ABSTRACT
This
research work centers on the epileptic power supply and the performance of
small and medium scale industries in Nigeria from 1986 – 2010. carrying out
this study, secondary data were collected and empirical analysis was made to
achieve these objectives, multiple regression were used in anglicizing the
data. In investigating this problem, the researcher introduces 2 hypotheses
that epileptic power supply changes has no significant in Nigerian econometric
mode were used for evaluation and testing of the hypothesis. The researcher
made use of the ordering least square (OLS). The out come of the model shows
and confirms that epileptic power supply changes has a negative impact on
Nigerians. And that a unit change in epileptic power supply has a positive
impact on both the gross domestic product and balance of payment in Nigeria.
Based on the findings, certain recommendations were made which include
government increasing its efforts in tackling the issue of corruption and
fraud.
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The economy is a
complex dynamic factor, requiring greater attention in terms of its analysis
and efficient management for productivity, stability growth and increased
standard of living of people operating
Nigeria.
Since 17th
century efforts was made to promoting economic growth and have focused on the
small and medium scale industries (SMIS) as the keys and the development of an
economy and manufacturing sector in general. The role of small and medium scale
industries in the overall growth and development of an economy‟s manufacturing
sector in particular and the economy in general cannot be over emphasized.
Small and medium scale industries are indeed high potentials for development in
term of employment generation and wealth creation in any economy. Empirical
studies have shown that the small and medium scale industries (SMIS) have in
many state has enhanced greater employment opportunities per unit of capital in
vested and aided the development of local technology. This explains the deep
interest which developing nation has shown in the promotion of small and medium
scale industries since the 1970s.
Moreover, the
potentials of small and medium scale industries in contributing substantially
to the economic growth and development of Nigeria has been hampered by various
constraints, inducing long term capital inadequate financing unavailability of
information for potential investors, poor management practices and low
entrepreneurial skill, over bearing regulatory and operational environmental,
unfavorable tariff policy and infrastructural deficiencies such as inadequate
power supply.
These
constraints also limit the performance of small and medium scale industries in
Nigeria.
Although, it is
a widely held view that the availability of credit as the most critical to the
performance of small and medium scale industries (SMIS), but some studies have
shown that a large number of small and medium scale industries fail because of
non financial reasons such as infrastructural deficiencies (Liedhorm et al
1994). One of the infrastructual facility affecting the performance of the SMIS
in Nigeria is epileptic power supply (electricity). Due to inadequate provision
of power supply constitutes one of the greatest constraints in SMIS
development. The current situation whereby each investor is too provide
electricity is, to say the least, tasking to the SMIS investors who generally
lacks adequate capital for the business and the result of this is low return on
investment due to high operations cost. Therefore, adequate power supply is
necessary to ensure cost effectives in vestments in small and medium scale
industries (Charles Soludo, 2005).
It is however,
noteworthy, there is need to objectivity access the Nigeria and impact of epileptic
power supply on the performance of the SMIS sub-sector of the Nigeria
manufacturing sector.
1.2 Statement of Research Problem
Small and medium
scales industries in both developed and underdeveloped nations plays an
important role in the process of economic development and industries. In spits
of the relevance of the small and medium scale industries to Nigeria economy
and industrial development, on that sector faces a lot of problems.
Although there
are various factors affecting the performance of small and medium scale
industries sub sector ranging from inadequate capital to unfavorable tariff
policy, however, the poor state of power supply in Nigeria is one of the
significant factors militating against the performance of small and medium
scale industries.
The equality and
quantity of a country‟s power supply determines its ability to create
competitive industries. Since the performance of SMIS in any state is greatly
influenced by the electricity supply. Given the pathetic state of power supply
in Nigeria it is no wonder that the contribution of the development the state,
manufacturing sector and the economy in general is very negligible or
unsupported by the government.
An overview of
the performance of the small and medium scale industries in Nigeria shows that
past policies made limited impact on the sector for example, it is estimated
that SMIS account for about 80 percent of the total industries employment in
Nigeria, but only contribute 15-20 percent of total manufacturing output.
Power supply has
remained unreliable and power out-age load shedding and rationing have become
very frequent. Power supply had been erratic and unreliable that many
businesses have resorted to
purchasing private generators at
prohibi
-ost. The substantial investment in private generating plants
is estimated to be of capacity of over 250mm, which is almost half of power
holding company of Nigeria (PHCN) available capacity.
1.3 Research
Questions
The study would
therefore provide answers to the following fundamental questions.
(1)
How does power supply affect the performance of small
and medium scale industries in Nigeria?
(2)
Are there linkage between power supply and the
performance of small and medium scale industries in Nigeria?
(3)
What contributes to failure of power supply and
manufacturing sector?
1.4 Objective Of The Study
The objectives of
this research study are to provide a clear picture on the activities of effects
of power on the performance of small and medium scale industries. The specific
objectives of the study are:
(i)
To examine the impact of power supply on the performance
of small and medium scale industries in Nigeria
(ii)
Solutions polices options and recommendation
(iii)
To identify the problems of that might be against the
effectiveness of small and medium scale industries in Nigeria.
1.5 Hypotheses
The broad objective
of this study is to assess the performance of power supply to small and medium
scale industries in the state. The
specification
objectives of the study a
re as follows:
(1)
(Ho; No significant dependence) the performance of
small and medium scale industries is not dependant on the quality and
availability of adequate power supply in Nigeria.
(2)
(H1; Have significant dependence) the performance of
small and medium scale industries is dependent on the quality and
1.6
Justification
of Study
This study is
significant of selected growths. It will add to the available literature on the
study area. Power supply is a problem to the state government and its citizens.
From experiences our various industries, there is no doubt that the small and
medium scale industries over the year have been at the receiving end of the
economic environment in the state.
Infact, the contributions of the sector has been declining over the years.
Hence, this study will create awareness to the government to see the extent to
which neglect of infrastructural facilities such as electricity is hampering
the performance of SMIS in meeting their potentials of the providing employment
per unit investment capital,
facilitating the development of indigenous entrepreneurships, enhancing local
resources utilization and value added expanding non oil exports at competitive
prices, improving balance of payment position and bring about disagreed overall
growth and development of the state economy.
The lack of power
supply in the state serves as external diseconomics for SMIS adversely
affecting their performance, productivity and profitability.
1.7
Scope of the
Study
The research work is
concerned basically with the roles to lay emphasis on power supply and the
performance of small and medium scale industries in the state and will cover
those SMIS in state that have electricity as relevant infrastructural for their
production process. The analysis covers a period of 1986-2010.
The basic limitation
of this study is the completing nature of sources of statistical inputs. The
data obtained from the annual bulletin, journal, and statistical data text
books, magazines and seminars reports etc. consequently the information given
is extracted from the CBN and others sources of secondary data.
1.8
Plan of the
Project
This study will
be structured into chapters. Chapter one will cover the introduction of study
statement of the problem, objectives of study, hypothesis, justification of the
study, scope and limitation of the study.
Chapter two also
will be review of the relative literature which will include the
conceptualization of terms, the theoretical framework and empirical literature.
Chapter three also
is research methodology of the study which includes the sources from which data
will be collected and the method of data collection is field survey. This
chapter also highlights how the sample will be designed, in terms of the
technique questionnaire as an entrustment of data. Chapter four will include
the presentation of result and analysis which will follow the objectives of the
study and nature of the results obtained and also the testing of hypothesis.