A STUDY OF THREE SELECTED SMES IN ETIO-SA LOCAL GOVT AREA, LAGOS STATE

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Abstract

The study aims at assessing the problems and prospects of small and medium enterprises (SMEs) in Etio-sa LGA of Lagos state, Nigeria. The objectives of the study are to: identify and assess the key factors responsible for the relatively low performance and failure of the SMEs survival; investigate the reasons why programmes designed by government to boost manufacturing SMEs performance do not effectively achieve its role; make appropriate recommendation towards alleviating the problems facing SMEs; identify ways and means, which will establish and sustain the vibrancy for Nigerian SMEs. Primary sources of data collection where questionnaire was distributed to respondent which was used to test the hypothesis of the study using chi-square. The study revealed that policies implemented for SMEs have a positive relationship on the survival of SMEs in Nigeria and there is prospect in SMEs in Nigeria. It is recommended that: the government should establish SME clusters in relevant sectors in areas that have comparative advantage for such sectors such as Auto Parts Cluster in Nnewi, Leather Products Cluster in Kano, Apple Processing Cluster in Plateau, Export Clusters for Cocoa in Ondo, Cashew Crushing Plant in Oghe, etc; the government through the Central Bank of Nigeria should establish the much-awaited National Credit Guarantee Scheme for SMEs, which should guarantee at least 80 percent of loans needed by small and medium enterprises in Nigeria; the government should tackle accelerated development and upgrade of rural/urban road and rail network, water and air transport system and other infrastructural facilities head on and review tariff in favour of local manufacturers especially theSMEs.

CHAPTER ONE

1.0       INTRODUCTION

A Recession is when the economy declines significantly for at least six months. That means there’s a drop in the following five economic indicators: real GDP, income, employment, manufacturing, and retail sales. People often say a recession is when the GDP growth rate is negative for two consecutive quarters or more. All over the world both in develop and developing economies, entrepreneurship is increasingly seen as a vital part of economic development. National leaders, policymakers and researchers point to entrepreneurship as a key strategy for short and long-term prosperity of nation. Indeed, for many rural communities, it is the only form of economic development that has any real hope of creating jobs and wealth. In this regard, locally grown entrepreneurship offers unique opportunities for value creation that is resilient especially in times of economic recession as recently experience in Nigeria. The recent economic recession in Nigeria, which officially came to effect in May, 2015, raised questions about what effect it had on entrepreneurial activity and what this means for the future entrepreneurs.

The economic recession, triggered by the drastic fall in oil price from $170 to less than $50, deeply affected businesses, economy in general, politics and the personal lives of many. Looking at the Nigerian economy, lots of small businesses went bankrupt, contributed hugely to the fall in oil price and millions of people lost their jobs and houses. The struggling economies around the country still portray that many of these victims are still licking their wounds inflicted upon them by the economic recession due