The Impact of Small Scale Business on the Nigerian Economy Small Scale Businesses contribute immensely to the growth and development of the Nigerian economy. Some of these impacts are felt in the following areas: Increase in the nation’s Gross domestic product and Gross national product 1. Increase in Gross Domestic Product and Gross National Product The Gross National Product (GNP) is the total dollar value of all final goods and services produced for consumption in society during a particular time period. Its rise or fall measures economic activity based on the labor and production output within a country.
The Gross Domestic Product (GDP) measures output generated through production by labor and property which is physically located within the confines of a country The gross domestic product GDP) and the gross national product (GNP) of the country is increased as a result of the activities of small scale businesses. The Gross domestic product of any country is the total wealth created by the citizens living in that country, the gross national product is the total wealth created by the nationals of a given country. The activities of Small scale businesses lead to growth in the economy. ww. cftech. com/brainbank/corporateadministration. 2. Largest employer of Labor The existence of small scale businesses in the country had provided job and employment to many citizens. Small scale businesses play crucial roles in the economic development of countries (Ogundele; 2006). They employ more workers than their large scale counterparts. In Nigeria for instance, Small Scale Businesses (SSB) Constitutes 85% of all firms operating in the economy, and like in most other developing countries they employed the largest number of workers.
Increasing number of graduates from increasing number of public and private higher institutions who roam the streets, seeking for placement in the few declared vacancies can avail themselves of the opportunity available to make a living through small business. (Fabiyi and Adetoro; 2006) 3. Poverty alleviation and improved living standard With the employment opportunities small scale businesses provide, poverty in alleviated. Many people who hitherto cannot afford the necessities of life uch as food, shelter and clothing can now do so through income generated from small scale businesses. 4. Wealth creation Besides poverty alleviation, small scale businesses have been the “launching pad” for many large scale businesses today. The have serve as catalyst to wealth creation. Per. Capital income of the nation had grown as a result of the proliferation of small businesses. Many have acquired landed properties, motor vehicles and other assets through small businesses. Besides, small businesses have served as a boost to the revenues of some employed citizens.
In Nigeria, it is common to see persons employed with the government or organized private sector still running small businesses which serve to boost their revenue. 5. Promotes self reliance and less dependence on government Small business had encouraged self reliance and less dependence on government for job, and other forms of support. The resources available at government’s disposal are limited and as such she encourages small businesses in order to ensure self reliance and less dependence on her.
This has been largely achieved in countries like Malaysia, Indonesia, Thailand and other nations that form the so called Asian Tigers. This is slowly being realized in Nigeria. 6. Reduction of social vices and crimes. Small businesses have served to reduce the prevalence of social vices and crimes among especially among the youths. The absence of this source of employment would have seen many youths taken to crimes and other forms of vices to make ends meet.