In addition, foreign investors could hold only a share of up to 40 per cent in insurance, banking, oil production and mining. Performance, according to Hornby is described as an action or achievement consideredin relation to how successful it is.
It can be concluded that performance is synonymous to success. What connotes performance varies from one organization to another.
Prior to the s, financial indicators were the sole measurement rod of performance such as profit, return on investment, sales per employees and productivity. This include Just in-time delivery JITD total quality management TQM , communication, trust, stakeholder satisfaction, competitive position and quality of product also categorized performance measurement into four, namely: I Profit which include return on assets, return on investment and return on sales, 2 Growth in term of sales, market share and wealth creation 3 Stakeholder satisfaction which include customer satisfaction and employee satisfaction, and 4 Competitive position which include overall competitive position and success rate in launching new products.
According to Komppula , performance of small and medium enterprises was viewed as their ability to contribute to job and wealth creation through enterprises start-up, survival, increase in output and growth. According to Alaye-Ogani, business is considered small if it is independently owned, operated and financed, has fewer than employees; and has relatively little impact on its industry.
Also, the Federal Ministry of Commerce and Industry of Nigeria define small-scale business as a business with capital investment that is not over seven hundred and fifty thousand naira N, , Alaye-Ogani, while the Central Bank of Nigeria CBN defined small and medium enterprise as business with asset base of between five and five-hundred million naira, and staff strength of between people.
Hatten averred that small and medium enterprise includes business activities of the stay-at-home parent who provides day care for children whose parents are not around. The model was tested using a sample of UK small and medium exporter firms. The data were analysed through a structural equation modelling technique. Further, only relationships with foreign buyers had a positive impact on export performance. Shepherd illustrated that export experience of small and medium enterprises SMEs has a statistically significant effect on financial performance.
This may seem obvious, but similar studies done elsewhere have shown conflicting results. Data from a sample of exporting SMEs were collected using a structured questionnaire. Export experience is measured by years exporting, and financial performance covers a period of three years. A Chi-square test was used to measure the effect of experience on performance.
Results show that export experience had a statistically significant effect on sales and profitability, but not on savings. They also show that performance in sales and profitability increased with export experience. Prebisch and his colleagues were troubled by the fact that economic growth in the advanced industrialized countries did not necessarily lead to growth in the poorer countries.
Indeed, their studies suggested that economic activity in the richer countries often led to serious economic problems in the poorer countries. Such a possibility was not predicted by neoclassical theory, which had assumed that economic growth was beneficial to all Pareto optimal even if the benefits were not always equally shared. Prebisch's initial explanation for the phenomenon was very straightforward: poor countries exported primary commodities to the rich countries who then manufactured products out of those commodities and sold them back to the poorer countries.
The "Value Added" by manufacturing a usable product always cost more than the primary products used to create those products. Therefore, poorer countries would never be earning enough from their export earnings to pay for their imports. Prebisch's solution was similarly straightforward: poorer countries should embark on programmes of import substitution so that they need not purchase the manufactured products from the richer countries. The poorer countries would still sell their primary products on the world market, but their foreign exchange reserves would not be used to purchase their manufactures from abroad.
Three issues made this policy difficult to follow. The first is that the internal markets of the poorer countries were not large enough to support the economies of scale used by the richer countries to keep their prices low.
The second issue concerned the political will of the poorer countries as to whether a transformation from being primary products producers was possible or desirable. The final issue revolved around the extent to which the poorer countries actually had control of their primary products, particularly in the area of selling those products abroad. These obstacles to the import substitution policy led others to think a little more creatively and historically at the relationship between rich and poor countries.
At this point dependency theory was viewed as a possible way of explaining the persistent poverty of the poorer countries. The traditional neoclassical approach said virtually nothing on this question except to assert that the poorer countries were late in coming to solid economic practices and that as soon as they learned the techniques of modern economics, then the poverty would begin to subside.
Nigeria has abundant energy reserves. Why do we suffer from its shortage? Nevertheless, SAP was not benefitting everyone. While the rural classes and farmers rose from the ashes, Nigerian middle class and the civil servants dropped back down. In order to keep the fiscal policy in check, government reduced the expenditures on the social infrastructure. SAP was working, but it was incredibly slow. This meant that it would take at least thirty years for the economy to reach its level.
The inflation level barely improved. At the same time, people started to notice the corruption of their government. Nigerians saw that most of them were not benefitting much from the new policies.
On the other hand, the President and his closest circle did not seem to get any poorer. Many citizens took to the streets to protest the unfairness of the situation. Top ways to survive economic depression in Nigeria.
However, as the government tried to keep its place by loosening the fiscal policy, it only made things worse. Structural adjustment programme did not really work in Nigeria. It had great intentions and an even greater potential. Nevertheless, it was not very appropriate for the Nigerian situation.
The tried-and-true approach failed, as the programme clashed with a tumult in the country, and the objectives were not reached. No doubt, the debt crisis of the s was not the first in the nation's history. Indeed, at independence, Nigeria's external debt was N Bangura The oil boom of thes brought the country sufficient foreign exchange earnings, which enabled her meet her obligations.
The enhanced inflow of foreign reserves from oil exports encourages the expansion in government expenditure on capital-intensive projects with huge import outlays. Such projects included the Ajaokuta Steel Complex. Agriculture was neglected while little attention was given to backward integration in the manufacturing sector of the economy.
This trend was however undermined by the oil glut, which began in ,when Nigeria's revenue from the oil sector declined until it became expedient to borrow to bridge the domestic resource gap, support balance of payments and finance project that will accelerate economic development. Consequently, the favorable external sector position gave way to intense pressures from According to Ojo , since , the balance of payments remained in persistent and increasing deficits, averaging N Few areas of economic activity were exempted from the observed stagnation and decline.
Even agricultural exports slipped, from a previous healthy position to a dismal one in the s. The nation also lost ground in its exports of ores and minerals. Only in oil did Nigeria improve its export share. Curiously, Nigeria failed to diversify her export base but continued to rely heavily on oil exports, because of the easy cash it generated. By the mid s, symptoms of the economic malaise were evident almost everywhere. Nigeria was in recession. The returns to World Bank and other donor agencies' investment projects were very low in Nigeria, and many of these projects failed to generate a positive rate of return.
The physical infrastructure, already poor, deteriorated from lack of maintenance, and the quality of government services suffered; health and education indicators though quantitatively increasing, their quality fell below the minimum accepted global standards. Clearly, it was time for the Nigerian economy to begin an adjustment. Many reasons are responsible for the problems, nature and structure of the Nigerian economy.
They are summarized as follows: A narrow and technically backward production base. The above structural weaknesses made the nation's economy extremely vulnerable to cyclical and random shocks since the later s, which, persisted; and warranted the introduction of the structural Adjustment program SAP in It attempted to reduce the state's role in production and in regulating private economic activity. SAP was designed to pay more attention to exports, especially in the agricultural sector, which witnessed the worst neglect.
Emphasis was more on maintaining macroeconomic stability and avoiding overvalued exchange rates. This process of revamping the policy framework in line with this new paradigm becomes known as structural adjustment. The impact was such that other oil producing nations' revenue was more than doubled. Nigerian's federally collected revenue rose from N However, in the early s, the supply of crude oil to the international market stabilized when the Arab-Israel political crisis had been settled.
There was also the oil glut, a consequence of OPEC members over-shooting their allotted production quota eventually rocked the World oil market. The message was clear and pointed: Nigeria could no longer enjoy the previous condition of affluence. Below are the specific objectives of SAP:. At inception, SAP was designed to last a period of two years, On realizing the enormous economic nation was grappling with, the government modified of SAP. Even though a modified program it was meant to last seven years , the philosophy of SAP continued to influence to date, the nation's economic policy.
A good starting point is the budget, which while appreciating the need for continued fine-tuning of policy measures of SAP, clearly drew attention to the lingering economic problems.
The economy seemed to have responded positively to the structural. This is best illustrated by the overall growth. After a slow growth rate of 2. Between In spite of the gains, certain macro-economic problems such as.
Others are: fiscal deficit, excess money supply, growing.
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