Accountability as A Driver of Small-Scale Business Development in Nigeria: Evidence from Oghumu Rubber Factory, Benin City, Edo State

to Oghumu Rubber Factory. The research contributes to the growing body of knowledge on SME governance in developing economies and offers actionable insights for policymakers, financial institutions, and enterprise owners seeking to strengthen the accountability architecture of Nigeria’s small business sector. 1.1 Objectives of the Study The specific objectives of this study are to: • Examine the state of accounting and financial accountability practices in Oghumu Rubber Factory; • Identify the key financial and managerial challenges confronting small-scale enterprises in Benin City, Edo State; • Assess the relationship between accountability systems and access to formal business financing; • Propose evidence-based recommendations to improve accountability and development outcomes for small-scale businesses in Nigeria. 1.2 Research Questions The study is guided by the following research questions: • What is the current state of accounting and accountability practices at Oghumu Rubber Factory? • What are the major financial and managerial constraints facing small-scale businesses in Benin City? • To what extent does accountability influence access to credit and overall enterprise development? P-ISSN 2695-186X 2. Literature Review 2.1 Conceptual Framework: Accountability and Enterprise Development Accountability in the context of small-scale businesses refers to the obligation of enterprise owners and managers to maintain transparent financial records, adhere to regulatory requirements, and demonstrate responsible stewardship of organisational resources (Adebayo and Oluwafemi, 2022). It encompasses both internal accountabilities, directed at owners, employees, and investors, and external accountability, directed at government agencies, creditors, and the broader public (Musa et al., 2021). The theoretical underpinning of this study draws on the Agency Theory, which postulates that information asymmetry between principals (investors and creditors) and agents (enterprise managers) creates accountability gaps that impede efficient resource allocation (Ojo and Akinola, 2023). In SME contexts, where owner-managers frequently conflate personal and business finances, these asymmetries are particularly acute, generating credibility deficits that constrain access to formal credit markets (Akinwande et al., 2024). 2.2 Small-Scale Enterprises in Nigeria: An Overview Nigeria’s SME sector is heterogeneous and dynamic, encompassing micro, small, and medium- scale enterprises operating across agriculture, manufacturing, trade, and services. As of 2023, SMEs accounted for approximately 96% of businesses in Nigeria and contributed over 48% of GDP (Small and Medium Enterprises Development Agency of Nigeria [SMEDAN], 2023). However, the sector’s contribution to industrial output remains constrained by structural bottlenecks including inadequate infrastructure, regulatory burdens, and the perennial challenge of financing (Eze and Okafor, 2022). Historical policy interventions, including the National Economic Reconstruction Fund (NERFUND), the World Bank-assisted Small-Scale Enterprise Loan Scheme , and various state-level development finance initiatives, have yielded limited outcomes, largely because disbursements lacked rigorous accountability mechanisms (Chukwuemeka and Nwankwo, 2021). The People’s Bank of Nigeria and community banking initiatives similarly failed to achieve sustained impact due to institutional corruption and poor governance structures (Adeyemi and Bello, 2020). 2.3 Financing Challenges and the Role of Accounting Access to finance remains the most frequently cited constraint for Nigerian SMEs (Okpara and Wynn, 2020). Empirical studies consistently demonstrate that enterprises with formalised accounting systems are significantly more likely to obtain bank credit than those relying on informal financial records (Nwosu et al., 2022). Banks require financial statements, cash flow projections, and audited accounts to assess creditworthiness, documentation that most small-scale operators in Nigeria are unable to produce (Osei-Assibey et al., 2021). Chukwu and Obiechina (2023) found that over 70% of Nigerian small-scale enterprises do not maintain formal accounting records, relying instead on mental accounting or rudimentary ledger systems. This accounting deficit not only undermines credit access but also limits the capacity of enterprises to monitor profitability, control costs, and plan strategically. In the rubber manufacturing sub-sector specifically, limited accounting infrastructure has been identified as a major contributor to enterprise failure and stunted growth (Adesanya and Okonkwo, 2022). P-ISSN 2695-186X 2.4 Institutional and Managerial Dimensions of Accountability Beyond financial record-keeping, accountability in small-scale enterprises encompasses managerial transparency, ethical conduct, and compliance with regulatory frameworks. Weak managerial accountability frequently results in poor strategic decisions, misallocation of resources, and the erosion of stakeholder trust (Babatunde and Akinbogun, 2021). In Nigerian SMEs, managerial constraints are often rooted in low educational attainment among owner-managers, limited exposure to modern business practices, and an absence of professional advisory services (Adeola and Nwosu, 2023). The intersection of accountability and gender is also noteworthy. Female-owned SMEs in Nigeria face compounded accountability challenges, including restricted access to formal financial services and limited participation in business development programmes (Omitogun and Adeyemi, 2024). These gendered dimensions of accountability are particularly relevant in Edo State, where male-dominated ownership structures prevail in the manufacturing sector. 3. Materials and Methods 3.1 Research Design This study adopted a descriptive survey research design, which enabled the systematic collection and analysis of quantitative data from a defined target population. The survey design is appropriate for this study because it facilitates the collection of first-hand information from respondents about their experiences, perceptions, and practices relating to accountability and small-scale business development (Creswell and Creswell, 2022). The design also permitted the integration of qualitative insights gathered through personal interviews, thereby enhancing the depth and contextual richness of the findings. 3.2 Study Area The study was conducted at Oghumu Rubber Factory, located in Benin City, Edo State, Nigeria. Edo State is one of the leading rubber-producing states in Nigeria and has historically hosted a significant concentration of agro-industrial enterprises, including rubber processing factories. Oghumu Rubber Factory represents a prototypical small-scale manufacturing enterprise operating in the southern Nigerian industrial landscape, making it a suitable and accessible site for the investigation of SME accountability practices. 3.3 Population and Sample Size The target population of this study comprised all staff and management personnel of Oghumu Rubber Factory, totalling 85 individuals. The Taro Yamane (1967) formula was applied to determine an appropriate sample size at a 5% margin of error: n = N / (1 + N(e)2) Where n = sample size, N = population (85), and e = tolerable error level (0.05). Applying the formula yielded a sample size of 65 respondents, which constitutes approximately 76.5% of the total population, ensuring representativeness and statistical reliability (Yamane, 1967). 3.4 Sampling Technique A stratified random sampling technique was employed to ensure proportional representation across different departments and employment categories within the factory. Stratification was based on job function (management, production, administrative, and sales staff), after which respondents P-ISSN 2695-186X were randomly selected from each stratum. This approach minimises sampling bias and improves the generalisability of findings within the study context (Bryman, 2021). 3.5 Data Collection Instruments Primary data were collected using a structured questionnaire comprising 20 items divided into two sections. Section A captured demographic characteristics of respondents (age, sex, marital status, educational attainment, religion, and ethnic nationality), while Section B addressed substantive issues related to accounting practices, financing patterns, and accountability mechanisms within the enterprise. The questionnaire employed a combination of closed-ended and Likert-scale items to facilitate quantitative analysis. Additionally, semi-structured interviews were conducted with five senior management personnel to obtain qualitative insights into the enterprise’s governance and accountability structures. Secondary data were obtained from relevant academic journals, government reports, policy documents, and institutional publications covering the period 2020–2026. These secondary sources provided contextual and comparative material for situating the study within the broader literature on Nigerian SME development. 3.6 Validity and Reliability Content validity of the research instrument was established through expert review by three academics in the fields of accounting, business management, and small enterprise development. The instrument was refined based on their feedback prior to administration. Reliability was assessed using Cronbach’s Alpha coefficient, which returned a value of 0.81, exceeding the commonly accepted threshold of 0.70 and indicating strong internal consistency (Nunnally and Bernstein, 2020). 3.7 Data Analysis Quantitative data from the questionnaires were analysed using descriptive statistics, including frequency counts and percentage distributions, presented in tabular format. Qualitative data from interviews were analysed thematically, with key themes identified and reported alongside the quantitative findings to provide a holistic interpretation. All analyses were conducted using IBM SPSS Statistics version 26.0. 3.8 Ethical Considerations Informed consent was obtained from all participants prior to data collection. Respondents were assured of the confidentiality and anonymity of their responses, and participation was entirely voluntary. The study posed no risk of harm to participants. Ethical clearance was obtained from the relevant institutional authority in accordance with standard research ethics protocols (American Psychological Association [APA], 2020). P-ISSN 2695-186X 4. Results and Discussion 4.1 Sociodemographic Characteristics of Respondents Table 4.1: Distribution of Respondents by Age Age Group Frequency (n) Percentage (%) 20 – 40 years 53 81.5 41 – 60 years 12 18.5 Total 65 100.0 Source: Field Survey, 2024 Table 4.1 shows that the majority of respondents (81.5%) fall within the 20–40 age bracket, indicating that the enterprise’s workforce is predominantly youthful. This demographic pattern is consistent with national trends for SME-employing populations in southern Nigeria, where young adults constitute the primary segment of the manufacturing labour force (Eze and Okafor, 2022). The relative youth of the workforce suggests a capacity for digital financial literacy training, which could improve accountability practices if targeted interventions are implemented (Adebayo and Oluwafemi, 2022). Table 4.2: Distribution of Respondents by Sex Sex Frequency (n) Percentage (%) Male 55 84.6 Female 10 15.4 Total 65 100.0 Source: Field Survey, 2024 The data reveal a predominantly male workforce (84.6%), which mirrors the male-dominated character of manufacturing SMEs in Edo State. This gender imbalance reflects broader structural inequalities in Nigeria’s industrial labour market, where cultural norms and limited access to vocational training continue to restrict female participation in formal manufacturing employment (Omitogun and Adeyemi, 2024). Such imbalances also have implications for enterprise governance, since diverse leadership structures have been associated with improved accountability outcomes in SME research (Adesanya and Okonkwo, 2022). Table 4.3: Distribution of Respondents by Marital Status Marital Status Frequency (n) Percentage (%) Single 24 36.9 Married 39 60.0 Divorced 2 3.1 Total 65 100.0 Source: Field Survey, 2024 P-ISSN 2695-186X Table 4.4: Distribution of Respondents by Educational Status Educational Level Frequency (n) Percentage (%) Primary 5 7.7 Secondary 19 29.2 Tertiary 41 63.1 Total 65 100.0 Source: Field Survey, 2024 The educational profile of respondents reveals that 63.1% possess tertiary-level qualifications, which is a positive indicator for the potential uptake of formalised accounting and reporting practices. Nevertheless, educational attainment alone does not guarantee sound financial management unless complemented by specific training in business accounting and governance (Nwosu et al., 2022). The remaining 36.9% of respondents with secondary or primary education may face greater challenges in navigating formal financial systems, necessitating tailored capacity- building interventions. 4.2 Ownership and Financing Structures Table 4.5: Analysis of Ownership Structure Form of Ownership Frequency (n) Percentage (%) Sole Proprietorship 40 61.5 Partnership 15 23.1 Limited Liability 10 15.4 Total 65 100.0 Source: Field Survey, 2024 The dominance of sole proprietorship (61.5%) among the firms surveyed reflects a broader pattern in Nigerian small-scale enterprise ownership, where single-person control is the norm rather than the exception. While sole proprietorships offer flexibility and ease of formation, they are structurally predisposed to weak accountability, since there is minimal separation between the owner’s personal finances and business finances (Okafor et al., 2022). This structural vulnerability is a key driver of the accounting deficits identified in the study and corroborates findings from similar studies on Nigerian manufacturing SMEs (Chukwuemeka and Nwankwo, 2021). P-ISSN 2695-186X Table 4.6: Sources of Subsequent Business Funds