Problems of Establishing Small Scale Industries in Anambra State.


The study was carried out to determine the problems that militate against the establishment of small scale industries. This necessitated carrying out a survey of small scale establishments with view to findings lasting
solutions to the problems.

Questionnaires are unstructured oral interviews were the major instruments used in this study.

A sample of 44 small scale establishments in Augata, Awka and Nnewi Local Government Areas of Anambra State were served the questionnaires and the various Pie charts were used in presentation and analysis of data and
for clarity purpose.

It was found out that the problems confronting the establishment of small scale industries are lack of adequate capital, problems, relating to management/managerial, marketing, manpower, quality/standard and non-availability of raw materials.

These problems are caused by political instability in the country, lack of good manpower development programme, poor leadership style and unawareness cum non-utilization of government assistance programmes.

However, these problems are at various stages of growth but most at the existence stage when authority is still centralized and yet to stabilize.

To solve these identified problems, local sourcing or law materials, employment of trained personnel and skilled manpower, as well as full utilization of government assistance aimed at improving the productivity of the
establishment were recommended.


Title Page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract vi
Table of Contents vii
List of Tables x
List of Figures xii


1.1 Background of the Study 1
1.2 Statement of Problem 8
1.3 Objective of the Study 8
1.4 Research Questions 9
1.5 Significance of the Study 9
1.6 Scope and Limitations of the Study 10
1.7 Definition of Important Terms 11
References 13


2.1 The Concept and Nature of Small Scale Enterprises in Nigeria 14
2.2 The Concept of Manufacturing Industries 18
2.3 Development of Small Scale Industries in Nigeria an Overview 19
2.4 Basic Characteristics of Small Scale Industries 25
2.5 Significance of Small Scale Industries 27
2.6 Government Incentive Policies for the Growth of Small and Medium Enterprises (SME) 30
2.7 Financial Schemes for SMEs 31
2.8 Realisation of Industrial Policy Monetary and Fiscal Meaus 35
2.9 Problems Confronting Industries in Nigeria 37
2.10 The Small Business and Business Failure 42
References 47


3.1 Introduction 51
3.2 Sources of Data 51
3.1.1 The Primary Sources 51
3.1.2 Secondary Sources 51
3.3 Population for the Study 52
3.4 Sample Size Determination 52
3.5 Instrument Used for Data Collection 53
3.6 Data Analysis Techniques 54
3.7 Validity and Reliability of Data 55


4.1 Data Presentation 56
4.2 Data Analysis 69
4.3 Test of Hypothesis 69


5.1 Summary of Findings 83
5.2 Recommendations 85
5.3 Conclusion 87


1.1 Background of the Study

Every organization in the process of pursuing its aims and objectives is bound to have problems and prospects. Small Scale firms are not left out in this effect. The significance of small scale manufacturing enterprises in socioeconomic
development, in many parts of the world has been well documented.

In Nigeria the contribution of small-scale business is not in doubt. However, in the recent times the contribution of this vital subsector to our economy has increasingly, assumed an unprecedented development.

It has come to occupy a central position in the development aspiration of Anambra State. As stated already, the concept of small-scale business is not new; it is the practice that is new.

According to UNIDO monographs on industrial Development review titled: Industrialization of developing countries: Problems and Prospects of Small Scale Industries there are two broad categories of small scale industries.


Adejugbe, M. A. (1 987), “The Impact of Small Scale Industries on the Nigerian Economy” Towards the Development of Small Scale Industries in Nigeria, A.M. Osoba, (ed) Ibadan: Rosprint Industrial Press

Akeredolu, E. O. (1975), The Underdevelopment of Entrepreneurship in Nigeria Ibadan: University Press

Akpala, A. (1990), Management: An Introduction and Perspective, Enugu: Published by the Department of Management, Faculty of Business Administration, University of Nigeria, Enugu Campus

Bates, J. (1972), Financing Small Business: London: Sweet and Maxwell

Broom H., Longneckes J. (1972), Small Business Management, Cincinnati,U.S.A.: South Western Publishing Co.

Degarmo E.P. (1974), Materials and Processes in Manufacturing 4th ed. New York, Macmillan Publishing Co. Development of Small Industries in Nigeria A.M. Osoba (ed), Ibadan: Rosprint Industrial Press.

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