Which of the following is NOT a reason for the absence of an industry in the rural areas?

Step 1: Analyze the question The question asks which option is NOT a reason industries are absent from rural areas. Four options are obstacles to industrialisation in rural areas, and one is actually an advantage that attracts industries.

Step 2: Key concept External economies of scale are benefits a firm enjoys because the industry as a whole is concentrated in one place. Examples are a skilled labour pool, good roads, banks, suppliers, and ready markets. These benefits are found in urban or industrial centres such as Lagos, Kano, and Port Harcourt. They attract industries and are usually missing in rural areas.

Step 3: Check each option

• A. Absence of financial institutions: Without banks, industries cannot easily get loans or save money. This is a reason for the absence of industry.
• B. Restricted market: Rural people are few and have low incomes, so demand is small. This discourages industries, so it is a reason.
• C. Inadequate power and water supply: Factories need electricity and water to operate. Their absence is a reason.
• D. Inadequate transportation: Poor roads make it hard to move raw materials and finished goods. This is a reason.
• E. Presence of external economies: If external economies were present, they would encourage industries to locate there. It is therefore NOT a reason for their absence. In fact, the absence of external economies is the real reason.

Step 4: Answer

Tip: In "NOT" questions, find the option that works in favour of industry. Words like "absence," "inadequate," and "restricted" signal problems, while "presence of" a good thing signals an advantage, so it is the odd one out.