2.1.5.2 Small Businesses in Africa.
Despite the claims globally to the talismanic success of SMEs, Africa is
yet to catch up with the fever. In the words of Asmelash (2002), despite
the ”repeated public announcements about their assumed importance as
instruments of development, SMEs in many African countries enjoy a
lukewarm support. They lack effective organisation and knowledge of
modern management techniques. Organisations created to promote SMEs are
not sufficiently prepared for the task and the interference with
policy-makers leaves much to be desired”. Although this is true, it is
not always so because one cannot overlook the successful small
businesses we see in the streets of Lagos, who despite the constrains of
poor social infrastructure particularly electricity and water supply
still remain economically viable. There is also the problem of frequent
harassment by government officials who extort money from these
businesses.
Small business remain a veritable tool for encouragement of
entrepreneurship, creating immediate employment opportunities, promoting
inter- and intra-regional trade, breaking monopoly of larger enterprises
as well as alleviating poverty (Cook and Nisxon, 2000) world over. They
can usually be established rapidly and put into operation to produce
quick returns. Several African small businesses do not fall short of
these qualities but that cannot be justified in the present scheme of
things. The reason however is not farfetched because corruption and
political instability continues to thrive. Small businesses in Nigeria
probably dipped with the introduction of the Structural Adjustment
Programme (SAP) in 1986 by the Military government of General Ibrahim
Babangida.
The SAP policy according to Mambula (2002) caused the value of the
national currency to decline. This made it difficult for small business
to afford to train their workers overseas and obtain foreign exchange to
order or purchase machinery and spares parts.
Small business remains a viable alternative to foreign direct
investments (FDI) which are difficult to access as a result the high
risk ratings of developing countries like Nigeria (Mambula,2002).