Strengthening Small and Medium Scale Enterprises (SMEs) For Poverty Alleviation in Nigeria

Abstract

Small and Medium Scale Enterprises (SMEs) is recognized as the engine of promoting economic growth, employment opportunities and poverty alleviation both in developed and developing countries. In Nigeria, these are widely accepted and documented by both scholars and policy makers. Unfortunately, the myriad of problems have strangulated SMEs from performing well as expected which make poverty persist in Nigeria. Various programmes were established by the Federal Government towards boosting SMEs and poverty alleviation, but with the unsatisfied result. In this paper, our preoccupation is to accept the fact that strengthening SMEs serves as a means for poverty alleviation in Nigeria. This paper identifies the problems affecting SMEs from not performing well. These are inadequate finance, inadequate infrastructural facilities, lack of sound strategic planning system, multiple taxation, restricted market, unfavourable Government policy and corruption. This paper discovered that the major problems that affect SMEs are inadequate finance, inadequate infrastructure and corruption situation in the country. This paper also recommends a strategy based on strengthening SMEs for poverty alleviation in Nigeria. Firstly the government should provide fund/finance to SMEs for them to play and discharge their duty effectively and efficiently and make loan available on a regular basis and the interest rate charge should be at a single digit. Secondly the Government should provide necessary infrastructures such as power supply, water supply, telecommunication and a sound transportation system. The last both not the least, the Government should intensify the war against corruption by sanctioning anybody found in such act in the country. Therefore, if these major areas are adequately addressed, our SMEs will be an engine of reducing poverty in the country and at the same time contribute to the achievement of the Millennium Development Goal (MDGs) of eradicating poverty and hunger in Nigeria specifically and in Africa generally.