5.0 THE VARIOUS INDUSTRIES AND SUPPORT AGENCIES IN NIGERIA.
Business exist in different forms and sized A business can be undertaken on a small scale, medium scale or large scale basis.
5.1 Industries and support agencies.
Industry refers to manufacturing activity in general. This involves manufacturing of goods such as; steel, foods, footwear, rubber, textiles etc.
The National council on industry (2000) adopted the following as the new classification of small and medium enterprises (SMEs)
An industry wit a total capital employed of at least N1.5 million, including working capital but excluding cost of land and or labor size of 11- 100 workers.
An industry with a total capital employed of not more than 50million including working capital but excluding cost of land or a labor size of 11- 100
The National directorate of Employment (NDE) defines small-scale business to a accommodate projects with capital investment as low as N5, 000 and employing as few as there persons
The enterprises promotion decree of 1989 as amended in 1994 defines small scale business and any enterprises set up to make the owner self employed and self-reliant e.g., business centers, mechanics, panel beaters and super market, etc
Small- scale enterprises, therefore is any business enterprise that is highly personalized, situated within a local area of operation which is relatively small in terms of size, employment, turnover and capital is actively managed by one or few persons for the purpose of making profit
Government participation in entrepreneurship in Nigeria should be seen as a blessing and a way of encouraging and stimulating the economy. Governments (Federal, state and local government) play three major roles in business activity these are; participatory, regulatory and facilitating roles.
1. Participatory role: the federal, state and local government directly participates in business through investment and management stake in different types of activities.
2. Regulatory role: to protect the interest and welfare of the general citizenry, preserve the environment and ensure fair dealing especially in competitive actions of business. Government interferes in the private sectors activities through some forms of regulatory measures.
3. Facilitating role: Governments, because of numerous advantages of business organization to the society, governments, other organizations and individuals, play major roles in ensuring healthy existence and smooth operations for them.
Different measures used y government used by government to regulate business includes:
(a) Establishments of rules, regulations and laws that guide the establishment of business
(b) Directing court action to correct offending firms
(c) Establishment of numerous agencies to ensure safe quality products, minimum quality of work lives for employees and to ensure that firms comply with environmental protection regulations.
There are various industrial associations and support agencies that are involved in the promotion and development of entrepreneurship in Nigeria. They include the following:
v The National Association of Small scale Industries (NASSI)
v The National Association of Chamber of commerce, industries, mines and Agriculture (NACCIMA)
v The Manufacturer Association of Nigeria (MAN )
v The Nigerian Employment Consultative association (NECA)
Several agencies are established for the purpose of regulating business, such regulation involves inspection of facilities, laboratory test of product, approval of facilities ad product, etc.
These agencies include:
v Standard Organization of Nigeria (SON)
v National Agency for Food and Drug Administration and control (NAFDAC)
v National Drug Law Enforcement Agency (NDLEA)
v Federal Environmental Protection Agency (KEPA) and
v State Environmental Protection Agency (SEPA) e.g.
v Kaduna Environmental Protection agency (KEPA)
Some agencies that facilitate the establishment and successful existence of entrepreneurship are:
v Nigerian Agricultural co-operative and rural development Bank (NACDB)
v Nigerian Economic Reconstruction Fund (NERFUND)
v Nigerian Export Promotion Council (NEPC)
v The National Directorate of employment (NDE)
v Row Material Research and Development Council (RMRDC)
v The Industrial Development Centre (IDC)
v National poverty Eradication Program (NAPEP)
v The Industrial Training fund (ITF)
v The Centre for Industrial Research and Development (CIRD)
v Federal Institute of Industrial Research (FIIRO)
v Bank of industry (BOI)
v Small and Medium Enterprises Development Agency of Nigerian (SMEDAN)
v The Universities and Polytechnics
v United Nations Development Program (UNDP)
v United Nations Children’s Fund (UNICEF)
v United Nations Industrial Organization (UNIO)
v African Development Bank (ADB), etc.
5.2 The nature and types of materials used in both manufacturing and service industries.
Organizations use a lot of funds in procuring materials rather called inventories. The firm’s ability to utilize and convert these materials into cash at a profit is very fundamental to its success. You should know that ‘stock is cash’; at least after you have paid for it, and if, treat it with the same care, it will repay you just as much as if you had left the money earning interest elsewhere.
A major purpose in business is to have the right goods, at the right place and at the right time.
Manufacturing and service Industries.
Manufacturing is the changing of raw material obtained by workers from the extractive sector into finished products. Production is the process of converting raw materials (tangible goods) and intangible services into finished goods and services.
Production includes all activities involved in creating any valuable item whether tangible or intangible for the satisfaction of human need. It simply means that production is more than conversion of inputs into finished goods (manufacturing /but covers distribution and provision of other intangible services such as medical, consulting, counseling, teaching and personal services like barbing, dry-cleaning, etc.
Examples of small – scale manufacturing businesses are:
Soap/Cosmetic making, Block Industry, Drinks (pure water, yoghurts, juice, ice cream), paper mills (stationeries, books, toiletries), Textile mills, catering and confectionary (bakery, restaurant), livestock (poultry), fish production, Food production (yam, cassava, beans, vegetables, groundnut),
Examples of small –scale services are:
Business center (Photostatting, Computer typesetting, Scanning, Binding), Barbing/Hair dressing salon, printing press, Transporting, Electrical, Tailoring/Fashion designing, Dry-cleaning, Hospital, school, consultancy, etc.
Manufacturing Material and Chemicals
5.3 The types and sources of plants and machineries used in small-scale industries.
Most businesses, however small, need to acquire some assets. It is well worth it in the long run to give a great deal of though and care to such purchases. The right type and size of plant and machinery should be selected depending on the type of production
Some types of plants and machineries in small scale industries are;
· Milling machines •Binding machines
· Grinding machines •Cameras
· Micro wave oven •Video machines
· Mixers •Calculators
· Dryers •Handsets
· Vehicles •Laminating machines
· Scanning machines
· Electric/gas cookers
· Fire extinguishers
· Sewing machines
· Designing machines
· Water distillers
· Deep freezers
There are many sources of acquiring plants and machineries. The different sources have different financial implication for a businessman. It is necessary for a businessman to evaluate the alternative sources before acquiring any plant or machinery. Some sources are local or foreign, leasing or absolute ownership and hire purchase or credit arrangement. A business that is not financially strong may prefer leasing while a financial buoyant firm may avoid the harsh demands of hire purchase and buy the machine through cash.
The following sources can offer useful information on the plants and machineries requirement.
· Research institute as FHRO AND PRODA, etc.
· Centers for management development, industrial development centers, private consultants.
· Trade missions and embassies.
· Trade fairs and inventors exhibition.
· Similar industries.
· Magazines and trade journals
A businessman must keep check on his technology to keep abreast, or ahead of his competitors. Trade journals will have news of the latest processes or more revolutionary machinery. Business can be lost overnight if some one else is able to provide a more rapid turnover or a higher quality article at the same unit cost.
5.4 Contributions of support agencies in the promotion of entrepreneurship in Nigeria.
Government participation in entrepreneurship in Nigeria should be seen as a blessing and a way of encouraging and stimulating the economy. The government is committed to boosting entrepreneurship as part of its strategy to transform its economy and build its future economic and competitive strength. This is because government exerts much influence on activities of business through its regulatory and facilitating roles.
In Nigeria, many agencies have been established to regulate the activities of business men. This regulation is important for the protection of consumers and the physical environment and to ensure fair competition among business. The Federal government has equally established and empowered some agencies to facilitate the establishment and continued existence of small scale businesses, e.g. NACRDB, BOI,NDE,ITF, NAPEP, NEPC, NERFUND, etc.
1. Nigeria Agricultural Co-operative and Rural Development Bank (NACRDB).
The NACRDB as the single largest development finance institution in Nigeria was given birth to through the successful merger of the former peoples Bank of Nigeria (PBN), the defunct Nigerian Agricultural cooperative Bank (NACB) and the risk assets of the family Economic, 2000. The primary aim of NACRDB is agricultural financing at micro and macro levels as well as micro-financing of small and medium scale enterprises.
Objectives of NACRDB.
i. Provision of affordable credit facilities to the less privileged segment of the Nigerian society who cannot readily access the
services of conventional bank.
ii. Acceptance of saving/deposits from customer and repayment of the accrued interest when due.
iii. Provision of opportunities for self-employment in rural areas, thereby reducing rural-urban migration.
iv. Establishment of banking habits at the grassroots of Nigeria society.
v. Promotion of capacity- building through the provision of relevant training and advisory services
vi. Fostering accelerated growth and development of agricultural and rural economy.
vii. Encouraging the formation of agricultural cooperative societies at all levels.
viii. Augmentation of government efforts to diversify the production base for the national economy, etc.
2. Bank of Industry (BOI)
The Bank of Industry was established in October, 2001, following the reconstruction of the Nigeria Industrial Development Bank (NIDB) to incorporate the mandate of the Bank for Commerce and Industry (NBCI) and the National Economic Reconstruction Fund (NERFUND). The BOI was formally inaugurated by the president on 17th May, 2002 and empowered to engage in the following:
i. Agricultural finance
ii. Industrial and commercial finance
iii. National resources exploitation finance
iv. Long-term investment financing and equity funding of small and medium scale enterprises
v. Supporting small and medium enterprises through lending funds to commercial and merchant banks.
Possible beneficiaries of BOI
i. Small, medium and large enterprises including cottage Industries
ii. New and existing companies seeking expansion, modernization or diversification.
iii. Borrowers with demonstrable ability to meet loan payments
iv. Borrowers with no record of unpaid loan elsewhere, etc
3. National Economic Reconstruction fund (NERFUND)
NERFUND was established in 1989 to provide special funding facilities to our Industrialist and act as a catalyst for the stimulation of the tempo of real production activities in Nigeria. Some of the main aims are:
i. To provide loans to small – scale industrialists at rates lower than market rates.
ii. To provide medium to long- term loans sot participating banks for onward lending to SMEs
iii. To provide Professional assistance on how to go about the processing of the loan.
iv. To correct inadequacies associated with the provision of Industrial and agricultural sectors of the economy.
4. National Directorate of Employment (NDE)
The NDE was established in 1989. The functions of NDE in Nigeria are:
i. To help in reducing unemployment by creating employment opportunities, through vocational and apprenticeship training for the jobless people on information technology, textiles, fashion design, secretarial studies, computer literacy, catering , hairdressing, etc.
ii. To technical support for food production in Nigeria
iii. To develop and encourage potential entrepreneurs and equip them to successfully manage SMEs, through provision of loans schemes to young entrepreneurs and school leavers to start their small – scale business.
iv. To help in minimizing rural- urban drift by stimulation of rural development.
v. To improve the over-all economic, social and political well being of Nigerians
5. Industrial Training Fund (I.T.F)
The ITF was established on 8th October, 1971 by the federal government for the primary purpose of promoting and encouraging the acquisition of skills in industry and commerce to meet the needs of the Nigerians. Some of the functions of ITF are:
i. Identifying the training needs of companies/employers in commerce and industry.
ii. Designing vocational and apprenticeship training programs
iii. Installing and maintaining audio-visual equipment and advising on their utilization.
iv. Organizes workshops, seminars and conferences on specialized areas of commerce and industries
v. Establishing training standards in skills and apprenticeship training
vi. Managing the career developments of students
vii. Coordinates nationwide students industrial work experience scheme (SIWES)
viii. Liaising with International bodies for bilateral technical cooperation agreements in human resources development and
ix. Renders research and consultancy services on areas of manpower needs and training
x. Provides monetary incentives to employers that train their staff, etc.
6. Universities and polytechnics
Many federal, states and private universities and polytechnics have been established in Nigeria and have contributed immensely to the promotion, growth and development of SMES in Nigeria in the following ways:
i. Producing required manpower for the industries who will help to promote the development of entrepreneurship
ii. The training of manpower in the art of management. Writing of feasibility reports, investment appraisals and equipping
them with right entrepreneurial skills needed
iii. They carry out researches on the development of equipment and machinery, row material and overall technological
development of Nigeria.
iv. They provide consultancy services to our entrepreneurs in the areas of raw materials production, finished products, pricing,
promotion, packaging, sales distribution of goods and services, and management advisory services, etc.
7. Raw Material research and Development Council (RMRDC).
The RMRDC was established in 1987. The contribution of RMRDC in promotion and development of entrepreneurship are:
Onuoha (1998) identified the following major areas:
i. Establishment of science and data bank which provides data on available local mineral and agro raw materials in Nigeria,
their location, reserve estimates, level of development production and utilization.
ii. Funding of innovative and applied research and development project necessary for the advancement of local raw materials,
development and utilization by the manufacturing sector.
iii. Boosting agricultural productivity through seed multiplication and distribution to farmers.
iv. Commercialization of indigenous research and development (R&D) results form other research institutes and industries
v. The promotion of investment in local resources based industries through the provision, financial brokerage service and
equity participation in joint venture projects.
vi. The development of alternative livestock feeds.
8. The Centre for Industrial and Research Development.
Center was established in June, 1979 as an interdisciplinary unit faculty of social sciences of the Obafemi Awolowo University (OAU) Ile Ife. It is being funded by the Federal government of Nigeria and United Nations Industrial Development Organization (UNIDO) – a specialist agency established by the United Nations in 1985.
The functions of CIRD in the promotion and development of entrepreneurship in Nigeria are:
i. they conduct management training, seminars, workshops on all aspect of SME business.
ii. They do feasibility studies, financial analysis, monitoring and evaluation of project s and other areas of consultancy.
iii. They provide extensive services in starting and maintaining a business
iv. They encourage and assist community sponsored industries through a close liaison between the centre and the local
9. Federal Institute of Industrial Research Oshodi (FIIRO)
Federal Institute of Industrial Research Oshodi was established by the Federal Government of Nigerian in 1958. As a semi – autonomous institute, it was funded in 1953 as the Institute of Applied Technical Research but later converted to FIIR and placed under the control of the Federal Ministry of Science and Technology.
The Institute is further expected to provide laboratory and other technical services in the relevant field to industry, disseminate research findings to general public, collaborates with other research and development organizations to perform functions that may be determined from time to time.
Other functions of FIIRO are:
(a) Organizes training programs and workshops in the utilization of local raw materials.
(b) It organizes and participates in exhibition of trade fairs of local technologies
(c) Publishes series of technical bulletins, newletters, journals etc, with the view to educate and disseminate vital information to
small – scale entrepreneurs.
(d) It enders consultancy services in the areas of project appraisal, monitoring, evaluating and Agro industrial analysis
(e) Upgrading of indigenous technology and adoption of important technology
10. Industrial Development Centre came into lime light through the Ford Foundation of USA in 1963. IDCS were established at Zaria and Owerri before the civil war. The Federal Ministry of industry reactivated the IDCs and established more in the states.
Some of the functions of IDCs in the promotion and development of entrepreneurship are:
(a) they assist in the repairs of machinery and tools, and do on the job training of artisans in the handling of machines and simple
(b) They assist SMSs in the installation and operation of machineries and help resolve operational problems encountered by
(c) They assist and advice small scale industrialist on the improvement of the design and quality of their products.
(d) they help in conduct feasibility studies for intending small scale industrialists
(e) They train small scale entrepreneurs and managers
(f) they render technical, managerial and accounting assistance (in wood and metal works, automobile repairs, textiles and
leather, painting and building works) to small – scale industrialists.
11. National Poverty Eradication Programme (NAPEP)
This programme aims at eradication absolute poverty in Nigeria, through the streamlining and rationalizing of exiting alleviation institutions and implementation of relevant schemes and programmes. NAPEP was established in 2001. Different ministries and agencies ere recognized as core poverty alleviation ministries and agencies. Some of these ministries and agencies are: Agricultural and Rural Development, Education, water resources, Industry, employment, labor and productivity.
Women affairs and youth development, health, NACRDB, NDE etc. Some of the functions of NAPEP through the different ministries and agencies are:
a. capacity building and vocational training through the capacity acquisition programme in the major pro-occupations of the nation’s labor force e.g. plumbing, glazing and painting, mechanical, electrical and electronics technicians apprenticeship.
b. Data generation and statistics on employment among, by maintaining a record of unemployment among youth and others at the “labor office in each state and local government council”.
c. Job and employment opportunity creation. This is to expose as many youth as possible to the opportunities for or the –job training and skills acquisition and concurrently maximize employment opportunities.
d. Promotion of awareness in the activities and opportunities in the expiration of solid minerals resources for employment and promotion investment.
e. co-ordination and control of activities in teaching and application of science and technology in the locality.
f. Enterprises development and promotion like establishment of local resource based cottage industries.
g. rural infrastructural development, like power supply, water supply, transportation, housing, communications and farm development etc.
h. social welfare services like, quality special education, quality health care delivery services, rehabilitation programmes for destitute and the disabled, credit delivery for all group..
12. Partnership with International Organizations
Entrepreneurship development is a vast and complex policy issues that requires a colossal amount of money, and wide range of ideas form practice and experience. To obtain the required funds and ideas, the Federal Government of Nigeria entered into partnership with some international organizations. These organizations include:
United Nations Development Programme (U.N.D.P)
United Nations Children’s Education (UNICEF)
United Nations Industrial Organization (UNIDO)
African Development Bank (ADB)
The international organizations provides support to entrepreneurship development in Nigeria through funding and training programmes for potential and actual entrepreneur, each of these non-governmental agencies provides common areas of assistance to the small – scale industries though:
a. funding (loans at rate lower that that of the market).
b. Technical aids, manufacturing/production inputs (equipment, machinery, etc.)
c. Specialized training programs etc.
· Businesses exist in different forms and sizes. E.g. small-scale, medium and large scale.
· An industry refers to manufacturing of goods such as steel, foods, footwear, textile, etc.
· Governments (federal, state and local) play 3 major roles in promoting entrepreneurship in Nigeria, viz;
* Participatory role, like direct business investment and management in different types of activities.
*Regulatory role, to protect the interest and welfare of the general citizenry, preserve the environment and ensure fair dealing especially in competitive actions of business. E.g. NAFDAC, SON, NDLEA.
* Facilitatory role, by establishing support agencies like NACRDB, NDE, RMRDC, IDC, BOI and also in partnership with international organizations such as UNICEF, UNDP, ADB etc.
1. Explain government’s role in promoting entrepreneurship in Nigeria.
2. Identify any 3 regulatory agencies established by government in promoting entrepreneurship in Nigeria.
3. Explain the roles of the following agencies in promoting entrepreneurship in Nigeria: