Poverty Alleviation: The Role Of Government And Small Scale Businesses

Poverty Alleviation: The Role Of Government And Small Scale Businesses

Chapiter 1

Introduction

1.1 Background of the study

Unemployment and poverty were not as prevalent in Nigeria more than two decades after independence. The majority of the labor force may be absorbed by the public, industrial, and agricultural sectors (Huglice & Musselman 1993). According to Nwakobi (1995), poverty is a global issue that has diverse effects on different countries and people. It has an impact on people to different degrees and at different points in their lives. There isn’t a place on earth where poverty doesn’t exist. The highest rates of poverty and the lowest levels of socioeconomic development are seen in third-world countries. According to Feldman (1999), a person is said to be in a state of poverty if they are unable to meet their basic needs for food, clothing, and shelter as well as their social and financial obligations. They also have limited access to social and economic infrastructure like education, health care, portable water, and sanitation.

According to a number of scholars, the term “poverty” has many meanings. Some people might find it challenging to define poverty. According to Haiman, as stated in Kure (2002), the definition of poverty is the inability to satisfy basic requirements necessary for a respectable standard of living; most frequently, people who are classified as poor are those whose resources are insufficient to meet the basic necessities of existence. Being in poverty is a vicious cycle from which it is challenging to escape. This is predicated on the fact that poor families have a higher propensity to stay poor. Poverty is defined by Broom & Longnecker (1992) as the inability to achieve basic requirements for a good life. When one’s resources are insufficient to cover one’s fundamental needs, one is said to be poor. He asserts that poverty has a complex cycle and that it is challenging to escape from it. This is based on the observation that poor families have a higher propensity to stay poor (Oshagbenius, 1995). Poor parents are unable to give their children the opportunities for good health and education needed to improve their situation and the situation of their children in the future due to their low income levels, high risk of similarity, limited access to education, mobility, information, and training. As a result, poverty’s severe legacy is passed down from parents to children and from one generation to the next. Although it is very debatable, it has been said that as the number of small enterprises has increased, so has the amount of poverty. The poor are typically uneducated, in bad health, and have a low life expectancy (Oshagbenius, 1995).

Any processing, service, or manufacturing business with an investment in machinery and equipment of more than N500,000 is considered a small scale firm in Nigeria (Nwakobi, 1995). Small-scale businesses are crucial for Nigeria as a nation at this crucial juncture in its socioeconomic and political development, especially if the government is to provide benefits to the populace. Due to their crucial role in ensuring the diversification and expansion of industrial production as well as the achievement of fundamental development goals, small scale firms are the driving force behind such industrial growth and economic development.Small companies have been crucial to the growth of a nation’s economy as well as the reduction of poverty by generating new employment and providing money for the populace (Yewande, 1991). SMEs are advantageous not only in times of economic boom but also in times of economic hardship. In practically every nation, small businesses account for a bigger percentage of all businesses, and they also account for the majority of private sector employment and production.

1.2 Situation Of The Problem

The biggest obstacle and problem that people encounter, particularly globally, is poverty. According to Broom & Longnecker (1992), as of 2014, there were around 2.4 billion people living in poverty around the world, with an average daily income of USD 2 or less (Feldman, 1999). The bulk of these individuals came from developing or undeveloped countries on the continents of Africa and Asia. The number of persons living in poverty fell considerably between 1991 and 2014. As a result, the decreases are primarily concentrated in more developed countries. Poverty has long been a concern in Nigeria, one that various administrations have attempted to address but without much success. This can be attributed to a number of problems, such as poor management of human and material resources, indiscipline, and a lack of political will on the part of the government from Nigeria’s post-independence period till the present. Our legislators and leaders, to the detriment of the suffering people, have engaged in squandamania, embezzlement, corruption, and money laundering instead of solving societal poverty. Small-scale businesses not only have the nation’s greatest potential for industrialization and a path out of poverty, but they also provide a substantial contribution to long-term growth in terms of taxes, the need for raw materials, the creation of jobs, and the alleviation of poverty (Oshagbenius, 1995).

Despite playing a crucial part in the nation, Nigeria’s small-scale businesses fail frequently because there are large-scale commercial companies nearby that might operate as a rivalry, worsening the already dire condition in the nation. Although the contributions of small businesses to growth are widely acknowledged, entrepreneurs in this industry face a number of obstacles that hinder their long-term survival and growth (Nwakobi, 1995).

According to Yewande (1991), the government has put into place a number of laws, regulations, and initiatives/programs, the bulk of which have not been executed. Even with all of these initiatives, poverty still plagues the nation. What should we do?

1.3 Study’s Objectives

This study’s main goal is to evaluate how the government and small enterprises contribute to the reduction of poverty. The following are additional study goals:

i. To investigate the variables affecting poverty

ii. To assess the impact small enterprises have on reducing poverty in Nigeria.

iii. To investigate the difficulties faced by Nigerian small enterprises.

iv. To ascertain whether government initiatives are successful in reducing poverty.

v. To learn more about the government’s ongoing initiatives to combat poverty.

1.4 Questions For Research

By doing this study, the following research questions will be resolved.

i. What are the causes and effects of poverty?

ii. How effective are small-scale enterprises in Nigeria at reducing poverty there?

What are the difficulties faced by small enterprises in Nigeria?

iv. To what extent are government initiatives successful in reducing poverty?

v. What initiatives does the government now have in place to combat poverty?

1.5 Relationship To Other Studies

The results of this study will have substantial implications for the general public since they will explain what poverty is, its causes, the roles of small businesses and the government in reducing it, as well as the various initiatives the government has taken to do so.

The results of this study will also be helpful to small firms because they will emphasize their difficulties and attempt to provide solutions.

This study will also be used as a resource for future research and studies in the future.

1.6 The Study’s Scope

The study will concentrate on the influence of big and small enterprises in reducing poverty. Additionally, it will concentrate on the factors that contribute to poverty, how the government and small businesses may help to reduce it, and the difficulties faced by small enterprises.

Small business owners in the Lokoja LGA of Kogi State would be the survey participants for this study.

1.7 Limitations of the study:

The focus of this study will be on small enterprises and government involvement in reducing poverty. Additionally, it will be restricted to discussing the factors that contribute to poverty, how the government and small businesses may help to reduce it, and the difficulties faced by small enterprises.

Small business owners in the Lokoja LGA of Kogi State will be the study’s recruited participants for the survey, thus more research is necessary before it can be applied elsewhere.

1.8 Term Definition

A series of economic and humanitarian initiatives aimed at permanently rescuing individuals from poverty are referred to as poverty alleviation.

Small-scale firms are independently held corporations, partnerships, or sole proprietorships with fewer employees and/or lower yearly income than a typical-sized company.