A Survey of the Management Problems of Small-scale Industries in Nigeria
Chapter One
Objective of the study
The objectives of the study are;
- To assess the extent of the access to finance problem faced by small-scale industries in Nigeria, including identifying the key barriers and constraints related to securing affordable capital for business operations and expansion.
- To examine the knowledge and skills gap in managerial and technical competencies among small-scale industry owners and employees in Nigeria, with a focus on understanding the specific areas where training and capacity building programs are needed.
- To analyze the impact of inadequate infrastructure, such as unreliable power supply and transportation networks, on the operational efficiency and market reach of small-scale industries in Nigeria.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
Concept of Small and Medium Scale Business
Prior to the introduction of the structural, adjustment programme in Nigeria, small and medium scale industries were virtually neglected in all the development plans of the country. However, since the advent of democratic government in 1999, there have been significant changes in attitude to small and medium scale industries and entrepreneurship among policy makers and managers of Nigeria economy. (Ukaegbu, 2004), This change in orientation, as rightly observed by Leon (2009) to an acknowledgment of the continuous importance of the sector in terms of the number of such enterprises, job creation and the promotion of its contribution to the Gross National Product (GNP). Oyedijo (2008) opines that the definition of small and medium industries should reflect the level of technology within the economy, the development needs or objectives of the economy and such other facts that are dictated by the social and cultural value of the economy. These considerations he asserts, suggest that there is no universally accepted definition of small and medium scale industries, the world over. It is however important to realize that there is need for a standard definition of small and medium scale industry within an economy. This need is paramount in the context of providing a frame of reference for the various agencies responsible for policy formulation and implementation in respect of small and medium scale industries. Adidu & Olannye (2006), states that different countries have different basis of defining small and medium scale enterprises, some on capital investment, while others define it on the basis of management structure. There are many definitions on small and medium scale enterprises (SMEs) as there are experts on the subject. The Nigerian industrial policy describes SMEs as those whose total investment is between N100, 000 and N2million exclusive of land but including working capital. There are however, some qualitative indicators that are common to most definitions namely: size of capital, the number of employees, the annual turnover. Adidu & Olannye (2006), summarize SMEs as those business whose capital investment do not exceed #5 million (including land and working capital) or whose turnover are not more than N25million annually. The Small Business Administration SBA in the USA measures SME as one which posses at least two of the following criteria. · Managers are also owners, Owners supply the capital, Area of operation mainly local, and Small in size within the industry. · It is therefore glaring that there is a universal cord that links all the above definition and that SMEs are generally low in terms of number of persons employed and the amount of investment and annual turnover. Thus, a review of existing literature on the subject suggests the following as the mostly used criteria for the definition of small and medium scale industries:
- No of employees
- Sales volume: The size of sales volume in any business will determine where to group it, i.e. whether to a very small, small or medium business.
- Financial strength: This as well determines whether it is a very small, small or medium business. The amount of fixed assets and current assets each business is having helped to determine where to categorize them.
- Relative size: The relative size of the business is determined by number of people working in this business, that is, the number of employees helps in determining whether it is a small, very small or medium business.
- Initial take-off capital: This means that the amount of shares used to start or incorporate business will help in large way to determine where to categorize the business.
- Personal management style, Independent ownership, Name of business, and Composition of ownership and types of industry (Bhatia, 2003). Even if there are controversies on definitions, what is not contestable is the contribution SMEs are making to the Nigerian economy.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine the Management Problems of Small-Scale Industries in Nigeria. Edustores Ng, Ibadan form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the Management Problems of Small-Scale Industries in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the Management Problems of Small-Scale Industries in Nigeria
Summary
This study was on the Management Problems of Small-Scale Industries in Nigeria. Three objectives were raised which included: To assess the extent of the access to finance problem faced by small-scale industries in Nigeria, including identifying the key barriers and constraints related to securing affordable capital for business operations and expansion, to examine the knowledge and skills gap in managerial and technical competencies among small-scale industry owners and employees in Nigeria, with a focus on understanding the specific areas where training and capacity building programs are needed and to analyze the impact of inadequate infrastructure, such as unreliable power supply and transportation networks, on the operational efficiency and market reach of small-scale industries in Nigeria. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Edustores. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
It is crucial for policymakers, industry stakeholders, and entrepreneurs to recognize and address these management problems effectively. By implementing appropriate strategies and interventions, the small-scale industry sector can overcome these challenges, leading to a more vibrant and sustainable economic landscape in Nigeria. Future research should continue to explore these issues, taking into account the dynamic nature of the business environment and evolving management challenges faced by small-scale industries in Nigeria.
Recommendation
Enhance Access to Finance:
- Develop and implement financial support programs specifically tailored to the needs of small-scale industries, including low-interest loans, grants, and venture capital.
- Simplify and streamline collateral requirements and loan application processes to make them more accessible and less burdensome for small-scale industry owners.
- Encourage partnerships between financial institutions and small-scale industries to foster financial inclusion and improve access to capital.
Strengthen Managerial and Technical Skills:
- Establish training and capacity building programs to enhance the managerial and technical skills of small-scale industry owners and employees, covering areas such as business management, marketing, finance, and operations.
- Encourage partnerships between educational institutions, industry associations, and small-scale industries to facilitate knowledge transfer, mentorship, and skill development.
- Promote lifelong learning initiatives and provide resources for continuous professional development for small-scale industry stakeholders.
Improve Infrastructure:
- Invest in improving power supply and developing reliable and affordable energy solutions for small-scale industries, such as renewable energy sources and decentralized power generation.
- Upgrade transportation networks, including road, rail, and waterway infrastructure, to facilitate the movement of goods and reduce logistics costs.
- Improve access to basic amenities, such as clean water, sanitation facilities, and telecommunications services, in areas where small-scale industries are concentrated.
References
- Abor, J., & Quartey, P. (2010). Issues in SME Development in Ghana and South Africa. International Research Journal of Finance and Economics, 39(6), 215-228.
- Adebusuyi, B. S. (1997). Performance Evaluation of Small-Medium Enterprises (SMEs) in Nigeria. CBN Bullion, 21(4), 46-52.
- Adepoju, B. A. (2003). An Appraisal of the Factors Inhibiting Entrepreneurial Undertaking in Contemporary Nigeria: A Case Study of SMEs in Kano Metropolis. Journal of Business Administration. Department of Business Administration. UNIBEN, Vol. 5(2).
- Akabueze, B. (2002, February). Financing Small and Medium Enterprises (SMEs): The Small and Medium Industries Equity Investment Scheme (SMIEIS) Option. In Paper delivered at E-Week 2002 Seminar, MUSON Centre, Lagos, Nigeria (pp. 11-14).
- Apulu, I., & Latham, A. (2009, March). Knowledge Management: Facilitator for SME’s Competitiveness in Nigeria. In UK Academy for Information Systems Conference Proceedings 2009 (p. 6).
- Arendt, L. (2008). Barriers to ICT Adoption in SMEs: How to Bridge the Digital Divide?. Journal of Systems and Information Technology, 10(2), 93-108.
- Asian Productivity Organization (2001). “Export Orientation for Small and Medium Enterprises: Policies, Strategies and Programs”, APO Project, 22-25 February 2000, Surabaya, Indonesia.
- Ayeyemi, L. (2013). Industrial Development in Developing Nations: A Case Study of Nigerian Small and Medium Business Enterprises. Savonia University of Applied Sciences.
- Ayobolu, J. (2006). EFCC, Corruption and the Due Process. [Online]. Published by Segun Toyin Dawodu, USA. Available: http://segun.bizland.com/ ayobolu15.htm. (12 November 12, 2010).
