Explanation

The factors that limit the size of indigenous firms in West Africa are:
(i) Inadequate capital: There is inadequate capital for planned expansion due to low savings.
(ii) Technical know-how: There is inadequate technical know how and this militates against attempts to expand.
(iii) There is limited entrepreneurial or managerial ability
(iv) Lack of co-operative spirit among entrepreneurs: It is usually difficult for entrepreneurs to combine their resources for expansion due to mistrust.
(v)There is the problem of market limitation due to:
(a) low income which leads to low demand.
(b) external competition as a result of the people preferring foreign goods to locally manufactured ones.
(vi) There is inadequate government support e.g. extension services, technology consultancy, etc.
(vii)The firms also face the problem of poor infrastructural facilities like electricity, good roads, communications, etc.
(viii)Government policy on taxation, subsidies etc also affects the size of the firms.
(ix) The firms also face the problem of inadequate raw materials.
(x) Inadequacy of skilled labour also serves as a factor that limits the size of the firms. 
 

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