SURVIVAL STRATEGIES OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA (A STUDY OF SOME SELECTED SMEs IN ENUGU METROPOLIS) (EDUCATION PROJECT TOPICS AND MATERIALS)
CHAPTER I
1.0 INTRODUCTION
This chapter 1 introduces the background of the study, statement of the problem, purpose of the study, research questions, significance of the study, scope of the study, limitations of the study and definition of terms.
1.1 Background of the Study
Small and Medium Enterprises (SMEs) have been fully recognized by governments and development experts as the main engine of economic growth and a major factor in promoting private sector development and partnership. The development of SME is therefore an essential element in growth strategy of most economies and holds particular significance for Nigeria. SMEs not only contribute significantly to improved living standards, they also bring about substantial local capital formation and achieve high levels of productivity and capability. From a planning stand point, SMEs are increasingly recognized as the principal means for achieving equitable and sustainable industrial diversification and dispersal, and in most countries, SMEs account for over half of the total share of employment, sales and value added.
A major gap in Nigeria’s industrial development process in the past years has been the absence of a strong and virile small and medium enterprises sub sector. The little progress recorded from the courageous efforts of the first generation of indigenous industrialists were almost completely wiped out by the massive dislocation and traumatic devaluation which took place under the Structural Adjustment Programme (SAP) 1986. The SAP policies were rooted in the new-classical theory of perfect competitive markets whose assumptions do not adequately reflect constraints on SME in developing countries. The human and natural resources base is a significant feature that gives the country a special status in Africa. However, like most less developed countries, the country is witnessing a rapid population growth and this contrast with the less than average rate of development in communication, technological and social infrastructure. Instability and high turnover of staff have impacted negatively on the performance of primary institutions responsible for policy monitoring and implementation, resulting in distortions in macro economic structure and low productivity.
These problems constitute hindrance to development of Small and Medium Enterprises which provide the critical building blocks for industrialization and sustainable economic growth. With the dismantling of trade and other barriers, the world has been transformed into a global village. Consequently, SMEs in developing countries such as Nigeria are struggling to survive under intensive competitive environment both domestic and international. For this reason, there is an urgent need to provide the required enabling environment for the development of Small and Medium Enterprises (SMEs), so that that they could adequately play the role expected of them in transformation. Such role include mobilization of domestic savings for investment, appreciable contribution to gross domestic product, increased harnessing of local raw material, employment generation, significant contribution of poverty reduction effort through a sustainable livelihood and enhancement in personnel income, technological development and export diversification Udechukwu (2003:7).
