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The Impact Of Small And Medium Scale Industries On The Economic Growth Of Nigeria (1986 – 2010)
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CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY.
In recent time, the fortune of small scale and medium scale Industries attracted the attention of government world-wide and thus has been the focus of general interest and research, especially in developing Countries due to the importance of small scale and medium scale Industries.
Their importance cannot be over emphasized as they constitute a whole virile vehicle for the generation of vast production of outputs and job creation. They are also act as catalyst for restructuring and diversifying the productive base of an economy and for the Industrial economy and for the Industrial economy take-off and growth of such an economy. The small and medium scale Industries are seen to hold the key to future expansion of the Industrial sector.
In Nigeria, evidence has shown that in 1986, small scale and medium scale Industries accounted for 70% of all firms, employing millions of Nigerians (first Bank of Nigeria report, 1987). By the end of 1979, over 80% of all establishments licensed under the factory act were small and medium scale Industries (Onwuala, 1987). This made the importance of this economic unit to be unelectable.
Small scale and medium scale Industry in its widest sense implies the urgent response to the challenges of developing countries, of which Nigeria is not an exception. Small and medium scale Industries should be practiced with due regards to the importance of available local raw materials in its environs because the challenges facing small and medium scale Industrialist are enormous.
The importance of small and medium scale Industries to the economic development of any country, whether developing or developed, have been widely acknowledged and acclaimed. They are considered as there stimulate to private ownership and entrepreneurial skills, generate employment, promote industrial dispersal and rural- urban migration.
Clive carpenter (2001), said that across the world, small businesses are crucial for economic growth, poverty alleviation and wealth creation.
Uayatudeen (2001) said that across the world, small businesses have such a crucial role to play in the development of an economy and that cannot be ignored. According to William and David, most firms and small and medium scale Industries are compared with companies that economist usually study. But economists have concentrated on large scale Industries. The leading textbooks in economics have title discussions on small and medium scale business or entrepreneurs.
The partial combinations of small and medium scale Industries on the Nigerian economy are; creation of wealth, poverty eradication and employment generation as encapsulated in the national economic empowerment development strategies (NEEDS)
However small and medium scale Industries are bedeviled by numerous challenges which have hampered its development and growth and also its combination to national development. To this end, government has instituted various programs to address the challenges and constraints
facing small and medium scale industries growth. The programs and institutions Include:
a. Setting up and founding of industrial estates.
b. Establishment of national directorate of employment (NSE)
c. Establishment of the Nigerian bank of commerce and industry (NBC), the national economic re-construction fund (NERFUND),the Nigerian Industrial bank (NIDB) which has merged in to one agency in the bank of industry, the world assisted small scale enterprises loan scheme (SNEX), the Nigerian export and import bank (NEXIN) etc.
d. Setting up a small and medium scale enterprises development agency of Nigerian (SMEDAN); an agency which Co. ordinates development in small business sector.
Unfortunately, all these formal credit schemes have not been able to adequately address the fundamental problems which have constrained small scale enterprises access to credit; and any other enterprise establishing a small and medium scale industry requires capital to take off survive and eventually expand.
CHAPTER ONE -- [Total Page(s) 3]
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ABSRACT - [ Total Page(s): 1 ]The study investigates the impact of small and medium scale industries on the Nigerian economy, spanning from 1986 to 2010. The study adopted Ordinary Least Square (OLS) Linear Specification model. Using unit root test, the work shows that small scale industries significantly contributed to the economic growth in Nigeria despite poor funding by commercial banks. The work recommends among others that government should improve its monetary policies so as to reduce to an acceptable level, the rate ... Continue reading---
