APPRAISING THE IMPORTANCE OF SMALL-SCALE INDUSTRY IN RURAL COMMUNITY DEVELOPMENT – A STUDY OF SELECTED SMALL BUSINESSES IN ANAMBRA STATE

ABSTRACT

This research project appraising the importance of small-scale industry in Rural Community Development-A Study of Selected Small Business in Anambra State. The research was aimed at investigating the importance of small-scale industries as well as the problems and prospects of small-scale industries in a locality.  Suggested solutions to the problems facing small scale businesses in Nigeria were made. The sample used for the study is three small-scale industries which was statistically determined.   The research instrument design was questionnaires which formed the sources of primary data, while materials from libraries and other research units served as sources for secondary data.   The method of analysis was the use of table, figures and percentage. The test statistic for the hypothesis was chi- square test of independence and homogeneity. The result of the analysis showed that small-scale industry faces lot of problems.  The study also revealed that proper planning, proper recording, proper accountability can be used to solve some of the problems faced by the small scale businesses. From the analysis and findings, the recommendation that the establishment of small-scale industries should   be   evolved   as   a   strategy   for   effective   &   sustained development of the nation was also drawn.

CHAPTER ONE INTRODUCTION

1.1    BACKGROUND OF THE STUDY

Before, the various governments of this country – Local, State and Federal had directed attention on the establishment of gigantic industries in the urban centres of the country. This they believed, though erroneously, that large scale industry is the only yardstick of measuring the economic power of any country. This crave for large scale industry was dominant during the oil boom (Isemin, 1988:19). This resulted in the utter neglect of the nation’s rural areas which contain about 85% of the nation’s total population.   However, with dwindling of the oil money coupled with the oil crisis in the mid 80s, there  was  a  sudden  awareness  on  the  part  of  the  Federal Government that rural development should be the centre piece for industrial transformation (Omorodion,1989:8).

In realization of this, and in pursuance of its attainment, the Nigerian Government created various agencies such as the directorate of food, roads and rural infrastructures (DFRRI) to work in partnership with the rural communities towards the provision of amenities such as rural roads,

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Pipe-born water and  electricity which are essential for setting up small scale industry.   In addition, the National Directorate of Employment was created to train and develop school leavers’ skills for independence.   The directorate also provides financial and technical assistance to individuals wishing to start business of their own.  Also they provide credit/loan scheme to help provide financial assistance to individuals to set-up small-scale business.

In spite all these efforts by the government, small scale businesses are still faced with lot of problems. Under capitalization creates the problem of not buying merchandise independently at best price, in adequate quality and qualities. Poor business accountability makes it difficulty to assess the operating results of the business and at times starves the firms of its liquid resources. Some of the Government  polices  and  Regulations  brings  distortions  in  the structure and management of these businesses.   Inadequate and poor maintenance of infrastructural facilities, inadequate capital/funding, lack of managerial skill and project counseling, misappropriation of funds by government officials, to mention but a few, it has helped to increase the problems small scale businesses in Nigerian rural communities (Chukwujekwu, 1987:3) .

1.2    STATEMENT OF PROBLEM

Small-scale industries in  Anambra State play a  lot  of  roles today just like their counter parts in other states of Nigeria. These roles go a long way to facilitate the growth and development in the country, thereby contribute to the development of the economy. (Chukwujekwu,   1987:1). Despite this contributions, they are faced with a lot of problems, Among such problems are insufficient of fund owing  to  limitation  habits  of  the  people.    Thus,  money for  both services and expansion is always a major handicap.   There is no managerial acumen owing to the proprietor’s limited education and training.

Along side this is the neglect of the nation’s rural areas visa- vise small-scale industry has left a serious hiatus in the economic development and progress of country.  This gap has resulted in the scarcity of essential goods and services with a spiral effect of high inflation  and  general  high  price  level  and  unequal  distribution of income.  Lack  of  rural  development  also  resulted  in  the  mass migration of people from rural areas to our urban centres and cities leading to rapid formation of ghettos and slums.

Most of the traditional skills possessed by people such as wood caving, cloth weaving and dyeing, mat making, iron smelting, etc

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have been deserted in search of white collar jobs.  As a result, most of these skills which could have been improved upon through encouragement and assistance of individuals to set up modern small- scale industries have been left to die away.

Beside, large-scale industry which we though formed the bed rock of economic development have become white elephant projects, that do not serve what they are established to serve.  Some of them are producing under capacity.  Some have been shut down due to lack of spare parts and raw materials.   Others become a breeding ground for embezzlement by their various boards of directors and top government officials.

Therefore, the inclusion of small-scale industrial policy in our economic plan in the rural areas has enhanced the community development, growth and stability in the rural areas in particular and the Nigeria in general.

1.3    OBJECTIVES OF THE STUDY

(1)    To  ascertain  the  problems  and  prospects  of  small-scale industry in community development.

(2)    To highlight the problems that stand against the success of small industries in Anambra State.

(3)    To identify the proper steps that could be taken to increase the efficiency and encourage the establishment of small scale industries.

(4)   To proffer solutions and recommendation that will hopefully be of great help to small scale business entrepreneurs elsewhere and new aspirants into small scale business.

1.4    IMPORTANCE OF THE STUDY

The role of the small-scale industry in rural community development cannot be over emphasized.   The research is being conducted with a view to ascertaining the problems and the causes of the   small   scale   businesses   failure   in   rural   communities  and suggested solutions to the problems.  The study will be useful to the government,  public  and  private  institutions,  entrepreneurs, individuals, students and above all, the nation.

The government will find it very useful in drawing up programmes and policies for rural development. Equally,

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economic planners in the government will take small-scale industry into consideration while planning for the developments and growth of the economy.

Public and private organisation will also benefit from this study through making them realize the problems and ways of solving them.

Entrepreneurs will also gain from the study by way of encouraging them to set up business in our rural areas.

Young graduates will also be encouraged to go into business without depending on government for employment, it will also serves as a driving force for developing entrepreneurship in people.

Finally, student will find it a very useful guide in the conduct of a research relating to small scale industry.

1.5    RESEARCH QUESTION

The research questions for the study are postulated as follows:-

1.      What form of business ownership is your establishment?

2.      What is (are) your source(s) of capital?

3.      What is your educational qualification?

4.      Did you consider Infrastructural amenities before establishing your firm?

5.   Does   small-scale   industries   contribute   more   to   economic development than large-scale industries?

6. What are the major hindrances the small-scale industries have towards optimum performance?

1.6    HYPOTHESIS

To answer the research question of the study; the following hypothesis will be tested at 0.05 level of significance.

Ho There is no relationship between small scale industry and rural community development in Anambra State.

Hi:    There is relationship between small scale industry and rural community development in Anambra State.

H0:    Small-scale industries are relatively not easy to set up when compared with what is required to set up large-scale indusries.

Hi:     Small-scale industries are easier to set up because of their low capital  intensive  nature  than  it  is  to  set  up  large-scale

industries.

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H0:    Inadequate   Planning   and   Unplanned   Expansion   do   not contribute more to problems of small scale businesses.

Hi:     Inadequate  planning  and  Unplanned  Expansion  contribute more to problems of small scale industries.

H0:    Inadequacy  of  Infrastructural  facilities  and  lack  of  skilled manpower are not the major problems of small-scale        industries.

Hi:     Inadequacy  of  Infrastructural  Facilities  and  lack  of  skilled manpower are the major problems of small- scale industries.

H0:    Government polices do  not  hinder  optimum  performance of small scale industries?

Hi Government polices do not hinder optimum performance of   small scale industries?

H0:  There is no significant difference in proportion between concentration of small scale industry and the attracting of infrastructures in a locality.

Hi:  There is a significant difference in proportion between concentration of small scale industry and the attraction of infrastructures in a locality.

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1.7    SCOPE OF THE STUDY

Three Selected small business in Anambra State have been chosen for the research because of their accessibility from the three types of small businesses i.e. commerce, industry and services.

The  study  investigated  their  impact  on  the  development of Nigeria by scanning innovations achieved in product development, product lines and their production quality.

These contribution are in terms of the services rendered (payment of taxes, levies and others and environmental cleanliness) employment profile, product availability and demand satisfaction and their product cast.   The study also examined the problems small business faced in their operations.   However, for the proper management of the study, not all the industries were studied.  The researches were based on three selected industries in Anambra State.

1.8     LIMITATION OF STUDY

The researcher, in carrying out the study was constrained by: (i)      Cost of transportation to the area of the study

(ii)    Also there way the unwillingness of respondents to whole- heartedly give out information.

(iii)   There was also the constraint of time limit allotted for the research. However, all this not withstanding, efforts were made to produce an objective document.

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