FACTORS WHICH LIMIT THE SIZE OF INDIGENOUS FIRMS IN WEST AFRICA
The factors which limit the size of indigenous
firms in West Africa are:
Inadequate capital: There is inadequate capital for planned expansion due to low savings.
Technical know-how: There is inadequate technical know-how and this militates against attempts to expand.
Limited managerial ability: There is limited entrepreneurial or managerial ability and this does not encourage the growth of firms.
Market limitation: There is the problem of market limitation due to low income, which leads to low demand, and external competition as a result of the people preferring foreign goods to locally manufactured ones.
Lack of co-operative spirit among entrepreneurs: It is usually difficult for entrepreneurs to combine their resources for expansion due to mistrust.
Inadequate government support: There is usually inadequate government support, e.g. extension services, technology consultancy.
Poor infrastructural facilities: The firms also face the problem of poor infrastructural facilities like electricity, good roads and communications.
Unfavourable government policies: Certain government policies on taxation and subsidies are unfavourable and the also affect the size of the firms.
Inadequate raw materials: The fir are also faced with the problem of lack of raw materials.
Inadequate skilled labour: Skilled labour required to handle the operations of firms are grossly inadequate
Political instability: Many African countries are politically unstable either due to military intervention or et wars, which discourage investment.
High level of illiteracy: The existence of high level of illiteracy among invest in many West African countries militates against the establishment of large bust units.