FACTORS WHICH LIMIT THE SIZE OF INDIGENOUS FIRMS

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.

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