Nigeria as a developing economy cannot achieve full development without the contribution of the small and medium scale enterprises (SMEs). In most developed economies, the main stay of their economy has been attributed to the effectiveness of the small and medium scale enterprises (SMEs). Small and Medium Scale Enterprises (SMEs) is accepted globally as a tool for empowering the citizenry and economic growth. It has been associated with the rapid economic growth of countries in Asia and North America.
In Nigeria efforts have been made by successive governments to reduce poverty and accelerate economic growth by increasing foreign direct investment, diversifying the economy, enacting policy frameworks which favor small business ownership and sometimes initiating employment and entrepreneurship programs. Nigeria as a developing economy needs the contribution of the small and medium scale enterprises (SMEs) to be able to become one of the twenty most industrialized economies by the year 2020.
Therefore, the problem is to critically examine the role of the small and medium scale enterprises (SMEs) in the growth nd development of the Nigerian economy. The role of Small and Medium Scale Enterprises in facilitating the economic development of any country cannot be underestimated. In Nigeria, for example, SMEs provide an average of 50 per cent of Jobs and same proportion of industrial output. Experts say that the SME sector, can thrive in Nigeria, if the government can address the challenges of poor infrastructure, lack of financing, multiple taxation and inconsistent government policy.
The Africa Economic Analysis reported that, “The proportion of Nigerian SMEs and heir impact on the economy is pretty much, similar to those in other countries of the world, especially in the advanced economies. There are approximately 23 million small businesses in the United States. “These altogether employ more than 50 per cent of the private workforce, and generate more than half of the nation’s Gross Domestic Product. In the European Union, SMEs are seen as largely essential for European employment.
Each year, one million new SMEs are set up in the European Union. SMEs account for 99. 8 per cent of all companies and 65 per cent of business turnover in the European Union. The Director-General of the Small and Medium Enterprises Development Agency of Nigeria, Alhaji Muhammad Umar, at a recent forum in Abuja said that the agency targets to develop a minimum of 10,000 small businesses which will in turn generate about one million Jobs annually.
This study will attempt to denne what constitute small and medium scale enterprises (SMEs) from different authors, the challenges being faced by SMEs in Nigeria, the role of government in promoting the development and growth of SMEs, the role of financial institutions, and to also look at the role of the small and medium scale nterprises (SMEs) in the growth and development of the Nigerian economy.
REFERENCES Central bank of Nigeria 2003, Seminar on small and medium industries equity investments scheme (smieis) publication of CBN Training Centre, Lagos. Edit Iukacs, 2003, The economic role of SMEs in world economy, especially in Europe, institute of business sciences, university of miskolic, Hungary. Normah M. A. 2005, SMEs: Building block for economic growth, Kuala Lumpur. Rotimi 0. , 2006, 6th African venture capital association conference, Dakar, Senegal.