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PROJECT TOPIC- IMPACT OF GOVERNMENT POLICY MEASURE ON SMALL-SCALE BUSINESS IN EBONYI STATE (A CASE OF BAN OF OKADA RIDING ON DUAL CARRIAGE ROAD IN ABAKALIKI)

PROJECT TOPIC- IMPACT OF GOVERNMENT POLICY MEASURE ON SMALL-SCALE BUSINESS IN EBONYI STATE (A CASE OF BAN OF OKADA RIDING ON DUAL CARRIAGE ROAD IN ABAKALIKI)

Abstract

The aim of this project is to evaluate the impact of government policy measure on small-scale business in Ebonyi State (A case of ban of okada riding on dual carriage road in Abakaliki). The purpose is to establish the course forms and effect of this government policy measure in small-scale business in Abakaliki urban. To carry out this, descriptive survey research was used, questionnaire were distributed to the present involvement only with primary and peru diary information and came up with percentage analysis of   questionnaire distribution which form in the rest of the hypothesis. The researcher came up with the following findings: that there is an impact of government policy measure on small-scale business in Abakaliki urban. That the essence of this policy is to regulate business and its environment that the communication system between the small business owners and government was very poor, the impact brought hardship parking out of the town by some business owners and even affect other business enterprises who has indirect contact with this okada business. Recommendations were made based on what was on ground, that the trade union should increase their investment capacity on government business policy as much as this has been done on other areas, government should provide a joint form where opinion and ideal on matter affecting them jointly on policies should be resolved. Government as a matter of fact should provide the affected people within an alternative business sources.

CHAPTER ONE

INTRODUCTION

  • BACKGROUND OF THE STUDY

The global economic meltdown recently doubled in the South East. While the region faces World Wide crisis, it has an additional problem to contend with. Their additional burden is the ban on commercial motorcycle operators in the region. In Abia State, Okada has been banned both in the cities and villages. In Ebonyi State, okada does not operate after six in the evening in Abakaliki. Enugu is part of the clampdown, while nothing like Okada is heard in Owerri at any time of the day.

The reason the gale is sweeping across the nation is well known. Okada riders take to a lot of excesses (Ikenna, 2009). That is why Nasire-el-Rufai years back banned Okada in Abuja when he was the minister for the Federal Capital Territory. Port Harcourt followed the step of the FCT early last year when the bikes were ordered off the streets. If the ban on Okada is justifiable because of the activities of the riders many of who have been accuse of using the motorbikes for criminal activities, other sectors directly affected by the ban don’t find it funny that their businesses should be dealt such deadly below even when they do nothing against the law.

Recently, there was a report incident in Aba, Abia State where a mob attacked and killed a man caught using his motorcycle for business. The suspicion was that the rider was a policeman and should not take advantage of his privilege to engage in the business. This could be another aspect of social crisis the ban would land us in (Emeka, 2009). According to (Longinus, 2010), a motorcycle spare parts importers and spare parts dealers, that the ban is rather counter-productive and would at last create more problems than solving any.

He fumed that the Motorcycle Spare parts Dealers Association in Nnewi, the South East hub of motor bike parts trade can’t understand why the government of the various states who have banned Okada would destroy their business without consideration for the economic damage the policy would endanger on the small scale businesses.    (Umaru, 2009), in the same vain stated “we know it is within the powers of the government to stop any engagement that offends the public peace and security, but we can’t understand how Okada or commercial motorcycle operation is illegal.

Yes, some Okada riders engage in unlawful activities in the course of their work or intentionally buy motorcycles for criminal activities, but that is not good reason for the government to throw the baby away with bans water. If there are bad persons in Okada business, I think it is proper for the government to use all this security organs and apparatus to fish them out (Emeka, 2009).

(Chukwuma, 2006), a union activist, who spoke for the dealers “Union in Nnewi implored that government should not forget in a hurry how in the first place Okada business came into being “it was in the eighties that the hardship emanating from Shehu Shagari’s austerity measure and finally IBB’s SAP forced Nigerian’s to devise an improvised means of livelihood. When the nation’s economy was booming, Okada was not known.

But when crisis hit the economy through adverse government policies, Nigeria naturally devised alternative means of existence. Okada business became the ready succor to the thousands of factory hands, menial labourers in construction companies, banks, government institutions, and the rest who lost their jobs. Yes, it may have its bad sides, but there is no doubt that it has helped millions of Nigerian’s to make a living that is small-scale businesses.

Furthermore, (Emeka, 2009) stated, “We should not look at okada ban as against the riders only”. Many Nigerian cities don’t have transport means and in addition to the bad state of the roads, movement to business places has been a bitter experience for people without an alternative to the okada. Those of us in spare parts sales feel the pang most. Some of us have just placed orders for tens of containers of spare parts with even bank loans, while expecting the arrival of the goods, government announced the ban, such members of our union just go home and die in agony and heartbreak because there is no way the person can repay the loan with the interest unless the goods are sold.

In the same vain, (Chukwuma, 2006) also lamented that 95% of motorcycles in Nigeria are for commercial use, that is okada business, that means our business has suffered 95% slump because the bulk of the users of the spare parts are no longer in business. The motorcycle mechanics and their families are also affected. Furthermore, we have lost billions in investment, and more means of livelihood will still be affected, and with the understanding of the intricate cycle of the economy, the ban’s ripple effects will get wider by the day. As we are affected, the sectors we plough the profits of our business into will also suffer; dealers are sustainers of our families including dependents, they pay rents, taxes from their business. All these are lost. This project will look into these effects of the policy measure on small scale business with particular reference to Abakaliki urban.

PROJECT TOPIC- IMPACT OF GOVERNMENT POLICY MEASURE ON SMALL-SCALE BUSINESS IN EBONYI STATE (A CASE OF BAN OF OKADA RIDING ON DUAL CARRIAGE ROAD IN ABAKALIKI)

  • STATEMENT OF THE RESEARCH PROBLEM

Public policy is simply government actions or course of actions or proposal action directed at achieving certain goals. These are attempt by relevant actors in a political system to cope with and to transform their environment by deliberate measures, which may involve the commitment of physical or symbolic resources. The public policy is what government chooses to do or not to do.

The recent ban of Okada in urban cities like Abuja, Nnewi, Aba, Enugu, and Port Harcourt is because of the way Okada riders abuse the privilege. There is hardly a day in all this cities that they do not record one accident or the other. In hospitals in these urban cities, there are social wards for victims of motorbike accident, there has been tremendous of the incidence of bank robberies in the city and attack of billion vans. Mostly, Okada men use it as a means of snatching bags from people, organizing private armed robbery.

These problems necessitated government policies on the recent ban of Okada riders in the urban metropolis. However, this research work is going to be directed on uncovering and identifying the impact, causes and the effect of the ban on small scale businesses in Abakaliki.

1.3 OBJECTIVE OF THE STUDY

The main purpose of this study in concerned on uncovering and identifying the impact of government policy measures on small scale business in some Nigerian state, with particular reference with the ban of Okada riding on dual carriage in Abakaliki urban. Other objectives include:

  1. To investigate the cause of this ban or policy
  2. To access the consequences of this policy measures on small scale businesses.
  • To find the comparative effect visa vis, on okada and small scale businesses in Nigeria.
  1. To make proper recommendations possibly towards purposeful study.

1.4     RESEARCH QUESTIONS

  1. What caused this ban or policy?
  2. What are the consequences of the ban or policy?

1.5     HYPOTHESIS

Base on the objectives of this study, the following hypothesis are formulated.

  1. Ho. The ban on “Okada” transport services does not inhibit on small scale businesses in Abakaliki.

H1.        The ban on “Okada” transport services inhibits on small scale businesses in Abakaliki.

  1. Ho. Okada policy measures syndromes do not reduce economic development and profitability of business in Abakaliki metropolis.

H1.    Okada policy measures syndromes reduce economic development and profitability of business in Abakaliki metropolis.

  • Ho. The ban of okada is rather counterproductive and would create more problems than solving it.

H1.     The ban of Okada is not counterproductive and would not create more problems that solving it.

1.6     SIGNIFICANCE OF THE STUDY

The research will be helpful to policymakers, small scale business owners, government and the student (researchers).

To the policy makers: The result of the study will not only enable themhave full understanding of the problems of this policy measure to know how to effectively tackle the problems.

To small scale business owners: This study will help them to understand why the ban was imposed and create a way forward from other businesses.

To Okada riders: The study will be of immense benefit to them as they are part in policy measure and any problems are heavily born by them, so the study will help to protect their interest.

          Optimistically, the academician and management scientist would uphold this study as achievements to reckon within the field of management as far as this study is concerned.

To the Students: The study will help them in the pursuit of their academics, especially, study in public administration who has the ambition of working in the private sector.

1.7   SCOPES AND LIMITATIONS OF THE STUDY

The coverage of the study or its scope is solely limited to evaluate the government policy measures on small scale business in some Nigerian states with particular reference to the ban of okada riding on dual carriage in Abakaliki urban. The study confined to the area of policy on businesses, growth and profit abilities after ban. The study was faced with a lot of limitations; include unwillingness of some of the executive members to co-operate in terms of giving out detailed information. There was also a constraint of time, money, mobility etc. which the researcher found delimitating.

1.8     THEORITICAL REVIEW

Laissez-faire economics

The first, and for a long time the only, widely accepted economic theory was the laissez-fairetheoryproposed by Adam Smith in his Wealth of Nations (1776). Laissez-faireroughly translates as “to leave alone,” and it means that government should not interfere in the economy. This theory favors low taxes and free trade, and it strongly holds that the market is self-adjusting whatever happens will be corrected over time without the help of the government.

Keynesian economic theory

John Maynard Keynes, an English economist, published his General Theory of Employment, Interest, and Money (1936) during the Depression. He argued that government should manipulate the economy to reverse the periodic downturns that take place in the market. Keynes maintained that economic depression was due to a lack of consumer demand. This created excess inventories of goods that forced business to cut production and lay off workers, which led to fewer consumers and even lower demand. The solution was to increase demand by increasing government spending and cutting taxes. This fiscal policy, as it became known, left people with more money after taxes and basic obligations to use for goods and services. Factories increased production to meet the demand and hired more workers.

Franklin Roosevelt used many of Keynes’s ideas in the New Deal. The federal government became the “employer of last resort” through such programs as the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA). These programs did not bring the country out of the Depression, however. The end to the Depression is more attributable to increased defense spending as World War II approached.

Le Grand’s Theory of Government Failure

Le Grand (1991) argued that whilst Wolf’s attempt at creating a theory of government failure conceptually analogous to the conventional theory of market failure is undoubtedly an innovative step, various problems inthe construction of this theory rendered it less influential than may otherwise have been expected. Accordingly, Le Grand (1991) has sought “to construct an alternative formulation of the theory of market failure that is, I hope, clearer, analytically more precise and more comprehensive”.

In essence, Le Grand’s “alternative” theory of government failure amounts to the development of a tripartite classification of government intervention in a market economy, which is subject to evaluation interms of two measures of economic efficiency and an undefined equity criterion. Le Grand (1991) argues that “government can involve itself in an area of socialand economic activity in any, or all, of three ways: provision, taxation or subsidyand regulation(original emphasis), and then examines various examples of these forms of state intervention using allocated efficiency, x-inefficiency, and egalitarianism in economic outcomes.

Any perceived limitations of this approach are met with the qualification that “I have only been able to give an outline of a more consistent theory of government failure here” (Le Grand, 1991). Government provision occurs in competitive circumstances, but competition derives from organizations which do not seek to maximize profits. In this latter case one can once again anticipate allocative inefficiency and x-inefficiency.

Overall, the empirical evidence on the economic efficiency of this form of government intervention is mixed. Moreover, the equity status of government taxation or subsidy is also far from clear-cut. Thus, whilst “it is possible that a combination of tax finance and subsidized service is more egalitarian than if neither the taxes concerned nor the subsidies existed there is no guarantee that they will promote equity either” (Le Grand, 1991).

Finally, governments “can regulate the production and distribution of the commodity, prescribing the structure of the markets or the quantity, quality or price of the commodity concerned” (Le Grand, 1991). Le Grand argues that although in principle state regulation can result in optimal quantity, quality, price, and market structure outcomes, in practices at least two factors inhibit the efficiency of regulatory programs.

Firstly, it is often difficult, or even impossible, to acquire the information necessary for successful regulatory regimes to operate. And secondly, the phenomenon of regulatory capture means producer groups can control the process of regulation, and influence it in their own direction. Accordingly, government regulation will usually generate both allocative inefficiency and x-inefficiency, and by stifling long-run incentives may also imbue dynamic inefficiency, Inequity terms, Le Grand notes that while regulation can redistribute income towards poorer individuals and groups, perverse regressive distributional consequences are equally likely.

1.8     CONCEPTUAL FRAMEWORK

The theoretical framework adopted is Le Grand’s Theory of Government Failure, the theory states that“governments can regulate the production and distribution of commodities, prescribing the structure of the markets or the quantity, quality or price of the commodity concerned”. Le Grand (1991) argued that whilst Wolf’s attempt at creating a theory of government failure conceptually analogous to the conventional theory of market failure is undoubtedly an innovative step, various problems in the construction of this theory rendered it less influential than may otherwise have been expected.

Accordingly, Le Grand (1991) has sought “to construct an alternative formulation of the theory of market failure that is, I hope, clearer, analytically more precise and more comprehensive”. In essence, Le Grand’s “alternative” theory of government failure amounts to the development of a tripartite classification of government intervention in a market economy, which is subject to evaluation in terms of two measures of economic efficiency and an undefined equity criterion.

In his discussion, Le Grand proposed that governments “can regulate the production and distribution of the commodity, prescribing the structure of the markets or the quantity, quality or price of the commodity concerned”. He argues that although in principle state regulation can result in optimal quantity, quality, price, and market structure outcomes, in practices at least two factors inhibit the efficiency of regulatory programs. Firstly, it is often difficult, or even impossible, to acquire the information necessary for successful regulatory regimes to operate. And secondly, the phenomenon of regulatory capture means producer groups can control the process of regulation, and influence it in their own direction.

1.9     DEFINITION OF TERMS

Government policy: A plan or course of action, as of a government, political party, or business, intended to influence and determine decisions, actions, and other matters.

Tax: a compulsory contribution to state revenue, levied by the government on workers’ income and business profits, or added to the cost of some goods, services, and transactions

Subsidies: a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low.

Business: A business, also known as an enterprise, or a firm, is an  entity  involved in the provision of  goods  and/or  services  to  consumers .

Social Crisis: Social Crisis is the crisis which hampers the Social life of an individual.

Ban: A ban is a formal or informal  prohibition  of something.

Endanger: Endanger means to cause (someone or something) to be in a dangerous place or situation.

Commercial: Commercial means Making or intended to make a profit: commercial.

Criminal Activity: Criminal activity is an act committed in violation of law where the consequence of conviction by a court is punishment, especially where the punishment is a serious one such as imprisonment.

Government: A government is the system by which a  state  or community is controlled.

Small Scale Business: Small businesses are privately owned corporations ,  partnerships , or  sole proprietorships that have fewer employees and/or less annual revenue than a regular-sized business or corporation.

Economy: An economy is an area of the  production ,  distribution , or  trade , and  consumption  of  goods  and  services by different agents in a given geographical location.

Rent: Rent is a  fixed  amount  of  money  that you  pay  regularly  for the use of a  room ,  house ,  car ,  television , etc. that someone  else  owns .

Dual Carriage: A dual carriageway is a class of  highway  with  carriageways  for  traffic travelling in opposite directions  separated by a  central reservation .

Administration: This is the  activities  involved  in  managing  a  business ,  organization , or  institution . the  activities  involved  in  managing  a  business ,  organization , or  institution

PROJECT TOPIC- IMPACT OF GOVERNMENT POLICY MEASURE ON SMALL-SCALE BUSINESS IN EBONYI STATE (A CASE OF BAN OF OKADA RIDING ON DUAL CARRIAGE ROAD IN ABAKALIKI)

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