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.