1.

0 INTRODUCTION
Importation is the bringing into the country of foreign goods. It is the practice where by goods are transported or moved from countries or places where it is in abundance to countries that are not self-sufficient. Its a way of enjoying what is necessary to the well being of the people in a place where they cannot be found. Normally, some countries have certain products in abundance (competitive advantage), while others do not and in trying to balance things up, importation become a vehicle. EFFECT OF IMPORTATION ON THE ECONOMY Importation is good where a country does not have the potential to produce the products in question but when a country has what it takes to produce such products and still embark on importation, the local economy is bound to decline. In the case of Nigeria, the last administration did all it could to help small and medium enterprises by establishing an Agency called Small and Medium Scale Development Agency (SMEDAN), but the countrys increase in importation of raw materials especially those that can be produced locally is negatively affecting the Agency. The following tables shows the effect of importation on local manufacturers within 5 years.

Table 1:

Shows the registered SME in Nigeria between 2001 and 2001 2002 98 240 1200 400 2003 120 260 2000 600 2004 350 300 2500 1000 2005 450 400 2900 1500

2005 in some selected states of Nigeria. Ibadan: P/H: Lagos: Kano: 110 220 950 350

The increase or decrease in registered outlets is matched by a corresponding decrease or increase in employment as shown below. The table below show employed workers in industrial sectors in Nigeria from 2001 2005 . in some selected states in thousands. 2001 Ibadan: P/H: Lagos: Kano: 40 32 80 50 2002 45 34 85 55 2003 48 36 89 57 2004 50 40 120 62 2005 56 48 200 68

These industries were supposed to manufacture semi-raw materials for other industries for further processing of finished goods for the Nigerian populace. But as importation began to increase, due to our preference for imported goods to home made goods. The No of Small and Medium industries keep reducing in no. This can be observed from the table below in Lagos.

2006 2007 2003

2,500 2,200 2,100

The values for 2008 is part projection giving by the rate at which they decrease. However, it should be noted that not all industries out there in Lagos market are registered. The next two tables shows the drop in employment within these three years, in thousands. 2006 2007 2008 180 150 110

More also, the importation and its effect on local raw materials in Lagos industries are shown below in million tones. Importation between 2001 2005 2001 Sugar 204 2002 334 2003 420 2004 525 2005 616

Wheat Starch

850 1.1

912 1.3

1010 1.4

1110 1.5

1150 1.6

MARGINAL INCREMENT OF THE RAW MATERIALS Sugar Wheat Starch 2001-2002 130 62 0.2 2002-2003 86 98 0.1 2003-2004 105 100 0.1 2004-2005 91 40 0.1

The table above shows that the importation of wheat was on the increase every year except in 2002-2003 that it decreased. Also, that of sugar increases for 3years and finally came down drastically due to some other companies that sprang up in Nigeria as small producers Joseph Dam and

Bachita Sugar industries. But starch is relatively stable all through the year, due to low productions. But between year 2006 2008, due to the closure of some small industries partly due to their inability to compete with the foreign materials, they were forced to shut down especially in Lagos state. The marginal increment of raw materials especially for Lagos State in importation for 2006 2008 is shown below. 2006 680 1000 1.6 2007 720 1200 1.8 2008 786 1500 2.4

Sugar Wheat Starch

Marginal increment table Sugar Wheat Starch 2006 2007 40 200 0.2 2007 2008 66 300 0.6

The above table shows that the marginal increment of all the raw materials are on the increase. This can be attested to by the rise in food stuffs world wide this year, 2008.

AIM AND OBJECTIVE OF THE STUDY The aim and objective of the study among others are : To find out
i.

If importation would help the local economy If importation would standardize the local products. If importation would help Mr. foreign exchanges etc.

ii. iii.

Research Questions The following research questions are what the research would answer: (a)
(b)

Is importation important to the Nigeria economy? Would importation help the foreign exchange earnings of Nigeria? Would it help to standardize Nigeria products?.

(c)

Statement of Problems The problem of importation has always been the take of any giving economy like Nigeria. But it has never been as worse as this. It has totally paralyzed the economy to such a level that our country has become a dumping ground for foreign goods even of lower standards to what our local industries can do. Statement of Hypothesis The following hypothesis would be tested in this research (i) (ii) (iii) H0: H0: H0: Importation is important to Nigeria economy Importation would standardize Nigeria economy Importation would help our foreign exchange earning

DEFINITION OF TERM Importation: Economy: The buying of goods from country of origin (manufacture) to The state of domestic affairs in a country. country of consumption.

CHAPTER TWO
2.0 Literature Review

Economist have always been of the opinion that any country that wants to grow economy should develop its internal production system to facilitate its own growth rather than depending on importation. This has been the bane of human development especially in Africa. The recent policies/of the UN especially on Millennium development Goals have shown that over 60% of poor people lives in Africa. Its not news that the African Union (AU) has always clamour for Africa to solve their problems themselves rather than looking else where for solution.

CHAPTER THREE
3.0 METHODOLOGY

The research would be carried out by the following methods. (i) Population

The population size for this study are the people in small and medium scale businesses within Lagos. (ii) Population sample:

The population sample for this study is about 50 industries out of the many lots that engage in small and medium scale businesses.

(iii)

Method of selection:

The population samples would be picked by random techniques. (iv) Data/Instrument of Data collection:

In this study, primary and secondary data would be used. This would be collected(primary) using questionnaire (that has been validated). (v) Validation and Administration of questionnaires

The questionnaire is validated by a group of experts in the field of Small and Medium Scale Industries before it is used for the research of study. After validation, it is then administered to the sample population. (vi) Collation and Method of Analysis

This data would be collated and analysed using descriptive and inferential statistics. REFERENCES

(1)

Allen. N. Berger and Gregmy. F. Kalell (2001). Small Business credit availability and relationship lending. The importance of bank organizational structure. Finance and Economic discussion series. 2001 36, Board of Governors of federal Reserve system (U.S).

(2)

Cole. Rebel A. 1998. The importance of relationship to the availability of credit. Journal of Banking and finance. Elsevier, vol. 22 (6-8), page 959-977.

(3)

www.federalministry of agric.org www.fos-ng.org www.ghrain.org

(4)

(5)

NAME: MATRIC NO: TOPIC:

GLORIA UGOH
021003119

THE EFFECT OF IMPORTATION

ON SMALL AND MEDIUM SCALE ON NIGERIA ECONOMY: A STUDY OF SMALL AND MEDIUM SCALE INDUSTRIES IN LAGOS STATE SUPERVISOR: MR ADELEKE I. TITLE: PROJECT PROPOSAL

August 2008