Reasons why Small Business exists in West Africa irrespective of the benefits derived from Large enterprises.
Majority of the business units that exist in West Africa are mainly small in size like sole proprietorship and partnership. Many factors are responsible for the existence of these small business units and they discourage the establishment of large ones like limited liability companies, public corporations and cooperative societies and such factors include:
1. Insufficient Capital: This factor hinders the establishment of large business units in West Africa, hence the existence of many small ones. Since many business men in West Africa cannot afford the huge amount of capital required for the establishment of large business units, they go for small ones which they can afford their capital since half bread according to an aphorism is better than none.
2. Low Savings: This is experienced by both the government and Individuals as a result of low national income and low per capital income. West African countries, we should remember, fall among the poorest nations in the world.
3. Lack of True Entrepreneurship: Many businessmen in West Africa go for small business units because, they lack the true entrepreneurship required to float and manage large business units. The type of businessmen we have in West Africa are the ones that many of them are not ready to bear business risks, who spend greater portion of their money in marrying many wives, owing fleet of cars, organizing elaborate parties etc.
4. Political instability: it contributes immensely to the absence of many large business units In West Africa. The type of political atmosphere full of coups and counter coups we experience in West Africa does not augur weir for the existence of large business units hence, the existence of many small ones.
5. The Economic Situation: The economic situation in West Africa is not stable as to encourage the establishment of many large business units. For instance, the rate of industrial unrest in West Africa can never motivate any businessman to establish large business units.
6. Inadequate Skilled Personnel: Large business units require high y skilled personnel for their effective performance. This type of highly skilled personnel is still inadequate in West Africa.
7. Absence of Developed Markets: Many rural areas in West Africa have no market places where buying and selling can take place and the rate of demand for goods and services is also low That means that large business units cannot survive in ail parts of West Africa, hence the existence of many small ones.
8. Inadequate And Inefficient Means of Transport And Communications: Large business firms require adequate and efficient means of transportation and communications for their proper functioning. In West Africa, we have dilapidated roads few air and seaports coupled with poor communication systems.
9. Inadequate Raw Materials: Large business units require more raw materials than small business units. Many small business units therefore exist in West Africa in place of large ones because of the inability to meet the raw material requirements of large business unit.
10. Inadequate Infrastructure Facilities: Infrastructure facilities that aid effective performance of large business units are inadequate in West Africa. Iron and steel complexes, pipe-borne water, electricity, good network of roads, railway lines, air and seaports, etc., are not adequate in West Africa.
11. Irregular Power Supply: Electricity that is so vital to the effective functioning of large business units is supplied intermittently n West Africa. This happens in spite of its inadequacy.
12. Low Level of Technological Development: West African countries have not developed the high level of technology required by large business units hence, the existence of many small business units that can thrive well under this low level of technological development.
13. Over Reliance On Foreign Made Goods: This has made us to lose our thinking faculties and therefore, do not work hard again in order to establish large business units. This is as a result of the fact that we can always import whatever goods the would-be large business units will produce. This has acted as a cog in the wheel of progress in the establishment of large business units.
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