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CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Small-scale industries have been in existence since time immemorial. They are earliest form of business that the early men use to get their needs, basically food, cloths and shelter. They exchanged what they had for what they wanted. It was latter on that large-scale business started to emerge and they are now found in a large number, in every country of the world. However, small-scale industries still form a dormant part of business enterprises particularly in developing nations, which includes Nigeria.

In recent years, since the adoption of the economic reforms program in Nigeria (1986), there have been a device switch of emphasis from the grandiose capital intensive large-scale industrial project to small and medium scale enterprises linkages for rapid sustainable industrial development based on the philosophy of input substitution. Small-scale industry is an industry whole total project cost excluding cost of land but including working capital above #1million but does not exceed N10million. However, in most developed countries and the newly industrializing countries of the world, Small and Medium Enterprises (SME) are generally defined on the basis of number of people employed to take account of Small and Medium Enterprises (SME) labour intensive characteristics. At independent in 1966, Nigeria economy was mainly agrarians industry plays a vital role in economic development in fact, it provided the brightest hope for generating sustained growth employment improved spinning and investment.

1.2      STATEMENT OF PROBLEMS OF STUDY

Despite the achievement recorded in the Small-scale Enterprises (SSE) sub-sector, we are mindful of the fact that we need to further address certain issues in order to match or even surpass those recorded by developed and the newly industrializing countries of this world. These issues includes:

(a)  Inadequate infrastructural facilities: both the Federal and State government are currently intensifying their programmes to provide industrial estate layouts and technology for promotion of SME.

(b)  Lack of inter and intra sectorial linkages: as at now, there are low level of linkages between the cottage industries and Small-scale Enterprises (SSES) ministry has conducted studies and recommendation of the studies are currently being appraised.

(c)  Poor managerial capacity: since 1986, the Federal Government has been exposing our small and medium scale industries to training through various entrepreneurship development programme like EDPI working- for yourself programme.

(d)  Lack of stable and generally acceptable definition for small and medium enterprises: such tends to question the basic policy under which activities and programmes an SMES evolve.

1.3   AIMS AND OBJECTIVES OF THE STUDY

This project has been designed to serve as an aid to the understanding of the roles played by small-scale enterprises to the development of Nigeria economy and also to suggest effective possible ways of improving small-scale enterprises in Nigeria so as to feel the contribution of small-scale industries. The following are considered to be the basic objectives of the aims or the study:

(i)  To examine the activities and contributions of small-scale industries.

(ii)  To identify the need for improving the small-scale industries.

(iii)  To identify problems associated with small-scale industries.

(iv)  To provide with useful suggestions and solutions how to improve small-scale industries in an economy.

1.4      SCOPE OF THE STUDY