CHAPTER ONE

INTRODUCITION

1.1 BACKGROUND OF THE STUDY

The contribution of small –scale business in fostering economic growth and

development has been well articulated in different areas of this study .the specific

attention on them based on their expected impact and potential contribution on

broad and diversified production base as well as their accelerative effect in

achieving macro objectives pertaining to full employment income distribution and

the development of local technology. They are particularly most conducive for

diffusion of management skills and emulation of indigenous entrepreneurship

overtime.

Small business provides financial opportunity and a chance to develop

wealth. It is a place where creative motivated individuals can use their talents and

expertise to the fullest because it provides satisfying careers and job opportunities

and it’s also the back bone of the market economy of the word. Every big business

starts as a small business and it started with an entrepreneur (small business)

who at first earns little or no profit. It was the new ideas of small business that

brought about Ekene Dili Chukwu Transport the FAN Milk Nnewi “Tokumbo”

parts and even the many commercial banks in Nigeria. Untried ideas become

annulations that become concepts that changed the business world. And so it goes.

Small business is the basis for the economic well being many developed nations

including USA/Japan.

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Entrepreneurship is what makes a small business successful.

Entrepreneurship occurs when an individual develops a new venture a new

approach to an old business or idea or a unique way of giving the market place a

product or service by using resources in a new way under conditions of risk. Small

business triumphs and entrepreneurship are closely related to it. It is difficult to

separate them.

The unemployment situation in the country coupled with the new

government instinctive towards easing social tensions among unemployed youths

through the programmed of the National Directorate of Employment (NDE) were

intended to lure a lot of unemployed Nigerians including graduates into self

determination through self employment. Graduates and school leavers are now

realizing that government and the established private companies are not ready to

come to their aid directly through paid employment due to the dividing state of

the economy. Short of the alternatives Nigerians including our graduates are

therefore launching themselves into various small-scale business ventures such as

cottage soap and cosmetics production fairing restaurants fast food publishing

writing block making garri processing food processing refuse disposal taxi

driving cleaning services weaving baking tailoring advertising and other same

business venture which depends mostly on local raw materials. The determination

to succeed is also fast becoming the order of the day.

Government has been playing appreciative role in promoting the survival

and growth of small-scale enterprise in recognition of them flexible and adaptive

nature as well as their re-generative power in promoting economic growth and

development. Government also encourages people to establish their own small

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business so as to reduce the problem of unemployment in the country and also

reduce the problem of importation of goods more so to produce exportation

products.

Government in believing that a dynamic and growing small manufacturing

sub-sector can contribute significantly to the implementation of a wide range

development effectives has thus enunciated various policies to encourage their

proliferation and make them veritable engines of growth and development. In the

third and for the development plans and the on-going three years rolling plan

priority has been accorded industrialization with greater emphasis on small-scale

enterprises. The basic activities of government policies as maintained in the

monetary and fiscal policy measures are to improve the financing and other

supportive services of small-scale business by expanding and improving access to

credit and infrastructural facilities reducing their production costs boosting their

profitability enhancing their survival and growth capacities as well as expanding

their contributions to non-oil exports by making their products competitive in the

export markets.

Hardly could any major industry succeed without the services of small-

business enterprise. The major goals of any profit oriented business are to make

profit. A company will make more profit if statistics its customers need better

them the competitors. Therefore in the contribution of small-scale business

bakeries would produce what the customers want and by so doing they maximize

profit and only bakeries that are effective and efficient can satisfy customer’s

needs. In reality it is possible to run a business without profit for a time but it is

not possible for to survive for one day without customers. Customers are the

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central theme of any business. Without a total commitment to them contribution

to economic growth and development will have limited and brief effects.

1.2 STATEMENT OF THE PROBLEM

Bakery is in the production industry the quality of products rendered by

our Bakeries have been attracting criticisms from people in all works of life. The

civil servants business men and the general public are all very critical of

production of cookies like bread chi-chin cake meat pie boons etc. The

complaints ranges from those of poor quality of products poor packages high

prices poor delivery shortage of skilled manpower which affects productivity and

restrain expansive the use of potassium bromated which National Agency for food

and Drug Administration Commission (NAFDAC) banned for health purpose.

Most bakeries do not put their customers in the prime place as they

supposed to be. There is now keen competition and to compete means to

contribute to economic growth and development. Dickson (1971:4) agreed with

this view when he said that small scale enterprises are ploughed by inadequacies

and serious miss-uses of business records and business information. The problem

of poor or wrong location of an industry affects its production. Such as nearness to

raw materials market sources of power and access to supply of labour and

transport facilities etc.

Government incentive in industries has previously directed to public

investment neglecting private initiative. But a diversified and self-sufficient

economy must take into consideration the importance of private sector in capital

formation.

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1.3 OBJECTIVE OF THE STUDY

Based on the fact that one cannot build a house on a platter of gold without

encountering one or two hassles here and there so in the genesis and revelation of

this work as the researcher encountered several problems the course of writing

which ranges from lack of time financial and material constraints to the inability

of reaching all members of the sample due to transport problems and even those

reached tend not to render full co-operation thus the total number of people

interviewed became smaller.

Other limitations which the researcher encountered in the course of writing

are that some of questionnaires distributed to the respondents were not returned

despite one or two reminders sent to them while those that were delivered by

hand were non-challantly filled. As such there have been criticisms about the

bakery industries in the way they render services to their customers. i.e. They do

not see the customers as king lot in terms of national output and employment.

Moreover Nigeria has various policies on small-scale enterprises in recent

National development plan and also in the structural Adjustment programmed

(SAP). The researcher wants to carry out a research on what bakeries do and the

role they play in economic growth and development the researcher also wants to

have an idea base either to support all the sources about the poor impression

people have on how to improve their production so as to contribute effectively in

national economic growth and development.

Bakeries can do more individualized jobs for customers and thereby attract

them on the basis of specialty product quality and personal services rather than on

the impersonal of price or mass production of largely identical business. Based on

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the above the need for studying this topic is to show the effectiveness of small-

scale business in national economic growth and development.

1.4 RESEARCH QUESTIONS

The importance of small scale business in the promotion of economic

growth and development has always been at the forefront of development

strategies. However many developing countries have failed to adopt this strategy

owing to their belief that it is a relatively show process of industrialization which

may not be very compatible with their desire to “catch up” with the industrial

countries. This along with the relative availability of foreign exchange

(particularly through foreign grants and export of basic commodities) in the early

days of independence has encourage many of those countries to follow a different

mode of industrialization for transition from a largely gravis ion society to a

modern industrial sector including Nigeria adopted import substitution strategy

of industrialization aimed mainly at producing domestically consumer goods that

were erstwhile imported. This strategy of industrialization often requires

continuous dependence on major supplier’s over-seas for the provision raw

materials and spare parts needed for uninterrupted production in these industries.

Therefore the aim of this study is to know:

 Whether or not small scale business provides opportunities for individual

freedom and economic growth and development.

 To know if small business community makes a significant contribution to

our total economic system as suggested earlier

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 To find out whether or not bakery industry contribute to the economic

growth and development of the country.

 If customers are satisfied by the services tendered by bakeries

 To formulate business strategies and make recommendations that would be

more effective in bakery industries.

1.5 RESEARCH HYPOTHESES

To guide the investigation of the issue raise in the problem definition. It is

hypothesized that:

HYPOTHESIS 1

H

0

: Small-scale industry does not contribute to economic growth & Development

H

1

: Small-scale industry contributes to economic growth development.

HYPOTHESIS 2

Ho: Lack of finance is the major problem facing small-scale business

Hi: Small-scale business does not have any problem in terms of Finance.

HYPOTHESIS 3

Ho: Bakeries do not encourage the use of local resources in larger

Scale in Nigeria

Hi: Bakeries encourage the use of local resources in larger scale in

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Nigeria

1.6 SIGNIFICANCE OF THE STUDY

This study is very timely especially today that all hand is on desk to

enhance the development and growth of the Nigeria’s economy through the small

scale enterprises. This study will be of immense benefits to cottage enterprises as

well as other small and medium scale enterprise.

Furthermore the research work will serve as a secondary data to future

researches on small and medium scale enterprises.

Finally this work is of importance to the researcher in the following ways.

 It will expose and enable him to know more about the organization.

Enterprises under study.

 It will enable him to more about the role which small and medium scale

enterprises play in Nigeria.

 It will also enable him to know the different meaning/definitions and

classifications of small and medium scale enterprises.

1.7 SCOPE OF THE STUDY

The scope of this study i.e. small scale enterprise is very wide it had to be carried

out in all small-scale industries in Nigeria.

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1.8 LIMITATION OF THE STUDY

The study is therefore limited to bakeries industries in Enugu Urban because of

time and material resources to see to the whole nation.

1.9 DEFINITION OF TERMS

NAFDAC: National Agency for Food and Drug Administration Commission

SAP: Structural Adjustment Programmed

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REFERENCES

Aguolu P. S. (1998). Financial Management 2

nd

Edition Aba: Model Academic

Publishers Ltd

Harry D. & Melane E. (1993). Core Business Studies Finance London: Mike

Mardes Publishers Ltd

Uche C. (1996). Principle of Public Finance 1

st

Edition Onitsha: Constrag

Communication Ltd

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