1.1 Background To The Study

The relative importance of small scale industries in advanced and developing countries like Nigeria has led to a reconsideration of the role of Small Scale Enterprises in the economy of nations. The development of many countries is often measured by such indices as the level of industrialization, modernization, urbanization, gainful and meaningful employment for all those who are able and willing to work, income per capital, equitable distribution of income, and the welfare and quality of life enjoyed by the citizenry.

There is no doubt that small scale industries exist in most economic environment. The historical background of small and medium scale industries in Nigeria can be traced back to 1946 when the essential paper No. 24 of 1945 on “A Ten year plan of development and welfare of Nigeria 1946 was presented. Small and Medium Scale Enterprise is an all-time necessity.

In recognition of the depth and breadth of the consequences of small-scale industries in alleviating poverty and national development, there has been a deep-self interest in recent years for development of Nigerians  small-scale industries particularly since the adoption of the economic reform in 1986. The small and medium scale industry is seen as a key to Nigeria’s growth and alleviation of poverty and unemployment in the country. Therefore, promotion of such enterprises in developing economies like Nigeria is of paramount importance since it brings about a great distribution of income and wealth, economic self-dependence, entrepreneurial development employment and a host of other positive, economic uplifting factors (Aremu, 2004). Moreover, in a country like Nigeria with an adverse Balance of Payment situation, the growing contribution of the Small Scale Industries sector in Nigeria’s export portfolio goes a long way in generating foreign exchange and smoothening out the adverse Balance of payment situation. Hence, this study will examine the role of small scale industries in economic development of Nigeria.

1.2 Statement of the problem

Nigeria has been plagued with multifaceted problems ranging from low capacity utilization, massive graduates unemployment, poverty, insecurity, collapse of infrastructural facilities and poor macroeconomic policy management (Odubanjo,2000). No doubt, Nigeria is blessed with abundant human and natural resources which could have been harnessed for its growth and development. However, with enduring corruption, monoculture nature of the economy and the dominant role of the public sector, the country lost open opportunities for growth and sustainable development(Modesty,2013). Government initiated numerous programmes and policies for SMEs development but there is a limit to which government alone can promote sustainable economic development (Ogbonnaya,2011). This necessitated the government to adopt economic reform programmes to switch from capital intensive and large scale industrial projects which was based on the philosophy of import substitution strategies to Small and Medium Scale Enterprises which invariably have better prospects for developing domestic economy thereby generating the required goods and services that will propel the economy towards development. It is due to this problem that this study will examine the role of small scale industries in economic development of Nigeria.

1.3 Research Question 

The following research questions are designed to guide the study as follows.

  1. To what extent does small scale industries contributes to job creation in Nigeria?
  2. To what extent do small scale industries contribute to economic development of Nigeria?
  3. To what extent do small scale industries enhances economic growth of Nigeria?
  4. What role does small scale industries play in economic development of Nigeria?

1.4 Objective of the Study

The main objective of this study is to examine the role of small scale industries in economic development of Nigeria.  Other specific objectives are to examine:-

  1. The contribution of small scale industries to job creation in Nigeria.
  2. The contribution of small scale industries to economic development of Nigeria.
  3. The extent to which small industries as enhance economic growth in Nigeria.
  4. The role of small scale  industries in economic development of Nigeria.

1.5 Research hypothesis

H0:  Small scale industries do not play any significant role in economic development of Nigeria.

H1: Small scale industries plays significant role in economic development of Nigeria

1.6 Significant of the Study

The study is  significant since it will highlight  the various ways in which  small scale industries  contributes to economic development in Nigeria. The study too will also give various reasons why small scale industries in Nigeria are crucial for the development of Nigeria and as well  as a vital avenue of creating job employment for Nigerians.  It will also enable the government appreciate the role played by small scale industries in economic development of Nigeria as well as  see reasons why  they should support small scale industries in Nigeria.

1.7 Organization of the study

Each of the chapter in this study contains the following heading which was discussed accordingly. The chapter such as in chapter one contains the introduction of  to the study, chapter two contains a review of related literature, chapter three contains the method used for the study, chapter four contains the result while chapter five contains the discussion of the finding of the research, the study will also cover  the recommendation  and the conclusion of mad by the study.