The Role of Small Scale Industries in Rural Development in Nigeria

THE ROLE OF SMALL SCALE INDUSTRIES IN RURAL DEVELOPMENT(A CASE STUDY OF ANAMBRA EAST LOCAL GOVERNMENT)

There is no doubt that small-scale industries are veritable tool for development have attracted a lot of attention and comments from various authors both government and non-government.  Institutions, even individuals.  This implies that a lot has been said and written of small-scale industries particular now that the governments (state and federal) places emphasis on rural development as a means of achieving overall national development.  In reviews of only those works that are relevant to the study with view to appraise the importance of small-scale industries in a national development.  The federal government in her industrial policy stated that rural areas will henceforth be made to feel the positive impact of industrial development through a programme of rational dispersion of industries to cover the rural areas and other hitherto neglected areas of this country.  To achieve the goals, the government resolved to set up a co-ordinating body in federal ministry of industries known as “small-scale industries corporation”.  This body is charged with the responsibility of promoting small-scale industries through the development of polices and programmes, provision of extension services, technical and management assistance.

The government believes that dispersion of industries (small scale industries) in the rural areas will provide employment opportunities, hence, reducing the unemployment problem.  It, then defines scale-scale industries as those industries.  “With total investment of between one hundred thousand naira (100,000) and two million naira (2,000,000) exclusive of land including working capital.

Funds for Small-Scale Industries (FUSSI) sees “small-scale industries as those manufacturing, processing or servicing industries with a capital of investment of one hundred and fifty thousand naira (150,000) in machinery and equipment alone”.  This sechdes working capital and cost of land.

National Economic Reconstruction Fund (NERFUN) sees small-scale enterprise “as those firm’s whose its fixed assets value do not secede ten million naira (N10,000,000) excluding cost of land and working capital.

Japan employs a different measures between the industrial and commercial sectors.  Thus, include a capital measure and a maximum size of three hundred (300) employees in manufacturing sectors and a maximum of fifty (50) employees in comers.

Central Bank of Nigeria in its own detunes “small scale enterprise as those firm’s whose total cost excluding cost of land but including working capital do not exceed ten million naira (10,000,000).

The Nigeria Bank for Commerce and Industries (NBCI) defines “Small-scale industries as an industries with capital not exceeding seven hundred thousand naira (700,00) including working capital but secluding cost of land.

Obatemi Awolowo University – Ille – Ife (the centre of industrial research and development) defines “small scale industry “as those firms whose total asset in plant equipment and its working capital do not exceed two hundred and fifty (250,000) and with not more than fifty employees.

The industrial policy of Nigeria, published by Federal Ministry of Industries, sees small-scale firms “as those investment whose total investment is between one hundred thousand and two million naira (N100,000 and N2,000,000) exclusive of land, but including working capital.

Ovemba of the opinion that both short and long-term development of Nigeria should be based on rural development because about 80% of the population resides in the rural areas.  He further says that for a successful rural development vis-à-vis national development appropriate Indus tries (small-scale industries) should be established in these areas.  It is his belief that the create employment to population not engage in agriculture to process and preserve agricultural produce which will subsequently generate more revenue for further development.  He submits that this will drastically refuse, if not eliminate rural – urban drift.  His conclusion is that the degree of rural industrialization on will determine the overall success of Nigeria Development Programme.

The Nigerian Economists believe that Nigeria’s march to industrialization can only be attained through the establishment of small-scale collage industries adding to some third world countries of which is among, therefore, urges Nigeria to emulate those countries as India.  Hong cong, Taiwan South Korea and others in their industrialization targets.  Ojemba and the Nigeria Economist are very explicit that they need no further clarification.  They have hit the nail on the head.

Pointing out that these is no universally accepted definition of a small scale industry; Okore defines 16 as wholly indigenously owned enterprise with less than investment of four million naira (N4,000,000) in capital equipment, plant and working capital.  He also agrees that establishment of such industries creates new employment opportunities particularly in labour- intensive economy such as Nigeria adding that small-scale industries are very crucial in the present economic downturn in the mobilization of capital, material and human resources that would have otherwise been lying plc.  He equally believes that they help in checking regional imbalance by reducing the rush to urban centers in quest of white – colar jobs and its associated problems of unplanned urbanization.

Okore definitions, implies that small-scale industry varies from author to author and from country to country or even state and largely depends on the circumstance(s) or purpose(s) for which definition is being made.

Though, small-scale industry has no specific accepted definition, therefore, there are standards adopted by people or institutions who define small scale industry.  These standards as based on the number of employees, fixed capital, criterion, and volume of sales, size of asset, profitability rate.  Any definition must have to be flexible for easy adjustment and to keep with changing needs of industrial development.

However, small-scale enterprise definitions portrays two approaches – (quantitative approach and qualitative approach).  A quantitative approach talks or deals of size of people in employed firm, sales volume profitability of the firm.  While quantitative approach shows four characteristics as follows:.

1. Owner supplier manager
2. Capital supplied by one person
3. It operates in local area
4. The size is small in consideration with other industries

2.2     GOVERNMENT ROLES IN PROMOTING SMALL-SCALE INDUSTRIES

Government are playing important role in promoting small-scale industries in Nigeria.  She have established several bodies organisaitons that provide financial, managerial, technical and serve as consultant to small scale enterprises.  However, Funds for Small Scale Industries (FUSSI) is intended for making finance available for potential industries in Nigeria.  This organisaiton having assessed the enterprises ability and inability ought to determine their needs and wants.  Besides, several industrial banks were established to called for small scale industries financially.  These banks are as follows:

1. THE NIGERIAN INDUSTRIAL DEVELOPMENT BANK (NIDB)

This bank was established in 1964, owned Jwnthy by federal government and central bank of Nigeria.  The bank is to provide medium and long term fund for small-scale enterprises; offering of consultancy services such as technical, managerial and supervising the implementation of project financed.  The bank also promotes and develops of feasible or viable projects to investments.  Besides, it induces capital market in Nigeria by encouraging prospective borrowers to list their shares in the Nigeria stock exchange.

1. PEOPLE’S BANK OF NIGERIA (PBN)

The federal government in her efforts to assists the very entrepreneurs set up the people’s bank of Nigeria.  The bank was established on 3^rd October 1987.  The objective is to innovate credit to poor people who due to non availability of collaterals do not have access to the facilities available at commercials banks.

1. THE NIGERIAN AGRICULTURAL AND COOPERATIVE BANK (NACB)

The bank was established in 1973 by Federal Government.  It was set up to improve level and quality of all aspects of agricultural production to enhance the availability of storage facilities and promote marketing of agricultural products through liberal credits to farmers and other agricultural related establishments.

• CLASSIFICATIONS OF SMALL SCALE INDUSTRIES

Small scale industries are classified in several ways and as follows:

1. Retailing Food: Grocery, fast prepared, restaurant, specially shops such as appliances, hardware, clothing and building materials.
2. Service: Auto repair, appliance repair, building repair, plumbing travel agencies, renovations floor covering, electrician etc.
3. Wholesaling: Jobbers, brokers, distribution, and manufacturing.
4. Research and Development: Materials, products information systems, software, manufacturing systems and equipments.
5. Consulting: Management, marketing information system, legal, development, engineering, economic government, management and financial investment.
6. Manufacturing: Constructions, metals, sheet metals, paper and pulp e.t.c

• TYPES OF BUSINESS AND LEVEL OF TURNOVER

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