THE ROLE OF SMALL SCALE INDUSTRIES IN ACHIEVING SUSTAINABLE ECONOMIC DEVELOPMENT IN EBONYI STATE (A STUDY OF SOME SELECTED SMALL SCALE BUSINESS IN AFIKPO NORTH L.G.A)

CHAPTER ONE

BACKGROUND OF THE STUDY

Small scale manufacturing firm, which is a part of small-scale enterprise, he attracted a lot of attention from Nigerian economists, management consultants, the government etc, who are interested in the transition of this country to an industrialized nation. Though there is phenomenal growth in the large-scale sector, small firms are known in playing a very important role in developing economics, (Scuafer and Talaveva 2006).

Infact, the small-scale sector play a vital role in the growth of many nations economy. The world over and is considered to be playing a key role in the development and growth of most countries. Tracing from history, Jegede (1990), opined that the earliest attempt by the government to develop small-scale enterprises in Nigeria was in 1946 when seasonal paper No. 24 of 1945 on a ten years development and welfare plan was designed. This plan was presented to the legislative council of the establishment of Nigerian local government board whose functions are to

1. Promote and develop village craft development of Nigerian products.
2. Set up and operate experimental undertakings for the testing or processing Nigerian products
3. Approve other suitable projects by the government. The board primarily was to encourage and develop small-scale enterprise within the country, which of course will help them grow to better and more efficient firms that will yield prospects to their properties as well as the development of the economy. This period was not having any coherent industrial policy but the former western and eastern government were able to establish industrial estates at Yaba and Enugu respectively in 1958. Subsequently in 1962 and 1963, the ford foundation of United States of America helped eastern and northern government to establish “industrial development centre” (IDC).

Jegede (1990) in continuation says that by the end of Nigeria Civil war, the federal government took over the leadership role in fostering the development of small-scale firms division and eleven other IDCs in addition to reactivating the one at Owerri and Zaira. Sequel to this, the federal government created credit and loan scheme that was known to be small-scale firms credit and loan scheme. This was to see that those would be investors in small-scale firms should not be scared by saying that in recognition of the role played by the small-scale industries. The federal government on her second national development plan included the fire points. Accelerating the pace of industrialization and dispersal of firms, generating substantial employment opportunities promoting industrial initiative and entrepreneurship among the populace, developing and increasing experts trades and complementing large scale firms. Primarily, industries and in turn faster the process of industrialization in Nigeria.

     The federal government continued by introducing different programmes and institutions to manage the programme for effective utilization of the resources provided. The establishment of Nigeria industrial development bank (NIDB) in the 1950s for instance was to help in the development process. The aim of the colonial master’s then was to use this as a platform to assist the potential entrepreneurs in agricultural plantation of national resources, commence and industrial production. It was expected that with the help of this bank many Nigerian would take advantage of the young economy as Nigerians market up to the 1960s was dominated by imported goods from Europe and develop alongside political evolution in the country. Every attempt to develop the small-scale firms in the 1970s was evident during the days of oil boom Ayozie (2006). The second development plan of the federal republic of Nigeria between 1970 and 1974 had a package meant to stimulate the growth of small-scale firms by giving it active support. That brought about the creation of eleven industrial development centers in different parts of Nigeria while the ones in Owerri and Zaria were reactivated. On that same second National Development Plan period (NBA) was established with an allocation of N5.4million. In furtherance of her effort the Federal Government through the third National Development plan (1975-1980), established three other development centres. The objective of identifying and developing small scale firms.

By 1984, the number was increased by six and now the IDC is 21 in number. Subsequent establishments of public banks to help fund small and medium enterprises. The people bank, Nigeria Agricultural and Rural Development Bank (NACROB), Bank of Industry etc are all geared towards small and medium enterprises funding of which small-scale industry is a part meanwhile, on this bid to pursue industrialization vigorously the federal government introduced indigenization decree of 1972 and letter on Nigeria Enterprises promotion act of 1977, which helped in creating chances for Nigerians who were interested in manufacturing and other small business. The decree was later amended in 1977, which encouraged Nigerians to take cue from economic history as industrial development requires a gradual, continuous, preserving exercise. The decree as well provided that for the nation to be self-reliant, it is necessary to check the present day giants humble beginnings, as small-scale enterprises. In the following decade i.e the 1980s Federal Government Policy measure placed emphasis on technological aspects of industrial development of small scale firm in Nigeria Ayozie (2006). The government then diverted efforts to exploration and exploitation of natural resources while discouraging capital intensive mode of production. This became an encouragement for Nigerians to go into small-scale firms for maximum utilization of the country’s natural resources. This was necessary was characterized by high geographical concentration due to lack of adequate infrastructures all over Nigeria, high production cost, low value-added, low capacity utilization, high import content and low level of foreign investment. All affected the industrialization process to a large extent. In an effort to laced being on track by the Federal government as a report by UNIDO was a great encouragement. UNIDO (1989) report that the rate of 7.5% between 1939 to 1994, and this will account for over 10% of gross domestic product by 1992 with small and medium enterprises contributing more than half of the sectors contribution to the 60P. The report say that not only will the expected growth come from small and medium enterprises but this would be achieved by using local resources and labour. By the 1990s, the government both at federal at the state level continued their contribution towards the growth of small-scale firms especially in the rural areas, to help in the dispersal of firms in Nigeria, due to the fact that large-scale firms within 1970s and 1980s failed in fulfilling the dynamic role of bringing about the desired growth and development of the Nigerian economy industrially especially in the rural areas. The federal government established small and medium firms development agency. The establishment was to help develop and harness the prospects of viable small and medium firms with the economy as the vehicle for rural industrialization and poverty eradication, (Mahmood 2003). The agency trains interested invested, help people to secure loan, appraise and re-appraises government polices to make sure its purpose are continually being achieved at the turn of the millennium, precisely but the year 2002, the federal government reiterated. The crucial need for sound small and medium scale firms as a veritable vehicle for rapid industrialization and the engine of growth in the nation like Hamel (1997) would say, the goal is to imagining a future that is plausible future that one can create. All those programmes and policy initiatives, were intended to transform the country from under developed state to a developed one which will guarantee a self-reliant future.

• STATEMENT OF THE PROBLEM

Nigeria is currently witnessing an alarming rate of unemployment whose growth is in geometric progression. The economy is also increasingly finding it difficult to cope as Nigerian economy is waning. Export have called for the creastion of an enabling environment for small-scale enterprise to thrive. They cited Asian “Tigers” such as Malaysia, china, south korea, Indonesia, Singapore and Thailand where both the government and individuals knowing the importance of small-scale industrial development join forces together in fostering effective and sustainable small-scale enterprises in their countries. Evidence also abound that in the above mentioned places, a lot is being done to empower the growth of the sub sector of the economy. While it is clear that the task of industrializing a nation is not an easy one, it is imperative that a study of this type is carried out to highlight the vital role small scale industry plays in achieving sustainable economy development process, identify why. The effort being meals has not impacted much on the process of industrialization. As the question remains, have we been able to imagine a plausible future and work towards its creation?

• OBJECTIVES OF THE STUDY

The broad objective of the work is to bring to the fore the role of small-scale firms (industries) in achieving sustainable economic development of Ebonyi State in particular and Nigeria at large.

However, the sub-objectives are:

• To ascertain the effective of small-scale manufacturing firms and entrepreneurship in Ebonyi State.
• To identify the extent to which small-scale industries (SSIS) are promoting industrial iniatives and entrepreneurship in Ebonyi State.
• To identify the role played by government towards promotion and development of SSI in Nigeria.
• To highlight the challenges that face SSIs in Ebonyi State.