Project Materials




Need help with a related project topic or New topic? Send Us Your Topic 



Chapter one

1.0 Introduction

1.1 Background of the Study

The histories of numerous industrialised countries demonstrate that the industrial revolution was the primary source of their economic existence. Their financial strength has primarily stemmed from the purchase of industrial and technological power.

Without exception, all large industrial organisations, whether multinational or indigenous, began as little businesses. Small-scale industrial setups abound, but the majority are purchasing and selling outfits.

Given the country’s economic position, entrepreneurs in the state are more than ever need to diversify their operations beyond buying and selling.

Over the previous two decades, Nigeria’s economy has progressed through several stages. From the oil boom of the 1970s to the period of excessive spending and painlessness in the early 1980s, and now the economic downturn.

One must understand that the sole proprietor’s existence in the Nigerian economy today is dependent on his ingenuity, drive, and swift response to the environment.

Agriculture employs the majority of the population, but some work in trade, traditional and industrial businesses such as pot moulding, basket and mat weaving, and hairdressing. Others include block moulding, farming, poultry, soap manufacturing

food processing, and so on. The majority of these activities are small-scale businesses, with sole proprietorships and partnerships as primary structures.

A large number of people have expressed concern about the development of Udi Local Government Area and Enugu State in general. People like Engr. Roy Umenyi, who conducted research of this sort, uncovered numerous bottlenecks in the development of the local government in question.

Such investigations also revealed that the main reason for the area’s low development was a lack of investment in industrial operations. This prompted the project writer to conduct research into the issues impeding the establishment and growth of small-scale companies in the Udi local government area.

1.2 Statement of Problem

Industrialization has been recognised as a fundamental tool for rural development. Thus, this study, titled “Accounting and management challenges of small scale enterprises in Enugu State (a case study of small scale industries in Udi local government area), attempts to determine why:

– There are only a few small-scale industries in the Udi local government district.

– The few industries that exist are not prospering.

– There is a high risk of infant mortality among small-scale companies in the area.

– What discourages investors from investing in small-scale industries in the area under study.


The major goal of this investigation is:

i) To determine why there are so few small-scale industries in the Udi local government region.

ii) Identify the primary issues confronting small-scale industries in Enugu state, specifically the Udi local government area.

iii) Determine the extent to which poor financial records have hampered the growth and prosperity of small-scale companies in the region.

iv) Determine the extent to which insufficient finance has inhibited the multiplication and prosperity of small-scale companies in the area.

v) Determine what roles the government and financial institutions should play in improving the plight of small-scale industrialists in the Udi local government region.

4.1 Importance of the Study

It is believed that this study would be extremely beneficial to a variety of individuals and businesses in the following ways:

i. This study will provide its numerous readers with a thorough understanding of the issues preventing the construction and development of small-scale companies in Enugu state, particularly in rural areas.

ii. It would also serve as a foundation for future research into other parts of the country’s industrialization issues.

iii. Finally, it is believed that this study will be useful to planning authorities because it will supply them with the required information for the articulation of economic activities.

1.5 Scope and Limitations of the Study

This paper is named “Accounting and Management Problems of Small Scale Industries in Enugu State” (a case study of small-scale enterprises in Udi local government area). Would have been extended to cover the entire state of Enugu and beyond

as well as all aspects of business establishment problems, but due to the large financial requirements involved and the short time frame in which the study would be completed, the project writer is compelled to limit the scope of the study to only the accounting and management problems of small-scale industries in Enugu state’s Udi local government.

1.6 Working Hypothesis

After reviewing the views and perspectives of several authors and business giants, the project writer desires to establish the following working hypothesis.

i. Poor financial records are the leading cause of infant morality in small-scale companies in the Udi local government region.

ii. Lack of Trust (Cooperation among small-scale industrialists is the primary cause of the low number of small-scale enterprises in the Udi local government area.

1.7 Definition of Terms

At this point, the project writer feels it is vital to describe and explain some of the causes of this investigation.

The definition of accounting is: “Accounting may be defined as a process by which data relating to the economic activities of an organisation are recorded, measured and communicated to interested parties for analysis and interpretation” .

According to the definition, accounting consists of three key branches.

– Finance Accounting

– Cost accounting

– Management Accounting

COST ACCOUNTING: – Is defined as “the part of management accounting that establishes budgets, standard costs, and actual costs of operations, processes, departments, or products, as well as the analysis of variances, profitability, or social use of funds.”

FINANCIAL ACCOUNTING:- Can be defined as the process of classifying and recording an entity’s actual transactions in monetary terms in accordance with established concepts, principles, accounting standards, and legal requirements, and presenting as accurate a view as possible of the effect of those transactions over time and at the end of the year.

MANAGEMENT ACCOUNTING:- According to the LCMA’s management and financial accounting terminology, management accounting is defined as “the application of professional knowledge and skill in the preparation and presentation of accounting information in such a way as to assist management in the formulation of policies and in the planning and control of the undertaker’s operations.” (ICMA).

AGRO-BASED/PROCESSING INDUSTRIES:- This includes sectors such as rice milling, cassava processing, palm oil processing, and chicken processing. This category of industries produces or processes agricultural products.

MANUFACTURING INDUSTRIES:- These are industries that engage in manufacturing operations by utilising raw materials, technical, and human resources to generate final product(s), also known as their industries, foods industries, block moulding industries, and so on.

Small Scale Industry: The definition of a small-scale enterprise differs depending on the organisation. For example, the Central Bank of Nigeria’s (CBN) Monetary Policy Circular No. 22 of 1988 defined small-scale enterprises (excluding general commerce)

as those with a total investment (including land and working capital) of less than N500,000 and/or an annual turnover of less than N5 million.

The national Economic Reconstruction Fund (NERFUND) caps small-scale companies at N10 million. Section 376(2) of the Companies and Allied Matters Decree of 2008 defines a “small company” as one that

a) Annual turnover of no more than N2 million.

(B) The net asset value is not greater than N1 million.

However, for the purpose of this research, it is relevant to categorise industries under the following headings:

SERVICE INDUSTRIES:- These are industries that engage in rendering various forms of services to people, such as tailoring industries, motor and motorbike repairing, hairdressing salons, gas filling stations and hotels.

Need help with a related project topic or New topic? Send Us Your Topic 


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.