IMPACT OF ENVIRONMENTAL POLLUTION ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES

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IMPACT OF ENVIRONMENTAL POLLUTION ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

CHAPTER ONE

INTRODUCTION

Background to the Study

Small and Medium Enterprises (SMEs) as defined by the National Council of Industries refer to business enterprises whose total costs excluding land is not more than two hundred million naira(N200,000,000.00)only. It has been argued that SMEs are an effective instrument for economic growth and development in Developed and Less Developed Countries (Beyene, 2002; Nitani, 2005). This is because SMEs contribute significantly to the Gross Domestic Product (GDP) and produce substantial amounts of locally consumed products (ECA, 2000; Wattanapruttipaisan, 2003; Tagoe et al, 2005; Saleh and Ndubisi, 2006). According to Mojmir (2000), SMEs play an important role in the economic growth of any country including industrialised countries because they account for more than half of a country‟s output and employment (Hussain et al, 2008). In the same vein, Udechukwu (2003) asserts that the development of SMEs is an essential element in the growth strategy of most economies, which holds particular significance for developing countries like Nigeria. SMEs are a vital part of any market economy because they are represented in all major branches of manufacturing and service sectors (Obokoh, 2008c). This is in addition to their role in job creation for the unemployed, provision of goods and services within and across national boundaries of countries (Saleh and Ndubisi 2006; Woldie et al, 2008).

Due to their small size, SMEs are flexible and are more able to adapt to changes within the market environment than large firms (Mazzarol, 2000; Udechukwu, 2003; Aryeetey, 2005).

Small Scale Enterprises cover wide range of business activities some of which have environmental impacts.

Regardless of the contributions of Small Scale Enterprises in the environment, the environment suffers from their activities day by day. These attacks, more often than not, leave the lands, waters, air, vegetation and all other features that constitute the natural environment with damage done to them. This damage reduces the productivity of the environment and even reduces, if not completely extinguishes, the pleasure we can derive from it (Kasum, 2010). Hence, environment needs to be effectively managed in order to be conducive for human habitation and business productivity. Thus, there is need to plan, organise, supervise, monitor and control the environment to suit desired purpose- residential or/and business outfits.

The environment has become one of the most significant issues of present situation. The challenge is to find approaches to environmental management that will give people the quality of life they seek while protecting the environmental systems that are also the foundations of our well being. Environmental management is one of the neglected areas of management in many parts of the world, Nigeria inclusive (Okotoni, 2004). The State Environmental Protection Agencies (SEPAs) are charged with the responsibility of protection of environment in various States. But in Osun  State it is inadequate.

Therefore, there are no understandable formulated policies in the State aimed at coordinating and monitoring the relationship between environmental management and Micro, Small and Medium Scale Enterprises especially the informal sectors operations. This is in spite of the efforts of the Federal Environmental Protection Agency (FEPA). Presently, the environmental protection legislation in the State is poorly enforced. There are no incentives for the adoption of pollution abatement measures and very few disincentives for polluting the environment. Wastes are disposed indiscriminately, and environment is degraded illegally especially for small scale.

Consequently, little consideration has been given to the effect of the activities of confectioneries on the environment including the health of the people engaged in such activities and those living around places where such activities are carried out. The augment in number of small scale enterprises brings into question the extent to which such enterprises take into cognisance the environmental impacts of their activities. Also it is not clear if small scale enterprises are aware of the pollutions they are releasing into the environment. The Small Scale Enterprises are among those businesses that have negative environmental impacts. Such impact may include pollutions and deforestation which leads to degradation especially due to the source of raw materials (fire wood) and their location very close to residential buildings respectively.

Members of the public are complaining of pollutions, and they are not aware of where to forward the environmental problems due to inadequate environmental policies and laws guiding the activities of Small Scale Enterprises in the State. Therefore, the objective of this study is to assess the Impact Of Environmental Pollution On The Performance Of Small/Medium Scale Enterprises.