Small-scale industries play a vital role in the Material
welfare of many nations today’s especially the developing nations.
They makes specific contributions depending on the form and
objectives. Some produces raw materials, distribute products or provide
services while others them the raw materials into finished goods or
products. The need of most developing countries is to attain
self-reliance and resilient economic status capable of generating an
internally sustaining growth. Small-scale industries are the roots and
pillars upon which h this can be achieved. The activities of any
small-scale industry in any give economy cannot be over emphasized
especially mow the country is in political disarray and needs be called
Moreover, they provide avenues for the development of entrepreneurial capabilities and managerial skills.
As the business requires low capital for setting it-up, such
industries spring up in different parts of the country making maximum
use of local raw materials.
Despite the large number of small-scale industries in the
country, Common Nigerians, While urban concentration, unemployment and
other vices which these industries were meant to eliminate persist.
It is as a result of negative effect in our economy that need for the
diversification of economic activities through several ways of reviving
the Nigerian economy become comparative one, of which is an effective
and efficient role played by small- scale industries in economic
1.1 BACKGROUND OF THE STUDY:
In the earning of industries,Nigeriaand other countries were merely producers of raw materials for use in European industries.
While the raw materials which have been turn into the finished goods
were more concerned with the maintenance of law and order, and putting
in structures for easy evaluation of raw materials than industrizing the
SinceNigerialacked the necessary tools for capital investment,
technical and managerial skilled necessary to promote and operate viable
enterprises, foreign investors in a bi d to tap the abundant resources
in the country took the initiative of establishing small-scale
Stales morse, in his book modern small-scale industries for
developing countries page 1-10 wrote, at the end of the second world war
in 1945, the parliament of the united kind of autho- rised the
appropriation of the sum of $ $200 Million for the promotion and
advancement of British colonies and other dependent territories. In
order to determine how the and was to be allocated and for what scheme
the Nigerian government prepared, “A Nigeria”. This plan made provision
for the capital expenditures of $ 55 million.
Department of scheme were called for by the government, greater
emphasis was placed on the provision of social Amenities a stepping
stone for industrial development. Only 0.4 percent was embarked for
industrial development. The department for commerce and industry was
later established for the development and improvement of marketing
products for export .
In 1954, Economic programmes ofNigeriaemphasis was shifted from
expan sion to social services to gearing the economy towards to the
building of infrastructures . industrial expansion get more attention
than in earlier plans accounting for two percent of the cost of the
plan. After independence,Nigeriapursued a policy of attracting foreign
investment simultaneous with the policy of increasingNigeria’s
participation in small-scale industries, as a foundation towards a
larger scale production. Recognizing then significance of these
small-scale industries, the Nigerian government instituted various prog
ammes to encourage enterprises in this sector. Such incentives were
credit scheme, f inaccia and managerial assistance programmes,
industrialist promotion act and various. Kinds of tax relief were made
available to small-scale industrialist indeginisation of industries was
introduced in 1972 in t he economic sector of the country. It was also
meant among other things to protect infant industries.
1.2 STATEMENT OF THE PROBLEM:
The establishment, management and running of small-scale industries
inNigeriahave produced a less diminishing effort compared to the
increasing allocation made in this sector.
The problems ulitating against successful investment in small-scale
industries could be traced to the following factors, lack of raw
materials input s, sharp fluctuations in the rate of interest, exchange
rate of the local currencies, malpractice’s in the form of barbering and
corruption as well as “419” or obtain of the country’s geographical
and political environment and finally lack of infrastructure facilities
and skilled manpower inclusive.
To eliminate these problems government should ensure that
the rate of interest and exchange rate are stable. There fore
government should not spare corrupt businessmen who engaged in illegql
dealing. In addition, infrastructural facilities should be embraced by
the government to encourage small-scale by the government to encourage
1.3 PURPOSE OF THE STUDY:
The major purpose of conducting this objective was to find out the
role of small-scale industries in developing countries likeNigeria. How
they relate with financial institutions, their customers, government,
the public and other public corporation and organization towards the
industrialization of the country.
The study also looked into the achievements of small-scale
industries in the Nigerian economy the problems of impending the
survival and sustainance of small-scale industries inNigeriais looked
into, and consequently the solutions to such problems. Therefore the
objectives or purposes of thd study can be summarized clearly as listed
i) To identify the role of small-scale industries in the economy
ii) To investigate factors militating against improved performance by small-scale industries.
iii) To initiate appropriate measures for the enhancement and prolification of small enterprise.
iv) To recommend solution to the problems of small-scale industries.
1.4 SCOPE OF THE STUDY:
The researches had to limit the scope of the research to certain
geographical small-scale industries in umuahia andAbaboth inAbia
However more attention were given to small-scale industries at Aba
Urban, because of its industrial complex in in the production of goods
and service. Abais known as the Japan of Africa. It has done well in
given people the insight of what small-scale industries is all-about,
given assistance to opening up a small – scale industries and how to
manage it effectively.
1.5 RESEARCH QUESTIONS:
1. What is the amount used in starting industry.
- What is the duration of your industry.
- What is the number of people employed.
- How does your industry being financed.
- What is the qualification of people employed in your industry.
- How do you obtain your raw materials.
- Does you industry receive aid from the government.
- Does the government impose tax on the industries?
- How is the trend of patronage by Nigerians?
- What is the problem of the industry?
- How the problem could be solved.
- What is the contribution of the industry to development of the nation?
- What is your industry’s involvement on research activities?
- Does the. Present economic situation affect your industry.
- What is the annual income of your industry?
1.6. SIGNIFICANCE OF THE STUDY:
All the developing countries are aware of the big gap between them
and the developed countries. As a result of the gap, they are very
interested on bridging the gap.
Small-scale industries are considered necessary to the nation because of the following reasons.
1) They provide employment opportunities to our skilled and unskilled labour force.
2) Smale-scale industries leads to better utilization of raw materials with the country.
3) Small-scale industries help in raising the national income and this increase the standard of living.
4) They lend to rapid development of infrastructural facilities like road, electricity etc.
5) Small-scale industries help in rectifying the p roblem of balance or trade value.
6) They help in reducing the dependence on the out-side world for industrial products.
7) Small-scale industries contribute immensely on the healthy competition thereby eliminating the danger of monopoly.
8) Small-scale industries aid in the diversification’s of the economy.
1.7 LIMITATIONS OF THE STUDY:
The limitations encountered on the process of carrying out the study are as following;
Finance: Money was needed for going round in the involved city’s
towns. Fund is also needed for typing and the production of the final
volume as complied.
Therefore, lack of fund was a serious problem on the process of carrying out the study as fully wanted .
Collection of the data: The nonchalant attitude of some of the
staffs in our firms or visited firms constituted a major problem on the
However, some officials were reluctant to release essential in formation and tended to treat issue as sacred and top sacral.
All of these factors listed above were a set-back and stumbling block
to the collection of data and limits the efforts of the research.
1.8 DEFINITIONS OF TERMS:
Small-scale industries: these are the industries: These are the
industries whose capital investment in machinery and equipment is not
exceeding N250.000 (Two hundred and fifty thousand naira ) and employing
between on to fifty workers.
Industrial income of an economy during the course of a certain
period. Industrial development measures, the increase in the volume
or number of goods and services after allowing for price change.
PRODUCT: An article to district specification and
intend for sale under a separate brand. A product is the combination of
both raw materials and services. It is a packaged of customers
satisfaction and benefits.
INDUSTRIALIST: This refers to the person who
provides the necessary financial, human and material resources for the
establishment and up keep of an industry.
SKILLED MANPOWER: Labour force or worker who receive
comparatively long training in one type of skill or more and make
expert Judgement in the discharge of their duties.
RAW MATERIALS: These refer to the natural substance from which product is made or manufactured.
Obeleagu – Nzelibe C.G. (1989) Management of small-scale businesses inNigeria
Starley .M.K ( 1975) Modern small-scale industries for developing countries.
WashintonD.C.(1989) American Small Business Administration.