SURVIVAL STRATEGY ADOPTION BY SMALL SCALE RETAIL OUTLET IN NIGERIA. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
CHAPTER ONE INTRODUCTION
1.1 THE PROBLEM AND ITS SETTING
Every industry operates within two sets of constraints. Internal constraints are those problems within the organization and over which the enterprise has reasonable amount of control. Personnel problem, capacity utilization and the techniques or process of production are some of such factors. External factors could pose formidable problems to an enterprise. The problems are made more severe by the fact that these problems are caused by factors outside the competence of a given enterprise to control. Examples of such factors are government regulation, traditional or cultural values etc. The bakery industry in Nigeria has been a victim of externally imposed constraint. Hitherto, bakers depended on local millers who produced their vital raw materials, flour from imported wheat. Government banned the importation of wheat and wheat product in 1986, thereby, sending shock waves to this very well established and expanding industry. Wheat products has started to consume an unacceptable amount of the nation’s foreign exchange as the table 1.1.1 below clearly demonstrates, as well as figure 1.1.1 in page 3.Table 1.1.1 Foreign Exchange Spent on Wheat and Food Import 1981 – 1985 Import 1981 1982 1983 1984 1985 N,000 N,000 N,000 N,000 N,000 Total food 1,820,215 1,642,245 1,296,714 843,246 946,567Wheat 159,422 79,629 255,717 243,067 327,870C/o of total 9% 5% 20% 29% 35%` Source: Federal Office of Statistics, Lagos Given the above circumstances, there was a clear need for government action to check the outflow of the nation’s declining foreign exchange earnings through what important. Besides, it can also be argued that there were suitable local substitutes of wheat flour for bread baking; rice, cassava, maize and sorghum have been mentioned as such suitable substitutes. To some people these substitutes were at least as good as wheat as it
FIGURE 1.1.1
FOREIGN EXCHANGE SPENT ON WHEAT AND FOOD IMPORT1981 – 1985
Source:
Federal Office of Statistics, Lagos was suggested that local bakers rejecting them were doing so our of ignorance, or out of a slavish preference for imported products or whether one accepts the above arguments or not, what has become clear is that the effect of the ban on the importation of wheat was swift devastating on the bakery industry. In Enugu Urban alone, some famous baking houses closed up. Nigerline bakery, St Georges Bakery, many bakeries and Mother’s Pride Bakery all shut down between the middle of 1986 and the end of 1987. As at the time of starting this project, not every Bakery has resumed operations. A far more reaching effect on this ban on the industry as a whole is that it has quite clearly changes the eating habits of many Nigerians. Ubiquitous bread on the breakfast table has vanished and the frequent sight of peoples snacking on bread in the afternoon has also disappeared. The primary demand for bread products in this country has certainly contracted since then.
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