over 5000 small-scale units are accounted to exist in this state according to the official published in 1987 by the Anambra State Ministry of Finance and Economic Development (statistics division) Enugu.
Industries although have received very little government assistance, occupies a significant position in the nation asset which has the greatest alteration for and is indeed the prime mover in any manufacturing industry, is the existence of a large market.
The decree gave impetus to Nigerians include those of fixtures publishing and allied products, jewelry, saw milling fabricated metal product etc.
The small scale industry like Ify Bakery Bread Industry apart from being hampered by finance, technical and managerial, marketing and economic problems and so on, have the problem of lack of trust among the industrialists, they are not always ready to share ownership of their business even when it involves their own relations.
This is the type of industries we need in the rural areas if we hope to cope with the problem of unemployment and continued populations drift from the rural areas to urban cities.
Industries in most cases make use of the local raw materials and labour rather than capital intensives. This encourage the development of local technologies.
1.2 Statement of the Problem
My research work revealed that the continuous failure of these small-scale industries is probing a great public interest as to its cause and effect; economy are food scarcity, unemployment increase in social imbalance, adverse balance of payment positions experienced by the country, reduction in per capital income tax etc.
The following are the outline of the problem facing small-scale business:
1. Lack of accounting Record.
2. Problem of obtaining finance such as loan and over draft.
3. Little or no research.
4. Poor state of technology and skilled manpower.
5. Problem of marketing their product.
6. Problem of obtaining raw materials and components.
Some of these problems should be systematically studies so that they could be solved once and for all. But what ever is the case, the question to be answered in this study is that problems to small-scale industries like Ify Bakery Bread Industry, What factor influence them and what should be done so as to alleviate these problems. Should these problems be properly looked into, they can provide opportunities to small-scale industries in the state in particular and country in general.
1.3 Objective of the Study
The objective of the study is to provide possible solution to the stated problem of small scale business in Nigeria narrowed with the case study of Ify Bakery Bread industry and these are;
1. To let the small scale industries to know that Accounting record will help their business to grow;
2. To enable them understand some government effort and other means of substitution to the problem of obtaining loan;
3. To let them understand the important of research and invest in it;
4. To advise them on investing in technology;
5. To tell them the different market strategies involves and;
6. Finally to emphasis on matter of sourcing for raw material.