The Central Banking And Monetary Regulation In Nigeria

THE CENTRAL BANKING AND MONETARY REGULATION IN NIGERIA

Abstract

In order to propose solutions, this study will look into the reasons why small businesses in Nigeria fail. There are both simple and sophisticated systems in every economy. Because ownership and management are not often separate during the early stages of organization, the owner is in charge of running the company. One individual cannot effectively coordinate, direct, or oversee a company organization as it grows in scope. That ownership and management are now distinct from one another. As a result, managing the business enterprise for the owner becomes exceedingly challenging. Here, it will be simpler for management to pursue goals that diverge from those established by the owner, leading to competing ambitions that may cause the company to fail. It will be difficult for Nigerians to comprehend how a tiny company run and owned by the owner might fail in the blink of an eye. Is it a product of money, ineffective management, or government regulations? The goal of the research is to learn more about this. Based on the research’s findings, the researcher came to the conclusion that the government’s failure to create a favorable business environment had an impact on the performance of small businesses. She also noted that inadequate resource management had a significant negative impact on the expansion of small businesses in Nigeria. Therefore, the researcher advises that organizations use both their human, financial, and material resources wisely and that government work as hard as it can to provide a stable and conducive environment.

Chapiter 1

Introduction

1.1 Background of the study

As a result of their contribution to the creation of jobs and the delivery of specialized services, small and medium-sized firms (SMEs) are the foundation of almost all national economies (Wattanapruttipaisan, 2003). Because they promote economic growth and reduce poverty, SMEs have a significant impact on the sustainable development of both developing and developed nations (Ayyagari, Beck, and Demirguc-Kunt, 2003). According to Udechukwu (2003), the creation of SMEs is a crucial component of most economies’ growth strategies and is especially significant for emerging nations like Nigeria.

The highest performing Asian economies significantly rely on SMEs, which are important engines of economic dynamism. Due to competition, it is become harder for SMEs to meet the conditions necessary to reach the global market and improve their position within it as a result of trade liberalization (Abonyi, 2003). According to Berry (2002), the growing flexibility and specialization of SMEs has led many business analysts to accept the critical significance that SMEs play in the industrial structure of any developing country. However, he pointed out that because of increased global rivalry brought on by trade liberalization, SMEs are particularly susceptible to outside shocks. Given a supportive policy framework, there is a good chance that SMEs will be able to successfully participate in the global market (Briggs, 2007).

The majority of governments, particularly in Less Developed Countries (LDCs), increasingly realize the necessity of developing policies that foster an environment favorable to the formation and operation of SMEs. The present worldwide trend of economic liberalization and the requirement to close the development gap that currently exists between LDCs and industrialized nations can be related to the increasing focus placed on SME development by various administrations in LDCs. Governments in developing nations, particularly those in Nigeria, offer a wide range of programs to support and develop SMEs. Despite these initiatives, it has been noted that they have had a less than ideal influence on SMEs’ performance (Manbula, 2002). This can be ascribed to a number of issues that developing country governments and policymakers neglected to take into account while creating and implementing SME development plans.

Due to limitations that prevent their expansion, particularly in the area of financing, the majority of SMEs either stay small, go out of business, or close within a few years after starting up (Rodriguez and Berry, 2002). There is no proof that economic liberalization (trade and financial sector), which resulted in fierce competition from well-established Multinational Corporations (MNCs), has improved the situation in Nigeria. According to proponents of economic liberalization, SMEs’ circumstances are improved by increased access to financing and competition, which in turn will lessen poverty (Tagoe, Nyarko, and Anuwa-Amarh, 2005). This essay focuses on the measures the Nigerian government has created to support the growth of SMEs in the industrial sector.

It advances the claim that poorly executed government initiatives to support the growth of SMEs have hurt their ability to compete. the establishment

There are either insufficient or missing support mechanisms for these initiatives to operate efficiently. Due to the unbalanced economic climate created by this, SMEs now face increased competition from established MNCs in a liberalized trade environment.

This study of chosen enterprises in Enugu State is part of a larger research project on “The Failure of Small-Scale Business in Nigeria; Its Causes and Solutions” that aims to offer advice for small business challenges.

1.2 Statement of the problem:

This research project aims to address a wide range of issues. According to some experiences, small business management’s incapacity to identify the root causes of failure may have resulted in unproductive behavior. Additionally, it is believed that the management’s unwillingness to create rules to address the issue of small firms may have affected their profitability. Nothing, in fact, hurts an organization more than when management adopts a negative attitude toward employee training. Experience has shown that the likelihood of small-scale businesses surviving may have been lowered due to the government’s inadequate attitude toward the construction of business-friendly conditions. Unproductivity may have resulted from the failure of the workplace to put management policies into practice as experiences have demonstrated.

Again, bad financial management techniques may have made things worse, just as it’s possible that management’s alleged inability to hire qualified staff contributed to productivity issues. Above all, as experience has shown, the majority of firms’ subpar marketing techniques may not have helped. This study project is being done in light of this issue.

1.3.1 Purpose Of The Study

The following goals or objectives are attained through the task being done.

1. To ascertain the reasons why small enterprises fail.

2. To determine whether the government fosters an atmosphere that is favorable to small enterprises.

3. To ascertain whether employees in small organizations don’t put management policies into practice.

4. To determine how financial decisions impact small enterprises.

5. To ascertain whether hiring inexperienced workers causes failure of small businesses.

1.4 Questions For Research

The following studies are crucial to solving the aforementioned issue, hence the questionnaire includes them.

1. What are the reasons for Nigerian small businesses failing?

2. Does the government offer a favorable business climate for small businesses?

3. Do employees carry out management policies?

4. How do financial options impact small businesses?

5. Does the failure of small businesses result from the hiring of inept workers?

1.5 Hypothesis Of The Research

The earlier hypotheses in this study project are:

Ho: There are few reasons why small businesses fail.

HI: Small-scale business failure has a lot of root causes.

Ho: There is no evidence that the government can foster an atmosphere that is favorable to small businesses.

H2: There is evidence that the government can foster an atmosphere that is favorable for small businesses.

Ho: There is no proof that employees carry out management policies in small businesses.

H3: There is evidence to support the claim that employees carry out management policies in small businesses.

Ho: There is no conclusive evidence that a financial alternative can have an impact on small businesses.

H4: There is a strong correlation to demonstrate how a financial alternative may influence a small firm.

Ho: There is no proof to suggest that hiring inept workers causes small businesses to fail.

H5: There is evidence to support the claim that hiring inept workers causes small businesses to fail.

1.6 Analysis Of The Study

The failure of small enterprises in Nigeria impacts all organizations, thus the researcher wants to look into the reasons why and potential fixes. However, the researcher has selected Nourisher Bakery, Tasco Investment, Ozo Ekwem Furniture, Nelo Tailors, Francis foods, and Nucon Ventures as case study companies due to time and resource limitations. Additionally, it cannot be said that the failure of small-scale firms in Nigeria is solely due to the circumstances or arguments made in this article.

1.7 The Study’s Significance:

Managers of small and medium-sized businesses could utilize the information from the study to develop appropriate strategies for business growth and survival as well as the efficient use of resources. It will give students in all higher education institutions some crucial knowledge about how to run a small business successfully. Additionally, it will offer a foundation on which additional research could be carried out. Last but not least, it is anticipated that this research study will greatly benefit the general public by enhancing their understanding of small businesses.

1.8 Limitations of the study:

Several obstacles have to be overcome in order to complete this study project. The researcher lacks the tools necessary to handle the difficulties of this research project. Finding the appropriate materials to carry out this investigation was difficult. It was challenging for the researcher to get specific information from the organization’s management team, and it was challenging to explain to the respondents the best ways to complete the questionnaire.

References

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