CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

            Over the years, Nigeria’s economy has been dominated by Small and Medium Scale Enterprises (SMEs) such as in agriculture, manufacturing, commerce and industry, services among others. Small and Medium Scale Enterprises (SMEs) has been defined by Imeokparia and Ediagbonya (2014) as any manufacturing, processing or servicing industry which is owned and managed by one or few persons with direct owner(s)’ influence in decision making, and having  relatively low capital requirements, asset base and employee strength. In the words of Nwankwo, Ewuim and Asoya (2012:141), “the historical background of small and medium scale enterprises 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’ was presented”. However, Aremu and Adeyemi (2010:5) had earlier argued that, “ever since 1946, SMEs have gained prominence and mentioned as seed bed of innovations, inventions and employment generation or creation in Nigeria”.

            In the same vein, Ayozie, Oboreh and Umukoro (2013:2) contended that, “prior to Nigerian independence in 1960, the business climate was almost totally dominated by the colonial and other European multinational companies like United African Company (UAC), GB Olivant, Lever Brothers Company, Petterson Zechonics, Leventis and many others”. These companies primarily engaged in bringing into Nigeria, finished goods from their parent companies from over seas. These companies, Ayozie et al (2013:2) further argued “had vast business experience and strong capital base, and dominated the Nigerian economy”. The government of those days encouraged them to become stronger by giving incentives such as favourable tariffs and tax concessions. In 1962, the Nigerian Industrial Development Bank (NIDB) was established to assist potential entrepreneurs to get involved in agriculture, exploration of natural resources, commerce and industrial production among others (Aremo, 2013). Furthermore, “that period and the early 1960s saw the massive increase in import into Nigerian market, while the Nigerian economy became largely dominated by very few large foreign firms” (Adamu, 2015:20).            

            During the post independence Nigeria, between 1965 to 1976, a major remarkable breakthrough in small and medium scale enterprises came about through Indigenization Decree of 1972 and later in the Nigerian Enterprises Promotion Act of 1977 (Ayozie et al, 2013). Arguing further, they opined that “those were the genuine attempts by the federal government to make sure that Nigerians played an active and worthwhile role in the development of the economy”. In its 1970-1974 National Development Plan, the Federal Government gave special attention to the development of small and medium scale enterprises, particularly in the rural areas. This was in recognition of the roles of small and medium scale enterprises as the seed beds and training grounds for entrepreneurship (Adamu, 2015). Some of the cardinal points of the 1970-1974 Development Plan included: accelerating the pace of industrialization and dispersal of industries; generating employment opportunities; promoting individual incentives and entrepreneurship among the populace; assisting in the establishment of small and medium scale industries among others.

            Within the period of 1977-1998, the government policy measures placed emphasis on the technological aspects of industrial development of small and medium scale industries in Nigeria (Ayozie et al, 2013). This entails that various tiers of government within this decade embarked on corrective measures to divert efforts towards the maximum exploitation of natural resources, and tried to discourage capital intensive mode of production in the light of the abundant resources available. In this regards, the industrial policy tried to focus its attention mainly on local resource utilization through varieties of incentives worked out by governments. Some of such basic policy strategies aimed at revitalizing the industrial sector included the following; encouragement in the use of more local materials in the industrial development activities and encouragement of greater capital utilization in Nigerian small and medium scale industries.

            From 1999 to date, the federal government and state governments have both contributed to the growth of small and medium scale enterprises in Nigeria especially in the rural areas. In recent times, various fiscal and non fiscal incentives have been established for investors and entrepreneurs in the small and medium scale enterprises sub-sector of the economy; of special mentioning was the strategy adopted by federal government towards the training and motivation of unemployed graduates to be gainfully employed after graduation, referred to as Entrepreneurship Development Programme (Aremo, 2013).

            Furthermore, small and medium scale enterprises in Nigeria have been the backbone of Nigeria’s economy and are key sources of economic growth, economic development, dynamism and flexibility. SMEs constitute a greater percentage of all registered companies in Nigeria and they have been in existence for a quite long time (Ayozie et al, 2013). The small and medium scale enterprises as argued by Ogboru (2014:12) as a sub sector “provides on average, 50% of Nigeria’s employment and 50% of its industrial output”. Arguing in support, Anochie and Ude (2015:11) submitted that, “small and medium scale enterprises are the backbone of virtually all economies of the world because of their role in employment creation and provision of personalized services; having strong influence on the sustainable development process to less developed as well as developed countries because they foster economic growth and alleviate poverty at low investment costs, development of entrepreneurial capabilities including indigenous technological developments, utilization of local resources, increased government revenue through taxation among others”.

            Also, small and medium scale enterprises as recognized have over the years, been the engine for powering economic development in Nigeria. In terms of employment generation in Nigeria, SMEs accounted for the major source of employment to the over teeming unemployed population. For instance, Igwe (2011:43) stated that, “in 1970, of the estimated wage employment of 1.38 million, 622,000 persons (forty-five percent) were employed in small non-agricultural enterprises”. In this current dispensation where unemployment is alarming in Nigeria, the SMEs have become the bedrock by employing over 50%, both skilled, semi skilled and unskilled labour force. SMEs produce new goods and services which are supplied to satisfy the need of larger firms, and the consumption of the entire nation. In corroborating this view, Anochie and Ude (2015:17) opined that “SMEs bring about new goods and services and supply the needs of larger enterprises, which have to depend on small and medium scale enterprises for their own success”. In Nigeria, the contributions made by SMEs in the area of increased revenue for the government through the payment of income tax, value added tax (VAT) and other miscellaneous fees cannot be overlooked. Moreso, the Gross Domestic product and Gross National Product which are the values of the total goods and services produced in a country within a year have always received tremendous contributions of SMEs output. All those point out to the fact that SMEs have gone a long way in developing Nigerian economy from long history past.

            However, interest in the development of small and medium scale enterprises and their contributions to economic growth and development in Nigeria has over the years accounted for the various policies, programmes and financial incentives by the various levels of government in promoting the small and medium scale enterprises sub-sector. In his own view, Ogundipe (2015:5) opinion that:

“Governments at various levels (local, state and federal levels) have in one way or the other, focused on the small and medium scale enterprises. While some governments had formulated policies aimed at facilitating and empowering the growth and development and performance of the SMEs, others had focused on assisting the SMEs to grow through soft loans and other fiscal incentives”.

In view of the above, Nigerian government had devised policies and incentives for the development of small and medium scale enterprises. Such efforts according to Adebusuyi (1997) cited in Eze and Okpala (2015), could be classified broadly into fiscal and export incentives, tax regimes, financial supports and technical assistance programmes. Additionally, infrastructural incentive is part of government’s efforts over the years. In their words, Eze and Okpala (2015: 27) opined that:

“The fiscal incentives include tax relief for small enterprises during their first six years of operation, granting of pioneer status for a period of five years with a possible extension of two years for enterprises located in economically disadvantaged areas and provision of relief for investment in infrastructure, capital allowances and minimal local materials utilization… Export incentives include the introduction of import duty draw back, export credit and insurance schemes etc”.

To protect SMEs from dumping, the government adopted the use of high tariff rates to discourage importation of some of the industrial goods that could be produces domestically, and discouraged the importation of some of the industrial and agricultural products. Also, to provide funds to small and medium scale enterprises by way of commercial loans, government established the Bank of Industries (BOI), the Nigerian Agricultural Co-operative and Rural Development Bank (NACRAB), Small and Medium Scale Enterprises Equity Investment Scheme (SMEEIS), Micro Finance Institutions (MFIs) inter alia, all aimed at promoting SMEs for economic development. “In Nigeria, the respective government policies accorded and gave priority to the countries’ small and medium scale enterprises, this has been in recognition that they constitute the fountain head of vitality for the national economy…” (Ayozie et al, 2013:30).

            Notwithstanding, in Nigeria in general and Ebonyi state in particular, the small and medium scale enterprises sub sector has been faced with a number of constraints with inadequate financial facilities as the principal constraint (Oduyoye et al, 2013). Finance has been viewed as a critical element for the development of small and medium scale enterprises (SMEs). “Small and medium scale enterprises face higher transaction costs than larger enterprises in obtaining credit” (Lee, 2004:2). Moreso, “information asymmetries associated with lending to small scale borrowers have restricted the flow of finance to SMEs” (Berger and Udell, 2004:4). Also, “bank credits play a crucial role in providing external financing to small and medium scale enterprises, but in Nigeria, this crucial source of finance for small and medium scale enterprises is apparently non functional” (Kadiru, 2012:5). Berger and Udell (2004:9) attributed this trend to “the high interest rates on government securities which serve as anti- incentives to intensify lending to small and medium scale enterprises”. In the case of the Development Finance Institutions (DFIs), the cumbersome procedure and stringent requirements for obtaining loans often deter small owners from approaching them for financial assistance. These point out that the financial system has not been active in playing their role effectively and efficiently in promoting SMEs for faster economic development of Nigeria.

Moreso, SMEs in Nigeria have been challenged by other factors like the multiplicity of government policies and regulatory measures and the high rate of insecurity in the country, especially in the north eastern part which have crippled many SMEs in Nigeria.

            The Abakaliki Rice Mill in Ebonyi State has over the years, been crucial in the economic development of Nigeria in general and Ebonyi State in particular. It was established in 1964 though rice production in the city dates back to the pre-colonial era (Igwe, 2011). It is a hundred percent (100%) private sector driven enterprise and does not serve just Abakaliki and its environs but the length and breathe of Nigeria. It is a small and medium scale enterprise that is concerned with rice milling, destonning, blowing, and polishing among others. Its product is rice which makes it a rice processing enterprise. Since the inception of its activities and operations, the Abakaliki Rice Mill has effectively employed thousands of people hence reducing the unemployment rate of the state in particular and the nation in general. The consumption of the famous “Abakaliki Rice” cuts across the nooks and crannies of the country. From long distance past, the role of the Rice Mill over the years in ensuring adequate food production in reducing the rate of hunger and an effective substitute for rice products from other states of the federation and foreign rice products cannot be overemphasized.

            The Rice Mill company of Nigeria Limited, Abakaliki, Ebonyi State (Abakaliki Rice Mill) according to Orient Daily Newspaper (2012:10) “is always a beehive of activities, the mill boasts of over 5,000 workers, 2,500 rice milling machines, and a production capacity of more than 11,000 metric tones per month”. Abakaliki is known for agriculture, especially rice production which dates to years before the 1960s. Many people from hinterland from within and outside Ebonyi State take their parboiled (unprocessed) rice to the mill for milling, destonning, bagging and other services (that is, processing). People travel from all the nooks and crannies of the country to purchase rice from the mill.

            Moreso, it is interesting to note that over 50% of the mill is owned and managed by non-indigenes of Ebonyi State, many of whom have been active stakeholders in the rice mill for decades. There is a thriving market within the rice mill run by several petty traders of food stuffs, articles, restaurants, ware house and a petrol station called Rice Mill Oil which is run by the Rice Mill Owners Association. The Rice Mill Owner’s Association is an umbrella of several small groups which all peacefully co-exist together. These groups meet from time to time and they have their various leaders. The groups include; the Rice Blowers, the Rice Millers, the Rice Blenders, the Rice Destonners, the Rice Dusk/Husk Carriers, the Bag Stitching workers, the Barrow pushers amongst others.

            In terms of the role of the Abakaliki Rice Mill in the economic development of Ebonyi State in particular and the nation in general, the Rice Mill over the years have contributed to the economy of the state through payment of their income taxes to the government, thereby enriching the internally generated revenue of the state. The Rice Mill also pays for other fees like business permit, premises and license fees among others. Abakaliki Rice Mill over the years has been in the forefront of sufficient food (rice) production in the state thereby, alleviating hunger and poverty in the state and beyond. The income of the individuals and the rice mill owner’s is still a worthy contribution to mention. Farmers whose main occupation is rice farming mill and sell their rice in the rice mill and as such, earn a lot of income which most of them have used to train their children in various tertiary institutions within and outside the state. In the area of employment, the Abakaliki Rice Mill has employed over two thousand (2000) employees including the rice mill owners. This has gone a long way in reducing the rate of unemployment in the state. Interestingly, the Rice Mill contributes in no small measure to the Gross Domestic Product (GDP) of the nation’s economy. The technological development of the state has been boosted by the Rice Mill. Ebonyi State being a non-industrial state can mainly boast of Abakaliki Rice Mill in terms of technology and industry and utilization of local materials etc.

Despite all these, the industry is faced with numerous challenges including; poor financing, the issue of relocation by the state government, importation of foreign rice among others.

            In recognition of the role of Abakaliki Rice Mill in the economic development of the state, the effort of the Ebonyi State government towards improving the operations of the Abakaliki Rice Mill was witnessed in 2012 when the State Government under the administration of Martin Elechi constructed three ultra-modern Rice Mill industrial clusters in the three senatorial zones of Ebonyi State and decided to relocate the Abakaliki Rice Mill to the three newly constructed rice mill clusters at Iboko in Izzi Local Government Area, Onuigboji in Ikwo Local Government Area and Osso-Edda in Afikpo South Local Government Area. Though this move to relocate the Rice Millers has been frictional and proved abortive as the Rice Millers refused to hearken to the voice and directives of the state government but rather dragged the state government to court. Since then, the case is still pending in the court up till today.

1.2       Statement of the Problem

Small and medium scale enterprises (SMEs) as noted earlier occupy a place of pride virtually in every country’s or state’s economy. “Because of the significant role of small and medium scale enterprises in the development and growth of various economies, they (SMEs) have aptly been referred to as the engine of growth and catalysts for socio-economic transformation of any country” (Ebube and Ezeigwe, 2014: 21). SMEs represent a veritable vehicle for the achievement of national economic objectives of employment generation and poverty reduction at low industrial cost as well as development of entrepreneurial capabilities including indigenous technology. Other vital benefits of vibrant SMEs include access to the infrastructural facilities occasioned by the existence of such SMEs in their surroundings, the stimulation of economic activities such as supplies of various items and distributive trades for items produced and/or needed by SMEs, stemming from rural urban migration and enhancement of standard of living of the employees of the SMEs.

            Despite the above contributions, small and medium scale enterprises in Nigeria and Ebonyi State in particular have not performed creditably well and hence have not played the expected vital and vibrant role in economic growth and development of Nigeria. Thus, according to Osuji (2015:11), “virtually 95% of small and medium scale enterprises in Nigeria die after their first four to five years of establishment”. Furthermore, he opined that “this situation has been of general concern to the governments, citizenry, operators, practitioners and organized private sector groups”. Year in year out, the governments at federal, state and even local governments have signified interests and acknowledgement of the crucial role of the small and medium scale enterprises sub-sector of the economy and have made policies for energizing the same. There have also been fiscal incentives, grants and multilateral agencies’ supports and aids as well as specialized institutions all geared towards making the SME sub-sector vibrant. Just as it has been a great concern of all and sundry to promote the welfare of SMEs, it has also been a great cause of concern to all, the fact that the vital sub-sector has fallen short of expectations, especially in Nigeria. This is why Ekpenyong (1992) cited in Ebube and Ezeigwe (2014:9) posited that “this situation is more disturbing and worrying when compared with what other developing and developed countries have been able to achieve with their SMEs, it has been shown that there is a high degree of correlation between the degree of poverty and hunger, unemployment, economic well-being (standard of living) of the citizens of a country and the degree of vibrancy of the respective countries’ SMEs”.

            Notwithstanding, in line with the foregoing analysis, the small and medium scale enterprises in Nigeria are constrained by the following problems in achieving economic growth and development in Nigeria and Ebonyi state in particular, they include;

-      Inadequate infrastructural facilities,

-      Poor entrepreneurial or technical know-how,

-      Multiplicity of government policies, taxation and regulatory measures,

-      Security and environmental challenges and

-      Poor financing.

            Inadequate infrastructural facilities available to SMEs in Nigeria and Ebonyi State in particular, account for the poor performance of SMEs in promoting economic growth and development. In corroborating this view, Ebube and Ezeigwe (2014:27) opined that, “inadequate infrastructural facilities tend to escalate the cost of operation as SMEs are forced to resort to private provision of utilities such as roads, water, electricity, transportation, communication etc”. In line with this problem facing SMEs, Imeokparia and Ediagbonaya (2014: 92) argued that, “the problem of electricity simply remains a major challenge to SMEs in the country, the power shortage or outage often experienced in the country has a great negative effect on the SMEs in Nigeria”. This points out that the SMEs in their course of economic development of Nigeria are constrained by lack of infrastructural facilities pertaining particularly to electric power supply. When the infrastructural facilities necessary for the smooth functioning of SMEs are lacking, their operations are hampered.

            Secondly, poor entrepreneurial or technical know-how has remained another major problem facing SMEs in fostering economic development of the country. Imeokparia and Ediagboya (2014:95) corroborated the above view when they stated that, “for one to start up SMEs, there must be some level of technical know how in terms of skills that are needed in that particular business”. The possession of appropriate entrepreneurial skills-sales, marketing, finance, administration, human relations etc will boost the growth of SMEs. Unfortunately in Nigeria, this is not the case as SMEs are owned by illiterates, school dropouts and inexperienced entrepreneurs. It was upon the realization of this major deficiency that the government decided to introduce entrepreneurship education into the curriculum of tertiary institutions compulsorily.

            Another problem of small and medium scale enterprises in promoting economic development as deducible from the analysis in the background of the study above is multiplicity of policies, taxation and regulatory measures which have in recent times negatively affected the establishment and growth of SMEs in Nigeria. In their opinion, Imeokparia and Ediagbonya (2014:95) citing Adelaja (2012) argued that, “the policies and regulatory measures put in place by government have been on the increase and this has a way of discouraging entrepreneurs in investing, owing to the numerous stages and formalities they have to go through before starting and remaining in business”. Arguing further, they wrote that “some policies and measures include registration of names, sign boards, payment of bills/rates and payment for outdoor adverts”. This shows that the unstable policy environments and the vagaries of SMEs’ policies in the country have been negatively affecting the growth and development of SMEs. In recent times, there has been frequent and series of policy changes in the country without due consultations with the SMEs stakeholders (that is, those concerned). Also, Imeokparia and Ediagbonya (2014:96) lamenting on this problem exemplified that, “the ban on motor-cycle in Edo State in 2013 which was less than a week notice is one of the examples too many to mention, this rendered most SMEs (spare parts dealers) unemployed and brought untold hardship on them”.

            Moreso, another worrisome issue in the case of SMEs and economic development in Nigeria is high level of insecurity in the country. “This remains a major problem confronting most SMEs owner’s in the establishment and growth of SMEs in Nigeria, most SMEs owners have shut down their business while would be entrepreneurs are apprehensive to invest” (Etim, 2010:11). This insecurity problem ranges from kidnapping to the current Boko Haram, insurgency. Most people especially in the North Eastern Nigeria have acquired the necessary entrepreneurial skills and technical know how, and have acquired the required funds but the insurgency has made them indecisive because no one will be willing “to fish in troubled waters”.

            However, the major problem that poised the researcher into this study is the poor financing of small and medium scale enterprises in Nigeria and Ebonyi State in particular despite their enormous contributions. Poor financing has affected the establishment, growth and development of SMEs despite that there are several financial institutions, agencies, schemes and programmes established with the aim of financing SMEs in Nigeria. Some of these financial institutional framework (financial system) include; the Bank of Industries (BOI), the Central Bank of Nigeria (CBN), Small and Medium Enterprises Development Agency (SMEDAN) inter alia.

            Therefore, based on the stated problem, the researcher raised the following questions that guided the study:

1.       What role has been played by government to promote small and medium scale enterprises (SMEs) in Nigeria and Ebonyi State in particular?

2.       To what extent has the financial system of government contributed to the growth and development of small and medium scale enterprises (SMEs) in Nigeria and Ebonyi State in Particular?

3.       To what extent has small and medium scale enterprises (SMEs) contributed to economic development in Nigeria and Ebonyi State in particular?

4.       To what extent has the Abakaliki Rice Mill contributed to economic growth and development of Ebonyi State?

1.3       Objectives of the Study

The broad objective of this study was to examine the role of small and medium scale enterprise (SMEs) in promoting economic development in Ebonyi State with particular reference to Abakaliki Rice Mill. The specific objectives of the study included:

1.      To examine the role played by the government towards the promotion of small and medium scale enterprises (SMEs) in Nigeria and Ebonyi State in particular.

2.      To ascertain the extent to which the financial system of government has contributed to the growth and development of small and medium scale enterprises (SMEs) in Nigeria and Ebonyi State in Particular.

3.      To analyze the extent to which small and medium scale enterprises (SMEs) have contributed to economic development in Nigeria and Ebonyi State in particular.

4.      To ascertain the extent to which the Abakaliki Rice Mill has contributed to the economic growth and development of Ebonyi State.

1.4       Research Hypotheses

In the course of our investigation, the following hypotheses were tested:

HA₁:   Government has played significant role in the promotion of small and medium scale enterprises (SMEs) in Nigeria and Ebonyi State in particular.

HO₁:   Government has not played significant role in the promotion of small and medium scale enterprises (SMEs) in Nigeria and Ebonyi State in particular.

HA₂: The financial system of government has significantly contributed to the growth and development of small medium scale enterprises (SMEs) in Nigeria and Ebonyi State in particular.

HO₂:   The financial system of government has not significantly contributed to the growth and development of small and medium scale enterprises (SMEs) in Nigeria and Ebonyi State in particular.

HA₃:   Small and medium scale enterprises (SMEs) have enormously contributed to the economic development of Nigeria and Ebonyi State in particular.

HO₃: Small and medium scale enterprises (SMEs) have not contributed much to the economic development of Nigeria and Ebonyi State in particular.                

HA₄:   Abakaliki Rice Mill has to a large extent contributed to the economic growth and development of Ebonyi State.

HO₄:   Abakaliki Rice Mill has not significantly contributed to the economic growth and development of Ebonyi State.

1.5       Significance of the Study

            The contributions of this study can not be overemphasized in recognition of the crucial role of small and medium scale enterprises as the engine of Nigeria’s economic growth and development. The relevance of this study to the government, the public, the academia, the small and medium scale enterprises operators, to the researcher and to the vagaries of financial institutions, agencies and schemes concerned with the affairs of small and medium scale enterprises in Nigeria are non exhaustive especially when the recommendations of this study are effectively implemented.

Firstly, to the government, this study will be highly significant in understanding the role the government at all levels should play in promoting the establishment, survival and growth of small and medium scale enterprises for more rapid economic development of the nation. In recognizing the role of SMEs sub-sector in economic development of the country, the government through this role prescription will reconsider and improve the existing policies and programmes for SMEs sub-sector development.

Secondly, in the field of academics, this study will be highly significant as it will serve as a reference material. It will contribute to the stock of existing materials especially on small and mediums scale enterprises, entrepreneurship and economic development. In other words, scholars, students and future researchers would use it as a veritable instrument and source of reference in their further research. It would be a good secondary source of data for future researchers especially for the fact that there is currently a dearth of well researched materials on small and medium scale enterprises and economic development.

Thirdly, this work will be very relevant to the public in improving their understanding of the role of small and medium scale enterprises in enhancing the economic development of the country and specifically the influence of SMEs on the welfare of the society. The public in recognizing the importance of small and medium scale enterprises will understand their (SMEs) roles over the years in generating employment, self sufficiency in food production, technological development and consequently motivate them (the public) into investing in the SMEs sub-sector.

Fourthly, to the SMEs operators, this study will be relevant as they will understand the strategies to surmount their challenges over the years in the management of their enterprises. The knowledge of the various financial institutional frameworks for financing SMEs will be afforded them.

Fifth, this study is also relevant to the various managers of the various financial institutions and agencies like SMEDAN, CBN, and MFBs etc. who are entrusted with the task of providing finance and other facilities (incentives) for the SMEs, to understand the strategic role the SMEs sub sector play in the economic development of the nation. This will enable them sit up and become more effective and efficient in performing their duties. Since they are established to undertake the task of ensuring the growth and development of the small and medium scale enterprises, the rate of productivity, success or failure of the SMEs are dependent on their role.

Finally, to the researcher, this research will be enormously significant in increasing his understanding and knowledge of the role of SMEs in the economic development of Nigeria. It also will be of aid in satisfying his curiosity to understand the role of the government, financial institutions and agencies and SMEs financing schemes (that is, the financial system) in promoting the growth and sustenance of small and medium scale enterprises in Nigeria. The effects of poor funding of SMEs as a result of poor government’s policies and programmes for financing SMEs will be unraveled to him in the course of this study.

1.6       Scope and Limitations of the Study

            This research covers the contributions of small and medium scale enterprises (SMEs) in economic development in Nigeria (Ebonyi State) with a special reference to Abakaliki Rice Mill. Moreso, the problems and prospects of SMEs in Nigeria and Abakaliki Rice Mill in particular were covered.

            In the course of this research, several factors acted as constraints. The first and most outstanding of these constraints was the sheer absence of sufficient research materials written on the small and medium scale enterprises and economic development in Ebonyi State in our reference libraries. Though much literature has been written on economic development in Nigeria, there is absolutely a dearth of well researched up-to-date literature on SMEs and economic development in Ebonyi State. This constraint was surmounted by the researcher through the use of some materials contained in several journals, magazines, newspaper, seminar/conference papers, text books and deductions made from data collected from the Abakaliki Rice Mill case.

            The second major limitation of this study was the short period available to carryout the research. The time frame was too short for the researcher to have broadened the scope of the study to ensure more coverage. The researcher however, was able to overcome this challenge by working more assiduously and painstakingly day and night to ensure that this work was completed within the time frame given. Another strategy the researcher adopted to surmount this constraint was through the recruitment and training of some research assistants who helped him to distribute and retrieve the research instrument of data collection among other duties and assistance.

            Also, financial constraint in no small way affected this research. The cost of materials was high in the market, the transportation cost to the area of study, the finance for the production of the work at café, payment of recruited research assistants’ wages inter alia posed a great limitation to the research. However, this constraint was overcome by the researcher through the personal savings made for a long time in the past, money granted him by friends and relatives and as well borrowings from friends.

            The attitude and behaviour of the respondents constituted another constraint. Many of them are illiterates who were unable to divulge required information and were ignorant of the importance of this research. Some were reluctant to return the instrument of data collection. This constraint was tackled by the researcher by taking time to convince and educate them on the importance of this research with the aid of his research assistants. Some of the respondents despite these efforts did not return their data collection instrument while some wrongly filled the data collection instrument.

            Finally, another factor that constrained this work was the researcher’s personal challenges, since he carried out this research alongside his studies in school and other personal engagements. Though this constraint was overcome by effective scheduling of his personal activities and efficient management of time; they nevertheless, affected the research.

1.7       Theoretical Framework

            Obasi (1999:43) wrote that “theoretical framework is a device or scheme for adopting or applying the assumptions, postulations and principles of a theory in the description and analysis of a research problem”. This implies that it involves linking the problem under investigation to the assumptions, postulations and principles of a theory. It gives the work a guide and direction as well as a support by existing postulations of other scholar(s) in the field.

            For the purpose of this study, “Systems Theory” was adopted. This theory was propounded by David Easton, a renowned political scientist in the year 1965. David Easton used this theory to analyze the political life as a system composed of several sub-systems that together form a whole in an interdependent manner. In other words, the systems theory proposes that the political environment is a system composed of several sub-systems which interact and together form a whole. In the words of Alo (2012:20), “a system is a whole consisting of functional parts or subsystems interacting with each other to ensure the survival of the entire system, and that any malfunctioning of one or more subsystems consequently affects the whole system”. This means that a system is a group of objects that communicate well with each other and has an input on others often enough so that the outcome of a stimulation in one location is predictable in another. Moreso, Orewa (1983) cited in Ezenwaja (2007:15) argued that, “a system is a set of identifiable elements, properties or variables existing orderly and enduring functional inter-relations between or among the various elements or parts of the whole at any time”. This entails that a system according to the proposition of the systems theory expressly connotes that a system exist on input-output matrix with all the component parts interdependent on one another and constantly interact such that what affects one part, ultimately affects the rest of the systems’ component parts. All the systems are interlinked.

            In this work, attempts were made to depict small and medium scale enterprises sub-sector as a sub-system within the whole economic system with other various sub-systems which interact and are interdependent. The entire economic subsystems are interdependent and interactive as well as interrelated. The performance of the entire economic system is highly dependent on the performance of the various economic subsystems. The functioning or malfunctioning of any part of the whole system affects performance of the entire economic system. Now, the gross domestic product (GDP) which is defined as the value of the total goods and services produced within a country in a given period usually a year, is a function of the contributions of the various sub sectors of the economy like the output of SMEs, large scale industries, multinational corporations within the country, workers services (that is, output of employees in every sector) among others.

            Moreso, the SMEs which have been noted to account for over 50% of the employment in Nigeria entails that since “the rate of employment” is an index of economic development, the SMEs hold a greater share and also contributions which are complemented by other sub sectors to position the entire economic system in terms of employment rate.

            Therefore, from the theoretical perspective of systems theory, the malfunctioning or otherwise of the SMEs sub-system affects the performance of the whole economic system. In another element, the SMEs subsystem utilizes the input-output matrix to influence the economy. SMEs receive input from the environment like finance, demand for certain goods and services, raw materials and convert them through the conversion process to produce outputs which are the goods and services for the general consumption of the entire citizenry. SMEs also get feedback from the environment which they now feed back into the system to provide another output (that is, a special kind of goods and services) in terms of environmental influence; the SMEs are affected by the social, political, general economic, technological and cultural environments. In résumé, the SMEs are a subsystem of the entire economic system; they are interdependent and interrelated; communicate and co-operate to make up the economy of Nigeria and Ebonyi State in particular, hence, its relevance.

1.8       Operationalization of the Key Concepts

            The key concepts in this study are defined by the researcher as follows:

1.      Small and Medium Scale Enterprise: This is defined here as any manufacturing, processing or servicing industry with a relatively low capital and asset bases as well as relatively smaller number of employees and is independently owned with lesser or no sophisticated management practices.

2.      Economic: As used in this work, economic simply means the activity relating to the system of production, exchange, distribution and consumption of goods and services.

3.      Development: This is defined in this work as a multidimensional qualitative and quantitative transformation process.

4.      Economic Development: For the purpose of this work, economic development is a multi-dimensional process of qualitative and quantitative transformation of the entire economic system.

5.      Abakaliki Rice Mill: This is the small and medium scale enterprise located in Abakaliki capital territory of Ebonyi State which is into the processing of parboiled rice.

Buyers has the right to create dispute within seven (7) days of purchase for 100% refund request when you experience issue with the file received. 

Dispute can only be created when you receive a corrupt file, a wrong file or irregularities in the table of contents and content of the file you received. 

ProjectShelve.com shall either provide the appropriate file within 48hrs or send refund excluding your bank transaction charges. Term and Conditions are applied.

Buyers are expected to confirm that the material you are paying for is available on our website ProjectShelve.com and you have selected the right material, you have also gone through the preliminary pages and it interests you before payment. DO NOT MAKE BANK PAYMENT IF YOUR TOPIC IS NOT ON THE WEBSITE.

In case of payment for a material not available on ProjectShelve.com, the management of ProjectShelve.com has the right to keep your money until you send a topic that is available on our website within 48 hours.

You cannot change topic after receiving material of the topic you ordered and paid for.