The role of small scale industry in national development in nigeria




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B. Provision of Infrastructural Facilities

Dividedi (1985) argues that the infrastructural facilities created by government helps the growth of small scale business by facilitating the accusation of required inputs, these facilities are the essential infrastructures that assist and promote investment. Some of them are;



      • Provision of access roads;

      • Increased improvement in communication facilities like telephone, postal services, NITEL, etc;

      • Provision and expansion of electricity;

      • Water expansion schemes to service industrial of business sites.

      • Construction of industrial layouts/estates;

      • Establishment and maintenance of an Export Processing Zone (EPZ)



The provision of all these facilities help the small scale business to expand through quick movement of goods and services, expansion of markets for products and lead to a relatively cheaper investment cost.

C. Provision and Constant Manpower Development Support

With the establishment of various institutions, especially the universities and polytechnic, the government directly help in the provision of skilled manpower at every level of management for the economy and small scale business. Apart from the tertiary institutions, government also established and finances some specific manpower development and training institutions. Some of them are the Centre for Management and Development (CMD), the Administrative Staff College of Nigeria (ASCON) and the Industrial Training Fund. The products of these Institutions are extensively utilized by businesses. The hitherto problem of technical and management manpower requirement are drastically reduced.



D. Establishment and Finance of Research Institutions

The government has assisted small scale business through the provision of some helpful research institutions. The research reports of these institutes are very useful to business organizations, not only in their product choice decision, but also in product development approach, product or service delivery strategies, thereby increasing business efficiency and effectiveness. The activities of Raw Materials and Research Development Council (RMRDC) are worth of note. This council through it affiliated institute conduct research into cheap sources and of alternative raw materials for various businesses. Its role has been so tremendous as small businesses take advantage of some discoveries in the research report to boost and expand their operations, other research institutes include the Nigeria Industrial Opportunities Centre and the Investment Information and Promotion Centre.


E. Provision of Direct Financial Assistance to Small Business Organisation
The Nigerian Government often gives direct financial assistance to business organization, some of the specific ways by which government gives financial assistance to small businesses are:

      • The establishment of specific financial institutions to serve a given or determined business factor e.g. People Bank, Nigeria Agricultural and Cooperative Bank for Commerce and Industry.

      • Direct financial assistance or loans to some business through a package of subsidized or discounted loan portfolio e.g. NEBFUND Scheme, Small Scale Industrial Credit Scheme (SSICS).

      • The creation and sustenance of many development and finance institutions for the purpose of providing long term funding on a generous or beneficial condition to business enterprises at Nigerian Industrial Development Bank, New Nigerian Development Company Limited, Peoples Bank of Nigeria Limited and the Northern Investment Limited.

The National Directorate of Employment (NDE) as a Guide towards Enhancing Small Scale Industries in Nigeria


The National Directorate of Employment was set up by the Federal Government in November 1986, to work out strategies for dealing with the mass unemployment in the country, especially among school leavers and university, polytechnic and college graduates.
The NDE has articulated a number of programmes to give effect to government objectives of generating employment. The programmes can be broadly categorized as follows:

(a) Small Scale Industries and graduate employment programme.

(b) National Youth Employment and Vocational Skill Development Programme.

(c) Special public work

(d) Agricultural programme
The main thrust of the NDE’s programme is to assist applicants in setting up their own businesses in agriculture, small scale industries, etc and to enable them employ additional hands in their establishments, thus helping to reduce the level of unemployment.
These programmes are backed up by necessary administrative, monitoring and support personnel, thus enabling optimum use of resources and prompt response to the requirements of the public.

Small Scale Industry – Its Role in the Economic Development in Nigeria

Small scale industries have a lot of important contributions to make to the economic development of the country. Shokan, O. O. (1997) writes some of them as follows:




  • The provision of employment, innovation and areas marketing for goods and services which are offered for sales. A lot of youths, retired workers and out of school graduates are now gainfully employed, thereby reducing the unemployment rate and its attendant’s social complication of armed robbery and white collar crimes.

It helps to bring about new goods and services and supply the needs of large industries, who have to rely on the small scale operators for business success.





  • The represent the overwhelming majority of industrial capacity in developing countries. A fact confirmed by Olabisi Ajayi (1977), Ayozie, Daniel O, et al (1997) and Akinseye, C. A. (1997) where it was postulated that presenting small scale business in Nigeria constitute over 80 percent of all registered companies, occupying positions in agro based and allied industries, rubber based, leather shoes industries, chemical, electronics, general merchandising, restaurants, dress making, hair dress making, cane-chairs, leather products, pomade and toiletries, animal feeds and husbandry, printing, etc.

They promote the development of indigenous manpower as well as increasing local participation in the manufacturing sector.

Small scale business checks the effect of polarization by a planned and systematic development of rural areas. The much talked about urban migration is reduced by the introduction of small scale industries in rural area.



  • The activities of small business firms have resulted in the mobilization of the resources of the environment and thereby improving on the standard of living of the population.

They contribute to the labour market by absorbing an ever growing supply. In doing this, they have sufficiently helped to curtail the rising unemployment in Nigeria.

They have accounted for a large percentage of all businesses and a favourable percentage of the nations is gross national product. This fact is more relevant in the developed countries of Great Britain and United Kingdom where proper accounting system is kept.

Other noticeable impacts are its contribution to the development of indigenous entrepreneurship. Mention is being made of the Dantatas, Fajemirokuns, Igbinedions, Ekene Dili Chukwus, Lodibes, Dankabos and the Amazus.

Its contribution to the mobilization of domestic savings and utilization of local resources is also a noticeable factor. They serve as good agents for disposal of industrial products and some services and have contributed immensely to the production of raw materials in the form of semi-processed goods for use by bigger industries.

It is a base for the development of appropriate technology and provides a veritable ground for skilled, unskilled and semi-skilled workers. It has provided productive self-employment to a number of educated and less educated young men and women coming out of schools, colleges, polytechnic, and universities.

Ayozie (2001) specifically mentioned the role in the accelerated industrial development by enlarging the supply of entrepreneurs and the enlarging of small and medium enterprise sector, which offers better potential for employment generation and wider dispersal of industrial ownership.

It has assorted in improving the performance of small industries by enlarging the supply of carefully selected and trained well rounded entrepreneurs and diversifying sources of entrepreneurship and business ownership.



Marshall (1970), Cole (1959), Cantilon and Schmpter (1934), enumerated that the entrepreneur viz a viz the small scale business person is the most critical factors in the economic development of any Natlon. Entrepreneur organizes, and utilizes the various factors of production and finally sets productive machinery in action towards overall economic development; consequently, the availability of the small scale industry is therefore the undisputed precondition for economic growth. Schumpeter 91934) noted that the supply of entrepreneurs depends on the rate profit at the social climate seeking out activities and opportunities which will give him profit or reward, induces the entrepreneur to be innovative and to take on purposeful calculated risks.


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