Mohammed Shettima
1Research Associate, (Economics Dept). School of Interdisciplinary & Liberal studies, Suresh Gyan Vihar University, Jaipur, India.
2Vice Principal, School of Interdisciplinary & Liberal studies, Suresh Gyan Vihar University, Jaipur, India.
Corresponding Author: Mohammed Shettima, e-mail:mrbee4real@gmail.com,
Contact No: +919664090841, +2348032333445
ABSTRACT
The SME sector is exceedingly an imperative segment of the economy because of its contribution to GDP, exports, Job creation, and overall social and economic development. Government designs policies, programmes, and schemes and ensures its effectual execution for the augmentation and expansion of the MSMEs. This study will examine the relationship between employment generation growth and MSME growth and as well the impact of MSMEs on employment generation in Kano state of Nigeria. This will be achieved by utilizing the primary source of data collection as a survey will be conducted with the use of questionnaires, and statistical tools will be used to analyse the data obtained to test the hypothesis and level of significance. MSMEs play a very significant role in economic growth and development and due to that fact, findings in the study identified some recent policy initiatives adopted by the Nigerian government to stimulate the MSME sub sector.
Key words: Entrepreneurship, Employment generation, Impact, Kano, MSMEs, Nigeria, Sure-P, You-Win,
INTRODUCTION
It is an established fact worldwide that the Micro, Small, and Medium Enterprises sector is a key indicator of economic growth and development. The role of Micro, small and medium enterprises (MSMEs) in the economic and social development of a nation cannot be overemphasized. The MSME sector is considered as the starting point of entrepreneurship, which is often driven by its efficiency, flexibility, individual creativity and in general its innovative entrepreneurial spirit. This sector is responsible for most of the job opportunities, proposition of new products and overall performance of an economy. Its productive nature makes it exposed to a high mortality rate which is caused by a sudden change in economic policy, global trends, global shocks in international markets and many unexpected circumstances, while its unproductive nature which indicates its exposure, is also its key asset. The issues of MSME development and employment generation are very important in today’s government economic development efforts. Government has been trying to put up structures in order to ensure that the business environment is very conducive for the private sector so that they can create many jobs. However this is one of the ways in which government can transfer dividends of democracy to its citizens and as well reduce the challenges of insecurity and unemployment in a nation. Entrepreneurs/MSMEs must be encouraged to drive the process of job creation as they are known all over the world as aggregate generators of employment. Every government of a nation undertakes entrepreneurship programmes or projects which however assists the citizens to seek and gain meaningful employments. For example The American Job Creation Act of 2004, which was designed to benefit domestic manufacturers, multinational corporations as well as the agricultural and energy sectors so as to enable them provide employment to its citizens. Also in Britain, two thirds of jobs created in the country are done by small firms.
“Employment generation” simply means jobs created in response to some sort of event or situation. Conceptually, it’s the proactive opposite of unemployment. In the real sense, industries and organizations employ more workers only when it’s necessary for them to do so with the aim of satisfying the demand for their products or services. They employ workers only when they believe they can do the required work, and they strive to minimize cost in having the work done. However, economic indicators like taxation, subsidies, and regulations do not alter the demand for goods or services and have no measurable effect on the demand for goods and services; as a result it does not affect the rate of unemployment. The argument still remains that changes in economic policy that allow companies to have higher margins will as well allow them to expand (equipment or personnel), in preparation for a prospective future increase in demand or new markets. Practically, in a depressed state where that prospective increase is not quantifiable, what actually happens is that profit-taking is done more judiciously.
(Umar, N.M, 2017), asserted that for any developing nation to be among the 20 most economically advanced nations in the world by the year 2020, much attention needs to be paid on the development of MSMEs. Entrepreneurs and MSMEs need all the support they can gather from all stakeholders in order to create more job opportunities for our teeming jobless population[1].
In Nigeria, the government introduced several entrepreneurship programmes that led to Job creation where two of the current and most prominent programmes include the Subsidy Reinvestment and Empowerment Programme (SURE-P) and the Youth Enterprise With Innovation in Nigeria (YOU-WIN). The SURE-P was introduced in February 2012 and focused on management and investment of federal government savings derived from proceeds accruing from the partial removal of the subsidy on petroleum products. The SURE-P is the front runner of the recent efforts by government to provide job opportunities to graduates of tertiary institutions. The (YOU-WIN) program was also designed to create job opportunities specifically, again, for graduates of tertiary institutions that choose to go into business as entrepreneurs. Here, the participants are required to develop and execute their own business ideas that will provide jobs for themselves and other unemployed youths who may or not be graduates.
Nigeria has abundant natural resources, despite that according to the recent HDI ranking it was identified as a very poor country because of the level of underdeveloped human and economic resources. In order to create favorable investment climate and wealth generating enterprises necessary for economic development, there is the urgent need to develop skilled entrepreneurial workforce in areas where the country has competitive and comparative advantage. Poor funding, inadequate and weak infrastructure, corruption, policy discontinuity, obsolete technology, ineffective market linkages among others, are responsible for the sorry state of the MSMEs. Thus improvement of entrepreneurship policies, adequate funding, good management and professionalism are recommended as potential solutions.
LITERATURE REVIEW
Micro, Small and medium scale enterprises for a very long time have been recognized as an instrument of economic growth and development. In overall economic development, a significant role is played by the micro, small and medium enterprises where it promotes its resistance level in competition, productivity growth and as well has external benefits on the economy at large. When this level is attained efforts are however directed towards government support and involvement in exploiting countries social benefits.
(Kola, V. 2014), asserted that the SME industry is an important sector of an economy. Power2SME is first of its kind of company that is committed to raw materials procurement, strictly for MSME industry and it will be able to scale new heights to empower many more MSMEs in the near future.[2] SMEs are very important in nation’s objectives of growth and development with fairness and involvement. Also the sector has constantly recorded a higher growth rate than the rest of the industrial sector.
(Sharma, V.S 2016), was of the opinion that if we can facilitate 100million SMEs to grow, it will be of great help. We want to solve the problems in payments, catalogues, logistics and marketing. We will invest to make SME business grow[3]. Small and medium scale enterprises have a limited framework within which its operation is carried out. However, in a situation whereby it is effectively operated it will have the capacity to increase the economic growth and national development (Kozak, R. 2007) said[4]. According to Onugu, A.N (2005), one of the main features of Nigeria’s MSMEs is related to ownership structure, which majorly revolves around the key person or family. Hence, MSMEs are predominantly either a sole proprietorships or partnerships. Even where the registration status of the business is a limited liability company, the true ownership structure is that of a one-man business, family or partnership business.[5]
MSME development and employment generation have a direct relationship as entrepreneurship is considered the most ideal way of creating Jobs. Entrepreneurship has always been referred to as a key determinant to improving economic growth and development in a nation. According to (Amaeshi et. al 2007), Entrepreneurship is also seen as a key element of reducing poverty level, as it creates new jobs, creates an atmosphere of innovative thinking, and can lead to the launch of pioneering and cutting edge companies.[6] However, much evidence has shown clearly that entrepreneurs create more employment than those people not in to entrepreneurship and it is very important to note that Entrepreneurial activities encourage and leads to development of new businesses. Thus, the establishment and growth of MSMEs results to more Job creation. As earlier stated, MSMEs are responsible for a greater percentage of the formal jobs in the developing world; therefore MSMEs can be a very effective way of job creation. Another key determinant is innovation, which will actually improve economic growth rate in developing nations. As research is going on in its early stage most especially in developing countries on the intersection of entrepreneurship and innovation, there is however a general understanding that entrepreneurship encourages high level of innovation. Innovation is of great importance because it brings about more high-value productivity chains and changes in technological process, which leads to a wider range and high quality of goods and services. Entrepreneurs are the ones that encourage innovation as they are much more aware of the potential new markets and utilize this opportunities in creating new ventures, products and services. Hence, Entrepreneurship plays a very important role in the process of changing developing countries from factor-driven economies based on natural resources and unskilled labour, to innovation-driven economies which compete in the form of providing new and unique products and services (Owuala, 1999) said.[7] Entrepreneurship development as phenomena in job creation plays a very important role in reducing the high rate of unemployment.
According to (Dilanchiev, A. 2014), based on some hypothesis conducted, entrepreneurship and unemployment rates are negatively related. It is however necessary to investigate the relationship between entrepreneurship and unemployment, where on one hand entrepreneurship may reduce the level of unemployment as a positive factor and on the other hand unemployment may increase or decrease the level of entrepreneurship[8].
In an entrepreneurial society, job creation is a common characteristic as new entrepreneurs in the society have new traits through open-source culture. In such a society a strong network is generated on new investors and training activities for the future venture capitalists and corporate leaders. After all, entrepreneurial activity is always about value creation and this enhances factor productivity which promotes factor utilisation and intensity in a typical production process. Consequently, jobs are created within and outside a particular enterprise from any entrepreneurial activity.
OVERVIEW OF STUDY AREA
The study is going to be carried out in one of the states of Nigeria known as Kano state.
Brief Insight of Nigeria
Nigeria came into existence in 1914 when the Northern and Southern part was amalgamated together to form a colony by the colonial masters. It gained independence on the 1st of October, 1960, and by 1963, the country became a full republic. Nigeria is located in the western part of Africa and has a total landmass area of about 923,769 km2 with 909,890 km2 and 13,879 km2 covered with land and water respectively. The country has boarder nations such as Chad and Niger Republic in the northern part, Cameroon Republic on the East, Benin and Niger Republics on the West and Guinea Republic on the Southern part and the nation experiences both the summer and winter seasons. Nigeria is made up of 36 states and 776 local governments with Abuja city as the federal capital. It is also divided into six geo-political zones which are the north east, north-west, north-central, south-east, south-west and south-south geo-political zones. The official language of Nigeria is English and has three major Native languages which are Hausa, Ibo, Yoruba and the currency is Nigerian Naira (NGN). As at 2017, Nigerian population increased to 190,886,311 million with a 2.53% share of world population and ranking 7th most populous nation in the world.
Nigerian economy is characterized among the middle income class mixed economy which has a growing market and expanding technology, communications, financial, services and entertainment sectors. The country is blessed with so many natural resources making it to be among the leading economies of the world if utilized judiciously. Crude oil which is the bedrock of the economy was discovered at Oloibiri, Bayelsa state in 1956 in commercial quantity, with an estimation of 36.5 billion barrels oil reserve. By world ranking Nigeria stood at 10th largest and second largest in Africa. In terms of gross domestic product (GDP) as at 2017, the economy ranked 28th in the world and the largest in Africa having a Nominal GDP of $400 billion with a global wealth share of 0.514% and had a GDP PPP of $1,124 Trillion ranking 23rd in the world with a global wealth share of 0.89%.
Kano state at a glance
Kano State is located in the North-Western part of Nigeria and was created on 27th May 1967. The state borders Katsina State to the north-west, Jigawa State to the north-east, Bauchi State to the south-east and Kaduna State to the south-west and it’s made up of 44 local government areas.
Kano state is known to be ethnically cosmopolitan. It is one of the seven true Hausa states alongside with Hadejia, Daura, Zaria, Katsina, Gobir and Rano. The major tribes in the State are Hausa, Fulani, Kanuri, Maguzawa and Kurama. However, the major language spoken in the state is Hausa language as everyone can also speak his mother tongue language.
As at 2011 the population of Kano state was estimated to stand at 11,058,300 million and over 14 million as at 2017 with 51% males and 49% females ranking 2nd among the various states in Nigeria. Kano state is referred to as the centre of commerce as it is the commercial nerve centre of the northern part Nigeria where both domestic and international businesses takes place.
Kano state is considered the biggest industrial center in Northern Nigeria and the second biggest in the whole country. The state has more than four hundred private MSMEs, which produce diverse products like agricultural implements, tanned leather, pharmaceutical products, dairy products, bicycles, pottery, rugs & carpets, Jewelries and textile materials. The state government provided big industrial areas like Challawa Industrial Area, Sharada industrial areas and Tokarawa Industrial layout for enhancing industrial progress and is planning to add more industrial estates.
The Micro, Small and Medium Enterprises sector in Kano is said to be very strong and diverse in nature, having an estimation of 1.6 million business enterprises as at 2017 across all economic activities, and contributing approximately 60-70% of output and employment of the state.
According to a report in Economic Confidential June 2016, the central bank of Nigeria released N2Billion to MSMEs in Kano. The governor of the state mentioned that women would constitute 63 percent of beneficiaries of the fund, which is an interest free loan, through the microfinance banks established in the state. This is to empower the women economically and lift families out of poverty and unemployment.
OBJECTIVES
The main objective of the study is to examine the Impact of Micro, Small and Medium Enterprises (MSMEs) on Employment Generation in Kano state. The specific objectives are to;
- Analyse the correlation between MSMEs growth and employment growth in Kano state.
- Examine the Impact of MSMEs on Employment Generation in Kano state.
- Identify recent policy initiatives for generating employment through MSMEs.
HYPOTHESIS
Arising from the research objectives the following hypothesis will be formulated;
- H0: MSMEs have no significant impact on employment generation in Kano state.
- H1: MSMEs have significant impact on employment generation in Kano state.
METHODOLOGY
This study utilized both the primary and secondary method of data collection. The secondary data was collected mainly from World development indicators, Journals, bulletins, National bureau of statistics report, National sample survey reports, government reports, publications, articles, thesis work, books, internet sources etc. However, the analysis of results for this study is based solely on the primary data collected. A survey was conducted on some 5 selected MSMEs in Kano state namely the Arts & crafts, Rugs & carpets, Textile, Jewellery and Pottery industries. The study carried out a review on the performance of the selected MSMEs in concern for the past five years from 2013 to 2017 and there was a sample size of 1,000 respondents with 200 in each of the 5 MSMEs selected.
The study used some statistical tools to analyse the primary data obtained. Correlation co-efficient model was used to measure how strong the relationship is between the two variables; employment generation growth and MSME growth. This model however aimed at achieving the first objective which is to “examine and analyse the correlation between MSME growth and employment growth in Kano state”. Also the chi-square model was used to test our hypothesis which is to determine if MSMEs actually have impact on employment generation in Kano state or not. This model will however enable us to achieve our second objective of the study.
DATA ANALYSIS
As earlier stated, for us to achieve the first objective of the study which is examining and analysing the correlation between MSME growth rate and Employment growth rate, the study will make use of the correlation coefficient model to measure the strength of the relationship between the two variables which are the employment generation growth and MSME growth. This is going to be done with the help of the following formulae;
The average employment generation and MSME growth rates for the period under review (2013-2017) is shown in the table 1.1 below;
Table 1.1 Average MSME and Employment generation Growth rate in selected MSMEs of Kano state (2013-2017).
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| MSME Growth | 162.6 | 176.8 | 180.0 | 192.4 | 210.4 |
| Employment Growth | 1,124 | 1,193 | 1,227 | 1,358 | 1,448 |
Source: Field 2018
From the values in Table 1.1 above we are going to compute the x and y variables of the formulae so as to substitute them and get our correlation coefficient value.
Table 1.2 Computed values of x and y
| x | y | xy | x*x | y*y |
| 162.6 | 1,124 | 182,762 | 26,439 | 1,263,376 |
| 176.8 | 1,193 | 210,922 | 31,258 | 1,423,249 |
| 180.0 | 1,227 | 220,860 | 32,400 | 1,505,529 |
| 192.4 | 1,358 | 261,279 | 37,018 | 1,844,164 |
| 210.4 | 1,448 | 304,659 | 44,268 | 2,096,704 |
| 922.2 | 6,350 | 1,180,483 | 171,383 | 8,133,022 |
Substituting the values of x and y computed above in the correlation coefficient formula where “n” is number of variables which are the five selected MSMEs.
5(1,180,483) – (922.2) (6,350)__________
√ [5(171,383 – (922.2)2] [5(8,133,022 – (6,350)2] =
5,902,415 – 5,855,970_________________
√ [856,915 – 850,452.84] [40,655,110 – 40,322,500] =
46,445________
√ (6,462.16) (342,610) =
46,445_________
√ (6,462.16) (342,610) =
46,445_________
√ 2,214,000,637.60 =
46,445_________
47,053.17 r = 0.99
As earlier stated where 1 indicates a strong positive relationship, our calculated value or ‘r’ which is 0.99 however indicates that there is a strong correlation between MSME growth and Employment generation growth. Hence for every positive increase in MSMEs there will be a corresponding increase in the rate of employment generated.
Testing of Hypothesis
As stated in our methodology, the study adopted the survey research design where copies of questionnaire served as instrument for data collection, and the generated data was analysed using Chi-Square. A total of 1,000 respondents were deliberately selected as the sample size with 200 in each of the five selected MSMEs. The simple random sampling technique was further adopted to give equal opportunity for selection to every element of the population. Chi-Square was used to test the hypotheses. Data were presented and analysed using simple statistical tables and percentages. The value of the Chi-Square was calculated using the formula;
Χ2 = ∑ (O – E)2
E
Given our hypothesis as;
- H0: MSMEs have no significant impact on employment generation in Kano state.
- H1: MSMEs have significant impact on employment generation in Kano state.
The researcher shall determine whether to accept to or reject the null or alternate hypothesis following the decision rule which states that;
- If the calculated X2 is more than the tabulated value of X2, the null hypothesis (H0) is to be rejected and the alternate hypothesis (H1) is to be accepted.
- If the calculated X2 is less than the table value of X2, the null hypothesis (H0) is accepted and alternate hypothesis (H1) is rejected.
Out of the 1,000 copies of the questionnaire distributed, a total of 732 were correctly filled and returned from the different five MSMEs selected. The data are presented below;
Question No1: Does Micro, Small and Medium Scale Enterprises have significant impact on employment generation in Kano State?
Table 1.3
| FREQUENCY | PERCENTAGE (%) | ||||||
| Yes | No | Not sure | Total | Yes | No | Not sure | Total |
| 640 | 63 | 29 | 732 | 87.43 | 8.61 | 3.96 | 100 |
Source: Field 2018
As shown in Table 1.3 above, it can be seen that six hundred and forty (640) respondents agreed that Micro, Small and Medium Enterprises have significant impact on employment generation in Kano State, whereas sixty three (63) respondents disagreed to that fact and twenty nine (29) of the respondents were not sure.
Question No 2: Have MSMEs been able to reduce the unemployment problem in Kano State?
Table 1.4
| FREQUENCY | PERCENTAGE (%) | ||||||
| Yes | No | Not sure | Total | Yes | No | Not sure | Total |
| 667 | 47 | 18 | 732 | 91.12 | 6.42 | 2.46 | 100 |
Source: Field 2018
In Table 1.4, six hundred and sixty seven (667) respondents were of the opinion that MSMEs have been able to reduce the unemployment problem in Kano State, while forty seven (47) respondents were against that opinion and eighteen (18) of the respondents were not sure if MSMEs have actually reduced unemployment or not in the state.
Question No 3: Have MSMEs been able to increase the economic growth and development in Kano State?
Table 1.5
| FREQUENCY | PERCENTAGE (%) | ||||||
| Yes | No | Not sure | Total | Yes | No | Not sure | Total |
| 629 | 66 | 37 | 732 | 85.93 | 9.02 | 5.05 | 100 |
Source: Field 2018
Table 1.5 reveals that six hundred and twenty nine (629) respondents had the view that MSMEs have been able to increase the economic growth and development in Kano State; whereas sixty six (66) respondents had a contrary view and thirty seven (37) of them were not sure.
Question No 4: Has the MSMEs impacted on the expansion of markets for local goods and services in Kano State?
Table 1.6
| FREQUENCY | PERCENTAGE (%) | ||||||
| Yes | No | Not sure | Total | Yes | No | Not sure | Total |
| 654 | 23 | 55 | 732 | 89.34 | 3.14 | 7.52 | 100 |
Source: Field 2018
Table 1.6 indicated that six hundred and fifty four (654) respondents were of the opinion that the expansion of markets for local goods and services in Kano State has been impacted by MSMEs, while twenty three (23) respondents disagreed to that statement and fifty five (55) of the respondents were not sure.
Question No 5: Will government intervention in MSMEs improve its performances for employment generation in Kano State?
Table 1.7
| FREQUENCY | PERCENTAGE (%) | ||||||
| Yes | No | Not sure | Total | Yes | No | Not sure | Total |
| 665 | 18 | 49 | 732 | 90.85 | 2.46 | 6.69 | 100 |
Source: Field 2018
Table 1.7 reveals that six hundred and sixty five (665) respondents were of the opinion that government participation in MSMEs will surely improve its performances for employment generation in Kano State, whereas eighteen (18) respondents had a contrary opinion and forty nine (49) of the respondents were not sure of the fact.
Question No 6: Has there been any effort from both the public and the private sector to reduce the challenges faced by the MSME sub sector in Kano State?
Table 1.8
| FREQUENCY | PERCENTAGE (%) | ||||||
| Yes | No | Not sure | Total | Yes | No | Not sure | Total |
| 464 | 183 | 85 | 732 | 63.39 | 25 | 11.61 | 100 |
Source: Field 2018
It is shown in Table 1.8 that four hundred and sixty four (464) respondents were of the view that there have been some efforts from both the public and private sectors to reduce the challenges faced by the MSME sub sector in Kano State, whereas one hundred and eighty three (183) respondents disagreed to that point and eighty five (85) of the respondents were not sure.
The chi-square technique was used to test our hypotheses and in this case 95% (0.95) or 5% (0.05) level of significance is adopted. This level of significance chosen simply means that there is 95% chance of the work to be correct and 5% chance of error and it is said to lie within the limits of 1 .96.
Table 1.9 Contingency Table of Observed (Fo) And Expected (Fe) Frequency
| QUESTION | YES | NO | NOT SURE | TOTAL |
| 1 | 640(642.67) | 63(45.5) | 29(43.83) | 732 |
| 2 | 667(642.67) | 47(45.5) | 18(43.83) | 732 |
| 3 | 629(642.67) | 66(45.5) | 37(43.83) | 732 |
| 4 | 654(642.67) | 23(45.5) | 55(43.83) | 732 |
| 5 | 665(642.67) | 18(45.5) | 49(43.83) | 732 |
| 6 | 601(642.67) | 56(45.5) | 75(43.83) | 732 |
| TOTAL | 3,856 | 273 | 263 | 4,392 |
Source: Responses of Questionnaire
From table 1.9 above, the figures in the bracket represent the expected frequency (Fe) while those figures outside the bracket represent the observed frequency (Fo). The observed frequency (Fo) is gotten from the responses of the respondents on the questionnaire while the expected frequency (Fe) was computed using the formula:
RT*CT
GT
Where, RT = Row Total, CT = Column Total and GT = Grand Total as it is shown in table 1.9 above.
Test of Significance
As earlier stated the 0.95 (95%) or 0.05(5%) level of significance is going to be used to test the significance and 10 degree of freedom (df) is also used. The degree of freedom is obtained by:
df = (Row-1) (column – 1) df = (6 – 1) (3 – 1), df = (5) (2) df = 10.The critical (tabulated) value of X2 = 18.30. Now we are going to get the calculated value of X2
Table 1.10 Contingency Table of Calculated Chi-Square
| Row & Column | Fo | Fe | Fo-Fe | (Fo-Fe)2 | (Fo-Fe)2/Fe |
| R1C1 | 640 | 642.67 | -2.67 | 7.1289 | 0.0111 |
| R1C2 | 63 | 45.5 | 17.5 | 306.25 | 6.7308 |
| R1C3 | 29 | 43.83 | -14.83 | 219.9289 | 5.0178 |
| R2C1 | 667 | 642.67 | 24.33 | 591.9489 | 0.9211 |
| R2C2 | 47 | 45.5 | 1.5 | 2.25 | 0.0495 |
| R2C3 | 18 | 43.83 | -25.83 | 667.1889 | 15.2222 |
| R3C1 | 629 | 642.67 | -13.67 | 186.8689 | 0.2908 |
| R3C2 | 66 | 45.5 | 20.5 | 420.25 | 9.2363 |
| R3C3 | 37 | 43.83 | -6.83 | 46.6489 | 1.0643 |
| R4C1 | 654 | 642.67 | 11.33 | 128.3689 | 0.1997 |
| R4C2 | 23 | 45.5 | -22.5 | 506.25 | 11.1264 |
| R4C3 | 55 | 43.83 | 11.17 | 124.7689 | 2.8467 |
| R5C1 | 665 | 642.67 | 22.33 | 498.6289 | 0.7759 |
| R5C2 | 18 | 45.5 | -27.5 | 756.25 | 16.6209 |
| R5C3 | 49 | 43.83 | 5.17 | 26.7289 | 0.6098 |
| R6C1 | 601 | 642.67 | -41.67 | 1736.389 | 2.7018 |
| R6C2 | 56 | 45.5 | 10.5 | 110.25 | 2.4231 |
| R6C3 | 75 | 43.83 | 31.17 | 971.5689 | 22.1668 |
| 98.0147 |
From the table X2 = 98.0147
Following the decision rule, and in the above statistical test which shows that the calculated value of X2 (98.0147) is greater than the critical (tabulated) value of X2 (18.30), we therefore reject the null hypothesis (H0) and accept the alternative hypotheses (H1) and then conclude that MSMEs have significant impact on employment generation in Kano State. Furthermore, the result obtained and the decision taken from our tested hypothesis implies that MSMEs have significant impact on job creation and by extension economic development of Kano State as the difference between the calculated chi-square value of X2 = 98.0147 and the critical value of X2 = 18.30 greatly disclose and confirms our previous expectation.
RECENT POLICY INITIATIVES ON EMPLOYMENT GENERATION
Almost all countries assist its MSMEs to a large extent because of the significant role it plays in economic growth and development. The assistance usually comes in the form of facilities and supportive services rather than on protection and subsidies. The government provides services such as commercial finance, venture capital, information, training and retraining, research and development (R&D) support, infrastructure and tax incentives among others. However most of these facilities are provided through the local authorities and industry associations and sometimes with the involvement of non-governmental organizations (NGOs).
The Nigerian government recently introduced several entrepreneurship programmes and schemes to stimulate the MSME sub sector. The MSMEs are flexible and can adapt to any sudden change home and abroad. These are some of the reasons which made it necessary for a change of focus in Nigeria’s economic policy direction. Policy makers had to look inward and see how the national economy can be developed through the MSME sector. Some of these policy initiatives may include;
- Small and Medium Enterprises Development Agency of Nigeria (SMEDAN)
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) is an Agency created to facilitate the promotion and development of the Micro, Small and Medium Enterprises (MSMEs) sector in an efficient and sustainable way. It is a known fact globally that the micro, small and medium enterprises contributes over 80% of industrial and human development most especially in developing nations such as that of India, Bangladesh, Pakistan and now Nigeria in the sub Saharan Africa and it serves as the engine room of economic growth and development. SMEDAN was mainly created to provide job opportunities, create wealth and also empower the Nigerian populace, so as to reduce poverty level and most importantly contribute to the nations GDP. The Mission of SMEDAN is to ease the access of micro, small, and medium entrepreneurs/investors to all resources needed for their development.” And the vision of SMEDAN is “to establish a structured and efficient micro, small, and medium enterprises sector that will enhance sustainable economic development of Nigeria.” SMEDAN is however charged with the responsibility of promoting viable and vibrant MSMEs in Nigeria and also create a conducive business environment for MSMEs in collaboration with both private and public sectors for increased employment generation.
- Subsidy Reinvestment and Empowerment Programme (SURE-P)
The SURE-P was introduced in February 2012 and focused on management and investment of federal government savings derived from proceeds accruing from the partial removal of the subsidy on petroleum products. The SURE-P is the front runner of the recent efforts by government to provide job opportunities to graduates of tertiary institutions. The scheme however aimed at sharpening their skills, enable them gain some working experience and enhance their employability skills.
- YOU-WIN Program
The (YOU-WIN) program was also designed to create job opportunities specifically, for graduates of tertiary institutions which constitute major part of the population that choose to go into business as entrepreneurs. Here, the participants are required to develop and execute their own business ideas that will provide jobs for themselves and other unemployed youths who may or not be graduates. This programme is expected to train and facilitate the establishment of youth owned enterprises.
- Women Entrepreneurship Development Programme (WEDP)
This is a gender based programme specifically for the women populace and the main objective of the programme is to transform women into successful entrepreneurs. The programme also aims at empowering the women economically through keen participation and development of their entrepreneurial capacities. However, with the establishment of this programme, today in Nigeria we have many business enterprises owned and managed by women.
- Youth Corpers Entrepreneurship Development Programme (YCEDP)
This programme is targeted at fresh school leavers that have just graduated from the university. It’s a National policy in Nigeria for every university graduate to undergo a one year national youth service programme. Government in that respect initiated the YCEDP where Entrepreneurship lectures are organized and delivered to prepare the youth corpers towards business ownership and management. The participants are expected to prepare and submit business plans at the end of the training programme and later these business plans are further sent to micro-finance banks for financial assistance and execution.
- National School Entrepreneurship Programme (N-SEP)
The National school Entrepreneurship programme was initiated by SMEDAN to deliver hands-on Entrepreneurship and community service in both primary and secondary schools across students in Nigeria. This is however aimed at removing the problem of poverty, conflicts and massive youth unemployment.
- Rural Enterprise Development Initiative (REDI)
The Rural Development Initiative programme aims at promoting entrepreneurship/enterprise development in the rural areas. These rural areas actually need government intervention because they are said to have abundant natural resources that can generate lots of employment, create wealth and even reduce poverty level drastically. This programme is also dedicated in transforming the rural area which is based on cluster support programmes that provide the populace some autonomy towards business ownership and management. This is however done by encouraging and pushing them into Cooperative Societies and Self-Help Groups and assists them with registration, business plan preparation and access to equity finance.
- Implementation of the National Enterprise Development Programme (NEDEP)/One
Local Government, One Product (OLOP) Initiative
Between 2008 and 2010, SMEDAN went into partnership with Japan International Cooperation Agency (JICA) in some of the States in Nigeria, specifically Kano and Niger states were the pilot study was conducted, and this was in line with the transformation agenda of the administration of that period to create more jobs and boost economic empowerment. The Ministry of Industry, Trade and Investment in collaboration with SMEDAN aimed at developing the OLOP initiative and including the National Enterprises Development Programme (NEDEP) as one project which is expected to create over Five million jobs between 2013 and 2015. This initiative is said to have the potential to change the Nigerian economy for good, especially in the area of agribusiness and as well reduce rural- urban migration. Initially the MOU signed to test run the initiative on five clusters but now a proposal is made to increase the number of clusters to 109 spread across the country. However the beneficiaries were informed that the performance of the initiative is very important, for that will determine the level of support the government will provide.
CONCLUSION
The importance of the MSME sector to the Nigerian economy cannot be overemphasized because of its significant contribution to the nations’ economic growth and development. Findings in the study have shown that MSMEs have significant impact on employment generation in Kano state and also there is a strong correlation between MSME growth and Employment generation growth, as for every positive increase in MSMEs there will be a corresponding increase in the rate of employment generated. Despite that, MSMEs are said to face a lot of challenges ranging from inadequate access to finance, lack of infrastructure, obsolete technology, and ineffective market linkages among others. Government has been trying its possible best to provide a conducive business environment for the MSMEs so that they can create many jobs and with the recent policy initiatives adopted by the Nigerian government to stimulate the MSME sub sector, the sector is said to experience a sustainable growth and development. However, as the MSMEs are considered to be the aggregate generators of employment, if its development is well encouraged by the government, the challenges of insecurity and unemployment will be reduced drastically and most importantly citizens tend to benefit from the dividends of democracy.
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[1]Umar, N.M. (2017), Job creation in Nigeria. Challenges, opportunities and the role of MSMEs. 3rd Annual CESA Economic policy and fiscal strategy seminar paper. p 24
[2] Kola, V. (2014). Annual publication on Power2SME.
[3] Sharma, V.S (2016). Invest to make SME grow. launching of Paytm services in the country. pp2
[4]Kozak, R. (2007), Small and medium forest enterprises: Instruments of change in the developing world.
[5] Onugu, A.N. (2005): Small and Medium Enterprises (SMEs) in Nigeria: Problems and Prospects.
[6]Amaeshi et. al (2007), Entrepreneurship as a core Economic development strategy for Nigeria: Journal of Business and Management studies. Vol. 1 No.2 pp 1-9
[7]Owuala, S.I (1999) Entrepreneurship in Small Business Firms, Lagos, GMAG Investment Ltd
[8] Dilanchiev, A. (2014), Relationship between Entrepreneurship and Unemployment: The Case of Georgia: Journal of Social Sciences; ISSN: 2233-3878; Volume 3, Issue 2, 2014. Pp 5-6