PROJECT TOPIC : SMALL AND MEDIUM SCALE ENTERPRISES DEVELOPMENT IN NIGERIA (A Case Study of Cassava Processing Industry) PROJECT PROPOSAL
BACKGROUND TO THE STUDY
Interest in the development of small and medium-sized enterprises (SMEs) and their contribution in the development process continue to be in the forefront of policy debates in developing countries. The advantages claimed for SMEs are various, including: the encouragement of entrepreneurship; the greater likelihood that SMEs will utilise labour intensive technologies and thus have an immediate impact on employment generation; they can usually be established rapidly and put into operation to produce quick returns. SME development can encourage the process of both inter- and intra-regional decentralisation; and, they may well become a countervailing force against the economic power of larger enterprises. More generally the development of SMEs is seen as accelerating the achievement of wider economic and socio-economic objectives, including poverty alleviation.
Staley and Morse (1965) identify a ‘developmental approach’ to SME promotion which has as its objective the creation of ‘economically viable enterprises which can stand on their own feet without perpetual subsidy and can make a positive contribution to the growth of real income and therefore to better living levels’. This approach emphasises the importance of efficiency in new SMEs. Small producers must be encouraged to adopt new methods, move into new lines of production and in the long-run, wherever feasible, they should be encouraged to become medium- or even large-scale producers. The presidential Initiative on Cassava Production and Export has increased the awareness amongst Nigerians of the industrial crop, popularly referred to as the ‘new black gold’. Started in July 2004, the initiative seeks to generate $5 billion in export revenue. Fortunately, Nigeria, according to the Food and Agricultural Organisation, FAO, in its 2004 report, is currently the largest producer of cassava in the world at 34 million tons yearly, but with a poor yield of an average of 10 tons per hectare over an estimated cultivated land size of three million hectares. Nigeria is closely followed by Brazil and Thailand, which have a capacity to produce 24 million tons and 20 million tons and a yield of 13.6 tons per hectare and 19.4 tons per hectare respectively. Unfortunately, experts at the International Institute for Tropical Agriculture, IITA, Ibadan, Oyo State, believe that up to half of the harvested cassava is wasted by production and post-harvest inefficiencies while the rest is consumed as food. Brazil and Thailand, which rarely consume the cassava products directly, have fully developed the cassava industry for the export market. | |
Nigeria should not focus on the exportation of cassava but develop the enormous local and regional markets for cassava that exist in the country, West African sub-region and Africa as a whole rather than start exporting the industrial raw material to Europe. Nigerians should be encouraged to add value and process them for industrial application. The main thrust of this research work shall focus on the development of small and medium scale enterprises in the cassava processing industry justifying the need for agro-processing industries that convert cassava fresh tubers into primary cassava-based commodities that are tradable in domestic and international markets. STATEMENT OF THE RESEARCH PROBLEM
The Small Scale Industry is acknowledged to have huge potential for employment generation and wealth creation in any economy. Yet in Nigeria, the sector has stagnated and remains relatively small in terms of its contribution to GDP or to gainful employment. Activity mix in the sector is also quite limited – dominated by import dependent processes and factors. Although there is no reliable data, imprecise indicators show that capacity utilization in the sector has improved...