Nurturing Small Businesses And Entrepreneurs In The South-East Of Nigeria: Problems And Prospects

Research Article
Uche G. Akam., Ellis I. Idemobi and Innocent C. Nworgu
SMEs, Entrepreneurship, unemployment, infrastructure, economic growth, industrial cluster

This study on developing a strategy and action plan for nurturing small businesses and entrepreneurs in the South-East of Nigeria is critical for generating a road map with which to encourage more local residents, especially young people, to consider entrepreneurship as a career option and to understand the importance of these firms for national economic prosperity. This would help to drastically reduce the rate of unemployment and crime in our society. The maximum variation sampling technique ensures that all the LGAs in the South-East as well with dimensions of interest are included in the samples collected was adopted. Data generated through questionnaire were analysed using percentage, chi-square and test of proportion statistical tools. The result of the study indicate that certain factors negatively affect the performance of SMEs significantly. These factors include poor electricity and water supply, lack of good road network, inability to access credit from the formal financial sector, inadequate supply of foreign exchange and raw materials. Other factors are unfavourable business environment which manifests in multiple taxation, bureaucratic bottlenecks, official corruption and high utility charges, all of which add up to constitute what is generally referred to as high cost of doing business in Nigeria. It was also found that the regulatory and policy environment of SMEs are bad. In particular, trade liberalization and globalization presents new challenges for SMEs. They have to contend with substitute products from their relatively more mature overseas counterparts who produce their goods under a friendlier environment. But despite all these challenges, the role of SMEs in developing indigenous entrepreneurship and creating employment opportunities in Nigeria cannot be overlooked. Though the operating environment has not been as expected, the sector has continued to be the engine of the development of the economy in one way or the other. It was recommended that for SMEs to contribute meaningfully to the growth and development of the economy, the problem of infrastructure must be dealt with decisively, especially in the area of electricity supply and provide conducive business environment by taking care of the infrastructural problem, running a tax regime that is devoid of multiple taxation, solving the problem of insecurity, dealing decisively with the issues of corrupt practices and eliminating all appearances of bureaucratic bottlenecks as well as making credit available at low interest rate.