Analysis of Employment Creation and Income Generation Potentials of Small and Medium Scale Enterprise in Abia State , Nigeria

Abstract

This study analyzed the employment creation and income generation potential of small and medium scale enterprise in Abia state, Nigeria. With reference on poultry and bakery, beyond the broad objective, the study sought specifically to assess the income generating capacity of these firms, and assess their employment capacity and its determinants. Sixty samples were randomly selected from each of these SMEs; Income statement account and multiple regression analysis were used to analyze the data collected. The Income Statement Account reveal that an average poultry in Abia state metropolis has an income generating capacity of N2,534,200 and average bakery N3,151,056 annually. The regression coefficient revealed that Size of the firms (0.638) at 1% level of significant, Number of department (0.611) at 5% level of significant is positively related to the employment capacity of these firms, Availability of labour (-0.636) and profitability of the organization (-3.138) has a negative relationship with the employment capacity of these firms. Each of these firms has a minimum of two employees and maximum of five persons, while one hundred and twenty (120) firms studied has a total number of three hundred and eighteen (318) employees. The researcher concluded that the employment creation and income generation potential of small and medium scale enterprises are indispensable for economic development of Abia state in particular and Nigeria as a whole. Thus he recommended that government should encourage more entrepreneurs through the creation of social amenities and reviewing of tax policies which have a negative influence on their income generating capacity.