Contributions of SMEs to Employment, Gross Domestic Product, Economic Growth and Development (original) (raw)
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Small and Medium Scale Enterprises (SMEs): A Catalyst in Promoting Economic Development in Nigeria
This research paper has specifically x-rayed the concept of Small and Medium Scale Enterprises (SMEs) and it was defined as a business which is owned, led by one or a few persons, with direct owner(s) influence in decision making, and having a relatively small share of the market and relatively low capital requirement. The contributions of SMEs to the economy were examined in this paper. The problems confronting SMEs and the possible strategies of combating the problems were also examined. A conceptual framework was developed by the authors and it explains/illustrates the series of variables that are integral in the area of SMEs and the effects it can possibly have on the economy. The concept of Economic Development was briefly described. A section was devoted to examining the roles of SMEs for economic Development in Nigeria. One of the major recommendations advanced in this paper was that the Government should urgently invest massively in improving the current infrastructural base in the country. 1.0. Introduction The national economy has remained a focal point in recent debates owing to the rising level of unemployment, poverty, insecurity, low productivity, human capital flight/brain drain. The need to advancing the socioeconomic , political and technological growth of any nation relies heavily on the creativity and technical ingenuity of the players/actors in that economy in transforming the available resources into productive use. It has been stressed by scholars that Small and Medium Scale Enterprises (SMEs) is a driving force in developing and developed nations alike. The emphases on SMEs remain a recurring decimal in the lexicon of Nigeria and this is not unconnected with the realization of the roles of SMEs in job creation, poverty alleviation and foreign exchange conservation (Jimah, 2011; Ikherehon, 2002; Akingunola, 2011). Agu (2001) defined SMEs as a business which is owned, led by one or a few persons, with direct owner(s) influence in decision making, and having a relatively small share of the market and relatively low capital requirement. The earliest manifestations of SMEs in advanced countries were coltage industries that later transformed into industrial complexes and tech factories. SMEs today account for the bulk of output in most countries today. It is also a proven job creator: the share of SMEs in global productivity is over 30% higher in some countries, but generally growing. In China, SMEs employ over 50% of the workforce while in the United States (US), SMEs account for over 50% of Gross Domestic Product (Ehinomen & Adeleke, 2012). In Nigeria, SMEs employ over 60% of the labour force both in formal and informal sectors. The need to have a regulatory body to control the activities of SMEs in the country led to the formation of Small and Medium Enterprises Development Agency of Nigeria (SMEDEN) in 2004 by an act of parliament towards the realization of the goals and objectives of SMEs. There is no doubt that SMEs play significant roles in the advancement and development of the economy. Some of these roles which have been briefly identified above remain integral to the progress of the nation. For these roles to be fully realized there is need for our educational system to fully be repositioned with the aim of accelerating the growth and development of SMEs. The establishment and management of SMEs no doubt have numerous implications on the economic development of the nation as documented by scholars in the field. The term Economic development has been defined by various scholars in different ways. According to Misra and Puri (2003), economic development means growth plus progressive changes in certain critical variables that determine the well-being of the people. They assert that there are qualitative dimensions in the development process which may be missing in the growth of a given economy expressed in terms of an increase in the national product or the product per capita. From the foregoing, it becomes obvious that economic development is far beyond the numerical growth in a nation's income which politicians often express to draw the attention of unsuspecting electorates. This growth or changes must cut across all the sectors of the economy and must be felt in the living standard of the citizens and this is what SMEs seeks to bring to reality.
Small and Medium Enterprises (SMEs): Key to Socio-Economic Development of Nigeria
International Journal of Research and Innovation in Social Science (IJRISS) , 2021
In Nigeria, as in many other developing and emerging economies, Small and Medium Enterprises (SMEs) contribute to their socioeconomic development and growth hence, successive governments have invested resources in intervention programs aimed at stimulating the sector to achieve sustainable development. The main objectives of the study are to; review the role of SMEs to the socioeconomic development of Nigeria, identify current government efforts and challenges to stimulating SMEs performance especially as it relates to wealth creation and employment generation. The study found that; SMEs play a key role in socio economic development of the country especially in the area of employment generation and wealth creation. However, there are prevailing economic and political conditions that have not given room for SMEs to thrive, as evidenced in the internal and external challenging factors they are currently facing in the country despite the enormous government intervention initiatives. It is recommended that government should reform the implementation of these initiatives, ensure programmes continuity due to change on government, fight corruption and insecurity, improve on the business environment and evolve youth reorientation programme to cause them to embrace entrepreneurship. The methodology adopted for this work is narrative textual case study.
Small And Medium Scale Enterprises (SMEs) And Nigeria’s Economic Development
Mediterranean Journal of Social Sciences, 2014
In a developing country like Nigeria, there several socioeconomic conditions impeding meaningful development, despite many interventions and policy strategies. However, Small and Medium Scaled Enterprises (SMEs), if fully developed have been identified as being beneficial in alleviating poverty through wealth and job creation. This sector can benefit any government that develops it to the extent that it has the capacity to grow a country's GDP, generate taxes and other revenue, as well as assist in bringing stability in the polity of a country. The corporate world can also gain from the specialised goods and services of SMEs and the healthy market competitiveness it promotes, thus giving way for a strong private driven economic sector, with entrepreneurs springing up. In Nigeria, the prevailing economic and political conditions have not given room for SMEs to thrive, as evidenced in the challenges they are currently facing in the country. Despite these challenges, SMEs are associated with immense benefits which can be harnessed to better the Nigerian economy. This forms the subject of analysis in this paper.
The paper discussed Issues, Challenges and Prospects of Small and Medium Scale Enterprises (SMEs) in Port-HarcourtCity, Nigeria. This was informed by the high rate of unemployment in the society and the poor performance of SMEs in employment generation. While the research questions addressed the extent to which poor financing, inadequate social infrastructures, lack of managerial skills and multiple taxation constitute major challenges in the performance of SMEs between October 2012 and November 2013, it assumes that government intervention through the provision of financial assistance, social infrastructures and favorable taxation policies will reverse the trend. The paper adopted a descriptive research design using 120 randomly selected registered operators of SMEs in Port-Harcourt City. Data collected were analyzed using descriptive statistics while formulated hypotheses were tested using z-test. Results from the data analysis indicated that poor financing, inadequate social infrastructures, lack of managerial skills and multiple taxation were major challenges confronting SMEs in Port-Harcourt City, thus recommended:provision of soft loans to SMEs operators, government guaranteeing of long-term loans to SMEs operators, establishment of SMEs funding agency, public/private sector partnership in infrastructural provision, capacity building for SMEs operators and provision of tax incentives for SMEs operators.
2021
The purpose of this study is to assess the role of small and medium-scale enterprises (SMEs) as a catalyst to all things good in great economies; however, sadly, Nigeria has been unable to unlock SME development and the many benefits. The paper’s examination revolves around SMEs and entrepreneurial development, employment generation, government policies and financial aid and its availability. With the intention of establishing the relevance of government role in creating vibrant economies via thriving SMEs and its ripple effect on employment generation.,The study adopts a survey design, using a questionnaire for data gathering and percentile, confirmatory factor analysis (CFA) and structural equation modelling (SEM) for data analysis.,The study established a significant direct relationship between entrepreneurship development and infrastructure development and employment generation. Also, there was a significant direct relationship between government policies and infrastructure deve...
SMEs in Nigeria have not performed creditably well and hence have not played the expected vital and vibrant role in the economic growth and development of Nigeria. However, the role played by SMEs, notwithstanding their development, is everywhere constrained by inadequate funding and poor management. It is against this background, the research problem is form. It is however imperative to examine the challenges, growth and development of small medium scale enterprises (SMEs) in Nigeria business environment. Review of several literatures was done on the subject matter. Quantitative Survey technique was used and a total sample of one hundred and fifty questionnaires was sampled, one hundred and thirty-eight (138) respondents returned completed questionnaires. Purposive random sampling technique was used to select one hundred and fifty (150) SMEs owners in some selected locations in Lagos State (Amu Olorunsogo, Mushin, Ladipo and Alabi International). Descriptive statistical techniques such as frequency distribution and percentages were used to analyze demographic of the respondents while mean score was also used to analyze the research questions. The inferential statistics of variances ANOVA) Analysis was used to test the hypothesis as a research method of analysis. Results however, revealed that the identified challenges affect the growth and development of SMEs in Nigeria. Based on these findings, it was recommended that Government should develop a lasting solution to the state of infrastructural deterioration especially electricity. Furthermore, policies which are aimed at rural development should top the lists of policies aimed at developing the already or semi-developed urban centers so as to reduce rural-urban migration and there is the need for clear national development objectives to meet the needs of the SMEs sector.
Challenges Affecting the Performance of Small and Medium Scale Enterprises (Smes) in Nigeria
Journal of Human Capital Development, 2015
Small and medium scale enterprises (SMEs) have been identified as the catalysts and builders for economic growth and national development for both developed and developing countries, particularly Nigeria. The objective of this study is to investigate the challenges affecting the performance of SMEs in Nigeria. This paper identifies the challenges affecting the performance of SMEs in Nigeria to include financial constraints, infrastructural problems, management problems, marketing problems, technological problems, corruption problem, lack of skill labour, government unfavourable fiscal policy and policy inconsistence’s, inadequate training, socio-cultural problem, strategic planning problem, multiple taxation, and location and business environment problem. But this study discovered that the major challenges that affect the performance of SMEs in Nigeria are finance, infrastructure and training among other challenges which this study adequately focused on. This study suggests that fin...
The study examined the impact of SMEs development on economic growth and development and also identified factors that contribute to the development of SMEs in Nigeria. Structured questionnaire was used to collect data from seventy (70) respondents in different sectors through judgemental method. The method of analysis is that of correlation coefficient and multiple regressions while the method of estimation is Ordinary Least Squares (OLS). The result revealed that SMEs development has significant impact on economic growth and development in term of poverty alleviation and employment generation. The study also indicated that access to finance is a major problem to SMEs development in Nigeria. The study concluded that SMEs development in Nigeria is an antidote to unemployment and poverty. Therefore, paper recommended that government should assist SMEs operators to have access to funds at lower rate of interest and reduce the importance attached to the collaterals and also federal government should provide enabling environment for the SME operators through provision of social amenities and reduction of excise duties.
Twintech Business School Review Malaysia, 2011
The paper notes that an action which needs to be taken over ten years for proper foundation to be laid, if rushed in two years will still be defective and inste a good result will more than escalate the problem. This is the true picture of Nigeria. It is contended that Nigeria is supposed to have joined the league of industrialized nations by now, but the fact remains that successive governments since independence did not give adequate attention to applying the right medication to the ailing economy. This pap examines the poverty situation in Nigeria. There is a focus on theoretical background with particular emphasis on defining the Small and medium Enterprises (SMEs). Effort is made in this paper to expose the economic development potentialities of small a medium scale enterprises It is noted that SMEs have, and are still performing the magic in the Asian countries like Taiwan China, Singapore Koreo and other South countries, and presently these countries are forces to reckon with in the world efforts of the past and present administrations were examined and reasons why the steps taken did not catapult the country forward economically were equally highlighted with recommendations on how the SMEs could serve as catalyst to economic dev Nigeria A model for actualizing the recommendation is presented The paper concluded on the note that the future development of Nigeria rests on effective promotion of the SMEs.