Stress and Frustration Among Small Business Owners in Nigeria

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STRESS AND FRUSTRATION AMONG SMALL SCALE BUSINESS OWNERS IN NIGERIA: CAUSES AND SOLUTIONS (A CASE STUDY OF APHA FURNITURE COMPANY, IKPOBA SLOPE BENIN CITY)

CHAPTER ONE

INTRODUCTION

Background of the Study

Before the arrived of the British Colonialists in Nigeria, there were numerous small scale industries and handicraft enterprises based on the available raw materials to meet local and regional demand. The Hausa, Yoruba and Bini people developed significant small-scale manufacture of goods for a variety of trade, social and religious purposes.

This traditional manufacture survived well into the colonial period, which understandably failed to provide sustainable basis for industrial change or investment (Synge, 1993). However, the 1962 – 1968 National Development Plan, tried to correct past deficiencies in the nation's industrial sector programme. Given the poor base of industrialization in the country and increase in direct government investment and promotional measures coupled with an ever increasing demand for foreign manufactured goods abroad, the strategy of Import Substitution Industrialization (ISI) was adopted. The original aim of the strategy was to promote growth and economic diversification as a means of reducing the dependence of the economy on the agricultural sector as the principal earner of foreign exchange. The strategy was adopted also because it was aligned to the potential as well as other known requirements of ready-made markets. It was limited at its early stage to the replacement of imports of nondurable consumer goods which generally called for the services of unskilled and semi-skilled labor and less application of advanced technological method (Sule, 1986).

Furthermore, there is a sense in which the SMEs industrial growth strategy could be viewed as an integral part of the National Economic Empowerment Development Strategy (NEEDS), which is a grass-root, approach to development through 'mass empowerment'. Indeed, this new approach has already anticipated the needs of the micro-scale and small-scale operators who may have very bright ideas but no collaterals to enable them secure financial assistance from the banks. The NEEDS campaign has already attracted a lot of attention both within and outside the country. It has also rekindled the hopes of many Nigerian entrepreneurs.

Despite Government policies and strategies, the modern day small and medium scale business in Nigeria now have wilder constraints which also refer to as the stress and frustration in this sector of the economy. Though Government of all kinds have put on ground strategies to encourage these entrepreneurial minded one in the society, as they recognize the sector as the major economic driver for growth and development. But the challenges that still exist in the sector are beyond management control. Among these element that causes stress and frustration in this sectors of the economy in Nigeria are: insecurity, access to capital funds and interest rates, good roads network, cost of production, lack of qualify man-power and availability of market for their products.

It was on this background that the researcher titled this work “stress and frustration among small scale business owners in Nigeria: causes and solutions” taking Apha furniture company Ikpoba Hill Benin City as a case study.

Statement of The problem

In the world over, small businesses face more constraints at start up developmental phases than when established. In Nigeria, for example, the failure rate of SMEs is 85% out of every 100 companies due to lack of skills and access to capital (Fadahunsi, 1997). It is typical of SMEs in Africa to be lacking in business skills, track record and collateral to meet the existing lending criteria of risk-averse banks (World Bank, 2000). This according to World Bank has created a "finance gap" in most markets between US$50,000 to US$1.25 million. The small businesses are able to source and obtain...
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