Introduction
1.1 Background To The Study
Good and sufficient infrastructure is a key stimulus to the development of small scale enterprises are catalysts in the socio economic development of a country, which implies that infrastructure impact on small scale enterprises in Nigeria manifold. These small scale enterprises are a veritable vehicle for the achievement of natural macroeconomic objectives in terms of employment generation, good source of raw materials for big industrial complex, the development of entrepreneurial capabilities and indigenous technology.
The catalytic role of small scale enterprises has been made possible with the aid of adequate infrastructure. Infrastructure is conceptually, perceived by social scientist from two interrelated dimensions and these interrelated dimensions can also be called the infrastructure sectors. The social services which include the provision of education, information, town and country planning, health services and other social welfare services in the society. Given their welfare related services, their outputs are usually defined as the social services. Sun − sectors of the entire infrastructural sector.
The economics infrastructure sub sectors which is the main focus of this paper embraces a group of hard core economic activities which related to the provisions of energy and power, transformation (air, water, road and rail) services, water and communication (telephone, telex, telegram and postal) services. By the nature of these economics services, they are generally defined as a utility with their sub sector is also known as the utilities sub sector of the infrastructure sector.
Adeyemo (1979), also sees physical infrastructure as the totality of basic, physical facilities upon which all others economics activities in the system, significantly depends. Infrastructure services are central to the activities of household and economics production. The development of infrastructure generally enhances welfare and faster economic growth.
Major infrastructure failure occasional by natural disasters or civil disturbances, such as destruction of power stations, roads, and bridge and water supply, could radically reduce communities quality of life and the productivity of the small scale enterprises in Nigeria. Thus, providing infrastructural facilities to meet the demand of business and households is one of the major challenges of economics development.
The abundance of evidences on the poor state of infrastructure and it adverse effects on small- scale enterprises in Nigeria brings to fore the rationale for this study. In particular, the physical conditions of Nigeria’s infrastructure, water supply, sanitations, roads, electricity among other is generally poor. All types of infrastructure suffer from a massive backlog of neglected rehabilitation and maintenance, not to speak of investment needed to serve future growth.
For instance, most enterprises and manufacturing establishment in Nigeria have been compelled by this worsening situation to have its own electricity generators, which increase the production cost of such enterprises. Actually, most small scale enterprises have been grounded due to the poor condition of the available facilities. Most importantly, more attention should be given to the rehabilitation and upgrading of the existing infrastructure as it is expedient for the development of small scale industries which also plays important roles like employment generation, reducing poverty level, high contribution to the gross domestic products (GDP), increasing local value added and technological development.
The main focus of this paper is to analyze critically the various impacts of infrastructural facilities on small scale industries and government effort at correcting the problems. Roles and state of those infrastructures are also to be considered in relation for the small scale enterprises,
1.2 Problems Of The Statement
Infrastructure has a very strong influence on the development of small scale enterprises and it determines the profitability and continuity of small scale enterprises.
The impact of infrastructural facilities needs to be researched due to the problem small scale enterprises encounter from a smooth running of them enterprises.
The poor state of infrastructure in Nigeria has led to increase in the cost of production of small scale enterprises,’ and these problems rang from un-motorable roads, frequent power outages, poor communication link, lack of water supply to mention a few.
Considering the issue of power outage most enterprises in Nigeria have been compelled by this worsening situation to have their own electricity generators, and even seek other source of power supply thereby increasing their cost of production and any enterprises that cannot afford other source of power supply eventually folds up. This is one of the major problem being faced by small scale enterprises.
Another problem is that of the unmotorable roads which hinder the growth of small scale enterprises, the bad state of these roads increases transportation cost which also affect their turnover as of increase their production cost.
Furthermore, information which is a form of resources input for production is still very much elusive. This is evident with the high cost of obtaining different means of communication such as telephones, text message, telex to mention a few even with the advert of the global system for mobile (G.S.M), adequate information is still not attainable and this is attributed to the high cost of obtainable and even maintaining it.
Also, there is the problem of water supply infact most enterprises dig boreholes to ensure their own private water supply, which also increases their production cost. There are extra cost added into small measures to total machinery and equipment budget of enterprises. (The world bank, 1998).
In spite of the problems small scale enterprises encounters from the above mentioned inadequate infrastructural facilities, they are also faced with the problem of finance because it is an important determinant of establishing any enterprises and this problem is basically
Though, government has for a long time been committed to small scale enterprises development which is evident through the Central Bank of Nigeria (CBN) credit guideline on the minimum credit commercial and merchant bank should lend to the small scale enterprises but the banks are relevant to discussed below.
The problem of high mortality rate, banks perceive small scale enterprises as high risk borrowed and are usually unwilling to provide loans for them, the perception may not be informed as many small scale enterprises lack financial integrity.
1.3 Aims And Objectives Of The Study
This study aims at examining a number of factor, which are significantly for a visible small scale enterprises that will promote and enhance the productivity of an economy.
The specific objectives of the study are:
- To analyze the roll of infrastructure at enhancing capacity utilization in small scale enterprises in Nigeria.
- To identify and enhance the various factors that impedes the development of small scale enterprises, especially in the area of finance and infrastructure facilities.
- To offer suggestions and make recommendations at enhancing the adequacy of infrastructural facilities in improving the profitability of small scale enterprises in Nigeria.
1.4 Research Hypotheses
Hypothesis is a tentative statement about an observed fact of a distribution. The respondent enables the researcher to make valid conclusion.
The researcher either accepts or rejects the hypothesis by testing for the validity or otherwise of the hypothesis.
Hypothesis I
Null Hypothesis:
Small scales are not essential for national economic development growth.
Alternative Hypothesis:
Small scales are essential for national economic development growth.
Hypothesis II
Null Hypothesis:
The quality of infrastructure in the country is not good enough for optimal productivity of the small scale enterprises.
Alternative Hypothesis (HI):
The quality .of infrastructure in the country is good enough for optimal productivity of the small scale enterprises.
1.5 Scope Of Study
The study shall be based on selected small scale enterprises in Nigeria precisely Lagos state where several industrial activities takes place. The places selected are: Ijora, Ikeja, Ilupeju and Oshodi area in Lagos state with their output infrastructure relatively analyzed.
Due to the broad native of this topic the research shall be based on key infrastructure such as electricity, transportation (condition of the roads), telecommunication and water. The restriction is due to the fact that cost of transportation and power supply often constitute major input cost apart from raw materials. For production process, communication is also a key aspect of infrastructure which should be considered.
1.6 Research Methodology
The methodology to be adopted in this research work will include, the gathering of data through primary source by the use of questionnaire as well as personal interview.
The primary data will be gathered by the researcher himself and this involves a systematic collection of information from respondents for the purpose of understanding some aspect of the behaviour of the population. The purpose of data would be through self − administered questionnaire and oral interview with some private investors and management staff of the selected small scale enterprises.
The secondary data shall also be of great important and relevance to widen the source of data and this should be through textbooks and journals. Methods of analysis to be adopted in this study will be if chi-square analysis coupled with descriptive analysis
1.7 Plan Of The Study
The research study is divided into five chapters.
Chapter One:
This contains the general introduction of the research work, the identification or problem statement, aim and objectives of the study, research hypothesis, scope of the study and research methodology
Chapter Two:
It deals with the literature review of the study, theoretical framework and also conceptual definitions.
Chapter Three:
This covers the research) methodology the research design, method of data collection, production of the study, sources of data collected among others.
Chapter Four:
It deals with the analysis of data, presentation of data, testing of hypothesis and the interpretation of result.
Chapter Five:
Finally, chapter contains the summary of the findings, conclusion, and the recommendations made, also with limitations of the study.
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