THE ROLE OF SMALL SCALE INDUSTRIES IN ECONOMIC DEVELOPMENT OF NIGERIA

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

In Nigeria, the small scale industrial sector until a few years ago consisted mainly of household units, which carry out diverse types of industrial activities in the traditional manner.  Most of this units do not employ paid workers.

            Prior to independence, Nigeria had consciously and constantly pursued and economic policy aimed at economic self reliance.  Infact, individual self reliance is typified by such programmes as National Directorate of employment (NDE) by Babangida Administration. The National Directorate of employment is characterized by graduate Assistant projects open apprenticeship programmes among others.  All these programmes are geared towards making people to appreciate the importance of small scale industries in a developing economy.  On the national level, self reliance was shown in banning other materials that can be sourced within.

            The Structural Adjustment Programme (SAP) which among other things aimed at sourcing of our own raw materials for the industries, described by some analysts as a comprehensive package of reforms designed to put the nation’s economy on a part of sustained growth. That net withstanding, the maintenance culture is also part of our attempt at self reliance.  Infact economic self reliance is not only discussed extensively in Nigeria but indeed in all the West African Countries. The call by the economic community of West African States (ECOWAS) to her member state of stop or at least minimize the import of her raw materials to the developed or industrialized nations to minimize the importation of food and to look inward to help themselves by encourages small scale industries.

            Small scale industries provide the backbone for cottage and rural industrialization. They are important in the development of the rural economy in that they widen the economic and social transformation of the rural population.  The deeping of the economic crisis in the early eighties revived interest in the small scale sector.

            Another factor or rationale for the development of small scale enterprise is based on the fundamental role of entrepreneurship and management skill in development. The scarcity of both this resources in developing countries highlights the potential role of the small scale sector in two complementary aspects as a training ground and seed-bed for medium and large scale man power, and as an efficient user of existing indigenous entrepreneur and management skills which would otherwise remain unused from this point of view, favourable attitudes towards small scale activities were necessary to advance the vertical disintegration and externalization of production.

STATEMENT OF PROBLEM

The bleak employment features that is facing many countries in Africa especially Nigeria, emphasize the need for a more employment intensive path of development in the future.  Achieving this will entail in one way or another a large contribution by small scale industries.

            Youth unemployment has lead to massive increase in crime wave in this country. One to lack of small scale industries especially in the rural areas, there have been an increase in rural-urban migration especially for the youths in search of non existence white collar jobs.

            It is obvious for instance that quite a number of people may have no option but to engage in small scale industries as entrepreneurs, self employed person as a means of survival.

            This is why various government have through one programme or other encouraged the establishment of small scale business more especially in the rural areas to provide employment opportunity for this youths and indeed reduce rural-urban migration.  Based on all those problems of unemployment, the researcher is compelled to carryout s through study on how small scale industries can contribute to the economic development especially the Hardis and Dromadas Ltd.

SIGNIFICANCE OF THE STUDY

This research is of great significance in many respects.

1.                  The work will be of great important to Emene, Enugu State and Nigeria in general.

2.                  The availability of small scale industries in rural areas will definitely reduce unemployment to the bearest minimum.

3.                  It will equally help the researcher to exploit the potentials of rural areas in establishing similar small scale business.

4.                  The finding on this work will help the school leavers embarks on meaningful small scale business of their choice.

5.                  The study will provide a vivid and clear understanding of the mode of operation of small scale industries in general and Hardis and Dromedas in particular.

6.                  This project in conjunction with other such industries will attract and aid the infrastructural development of the rural area and thereby attract other amenities to the area.

7.                  This research is also of a tremendous of small scale industries to the socio-economic development of Nigeria and Enugu State in particular.  

SCOPE OF THIS STUDY

            The scope of this project is limited to the Hardis and Dromedas in Emene, Enugu North Local Government Area of Enugu State.

            The study covers development strategies, contributions of the industry to the National economy constraints and management practical employed by the industry.

 RESEARCH QUESTIONS

To ascertain the role of small scale industries in the economic development with particular reference to Hardis and Dromedas, Emene Enugu.  The following research question are propounded:

1.                  What are the environmental impacts on the performance of small scale industries in the economic development of Nigeria?

2.                  What are the contribution of small scale industries in the overall improvement of rural area?

3.                  To what extent have government incentives to small scale industries influence their achievement in the development of the economy?

4.                  What are the factors necessary for proper management of small scale industries?

5.                  What are the causes of failure of small scale business in the society?