IMPACT OF RECESSION ON SME IN NIGERIA

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgment

Abstract

Table of content

CHAPETR ONE

1.0   INTRODUCTION 

1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study

CHAPETR TWO

2.0   LITERATURE REVIEW

CHAPETR THREE

3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1 Introductions

4.2 Data analysis

CHAPTER FIVE

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation

Appendix

 Abstract

This study is on impact of recession on SME in Nigeria. The total population for the study is 200 staff of national bureaus and statistics, Abuja. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made statisticians, administrative officers, senior staffs and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.

 CHAPTER ONE

INTRODUCTION

• Background of the study

Recession has remained a chronic problem for Nigerian economy for some time. Recession is not a new word in the world economy and not out rightly bad, but the case of Nigeria is severe because it has destabilized the entire economic frame work ever since it sets in. During recession, there is usually a decline in certain macroeconomic indicators such as GDP, employment, investment spending, capacity utilization, with the attendant increaseutilization, household income, business income, and in the rate of unemployment CBN, (2012).Technically, when an economy recorded two consecutive quarters of negative growth in real GDP, it can be said to be in recession. GDP is the market value of all legitimately recognized country in a given period of time, usually one year. “Recession is evidently no blessing for humanity, but since it does recur at regrettably frequent intervals, it is surely appropriate for society to make the best of these bad situations by deriving whatever benefits can be extracted from them” (Baumol, 2014 pg
situations by deriving whatever bene 61). In his analysis, he pointed out that there are indeed, potential gains offered by these periods of economic failure, stressing that markets automatically do provide inducements for the realization of these benefits, and that such gains have proved to be substantial. Arguing on the basis of evidence available in the literature reviewed, that recession, even depression, encourages and from among these ranks,
depression, encourages the entry of SME and from among these ranks,  a substantial proportion of the companies go on to become “giants of industry” emerge. Some of the largest and most prosperous firms in American economy were born during the periods of economic failure. Stangler (2009) reports that at least 51 percent of the 2009
Fortune 500 firms included in his analysis were founded during recession or a bear market or both. Among the companies included in Inc.’s 2008 list of the 500 fastest-growing firms, Stangler found that 48 percent originated in a recession or a bear market. Fano
(1987), reported that during the Great Depression in the United States, when the overall unemployment rate hovered between 15 and 25 percent for nearly a decade, the employment of scientists and technicians grew markedly. Such employment growth, Fano notes, is just one indication of the dramatic research and development growth that took place during the Depression era in the United States. Recessions associated with financial crises like that presently experience in Nigeria are
Recessions associated with  more severe and longer lasting than recessions associated with other shocks. Recoveries from such recessions have been typically slower, associated with weak domestic demand and tight credit conditions. This period is usually characterized with Credit Crunch because banks usually experience serious liquidity problems and became very risk averse cult for micro and small
about lending to small business and individuals as making it difficult for micro and small businesses to access financial services.
On this background the researcher wants to investigate the impact of recession on SME in Nigeria.

1.2 STATEMENT OF THE PROBLEM

In a period of recession, governments world over increasingly recognizes the severity of the downturn and the urgency to intervene in order to avoid a catastrophic collapse of the financial markets and real economy, such response usually consists of three main
intervention; bailout and injections of money to financial system to keep credit flowing; cutting interest rates to stimulate borrowing and investment; and extra spending to shore up aggregate demand. These measures have sought to prevent further economic deterioration and ultimately keep workers in jobs where possible and help create new jobs to provide opportunities for the unemployed. Overall, this response is expected to help avoid a far more severe downturn, though effectiveness has varied considerably across countries and Nigeria is among the least of the countries where measures adopted have worked as evident in the negative GDP of -0.36% and -1.5% in the first and second quarters of 2016, (NBS, 2016) and increasing rate of unemployment.
Hence the need for a review of the macroeconomic policies employed to arrest and turn round the situation in Nigeria. Presently the country witnesses more of struggling large firms while small SME are barely managing to survive due to harsh business
condition

1.3 OBJECTIVE OF THE STUDY

The objectives of the study are

1. To ascertain the impact of recession on SME in Nigeria
2. To ascertain the relationship between recession and SME
3. To ascertain the past and present anti-inflationary policies of the Nigerian government

1.4 RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀: there is no impact of recession on SME in Nigeria

H₁: there is impact of recession on SME in Nigeria

H₀²: there is no relationship between recession and the growth of SME in Nigeria.

H₂: there is relationship between recession and the growth of SME in Nigeria

1.5 SIGNIFICANCE OF THE STUDY

This study, which is primarily aimed at explaining the impact of recession on SME in Nigeria, will provide an insight into the problems associated with recession and SME. This report would be of great benefit for businessmen and businesswomen, to expose them to manage SME during recession. The findings will be useful for researchers to further generate knowledge in the field

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers impact of recession on SME in Nigeria. The researcher encounters some constrain which limited the scope of the study;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
3. c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

1.7 DEFINITION OF TERMS

Recession: In economics, a recession is a business cycle contraction which results in a general slowdown in economic activity.

Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise. In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters

INFLATION: It is a persist tendency for prices and money wages to increase. The dictionary of economics said “inflation is measured by the proportional changes over time in some appropriate price index, commonly a consumer price index or a GDP deflator” inflation occurs when the general price level is rising.

SME: Small and medium-sized enterprises or small and medium-sized businesses are businesses whose personnel numbers fall below certain limits

 1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

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