CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

          It is very important to note that in many developing countries like Nigeria, it is being argued that the small scale industries have not and cannot alone be expected to play the dynamic role that they are expected to play towards the rapid growth and development of the various segment of the country. It is therefore becoming even more important  those countries that the small scale industries which had however been neglected could play a significant role in the quest of economic development.  

     In recognition of this fact, the Nigeria government had in the recent  time play important role in promoting small scale business. This important role can be seen in various institutions that it had set up to promote small scale business activities in the country.

     Government also in its quest to further develop and promote small scale business, have adopted favorable policies (monetary and fiscal that could aid small scale business in the country). 

     Small scale business is a catalyst that improve standard of living.  It                            pointed out that our seventy percent (70%) of workforce in Nigeria earns their living of been employed in small scale business either directly or indirectly. It is on this role that small scale business is seen by the researcher of this work as a good channel through which government can efficiently alleviate poverty in the country.  Apart from employees, the small scale enterprises are equally lifted from grass to grace through increase in capitalization, special drawings and dividends that are usually the goodies of entrepreneurs. The increase in revenue increases the purchasing power of the entrepreneurs in relation to their standard of living. In addition, the influx (flowing) of social and recreation facilities in response of the multiplication of small scale industries also help in the transformation of the lifestyle of the public generally.

     There has been technological breakthrough by small scale enterprises in adoptive response in changing economic and social fortune  of the masses in all ramifications. It generates the desired forward and backward and linkage required in holding a vibrant industrial base.

1.2     STATEMENT OF THE PROBLEM

          Despite the good position of small scale business to bring about efficient poverty alleviation to impoverished Nigerian’s, small scale business on it’s own has some setbacks. In view of this development, the study is to look into the factors that cause severe problems affecting the promoting of small scale business in Nigeria.

SOME PROBLEMS ARE

• Lack of working capital
• Lack of good site
• Seasonal nature of raw materials
• Inadequate record and cost analysis
• Lack of research about the market and customers information
• Lack of managerial and technical knowhow (one man management)

          The entire above problem cause hindrance in promoting small scale business. These problems are encountered by entrepreneurs who means are  various small scale business. A careful understanding of these problems by entrepreneurs will help greatly to forestall it’s impediment to small scale business.

1.3     SIGNIFICANCE OF THE STUDY             

          The basic objective of any nation whether developed, developing or under developed is that of self-sustenance and reliance. It is important to know that the gross national product (GNP) of any country determines to a great extent, the standard of living of the people of the nation which is the hallmark of this study.

     As a result of this, it becomes clear that small scale industries in Nigeria have a lot to contribute towards the growth and development of the Nigerian economy which will positively rise the standard of living of the general populace. The government is now been aware these benefits and have been playing great role in promoting small scale business in all it’s perspective. The involvement of different tiers of government in the development of small scale business will bring a brighter hope for the masses of this country.

1.4     OBJECTIVE OF THE STUDY

          Considering the good of government in promoting small scale business, the study is geared towards achieving the following objectives:

• To identify government commitment in promoting small scales business in one hand and poverty alleviation on the other hand.
• To Examine the relationship between small scale business and poverty alleviation.
• To find out how the masses so far have benefited from small scale business.  
• To recommend how government can promote small scale business with a view of alleviating poverty in Nigeria.

1.5HYPOTHESES OF THE STUDY

          For the purpose of this study, the researchers have formulated the following hypotheses and they shall be test in chapter four (4) to enable them draw logical conclusion and make useful recommendation.

HYPOTHESES I

H0: Small scale business has not committed to poverty alleviation in Nigeria.

HI: Small scale business is committed to poverty alleviation in Nigeria.

     HYPOTHESES II

HI: Government has not promoted small scale enterprises with a view of alleviating poverty in Nigeria.

HI: Government has promoted small scale with a view of alleviating poverty in Nigeria

1.6     SCOPE OF THE STUDY

               This research centre’s on the contribution of small scale industry to poverty alleviation in Nigeria with a close reference to small scale enterprises in Lokoja metropolis, Kogi State.  The project also discuss the place of government in poverty alleviating and the roles of various agencies established to facilitate small  scale business with a view of alleviating the poverty level in the country.   

1.7     LIMITATION OF THE STUDY

               The study intends to identify the ways through which the development of small scale business could help to alleviate poverty in Nigeria. However, for financial constraints and time factor, the researcher could not embark on extensive research to cover various poverty alleviation offices across the country.

     Nevertheless, a sample of this population is selected and is expected that any conclusion drawn thereof shall to a reasonable extends reflect the true situation.

1.8.1    DEFINITION OF THEE TERMS  

1. 1.     POVERTY: Is a condition of an economy and political disempowerment which make an individual or state  unstable to satisfy their major needs poverty has physical manifestation because poor people lack a lot of what are needed  in comfort.  
2. 2.     SMALL SCALE BUSINESS: The company and Allied Matter Act of 1990 Section 351 Sub-Section 1 formally and legally defined small scale business as follow:     

(1) It is private company  having share capital

(2) The amount of its turnover for the year is not more than N2million or such amount as may be fixed by the corporate affairs commission.

(i)               None of its members is an alien

(ii)            None of its members is a general corporation or agency of its nominee and

(iii)         The directors between them held not less than fifty one percent (51%) of its equity capital.

 COMMENT: No matter the shortcoming of this definition  in terms of equity capital and amount of turnover, they should not be more than N1million respectively. The company and Allied Matter Act remains the more authoritative and dependable source of defining small scale business.

• POVERTY ALLEVIATION: It can be defined as a situation whereby government has been able to assist to materialize as a result of poor institutional organs to help in the implementation of masses in the country. Thereby government intends to introduce poverty alleviation programme in order to succor (Aid) the poor.
• BACKGROUND: This can be defined as accessing the collection of previously published and unpublished information about a particular topic.

           This is seen as the first step of all writers of any kind of research paper. This provides sufficient content to the readers so that they can understand the purpose of the experiment, the design and the interpretation of the results.

• STATEMENT OF THE PROBLEM: This can be seen as a concise description of the issues that need to be addressed by problem solving team (researcher) either presented to them or created by them to be solved. This can also be seen as a solved. This are provided to achieved a particular purpose.
• HYPOTHESES: This can be seen as a tentative statement about the relationship between two or more variables. In  conducting an experiment, research might explore a number of different factors to determine which one contributes to the ultimate outcome.
• SCOPE OF THE STUDY: This can be seen as the general outline of what the study (research work) will cover. It can also be seen as the parameter within which the study will operate. This decides or limits the way in which research work can be done.
• OBJECTIVE OF THE STUDY: This can be seen as a specific result that a research aims to achieve within a time frame and with available resources. This state what the researcher expect to achieve by the study in general terms and should relate to the researcher problem.