ABSTRACT
Majority of the industries that exist in developing countries like ours are still in the small and medium scale stages. This type of industries has numerous problems facing them. This study “Small Scale Industries Development in Anambra State: Problems And Prospects” is aimed at identifying these problems and also finding solutions to them the researcher Awka and Nnewi Industrial Areas As A Case Study. The researcher’s instrument in carrying out this research work is constructed questionnaires. The questionnaires were administered to 25 (twenty five) staff and workers of the organization for the purpose of gathering more information that could not be conveniently gather through the interview. After the conduct of the study by the researcher, it was discovered that the Awka and Nnewi Industrial Areas had the problem of inadequacy of finance, which started from the establishment of the firm. This work is divided into five chapters, the chapter one dealing with the background of the study, stating the statement of the study, stating the scope, the research questions, research hypothesis, limitation of the study and defining some irrelevant terms. Chapter two reviewed the related literature, chapter three stated how the work was designed and method of data collection, while chapter four dealt with the analysis of the data collection using some statistical measures and the last chapter which is the fifth chapter discussed the findings, conclusions, made recommendations and also suggested area of further study. This work cannot be said to be perfectly correct, especially as it was conducted under a limited time and finance. So the researcher will welcome any mistakes discovered. In recommendation, the prospects for the development of Awka and Nnewi Industrial Areas are still great. However in order to enhance its rapid growth and development (and not just more existence or survival) suggestions are made or directed towards what is expected of the company to do so that they can remain viable and attract loans at cheaper credit terms from financial institutions for expansion and diversification of their product line.
CHAPTER ONE
BACKGROUND OF THE STUDY
Men have from time immemorial been struggling indefatigable to find absolute solutions to his problems. Among these problems are economic, social, political and cultural Economic problem is the most significant.
The fact that economic development has been ubiquities problems of all societies of all times was succinctly reflected in the fight routine of the primitive man who earnestly attempted to subdue it by fashioning crude tool out of locally available wood and other materials to increase his productivity to satisfy his basic physiological needs in a larger measure.
Universally economic development of any society is primarily based on a solid industrialization program. This conception has been seriously laid credence by the numerous powers and influence which industrialized nations like U.S.A West Germany, Japan, and USSR held in the space of international policies and in all other affairs. It is disheartening to note that in most developing countries of the world like Nigeria; Small Scale Industries have been very often treated in economic policies as an inevitable backward and lagging sector of the economic reasons but not as a viable opportunity for economic development.
Consequently upon this wrong perception too little attention has been paid to the tremendous benefits to be derived by elevating existing the establishment of new ones. No amount of subsistence agriculture or trade without string and broad industrial base is enough to boast the economy of a nation. Industrial development makes for rapid development of opportunities in education, health and employment and therefore encourages even development. Small-scale industries provide greater number of the total labour force and they are credited with initiative tendencies. Infant small-scale industries provide greater number of the total labour force and they are credited with initiative tendencies. In fact small-scale industries is a symbol of opportunity, enterprise, innovation and achievement.
But, it is very sad to observe that most of these industries established hardly survive their first five years. Since the impact of these establishments cannot be underestimated or under look therefore, this study among other things is intended to look into the problems that are encountered by these industries and their prospects. The argument is not that small-scale industries are the ultimate panacea to national development but rather that development policies and economic planning should be based on a neutral combination of large, medium and small Arms.
The principle importance of these establishments lies in their responsiveness to changes and since changes are prerequisite factor for economic growth, it is highly desirable that more rather than few resource should be channeled to small scale industries after about a decade and a half of adopting an industrialization strategy based on large-scale industries, mostly of the assembly type, Nigeria has achieved only a fragile industrial development. The large-scale industries, which were set up, tended to be capital intensive and inappropriate, given the country’s resource endowment. Their capital equipment Technical manpower has continued to be largely imported. As a result, the triple objective of setting up the plants achievement of high level local value added, foreign exchange saving and acquisition materialized for example, the assembly plants have not achieved up to 15 percent in local Raw materials sourcing, instead they are more or less systematic foreign exchange guzzlers with neither the will nor the capacity to transfer any meaningful technology beyond the primitive type.
In response to these weaknesses of large-scale manufacturing government has sought to promote small-scale industries as a strategy for self-reliant industrialization.
According to Drucker P.F. (1974), maintains that there is only one criteria which with a fair degree of reliability indicates whether a business is small, fair sized or big. He says, “A small business requires at most one man who is not engaged in any other functional work required. The man at the top knows who the few people are in the organization in which responsibility for key results rest without having to consult his records or associates. Drucker also summed it up by asserting that regardless of titles and position, it can hardly exceed twelve to fifteen men which is about the number one man can really know and can really be familiar with.
Moreover, in the United Kingdom (1966) the committee of inquiry known as the Bottom Committee (BC) named after its chairman was appointed on small Arms, for the purpose of the study, a small firm was defined by them broadly as one with not more than 200 employees.
The committee chose to define a small firm in terms of three characteristics, which could be expected to make its performance and problems significantly different from these of large firms. Firstly a small firm is one with a relatively small or its owners or part owners in a personalized way, and not through the medium of a formalized management structure and thirdly, it is independent in that it does not from part of a large enterprise nor its managers subject to outside control when taking major decisions.
In Nigeria economy attention has been draw to the fact that small scale enterprises has received very little attention whereas it provided employment for approximately triple the number engaged in large scale manufacturing as well as playing their rotes of crucial importance to our developing economy. This is why it is important to reconsider the problem hindering the growth of this sector. Such factors, the researcher have classified into managerial and financial inhibitions as well as government policies.
1.2 STATEMENT OF THE PROBLEM
For the period under review the country’s economic objectives are centered on reducing the level of importation and promoting the expansion of domestic production especially in the small scale-manufacturing sector. Small-scale industries in Nigeria today are faced with a lot of problems. These problems go a long way to hamper their prospects and growth in the country and thereby limiting their potential contributions to the development of our economy.
(a) Managerial malady of the affairs of the firm. The owner or management of the firm does not take decisions that reconcile the various objectives of the firm.
(b) Many small-scale industrialists do not posses a variable feasibility study of their projects.
(c) They are usually under capitalized and find it difficult to obtain financial aid from financial institutions.
(d) There is also a problem of loan misapplication ad repayment of funds.
(e) They keep poor accounting and business records.
The researcher will therefore focus attention on problems and prospects of Awka and Nnewi Industrial Areas, and what the company should do to alleviate these problems hindering its prospects and opportunities available to them.
- PURPOSE OF THE STUDY
The purpose of this study are as follows: –
(i) To identify and examine the problems militating against the effective operation of the case company, in the areas of finance, management, marketing, technical, utilities and infrastructural amenities.
(ii) To identify the prospects available to the case company.
(iii) Suggesting ways or solutions of solving these identified problems.
- SCOPE OF THE STUDY
Available information reveals that we have numerous small-scale industrial establishments scattered all over the cities and states of Nigeria.
In fact they provide greater number of the populations in the labour force than the larger firms. Many of these firms hardly survive their first five years of existence. Given this premise an elaborate study of the case company would be pertinent so as to clearly establish some of the problems faced by these establishments and their prospects.
But owing to financial and time constraints, it becomes necessary to limit the study to Anambra state specifically at Awka and Nnewi Industrial Areas where the company under study is situated. The research therefore covered many problems that are inhibiting the continuous existence or survival of the case company’s business operations and their future prospects.
However the study paid much attention to the managerial, technical, financial and marketing problems of the company under study.
The study went further to determine the effects and impacts of the identified problems on the company.
- RESEARCH QUESTIONS
It is in consideration of the objective of this project work enumerated before that the researcher propounded the following research questions: –
(1) What are the problems of small-small enterprises?
(2) What are the causes of these problems?
(3) What solutions/measures should be adopted in solving these problems?
(4) What future benefits should be derived from the activities of small-scale business enterprises?
- SIGNIFICANCE OF THE STUDY
It is envisaged that the findings of this research work will be beneficial to the existing and prospective investors who would want to set up small-scale industries. This study will go a long way in helping the proprietors and would be proprietors of these firms adopt or employ modern management techniques in running their day-to-day activities, which will better their existence and operation.
This work will also include into the mind of the owners of these firms the apparent problems that they already know to an extent, and most importantly they will understand the ways and means of tackling such problems, which hinders their success. Also for the Awka and Nnewi Industrial Areas, this work will be very beneficial because it will expose certain areas that need much attention and how to tackle them which will be suggested.
Lastly, this research work could provide a database for future researchers on this issue and will also be a useful addition to the materials existing in the library. It is of the view that if some of the recommendations made in this study are properly integrated and implemented, the future of small-scale industries in the state will be more than bright.
1.7 LIMITATIONS OF THE STUDY
In the course of writing and carrying out this project work, the research encountered many difficulties; some errors in the results of the research and from external sources of data collection. These are factors standing as constraints thereby limiting the effect of the research result.
Among these are, time finance , scope and use of wrong statistics in data analysis, due to time limit, the research work is a time consuming one. A lot of time is taken to observe the subjects.
Most times the behaviour of the staff changes even when they are aware that they are being observed by the researcher, this is by taking their behavior. The researcher also observed that these senior staff some time give true and false information in order to cover their branches.
At sometime the research work lasted over two months due to large scope of area of the study
1.8 DEFINITION OF TERM
Small-Scale: According to Klott Lawrence (1973) he defined it as an industry, which is independently owned and operated and not dominant in its area of operation.
Prospects: This can be defined as a wide view over land or sea, also an imagination or expectation for future purpose.
Industry: According to Enudu .T. O. (1999) he defined industry as a factories that change raw materials into finished good, it is also primarily concerned with the creation of form (utility) or the production of goods that are used by the consumers.
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