Background to the Study
Small and Medium Scale Enterprises are sub-sectors of the
industrial sector which play crucial roles in industrial development
(Ahmed, S. 2006). Following the adoption of Economic reform programme
in Nigeria in 1981, there have been several decisions to switch from
capital intensive and large scale industrial projects which was based on
the philosophy of import development to Small and Medium Scale
Enterprises which have better prospects for developing domestic
economy, thereby generating the required goods and services that will
propel the economy of Nigeria towards development. It is base on this
premise that Ojo O. (2009), argued that one of the responses to the
challenges of development in developing countries particularly, in
Nigeria, is the encouragement of entrepreneurial development scheme.
Despite the abundant natural resources, the country still finds it very
difficult to discover her developmental bearing since independence.
Quality and adequate infrastructural provision has remained a
nightmare, the real sector among others have witnessed downward
performance while unemployment rate is on the increase. Most of the
poor and unemployed Nigerians in order to better their lots have
resorted to the establishment of their own businesses. Consequently,
Entrepreneurship is fast becoming a household name in Nigeria. This is
as a result of the fact that the so called white collar jobs that
people clamor for are no longer there. Even, the touted sectors (Banks
and companies) known to be the largest employer of labour are on the
down-turn following the consolidation crisis and fraudulent practice of
the high and mighty in the banking sector. The companies of course are
folding up as a result of erratic power supply, insecurity and
persistent increase in interest rate which has lead to high cost of
production and undermines profit making potentials of companies
operating in Nigeria. As a result of banking sector practices and
continuous folding up of companies, a lot of Nigerians are thrown into
unemployment which inevitably detriment the economic situation of the
country.
Since the office jobs that people desire are no longer there for
the teeming population, and few ones that succeeded in getting the jobs
are thrown out as a result of the factors identified above, the need
for the government and the people to have a rethink on the way-out of
this mess became imperative. Hence, the need for Small and Medium Scale
Enterprises (SMEs) became a reality as a means of ensuring self
independent, employment creation, import substitution, effective and
efficient utilization of local raw materials and contribution to the
economic development of our dear nation (Nigeria). All the aforestated
benefits of Small and Medium Scale Enterprises cannot be achieved
without the direct intervention of the government and financial
institutions. Over the years, a number of policies have been formulated
by the government with a view to developing Small and Medium Scale
Enterprises. The Nigerian government under the then leadership of Chief
Olusegun Obasanjo promulgated micro-finance policy and other regulatory
and supervisory framework in 2005.
The research will therefore examine the impact of small and medium
enterprise development on youth empowerment in Kaduna metropolis.
1.2 Statement of the Problem
There has been stunted growths and sluggish development in the
small and medium enterprises (SMEs) regardless of increasing targeted
government assistance streamlined to benefit firms operating in this
sector. There were several policies in the past which gave priorities to
entrepreneurship development, indicating the trust in government
policy in support of SMEs. The government of Nigeria identified
entrepreneurship development as a major thrust to achieve economic
development through SMEs growth and development.
This made Nigerian government both at National and State as well
as local government to prioritize small and medium enterprises
development initiatives by. As such the prioritization of the small and
medium scale by government at different level is echoed in almost every
policy document.
For example in the industrial development policy in vision 2020,
the Nigeria aim is to promote and support small and medium enterprise
as they are viewed as an important engine for employment creation and
economic growth. Although the government of Nigeria has been advancing
targeted support in marketing, management and finance and worse still
others collapsed. Egbe (2004) in this regard rated Nigeria as having
one of the lowest small and medium scale sector’s share of employment
in the world, when “250 employees” was considered the yard stick in the
definition of small and medium scale enterprise. Targeted government
assistance has been observed to play a pivotal role in starting,
growing and medium scale enterprise in Nigeria, (Beck, 2005; Zainab,
2008; Herbert 2008 and Atino, 2001). Although some entrepreneurs in
SMEs have received both financial and non financial assistance, many
are still small or are facing viability problems. In Nigeria, the SMEs
sector is facing to contribute meaningfully to the national economy as
was experienced elsewhere when governments advanced target support.
Targeted government support to SMEs was found to translate into
economic development in countries like Indonesia where SMEs accounted
for 98% of employment creation and growth with Japan and Thailand
having their SMEs contributing 81% and 78% to gross domestic product
(GDP) (Okoh, 2009).
This contrast has promoted the researcher to carryout a study to
investigate the impact of small and medium scale enterprise on youth
empowerment in Kaduna. As well as to find out the forms of government
support render to small and medium scale enterprises in Kaduna.
1.3 Objective of the Study
The central objective of the study is to examine the impact of
small and medium scale enterprises development on youth empowerment in
Kaduna Metropolis. The specific objectives are:
- To assess how small and medium scale enterprises development affect employment generation in Kaduna Metropolis.
- To investigate the forms of targeted government support rendered to small and medium scale enterprise in Kaduna Metropolis.
- To analyze the efficacy of government capacity building
programmes and support to promote the development of SMEs among youth
in Kaduna Metropolis.
- To evaluate the sufficiency of youths empowerment through SMEs
development initiatives in Kaduna and recommend possible policy
adjustments.
1.4 Research Questions
In order to affectively investigate the problem of this research,
the researcher formulated the following research questions:
- What are the effects of small and medium scale enterprises development on employment generation in Kaduna Metropolis?
- What kind of support does the government render to small and medium scale enterprise in Kaduna Metropolis?
- How effective is government capacity building programmes and
support in promoting the development of SMEs among youths in Kaduna
Metropolis?
How sufficient is youth empowerment through SMEs development initiative in Kaduna Metropolis?
1.5 Statement of hypothesis
In order to confirm the impact of SMEs development on youth
empowernment in kaduna metropolis and fully appreciate their respective
relevant significance, the following hypotheses is postulated:
H0: There is no significance relationship between SMEs development and youth empowerment in Kaduna metropolis.
H1: There is significant relationship between SMEs development and youth empowerment in Kaduna metropolis.
1.6 Significance of the study
The study will be beneficial to entrepreneurship development; as
such Kaduna state government can utilize the findings of the research
as a basis for policy formulation as regard entrepreneurship
development.
The study will also contribute to the existing knowledge on entrepreneurship development.
It is also worthy to note that the study can be use as a basis for
further research, as the research can be use as a spring board for
further research as well as a good reference material to students
undertaking similar research.
1.8 Scope of the study
The study covers an empirical examination of the effect of small
and medium scale development on youth empowerment in kaduna metropolis.
The study also identifies the practical approaches use in developing
entrepreneurship as well as the problems militating against
entrepreneurship development. The study is limited to Kaduna metropolis.
The study covers a time from 2006 – 2011.
1.7 Limitation of the study
The study is limited to Kaduna metropolis, as it will be difficult
to cover other part of the state due to the duration of this study.
For the fact that a survey study was used as the research design
as well as the questionnaire as the research instrument, it is not
certain if the same result would be obtained if other designs and
instruments were used. Besides, another limitation is that the
respondents could have either over exaggerated or understate their
responses while scoring the items in the questionnaire. Also the
nonchalant attitude of some of the respondents could affect the
validity of their response to the questionnaire. This limitation should
be taking cognizance of other researches conducting similar studies.
1.9 Definition of terms
- Entrepreneurship: is an innovative act, which includes endowing existing resources for new wealth – producing capacity (Afonja, B. 1999).
- Entrepreneur: An individual that
identifies develops and brings vision to life under – condition of
risk and a considerable uncertainty (Bashar, O. 2005)
- Entrepreneurial Characteristic: These are traits that make an individual an entrepreneur (Tonga, R. 2009).
- Business Performance: The success or failure of an enterprise (Tonga, R. 2009).