ABSTRACT
The research on the evaluation of the impact of
small scale enterprise on economic development in Onicha Local Government Area
of Ebonyi State, Nigeria. The data collected
were analyzed using descriptive statistics such as frequency distribution
table, percentages and multiple regression analysis. Simple random sampling was applied, 60
(sixty) small scale enterprises were selected from the study area. The data used for the study was obtained
through primary and secondary source, primary data were collected using
structured questionnaire. The secondary
data were obtained from journals, bulletin, textbooks, and research reports. The major finding of this study were that
majority of the respondents in small scale enterprises were mainly male. In respect to recent development, state
government should assist small enterprise in supply of social amenities and
infrastructural facilities. The result of the multiple regression showed that
the co-efficient of age was negative and statistically significant at 1%
alpha. This implied that old age
decreases productivity, since the activities of small scale enterprise requires
able bodies and active individuals.
CHAPTER
ONE
INTRODUCTION
1.1
Background
of the study
A business, whether small or big,
private or public is created to provide competitive prices. In Nigeria, business has been classified as
small, medium and large. However, a small
scale enterprise can be defined by the criteria of project costs, capital cost
turnover by the employee, etc. the
federal and state ministries industry and commerce have adopted the criterion
of installed fixed capital to determine what a small scale enterprise is in
this respect, the value has varied from N60,000 in 1972, N159 in 1975, N250,000
in 1979, N500,000 in 1986, to a fixed investment of not more than N2000,000
(Two million naira) in 1992. This
figures is exclusive of and building and subject to government determination
and land prevailing objectives of public policy, this value has now been
reviewed subsequently, increase to five million naira.
Since this happened, there may be
need to classify the small scale enterprise into micro and super micro
business, with a view to providing adequate incentives and protection or the
former.
In the recent time any business or
enterprises below the upper limit of N250,000 and whose annual turnover exceed
that of a cottage industry currently put at N5,000 per annual is a small scale
enterprise. In Nigeria today some of the
business or enterprises below started as small enterprise or industry. These business firms perform various
functions, which include manufacturing of goods, distributing of goods and services
and retailing of these goods to the final consumers.
Small scale enterprises have a lot
of important contributions to make on the economic development of the country.
Shokan, O.O. (1997) writes some of them as follows: The provision of employment, innovation and
areas marketing for goods and services which are offered for sales. A lot of youths, returned workers and out of
school graduates are now gainfully employed thereby, reducing the unemployment
rate and its attendants social complication of armed robbery and white coller
crimes. It helps to bring about new goods and services and supply the need of
the large industries or enterprises, who have to rely o the small scale
operators for business success.
In Nigeria, the government policy
measures placed emphasis on the technological aspects of industrial development
of small scale enterprise in Nigeria.
Various Nigeria government within this decade embarked on corrective
measure to divert efforts towards the maximum exploitation or natural resources,
and tried to discourage capital intensive mode of production in the light of
the abundant resources available. In
this regards, the industrial policy tried to focus its attention mainly on
local resources utilization through various forms of incentives worked out by
governments. Some of the basic policy
strategy aimed at revitalizing industrial sectors included the:
·
Encouragement in the
use of more local materials in our enterprises development activities.
·
Encourage greater
capacity utilization in Nigeria enterprises, in addition, both the third and
the fourth economic development, plans, the government then tried to increase
her support for and contribution on:
·
The establishment of
research product development of results and cooperate with manufacturing
establishment to adopt imported machines to Nigerians condition eventually
develop the capacity for fabricating such machines;
·
The federal institute
of industrial research and other institutions as the project development
agency, Enugu
·
The industrial
development centers.
·
The provision of funds
to implement feasible project emanating from policy paper, prepared by the
Nigerian council for science and technology
·
The industrial research
council of Nigeria to get organized for coordinating industrial research
effort.
·
The focal point of
these policies measures as construed place a great emphasis on the
technological aspects of enterprise development and development of small scale
enterprises in Nigeria.
1.2 Statement of the Problems
The major problems facing the
success of small scale enterprise in Nigeria have contributed to the failures,
winding-up and folding up of many small scale enterprise, they includes;
1. Lack
of Managerial Experience: The
entrepreneur may lack knowledge in the management of these resources e.g men,
money, material and machinery.
2. Poor
Management: Many business operators are
lacking the basic principles of management, which will help them to organize,
plan and control their business. They
get frustrated when they come across some management problems which when not handled
carefully can sink their business, which took time to build.
3. Financial
Problem: A good enterprise has its strength from money. In the course of running a business one falls
short of money, the result is winding up and of course when an enterprise does
not have enough cash, enterprise may not be able to operate successfully.
4. Wrong
Business Decision: This is when
entrepreneurs does not know how to run the enterprise and so makes wrong
decision which might lead to failure. In
other words one does not have these skills and competence. This is usually very risky and many of our
small scale enterprise have folded up because of these reason.
5. Adverse
Government Fiscal and Monetary Policies:
The government monetary and fiscal policies can adversely hurt small
scale enterprise and cause them to fold and when the government regulate the
increase rate for borrowing for example it can frustrate the small scale
enterprise operator so that the enterprise may not find it convenient to
operate successfully, the activities of those commercial banks are usually
supervised by government through the central bank of Nigeria (CBN).
6. Competition: Many of these small scale enterprise can
hardly survive in an environment where competition is keen, many of these
enterprises hardly survive in an area where you have some entrepreneur who are
so financially sound, to expand and even set their products at lower
price. All these are majority problem
facing the success of small scale enterprise.
1.3 Objectives of the Study
The objectives of this research
work is to;
i.
To determine the impact
of small scale enterprise on economic development of Onicha local government
area in Ebonyi State?
ii.
To describe the level
of small scale participation in Onicha local government area in Ebonyi State?
iii.
To describe gender
involvement in small scale enterprises in Onicha local government area of
Ebonyi State?
iv.
To describe
socio-Economic characteristics of small scale enterprise?
1.4 Research Questions
For the purpose of this research
question work, the following research question will be relevant in focusing
attention on the major point of discussion.
a. How
do small scale enterprises contribute to the economic development of Onicha
local government are in Ebonyi state
b. To
what extent is the small scale enterprises aware of this role
c. What
factors against the small scale enterprises in the optimal performance of this
role expectation.
1.5 Research Hypothesis
The hypothesis for the research
work is formulated after through and careful and review of work that are
directly or indirectly related to the subject matter. The hypothesis for this research work are as
follows:
HO:
the small scale enterprises do not contribute in significantly to
Nigeria’s economic development.
HI: The small scale enterprises do
contribute in significantly to Nigeria’s economic development in Onicha local
government area of Ebonyi State.
1.6 Significance of the Study
Many economies, developed and
developing have come to realize the value of small scale enterprises. And their small size allows for faster
decision making process. It is of great
importance and will be of help to the future researchers. Therefore, the significance of this research
work are:
i.
It can encourage young
youths to start up small scale business to enable them have food on their
tables.
ii.
This study can serve as
a reference material.
iii.
It also helps the
government to encourage the establishment and other local government to
encourage the establishment of small scale enterprise in Onicha local government.
1.7 Scope of the Study
This research work covers Onicha
L.G.A. of Ebonyi State tilled the impact of small scale enterprises in economic
development of Onicha local government is to select some small scale
manufacturing enterprise in the study area.
1.8 Limitation of the Study
In some of this research work, so
many problems were encountered due to difficulties in reading small scale
enterprise in their various villages.
i.
Time factor: This is a limited factor in data
collection. As of this, it makes the
researcher to use only data log techniques which is the log questionnaire.
ii.
Finance: Insufficient funding is another thing that
limited the researcher’s effort because the researcher is always on the move to
get data for the work and these movements involves and requires a considerable
amount of money was on short supply to her.
iii.
Attitude of
Respondent: Due to the policy in the
manufacturing enterprise, the researcher was prevented from getting all the
necessary information required and not all questions were answered.
1.9 Definition of Terms
There are lots of work used which
might pose a problem to an accurate reader or somebody who is not in the field
of business study.
Some of these words are defined for
clarity and easy computerization.
i.
Business: This can be defined as all oriented economic
activities that are channeled towards production of goods and services in order
to satisfy human want.
ii.
Enterprise: This can be defined as a project, a
willingness to take on a project. It is
also ma business venture or ability.
iii.
Small
scale enterprise: This is a business that employees
a small of number of workers and does not have a high volume of scales.
Entrepreneurs: There are people with ability to obtain the
necessary capital, labour, and the inputs and bring these factor together and
operate together.