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THE ROLE OF SMALL AND MEDIUM SCALE ENTERPRISES IN UNEMPLOYMENT REDUCTION IN NIGERIA
1.1 Background of the Study
Many scholars have written widely on small scale industries and its potency to generate employment, thus, underscoring the quintessence, significance and relevance of this sub-sector in the development of any given economy. The experience of developed economies in relation to the roles played by small scale industries buttresses the fact that the importance of entrepreneurship cannot be over emphasized especially among the developing countries. In order to highlight its significance in relation to the growth and development of a given economy, small scale industries have been variously referred to as a “source of employment generation”. This is because small scale industrial activities have been found to be capable of making positive impacts on the economy of a nation and the quality of life of the people (Adejumo 2000). Studies have established its positive relationship with stimulation of economic growth; employment generation; and empowerment of the disadvantaged segments of the population, which include women and the poor (Olurermi and Gbenga, 2011; Thomas and Muller,2000; Reynolds, 1987).
Nigeria as a country has numerous business and investment potentials due to the abundant, vibrant and dynamic human and natural resources it possesses. Tapping these recourses requires the ability to indentify potentially useful and economically viable fields of endeavors. Nigerians have made their marks in diverse fields such as science, technology, academics, business and entertainment. Thus, small scale industries activities and innovative ingenuity in Nigeria have developed enterprises in the following areas, agricultural/agro-allied activities where there are foodstuffs, restaurants, fast food vending etc. in the area of information and telecom business, there are manufacturing and repairs of GSM accessories and the printing and setting of recharge cards. In hospitality and tourism business, there are hotels, accommodation, resorts centers, films and home video production; in oil and gas business, there are construction and maintenance of pipelines, drilling, refining bye products. In the area of environment and waste management business, there is refuse collection/disposal, recycle plant and drainage/sewage construction job. In the area of financial banking services, there are banking, insurance and stock trading.
In engineering and fabrication work, there are machines and tools fabrications there is also the building and construction, where there are plan and design services and material sourcing (Agbeze, 2012) These human and natural resources notwithstanding, Nigeria are still one of the poorest countries in the world and Africa despite its alleged strong economic growth. Chukwubuikem (2008) notes that youth’s full-time unemployment rate for 2006-2008 was 55.9 percent, 4 times higher (Salami, 2011). Many other industrial sub-sectors to such a vibrant one that they have been able to reduce to the barest minimum their unemployment and poverty level because of the immense contribution of the sub-sector to their economic growth and development but such cannot be said of Nigeria (Onugu, 2005). In respect of the above sad and deplorable situation, the government has done little to reduce the misery and frustrations of the citizen. This has foisted a state of hopelessness on majority of young people who have resorted to any means including crime to succeed in life. They resort to vices because they are not gainfully engaged. In other words, they are unemployed; unemployed, not because they lack the qualification but because the system has been crippled politically economically, socio-culturally and even religiously. People especially youths and graduates became displaced economically (Kuratko, 2009), a situation that clearly negates the millennium development goals for 2015, I and II: to halve the proportion of people living in extreme poverty and to halve the proportion of people suffering from hunger respectively.
The dexterity with which hunger and poverty have devastated lives and future ambition of youths especially graduates in Nigeria, have led to scholars prescribing small scale industries development as the permanent cure for extreme hunger and poverty necessitated as one of the external forces that influence the development of small scale industries. The great need for small scale industries development in Nigeria today, more than ever, is necessitated by the rate of unemployment and its effect on both the people and the nation and the need for small and medium enterprises. In spite of the fact that small scale industries development has been regarded as the bulwark for employment generation and technological development in Nigeria, the sector nevertheless has had its own fair share of neglect with concomitant unpleasant impacts on the economy against this backdrop. Entrepreneurship when and if gallantly developed in Nigeria will take its pride of place in fuelling unemployment and thus generating employment among Nigerian youths especially the graduates and once again, place the economy on a proper footing.
It is in this respect that this paper seeks to investigate the connection between small scale industries and employment generation in Nigeria; assessing the level of unemployment in Nigeria and how far entrepreneurship has thrived, and also examines the major problems of entrepreneurship and thus proposing some plausible strategies that can promote effective small scale industries that will help quell unemployment and thus generate employment for the Nigerians youths especially. Based on the above background, the study intends to investigate the role of entrepreneurial development in unemployment reduction in Nigeria with particular reference to Onitsha metropolis.