IMPACT OF SMALL SCALE BUSINESS ON THE ECONOMIC DEVELOPMENT OF ANAMBRA STATE

THE IMPACT OF SMALL SCALE BUSINESS ON THE ECONOMIC DEVELOPMENT OF ANAMBRA STATE (A STUDY OF ORUMBA NORTH L.G.A).

ABSTRACT

Small scale business play significant impact in the growth and development of any nation both developed and developing countries like Nigeria.   These contributions led to employment generation, increase use of local resource, stimulation of indigenous entrepreneur, narrow market share, and conferment

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After payment, text the name of the project, email address and your names to 08064502337 to local community. The researcher injected more light to small scale business which helps in the diversification of an economy, their problems and relevance. The researcher, also highlighted the impact of small scale business in building up an economy and their significance for an effective and efficient economy with special reference to Orumba North Local government area of Anambra state. Small scale businesses continued to grapple with some problems which was amplified by the unstable economic and political environment. This research work evaluated the impact played by small scale business in economic growth and development of a nation and also determined the factors which affected effective development of small business. Secondly, it ascertained the causes of small scale business failures. Finally, the researcher made some recommendations with its perceived factors which affected development of small business. For the purpose of easy understanding, the researcher adopted surely research design in the study. Some objectives research questions and literature review, in order to have an in depth study of the investigation. The population of the study was drawn, one of which the sample size was taken, using taro-Yemeni formula of 1964, for the accuracy of the size of respondents. The sampling techniques was simple random sampling to get at the respondent. Interview was also employed in the study, having administered the questionnaire instrument. The data used in the study was primary and secondary source and data collected from the field work, was analyzed using chi- square, mean scores, table ratings and simple percentage. Major findings are inadequate finance, poor location of business premises, welfare problems and stiff completion among others. The researcher, therefore, recommended that there should be change of public policies and expectations, creation of industrial trust fund, creating avenues for strategic management behavior to monitor a turbulent environment.

CHAPTER ONE

INTRODUCTION

  • BACKGROUND OF THE STUDY

The meaning of the term small scale business varies from one country to another and from one industry to another even within the same country. The United Nations industrial Development organization (UNIDO) has located about fifty (50) different definition of small scale business in seventy-five (75) different countries (Akinrinades, 1989:28)

Accordingly, such various definitions were based on parameters such as installed capacity utilization, output, employment, capital type of industry or other criteria which have more relevance to the industrial policies of the specified country.

Accordingly some people would undoubtedly consider all business that had no more a specified number of employees (5 or 10) to be small. Others would believe that a small business is one that operates only in the local market area. Still other would classify businesses as small by the kind of firm such as the local drug store, dress-shop, neighborhood store or shoe-makers at the corner of the street.

Most people would agree that the neighboring beer parlors and provision stores at the corner of a residential area are small businesses while the Nigeria Breweries plc and UAC group of companies are big businesses. One would probably generate little argument about what is “big” or “small” between these two extremes since size is a relative concept. What appears small in the establishment in terms of employees or sales may be big in another establishment. In distinguishing between big and small business, some criteria that are used are relative size, type of customers, financial strength and the number of employees.

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Controversy arises than as where to draw the line between big and small. Or put in another way or expression, how big or small. The small business act of 1953 (USA) provides that a small business concern is “one which is independently” owned and operated and not dominant in its field of operation (Broom and Longnecker (1986:11).

Again the committee on Economic Development (CED) of the united states of America offers a definitions which states that a business will be classified as small if it meets two or more of the following criteria (Broom and Longnecker 1986 :12):

  1. Management is independent. Usually the managers are also owners
  2. Capital is supplied and ownership is held by an individual or a small group.
  • The area of operation is mainly local workers and owners are in one home or community markets need not be local.
  1. The size of the firm is small relative to the industry.

But in Britain, an attempt was made to define small business by adopting a payroll approach by looking at the number of workers on the payroll. By this definition those firms employing up to two hundred (200) workers may be regarded as small.

The 1989 industrial policy of Nigeria defined small scale business as those with total investment of between 100,000 and  N2million exclusive of land but including working capital (Jegede 1990:)

Also the central Bank of Nigeria refers to small scale business as any business whose annual sales volume and turnover ranges from N25, 000 to 500,000 and employs less than 10 workers

Chukwuma then defines small sale business as those enterprises that have relatively little capital investment, ranges from 50,000 to 200,000 that produce in small quantities and as a result control a small share of the market and employ not more than 10 workers. (Chukwuma, 2010:3)

Thus, such an establishment must be wholly Nigerian owned (all companies in schedule 1 of the 1977 Nigerian Enterprises Promotion Decree (NEPD). In addition, manufacturing units exceeding the limit of investment and employment a stated business of the scale of output is relatively small compared to prevalent size of plants and the technology is fairly labour- intensive.

The industrial Research unit of Obafemi Awolowo University. He defines small scale business as one whose total assets in capital, equipment, plant and working capital are less than N250, 000 and employing fewer than fifty (50) full time workers (Oresotu, 1985:17).

However, the centre for management Development (CMD) has recommended to federal Government of Nigeria that the official definition of small scale business is any manufacturing, processing or service industry whose investment in plant and machinery, land and building does not exceed N500, 000, utilize power, plant and machinery in its operations and employs up to fifty (50) full time workers.

Furthermore, Isemin (1988:19) states that the National Directorate of Employment (NDE) defines small scale businesses to accommodates project with capital investment as low as N5, 000 and employing as few as three (3) persons.

What we have so far examined is operational definition of small scale business. In practice, many definitions of small scale business have been applied at various times to file a particular operational guideline or legislation or study.

Nevertheless, there has been a wide spread clamor over the years for one definition or a national definition of small scale business in Nigeria (Oresotu, 1985:17). He (Oresotu) suggested a definition of small scale business, which incorporates a labour force often (10) as a lower limit to delimit a small scale business. This then suggests that any business employing less than ten (10) persons would not qualify for the appellation of small scale business. The figure of ten (10) according to him (Oresotu) is not sacrosanct since it would be suggest to review, as every five (5) years in the light of the development in the economy. According to him, this figure is the same as that of the National provident fund (NDF) firms which qualify to contribute to NDF for the benefit to their employees, are limited to those which employ a labour force of not less than ten (10).

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From the fore young therefore, we propose that small scale business should be defined as those enterprises that have relatively little capital investment, ranges from N50, 000 to N200,000 that produce in small quantities and as a result control a small share of the market and employs  not more than ten workers. This definition if adopted in Nigeria would help to encourage the growth of small scale business in particular and the Nigeria economy.

The above definitions of small scale business or enterprise notwithstanding, it must be pointed out that it is often difficult to ascertain the amount of capital invested in the business because of absence of appropriate records and suspicious on the part of the owners.

Because a generally accepted definition of small scale business or enterprise is not yet possible in Nigeria or in the world due to variation in socio-cultural and economic development in parts of the same country or some countries of the world and differences in industrial organizations of the countries, it is therefore difficult to understand clearly what is meant by small scale business.

Orumba north refers to the Nigerian Communities of Igbo extraction in the present day Anambra state of Nigeria who inhabits, generally the geographic Area from around the conference of the Mamu and Odo rivers at Okpeze and beyond. The location extends south ward to Umunze and Ifite communities. Bordered on the east and south by Inyi, Akpugoeze and Awlaw in Enugu state. Umuakurisuochi and Eziama- Nneato communities in the present day Abia state. To the west by Aguluezechukwu, Achina and Umuchi communities in the present day Aguata local government area. To the south are the Alor communities of Alor-Ikpa, Ndiogi and Arondizuogu in the present Imo state.

Originally, the communities that make Orumba North include: Agbudu, Akpugoeze, Amaetiti, Awa, Akpu, Amaokpala, Ajalli, Nawfija, Ufuma, Isulo, Ezira, Eziagu, Nkerefi, Ogbunka, Owerre-Ezukala, Umunze, Ihite, Enugu-Umuonyia, Ndiokolo, Ogboji, Onne and Okpeze.

Regrettably in 1976, when the federal military government reconstituted the local government areas, Akpugoeze was exercised from Orumba to make the present Oji river local government area, a relocation that the more discerning citizens of the community have protested ever since.

Similarly, in May 1989 at the formal creation of the enlarged Orumba North Local government area as political reality, by the federal military government, Nanka and oko communities here exercised from Aguata local government and includes in to the Orumba North local government area, following perceived political bickering with their original hosts.

Finally, some of the small scale businesses within Orumba north include: Osisioma block industry, Omogbo rice mill, Oko block industry, Ufuma campus mass transit, Rock tama pure water Nanka, Psamok pure water Amaokpala, Ndikelionwu oil mill, Pokobros oil mil Amaokpala, Federal Folytechnic Oko mass transit and so on.

  • STATEMENT OF THE PROBLEM

Despite the large number of small scale businesses or enterprise in Anambra state in general and Orumba north local government area in particular which employs hundreds of thousands if not millions of peoples, there is still high rate of unemployment in the state.

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One of the problems that continue to agitate the mind of the researcher is why it seems the impact or effect of these small scale businesses is not feet in the area of employment. Is it that there is too much population that is beyond the employment capacity of these small businesses or that the available ones should increase with the rate of population growth so as to keep people especially the growth busy.

Furthermore, despite the fact that many small scale businesses provides a number of goods and services, price of those goods and services are beyond the reach of the average person in the state. The problem arises as to whether the high prices are as a result of high cost of production or the high rate of inflation generally. These are some of the question and problems for which this work will try to provide solutions.

  • STATEMENT OF THE RESEACHER OBJECTIVE

The purpose of this study is to identify the impact of small scale business to the economic development or growth of the state by finding out if:

  1. Small scale business is important to the economic development of the state.
  2. To find out how the small scale business source their raw material for production. Problem they encounter with the view to preferring solution to the problems.
  3. Establishment of small scale business is necessary in the state.
    • SIGNIFICANCE/ IMPORTANCE OF RESEARCH

The small scale business can improve on the levels of living which includes income generation, employment opportunities and provision of social amenities and services.

It an lend to people learning on how to establish their own mini business or enterprise. It can bring about acquiring of sectors from having to work in different section of the business so that Rural-urban drift of individual will be reduced

1.5     RESEARCH HYPOTHESIS

Ho: Small scale business failure are not related to poor economic conditions

Ha: Small scale business failure is related to poor economic conditions.

Ho:  The Government did not really encourage the existence and growth of small sale business.

Ha: The governments really encourage the existence and growth of small scale business.

1.6    SCOPE OF THE RESEARCH

The study is limited to Orumba North Local Government area. It is expected to cover the impact of small scale business on the economic development of Anambra state.

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Project topic:THE IMPACT OF SMALL SCALE BUSINESS ON THE ECONOMIC DEVELOPMENT OF ANAMBRA STATE (A STUDY OF ORUMBA NORTH L.G.A).

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