CHAPTER ONE

 

1.1      INTRODUCTION

Privatization means the sales of public enterprises to private hands through the sale of share. The privatization programme in Nigeria is mean to benefit almost all Nigerians. While, Commercialization is the selling of share of some of the government to make them operate as profit making venture. It is the re-organization of enterprises in such a way that they shall operate as profit making commercial ventures and without subvention from the federal government. Commercialization can come in two forms;

 

v Public enterprises are expected to operate profitably on commercial basis and to be able to raises fund from the capital market without government guarantee.

v Public enterprises which may be considered by the government for capital grant to finance their capital intensive project.

 

1.2      HISTORICAL BACKGROUND OF THE STUDY

Privatization and commercialization was first hinted by the Shagari Government of Second Republic followed by Buhari’s Regime, but was only given priority in 1986 speech when the then president Babangida said that parastatals have constitute an unnecessary high burden on government resources. As from 1986 the volume of non-statutory transfer to all economic and Quasi-economic parastatals constitute not more than 50% of their present levels”

 

In essence, president Babangida Had went further to expressed out the position of government in relation or with respects to the public enterprises with regard to their performance, and criticized them as follows;

v Been inefficient in their operations.

v They are avenue for corruptions.

v Financial burden on government

v They are not making return in respect to investment made on them.

 

Other views are that government involvement in enterprises is the failure in economic development and that business is not a venture for government.

 

1.3      STATEMENT OF PROBLEM

As the country developed and the economy expanded many public enterprises in the country find it difficult to render effective service. A number of problems were responsible for the ineffective performance of these corporations and enterprises. They include;

v In appropriate capitalization from inception.

v Improper definition of roles and objective for setting them up.

v Total government ownership which did not encourage profit orientation operations.

v Influence of political environment.

v Poor funding conditions of service and work environment

v Poor organization structure.

v Poor attitude to work on the part of workers of the corporation who believed that government would always provided subvention for the payment of their salaries and wages.

v Unnecessary interference in the management of the corporation by the supervising agencies of the government.

v The partial failure of the antagonization Degree.

v The windily foreign earning from export of petroleum which had become the main stay of the economy by the end of the 1970’s

v The heavy linkage of natural expenditure and product to imports resulting in heavy foreign debt burden from the early 1980’s and the poor performance of public enterprises and corporations, all combined to create rapid and serious down ward trend in the Nigerian economy.Hence, in 1988, decree 25 was promulgated to recognize such enterprises. Thus, government corporations were commercialized. Now a second phase of the programme was inaugurated by the present administration taking a new step. The focus of the paper the examination of the success or other wise of the programme on public enterprises in Nigeria.

 

AN EVALUATION OF MONETARY POLICIES IN NIGERIA

(A CASE STUDY OF CBN). 

 

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TABLE OF CONTENT

CHAPTER ONE

1.0    Introduction

1.1        Historical background of study

1.2        Statement of problems

1.3        Objective of study

1.4        Hypothesis

1.5        Research Questions

1.6        Limitation of the study

1.7        Definition of terms

 

CHAPTER TWO- Literature review

2.0    Introduction

2.1    The Concept of Monetary Policy

2.2    Institutional arrangement for formulation and implementation of Open Market operation

2.3    Technical and Operational Modalities

CHAPTER THREE – Research Methodology

3.0        Introduction

3.1        Research Methods

3.2        Interview

3.3        Existing Document

3.4        Documentary Method

3.5        Validity of the Method Adopted

 

CHAPTER FOUR – Presentation and Data Analysis

4.0        Introduction

4.1        Presentation and Data Analysis

4.2    performance result and finding

 

CHAPTER FIVE – Summary, Conclusion and Recommendations

5.0        Summary

5.1        Conclusion

5.2        Recommendations

Bibliography

Appendix I

Appendix II

 

 

CHAPTER ONE

1.0        INTRODUCTION

Monetary policy deals with the discretionary control of money supply by the monetary authorities in order to achieve the desired economic goals. It cold be seen that money policy comprises of those government actions which are designed in attempt to change the influence the behaviour of the monetary sector of an economy. However, there are two views on the efficiency or monetary policy, monetarist and Keynesian view. The Keynesian view is that monetary policy should be direct towards interest rates rather than money supply and that the monetary policy should be subsidiary to fiscal policy. The monetarist recommends that the control of money supply should be the main concern of the money authorities. But it should be noted that money policy has a central role in macro economic management primarily because of the close relationship between the monetary aggregate and economic activity.

 

This is true irrespective of whether one is considering the monetarist or Keynesian framework. Although it may be desirable to introduce some monetary instruments the environment for their effective application may not be suitable. This fact should be borne in minds as we considered the application of various instrument of controlling money supply in the Nigerian economy. The Nigeria monetary system is part of the wider financial sector and its major operators are the monetary authorities, the banks merchant and commercial banks) as we as discount houses recently permitted to operate within the system.

 

The monetary authorities design and implement monetary policy and consist of the presidency, apex bank and federal ministry consist of these, the apex bank is the agency which is primarily responsible for designing monetary policy proposal for presidential approval and ensuring implementation of the monetary policy measures accepted by the federal government.

 

These goals of monetary policy remain the same irrespective of the package of instruments in use. The monetary policy attempts at maintain a balance as possible between the supply and demand for the monetary assets of the economy in order to achieve adequate economic growth. This broad purpose may be transmitted or rather translated into several specific objectives such as price stability, high level of employment or an acceptance  growth rate of the real gross domestic product (GDP), as well as balance of payment equilibrium.

 

Monetary management could take the form of direct or indirect control instruments comprising of interest rate registration, credit ceilings and sectorial allocation of credit. An indirect control instrument is mostly adopted by market based economy.  It has the advantage of the relationship between money supply and the monetary base and the ability of the monetary authorities to induce appropriate change in the monetary base. Banks reserves constitute an important component of the monetary base usually targeted by the monetary authorities to control the money supply in the Nigerian economic through the manipulation of the discount rate and reverse ratio. In Nigeria, the application of credit ceilings was designed to ensure that domestic credit expansion and the monetary implications of the balances of payment targets the expected increase in total demand for liquidity in the economy. But Nigerian have decided to move away from indirect and direct monetary instruments under credit ceiling for instance, the apex bank found it increasingly difficult to achieve the stated monetary targets. The techniques of indirect monetary control basically involves the control of the money stock through the manipulation of the sources of the monetary base by the application Open Market Operation (OMO), reserve requirement and rate.

 

OMO is conducted mainly in the secondary market for government securities through the buying and selling of government securities, the apex bank directly changes the level of the bank reserves and indirectly induces changes in the level of interest rates, terms and availability of credit and ultimately the money supply.

 

1.1    HISTORICAL BACKGROUND OF THE STUDY

the adoption of a market-base framework such as Open Market Operation in an economy that had been under direct control for long required substantial improvement in the macro-economic stability, effort were directed to the management of excess liquidity. Thus a number of measures were introduced to reduced liquidity in the system. These includes the reduction in the maximum ceiling on credit growth allowed for banks; the recall to Central Bank of Nigerian (CBN) from banks of the special deposits as requirements against outstanding external payment arrears; abolition of the use of foreign guarantees or currency deposits as collateral for naira loans and the withdrawal of public sector deposits fro banks to the CBN. The use of stabilization securities for purpose of reducing the bulging size of excess liquidity in banks was introduced in August, 1990.

 

Commercial banks cash reserve requirement were increased in 1989, 1990 and 1992; the rising level of fiscal deficits was identified as a major source of macro economic but also to synchronize fiscal and monetary policies. In the legal aspect, the federal government promulgated the CBN decree (BOFID) No. 1969, the CBN decree enhanced the banks powers and discretion in the design and conduct of monetary policy, while the BOFID addressed the problem of policy leakages in the monetary management by bringing the non-bank financial intermediaries, which hitherto, were entirely outside the control of the CBN under the control and supervision of the bank.

 

The decree streamline and simplified procedures for licensing bank and established procedures for licensing and controlling of other financial institutions including discount houses and financial companies. Three discount houses have been fully licensed to undertake secondary market dealership in treasury security. By way of inducing efficiency and encouraging a good measure of flexibility in banks, credit operations, the regulatory environment was also improved. Consequently, the sectors specific credit distribution targets were compressed into four (4) sectors in 1986 and to only two (2) in 1987. The commercial and merchant banks were subjected to equal treatment since their operations were found to produce similar effect on the monetary process. Hence, merchant banks, hitherto excluded from cash reserve requirement, were subjected to the same cash ration with commercial banks. Also liquidity ration of merchant banks was raised to the level applicable to commercial banks. In August 1987, all controls n interest rates were removed. However, in 1991, bank maximum lending rates were pegged at 21% while a minimum of 13.5% was stipulated for saving deposits. From 1992 the markets was feed of interest rate controls. However, controls measures were re-introduced in 1994 and later deregulated in 1997.

In recognition of the fact that well capitalized banks would strengthen the banking system for effective monetary management, the monetary authority increase the minimum paid capital of commercial bank and merchant banks in February 1990 from N40 million and N50 million and from N12 million to N20 million respectively. This was later increased to N500 million  for both banks in 1997. Also in 1990, the apex bank brought into force the risk weighted measure of capital adequacy recommended by the BALSE committee of the bank for international settlements for licensed banks, which were complementary to both the prudential guidelines for licensed banks, which were complementary to both the capital adequacy requirements and Statement of Accounting Standard (SAS). The prudential guidelines among others, spelt out the criteria to be employed by banks for classifying non-performance loans. The CBN and NDIC continue to monitor and examine banks in order to promote stable banking system.

 

In an effort to improve the operation of the money market an auction – based market for treasury securities was introduced in 1989 and these treasury instruments were made bearer bills so as to enhance transferability and promote secondary trading. The importance of timely data for the success of indirect monetary management, especially through OMO was realized by the CBN such that efforts have been made to improve the quality and timeliness of financial data. To this end, remarkable progress have been made in the computerization effort to the CBN and banks thereby creating a more conducive atmosphere for quick processing of relevant data. From 30^th June 1993, the CBN commenced OMO in treasury securities with banks through discount houses. The OMO is coordinated with discount window and reserve requirement policies to ensure the attainment of the monetary policy objectives and targets. In particular OMO has been conducted every week monitoring the growth in the monetary base, which consists of currency in the hands of the non-bank public total bank reserves.

 

OMO is based on the discretionary of CBN to buy and sell eligible securities in the money market from the private sector, depending on the objectives of the policy. Thus, if there is need to reduce bank credit and hence money stock in an inflationary economy, the appropriate response of CBN is to sell traded securities, hoping that the private sector (bank and non bank public) would purchase them. When purchases are made by bank on behalf of their customers, the banking system, money stock is still constrained through reduction in the system’s reserve and hence ability to expand credit. However, if the purchase security off the private is financed through currency outside the banking system, the constraining effect on money supply is direct. When the stance of the policy is monetary ease, the apex bank reserves it strategy of the banking system is expanded. This enable the bank expand credit which influence money stock, where funds sis realize from the sale of securities by non – bank public are kept outside the banking system, OMO expand money supply directly. Though, the effect of OMO is more flexible and better suited for ay to day adjustment of the reserves in the desired direction.

 

The type of securities used for OMO varies from country to county but generally they consists of both government and non-governments with issues ranging from very short to long term maturities. The essentials is that the securities trade should be those which the CBN can use easily to influence the level of reserves, credit and money and money stock thereby inducing favourably changes in order relevant variables for economic growth. Depending on the sophistication of the financial market the operation vary from outright sales and purchases to temporary trading securities. Temporary trading could be reports in which case securities are sold with an agreement to purchase in future before maturity; or reverse response in which securities are purchased with an agreement to resell later before maturity. Other techniques of OMO include forward sales sand purchase as well as swaps.

 

Recruitment of participations of OMO depends largely on the structure of the financial system. Where there are discount houses, it is common for the apex bank to channel transaction primary through discount houses, in their absence the CBN relies on the selected from the foregoing that the main purpose of OMO is to influences banks liquidity with a view of influencing monetary growth. However, the expansion or contraction in money stock is not desired for its own sake but rather to achieve monetary growth, that is consistent with short term to long term objectives of the economy especially with regards to exchange rates, interest rate, investment and low or non-inflationary growth in goods and services.

extreme

1.2    STATEMENT OF GENERAL PROBLEM

The fundamental problem of any government is it economic or otherwise its implementation. a number of government monetary policy instrument have been designed and applied in Nigeria in the hope of achieving the desired result of stable price level, low level of unemployment, efficient banking system etc. but the application of direct monetary instrument have not bring forth the desired objectives stated above hence, left the government with no any other alternative than to turn to the direct monetary instrument. Therefore, the problem under study is the application of OMO as an instrument of monetary policy in Nigeria.

 

ENHANCING THE EFFECTIVENESS OF MONETARY POLICY IN COMBATING INFLATIONARY PRESSURES

 PROBLEMS, PROSPECTS AND REMEDIES. 

 

 

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ABSTRACT

This research work is an attempt to examine the effect of Central of Bank of Nigeria in performance monetary policy of bank. The essay work provides a background to the origin and development of monetary policy in fighting inflation and highlighted the major functions and activities performed by the Central Bank of Nigeria in order to achieve their main objectives. It also discusses the objectives, instrument and problems of monetary policy.

CHAPTER ONE

1.1     Background of the study         –        –        –        –        –        –        –        1

1.2     Statement of Problems   –        –        –        –        –        –        –        3

1.3     Objectives of the study  –        –        –        –        –        –        –        4

1.4     Research Question-        –        –        –        –        –        –        –        4

1.5     Significance of the study         –        –        –        –        –        –        –        5

1.6     Scope and limitation of the study     –        –        –        –        –        6

1.7     Definition of terms         –        –        –        –        –        –        –        –        6

 

CHAPTER TWO

2.0     Literature Review          –        –        –        –        –        –        –        –        9

2.1     Introduction         –        –        –        –        –        –        –        –        9

2.2     Definition of Concepts   –        –        –        –        –        –        –        10

2.3     Definition of Monetary Policy           –        –        –        –        –        13

2.4     Instruments of Monetary Policy       –        –        –        –        –        –        15

2.5     Types of Monetary Policy       –        –        –        –        –        –        19

2.6     Objectives of Monetary Policy          –        –        –        –        –        –        22

2.7     Monetary Functions of the Central Bank of Nigeria      –        –        23

2.8     Weakness of Monetary Policy in Combating Inflation –        –        26

 

CHAPTER THREE

3.0     Introduction         –        –        –        –        –        –        –        –        29

3.1     Area of Study       –        –        –        –        –        –        –        –        29

3.2     Research Design   –        –        –        –        –        –        –        –        29

3.3     Population of Study      –        –        –        –        –        –        –        30

3.4     Sampling Technique      –        –        –        –        –        –        –        30

3.5     Data Collection and Instrument        –        –        –        –        –        –        30

3.6     Administration of the Instrument     –        –        –        –        –        31

3.7     Method of Data Analysis        –        –        –        –        –        –        –        31

 

CHAPTER FOUR

4.0     Data Presentation, Analysis and Interpretation   –        –        –        32

4.1     Introduction         –        –        –        –        –        –        –        –        –        32

4.2     Data Presentation          –        –        –        –        –        –        –        –        32

4.3     Summary of Findings    –        –        –        –        –        –        –        36

CHAPTER FIVE

5.0     Introduction         –        –        –        –        –        –        –        –        –        38

5.1     Summary of the study   –        –        –        –        –        –        –        38

5.2     Conclusion –        –        –        –        –        –        –        –        –        39

5.3     Recommendation –        –        –        –        –        –        –        –        39

Bibliography        –        –        –        –        –        –        –        –        41

Appendices

 

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Monetary policy entails the government policies aimed at changing the quantity of money or credit condition. In every economy, after fiscal policy, the next most powerful macro-economic stabilization is monetary policy.

 

In fact Monetary and fiscal policies are expected to work together as complements to achieve one goals of a sound macro economic management that include amongst other domestic price stability external sector viability as well as enhance efficiency in resource allocation, distribution and utilization.

 

Monetary policy is therefore measure designed to regulate and control the volume, cost, availability and direction of  money and credit in an economy to achieve some specifically micro-economic objectives. It is one policy that seeks to influence economic activities using the tools available to the central bank i.e. money supply (MS) interest rates and exchange rates. It can also mean the deliberate attempt by the authorities to either control the supply of money or to control interest rates or to ration the amount of credit granted by banks.

The history of economic growth shows that, economic transformation started in England in the Late eighteen century and gradually spread to other parts of Europe and North America. Economic transformations did not get to other parts of thee world until in the 1950s when Japan transformed to become one of world’s major industrial giants. This economic transformation has spread far and wide in the recent times but its spread is highly limited in Africa. It is only South Africa that has experienced it so far. This is clearly demonstrated by the World Bank report of (2001) which states that out of the 46 poorest countries in the World, 35 of them are in Africa.

 

Nigeria with it’s vast resources of both human and material nature is not left out of the club of poverty stricken countries. This poverty is illustrated by the recent World bank report (2005), which says that more than 70% of Nigerians are living below poverty line.

 

It is against this background that this study is being undertaken. This poverty can be tackled using both fiscal and monetary policies to help solve this problem and growing poverty. So far, removing the country from poverty trap that seems almost impossible to be solved using variety of macro-economic policy measures.

 

1.2            STATEMENT OF THE PROBLEM

The problem of inflation in Nigeria has been confronted in variety of ways by the government of the country using different macro-economic policies. The government introduced several measures e.g. National Development Structural adjustment Programmes (SAPs). Guided Deregulation etc. to combat this problem. Despite all these measures, we still experience inflation in the country.

 

The question now is, why we still experience inflationary conditions after all these variety of measures adopted by the government to control it or reduce it intensity?

 

Moreover, the issue of monetary policy has its objectives one of which is tackling the problem of inflation.  The Central Bank applied all measures to control it still every effort seem to be fruitless.

 

The nest question is why have all these measures failed in combating the problem of inflation?

CONTRIBUTION OF SMALL-SCALE BUSINESS TO NATIONAL ECONOMIC GROWTH AND DEVELOPMENT

 

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Dollar conversion rate for Naira is 175 per dollar. 

ATM CARD:  YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY. 

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form>DELIVERY PERIOD FOR BANK PAYMENT IS  LESS THAN 24 HOURS

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ABSTRACT

This paper analysed the contribution of small-scale business to National Economic Growth and Development in the Country.  It also paid attention to the foundling of these enterprises. Where as failure of the large-scale import department assembly to propel the country into a satisfactory course of industrialization necessitate the demagnification of strategy to embrace the promotion of small-scale enterprises achievement under the new strategy has not been adequate with expectations of the stated objectives which were economic growth and development through the mobilization of available local resources, employment generation and industrial dispersal as well as mitigation of rural urban migration.  This paper identified this lack of list achievement with problems associated with severe lack of managerial and technical skills among Nigerian small-scale industrialists, inadequate of financial resources as well as infrastructural deficiencies.  Chapter one contains a general discussion of the contribution of small-scale business to economic growth and development as seen by different people.  It went further to state the problem to be studied and why this study was carried out, the scope and limitation of the study and finally the proposition and the definition of terms.

A number of past related literature examined by other studies as it relates to the contribution of small-scale business in Nigeria are highlighted in chapter two. Chapter three deals with the design of the study, the methods used in collecting relevant data.  It also deals with way the questionnaires were  distributed and the treatment of data, and statistical techniques used.

The data got from the research survey were analysed and interpreted.  Also similar questions on both questionnaires were compared in chapter four.

Finally, the summary of findings conclusion in the research and recommendation made by the researcher are all in chapter five.

If small-scale business will put the recommendation on how to achieve economic growth and development to use, such as increasing availability of credit by raising interest rate ceiling and permitting a “spread” that makes it worthwhile for banks to lend to small-scale business or by increasing the number and range of investment etc. problems of small-scale business will be a thing of the past.

TABLE OF CONTENTS

CHAPTER ONE

1.0            INTRODUCTION

1.1            Background to the study

1.2            Statement of problem

1.3            Need for the study

1.4            Purpose of study

1.5            Scope of the study

1.6            Limitation of the study

1.7            Hypothesis

1.8            Definition of terms

CHAPTER TWO

2.0            REVIEW OF RELATED LITERATURE

2.1            Nature and scope of small-scale business

2.2            Factors that effect small-scale business

2.3            The role of small-scale business in economic growth

2.4            Starting a small business

2.5            Government policies for promoting small-scale business

2.6            The economic imperative of small business development in Nigeria

2.7            Importance of small business enterprises

2.8            Advantages of small-scale business

2.9            Advantages of self employment

 

CHAPTER THREE

3.1            Design of the study/methodology

3.2            Population for the study

3.3            Development of research materials

3.4            Research procedure

3.5            Analysis of data

3.6            Statistical techniques.

 

CHAPTER FOUR

4.1            Presentation, analysis and interpretation of data

4.2            Test of hypothesis

 

CHAPTER FIVE

5.1            Summary of findings

5.2            Conclusion

5.3            Recommendation

5.4            Suggestion for further research

5.5            Bibliography

5.6            Appendix

 

 

 

 

CHAPTER ONE

INTRODUCTION

BACKGROUND TO THE STUDY

The contribution of small –scale business in fostering economic growth and development has been well articulated in different areas of this study .the specific attention on them based on their expected impact and potential contribution on broad and diversified production base, as well as their accelerative effect in achieving macro objectives pertaining to full employment, income distribution and the development of local technology.  They are particularly most conducive for diffusion of management skills and emulation of indigenous entrepreneurship overtime.

Small business provides financial opportunity and a chance to develop wealth.  It is a place where creative, motivated individuals can use their talents and expertise to the fullest, because it provides satisfying careers  and job opportunities and its also the back bone of the market economy of the word.  Every big business starts as a small business, and it started with an entrepreneur (small business), who at first, earns little or no profit.  It was the new ideas of small business that brought about Ekene Dili Chwkwu Transport, the FAN Milk, Nnewi “Tokumbo” parts, and even the many commercial banks in Nigeria.  Untried ideas become annulations that become concepts that changed the business world. And so it goes.  Small business is the basis for the economic well being many developed nations including USA/Japan.

Entrepreneurship is what makes a small business successful.  Entrepreneurship occurs when an individual develops a new venture, a new approach to an old business or idea, or a unique way of giving the market place a product or service by using resources in a new way under conditions of risk.  Small business triumphs and entrepreneurship are closely related to it.  It is difficult to separate them.

The unemployment situation in the country coupled with the new government instinctive towards easing social tensions among unemployed youths, through the programme of the National Directorate of Employment (NDE), were intended to lure a lot of unemployed Nigerians, including graduates into self determination through self employment.  Graduates and school leavers are now realizing that government and the established private companies are not ready to come to their aid directly, through paid employment due to the dividing state of the economy.  Short of the alternatives, Nigerians including our graduates are therefore launching themselves into various small-scale business ventures, such as cottage soap and cosmetics production, fairing, restaurants, fast food, publishing, writing, block making, garri processing, food processing, refuse disposal, taxi driving, cleaning services, weaving, baking tailoring, advertising and other sam business venture which depends mostly on local raw materials.  The determination to succeed is also fast becoming the order of the day.

Government has been playing appreciative tole in promoting the survival and growth of small-scale enterprise in recognition of them flexible and adaptive nature as well as their re-generative power in promoting economic growth and development.  Government also encourage people to establish their own small business so as to reduce the problem of unemployment in the country and also reduce the problem of importation of goods, moreso, to produce exportation products.

Government in believing that a dynamic and growing small manufacturing sub-sector can contribute significantly to the implementation of a wide range development effectives, has thus enunciated various policies to encourage their proliferation and make them veritable engines of growth and development.  In the third and for the development plans and the on-going three years rolling plan, priority has been accorded industrialization with greater emphasis on small-scale enterprises.  The basic activities of government policies as maintained in the monetary and fiscal policy measures, are to improve the financing and other supportive services of small-scale business by expanding and improving access to credit and infrastructural facilities, reducing their production costs, boosting their profitability, enhancing their survival and growth capacities as well as expanding their contributions to non-oil exports by making their products competitive in the export markets.

Hardly could any major industry succeed without the services of small-business enterprise. The major goals of any profit oriented business is to make profit.  A company will make more profit if statistics it’s customers need better them the competitors.  There fore in the contribution of small-scale business, bakeries would produce what the customers want and by sodoing they maximize profit and only bakeries that are effective and efficient can satisfy customers needs.  In reality, it is possible to run a business without profit for a time, but it is not possible for to survive for one day without customers.  Customers are the central theme of any business.  Without a total commitment to them, contribution to economic growth and development will have limited and brief effects.

 

1.2     STATEMENT OF PROBLEM

          Bakery is in the production industry the quality of products rendered by our Bakeries have been attracting criticisms from people in all works of life.  The civil servants, business men and the general public are all very critical of production of cookies like bread, chi-chin, cake, meat pie, bons etc.  the  complaints ranges from those of poor quality of products, poor packages, high prices, poor delivery, shortage of skilled manpower which affects productivity and restrain expansivion the use of potassium bromated which National Agency for food and Drug Administration Commission (NAFDAC) banned for health purpose.

Most bakeries do not put their customers in the prime place as they supposed to be.  There is now keen competition and to compete means to contribute to economic growth and development.  Dickson (1971:4), agreed with this view when he said that small scale enterprises are ploughed by inadequacies and serious mis-uses of business records and business information.  The problem of poor or wrong location of an industry affects its production.  Such as nearness to raw materials, market, sources of power and access to supply of labour and transport facilities etc.

Government incentive in industries has previously directed to public investment neglecting private initiative.  But a diversified and self-sufficient economy must take into consideration the importance of private sector in capital formation.

 

1.3     NEED FOR THE STUDY

There have been criticisms about the bakery industries in the way they render services to their customers. i.e.  they do not see the customers as king lot in terms of national output and employment.  Moreover, Nigeria has various policies on small-scale enterprises in recent National development plan and also in the structural Adjustment programme (SAP).  The researcher wants to carryout a research on what bakeries do and the role they play in economic growth and development the resucher also wants to have an idea base either to support all the sources about the poor impression people have on how to improve their production so as to contribute effectively in national economic growth and development.

Bakeries can do a more individualized jobs for customers and thereby attract them on the basis of specialty product quality and personal services rather than on the impersonal of price or mass production of largely identical business.  Based on the above, the need for studying this topic is to show the effectiveness of small-scale business in national economic growth and development.