2.1.5.6 The Current Status of Small and medium sized enterprises
in Nigeria
Successive governments in Nigeria have initiated numerous programmes and
policies to generate employment, reduce poverty and engender
development. As at 2000, the incidence of poverty was believed to have
risen to 70 per cent at the national level (Obadan, 2003). According to
him,” the increasing incidence of poverty, both within and among
locations, was in spite of various resources and efforts exerted on
poverty-related programmes and scheme in the country, thus suggesting
that the programmes and schemes were ineffective and ineffectual.
Despite the plethora of poverty alleviation programme which past
governments had initiated and implemented, by 1999 when the Obasanjo
administration came into power a World Bank’s report indicated that
Nigeria’s Human Development Index (HDI) was only 0.416 and that about 70
percent of the population was vegetating below the bread line (Elumilade
et al, 2006)
The green revolution (aka ”Operation feed the Nation”), a brain child of
the military administration of General Olusegun Obasanjo initiated in
the late 70’s to address widespread poverty by encouraging involvement
in agriculture by both rural and urban dwelling citizens failed to yield
sustainable results. According to Obadan (2003) these programmes were to
designed to directly benefit the poor. The poor were expected to benefit
from the ”trickle-down efforts”.
Other poverty reduction and employment generation initiatives in the
past include the establishment of:
1. The Department of Food, Roads, and Rural Infrastructure (DFFR1) with
the major aims of opening up the rural areas and to improve the
conditions of the vulnerable poor; which had long been abandoned.
2. The National Directorate of Employment (NDE) to tackle the problem of
mass unemployment.
3. The People’s Banking Nigeria (PBN) to cater for the credit needs of
the less privileged Nigerians.
4. The Better Life Programme (BLP) which was later replaced by Family
Support Programme (FSP) which was gender specific. It was meant to
improve the life of rural women. The programme failed because the
programmes were hijacked by position seeking individuals, who used most
of the resources for personal aggrandizement rather than for the set
objectives.
5. The National Agricultural Land Development Authority (NALDA), The
Strategic Grains Reserve Authority (SGRA) and the Accelerated Crop
Production (ACP) were all established to improve the productive
capacities of peasant farmers as well as improving their incomes and
well-being.
6. The Nornadic and Adult Education Programmes were also established to
assist in the eradication of illiteracy, which was found to be a major
cause of poverty. (Elumilade et al, 2006)
According 10 them, these programmes failed because of what could be
summarized as politics of personal rule in which the rivalries and
struggles of powerful and willful persons, rather than impersonal
institutions, ideologies, public offices, or class interests, are
fundamental in shaping political life and the master and servant
relationships associated with the programmes to alleviate poverty.
Since 1999, the democratically elected government also headed by General
Obasanjo have initiated a number of programmes aimed at poverty
reduction and employment generation, the major ones being the National
Poverty Eradication programme (NAPEP) and Small and Medium Scale
Enterprise development Agency of Nigeria ( SMEDAN). These programmes
were initiated in line with the international goal to halve the
incidence of poverty by 2015.
This time however the idea was to achieve this by encouraging skill
acquisition and ownership of small business. President Obasanjo
introduced the National Poverty Eradication programme (NAPEP) in the
second quarter of 2001 which was primarily meant to develop ”strategies
for the eradication of absolute poverty in Nigeria” (FRN, 2001). NAPEP
was established bearing in mind four core values; the Youth empowerment,
rural infrastructure development, Social welfare service and the natural
resource development and conservation schemes. This aims are helping the
youth acquire education and vocational skills, improve on basic
transportation, health, electricity and water infrastructure for the
purpose of effectively harnessing resources that are readily available
in the environment which of commercial importance.
It is now clear to the government of the day that only poverty reduction
programmes aimed at encouraging individual ownerships of businesses be
it production or service oriented is practical and sustainable. However,
despite these gains in policy, there remains a major lag in
infrastructure and energy supply to drive productive business
initiatives of the citizenry. For example, between January 1, 1989 and
August 2005 the pri of petrol (gasoline) was increased eighteen times
from about 60 kobo to N65, eleven of which were in the last ten years.
Constant power outages and inadequate power supply means that business
has to run on generators as well. As a result of these increases, the
production costs of business are always on the rise making it difficult
for Nigerian businesses, particularly small ones to operate and compete
with cheaper imported goods. Hence the challenge of infrastructural
development remains a stumbling block to an ambitious programme like
NAPEP.
Nigeria cannot develop without the small businesses since it is
productivity that drives eve^ business and it is believed that so far
small businesses have played a role no matter how little in our economic
development. Hence within this context of this thesis, the role of SMEs
in moving the economy of Matori community in Lagos State would be
investigated.