ENTERPRENEURSHIP AND ECONOMIC DEVELOPMENT IN NIGERIA: AN ANALYSIS OF 2011 TILL PRESENT DAY

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ENTERPRENEURSHIP AND ECONOMIC DEVELOPMENT IN NIGERIA: AN ANALYSIS OF 2011 TILL PRESENT DAY

ABSTRACT

A business whether small or big, simple of complex, private or public is created to provide competitive prices. Business in Nigeria has been classified as small, medium and large. In both the developed and developing countries, the government is turning to small and medium scale industries, as a means of economic development and a veritable means of solving problems. It is also a seedbed of innovations, inventions and employment. Presently in Nigeria, SMEs assist in promoting the growth of the country’s economy, hence all the levels of government at different times have policies which promote the growth and sustenance of SMEs. Small scale industry orientation is part of the Nigerian history. Evidence abound in the communities of what successes our great grandparents, made of their respective trading concerns, yam barns, cottage industries, and the likes. The secret behind the success of a self-reliant strategy does not lie in any particular political philosophy; so much as the people’s attitude to enterprise and in the right incentive is adequate enough to make risk worthy businesses a necessity for the nation. There had been many policy actions by the government, governmental agencies and the private sector to promote entrepreneurship development in Nigeria. Many experts recognize marketing as a major problem and relevant solution to the growth of SMEs. This paper identifies the historical development and orientation of SMEs in Nigeria, tackles the operational definition and scope, and describes the role of the Nigerian government as a participant, regulator and facilitator, both legally and politically in the growth of SMEs. It identifies the marketing problems of SMEs in Nigeria, the provision and enactment of beneficial and supportive laws, the provision of infrastructural facilities, constant man-power and development, direct financial assistance to SMEs and the establishment of finance institutions to support SMEs. It identifies the roles of SMEs in Nigeria’s development and growth. It concludes by clearly specifying the role of marketing to the survival of SMEs in Nigeria, and Advances relevant recommendations. For SMEs to survive marketing practice and principles must be given prominence. Economic history is well stocked with enough insights into the humble beginnings of present great corporations. Evidence abound that almost all of the multinational giant corporations in America, Europe and even Nigeria were cottage enterprises, growing as their industry grew, and through their own sheer ability, marketing skills, and efforts to reproduce and produce existing products better and cheaply. Japan’s economy was dominated by traditional industries, cottage firms and by many SMEs, who drew their strength, not only from the abundance of capital, but from the role of marketing in guaranteeing the growth of SMEs. SMEs have contributed greatly to Nigerians development by the provision of employment, marketing of goods and services and the growth and development of the rural areas. It has also brought about the growth of indigenous entrepreneurship in Nigeria.

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Entrepreneur is one who builds a single product organism. (Schumpeter, 2010)The necessity of entrepreneurship for productivity was formally recognized by Alfred Marshall in 1990. In his famous practice principle of economics, Marshall ascertains that there are four factors of production; Land, Labour Capital and organization. These factors are properly utilized by an entrepreneur. Thus entrepreneur creates new commodities or improves the plan of producing an old commodity. (Marshall1994).Hence early entrepreneurs were characterized with production and manufacturing. In this case, the producers most often started with small capital. Early entrepreneurship started with trade by barter even before the advent of money. However, modern entrepreneurship in Nigeria started with the coming of the colonial masters, who brought in their wears and made Nigerians their Middlemen. In these way modern entrepreneurs was conceived. Most of the modern entrepreneurs were engaged in retail trade or sole proprietorship. After about a decade and a half of adopting an enterpreneurship strategy based on large scale enterprises, mostly of the assembly type, Nigeria has achieved only a fragile industrial development through enterpreneurship. A little after independence, some small-scale industrial could not really continue to exist let alone flowish due to the fact that they were either swallowed up by the larger ones or by foreign firms. The large scale enterprises which were set up tended to be capital intensive and inappropriate, given the country’s resource endowment. Their capital equipment and technical manpower have continued to be largely imported. As a result, the triple objective of setting up the plants, achievement of high level, local level, value added foreign exchange, saving and acquisition materialized. For instance, the assembly plants have not achieved up to 20 percent in local raw material sourcing, instead they are more or less systematic foreign exchange guzzlers with neither the will no the capacity to transfer any meaningful technology beyond the punitive type.

According to(Schumpeter, 2010) short after that the French economist J. B. added to the Castilian definition by including the idea that entrepreneurs has to be leaders. That an entrepreneur is one who builds a single product organism. (Schumpeter, 2010)The necessity of entrepreneurship for productivity was formally recognized by Alfred Marshall in 1990. In his famous practice principle of economics, Marshall ascertains that there are four factors of production; Land, Labour Capital and organization. These factors are properly utilized by an entrepreneur. Thus entrepreneur creates new commodities or improves the plan of producing an old commodity. (Marshall1994).Hence early entrepreneurs were characterized with production and manufacturing. In this case, the producers most often started with small capital. Early entrepreneurship started with trade by barter even before the advent of money. However, modern entrepreneurship in Nigeria started with the coming of the colonial masters, who brought in their wears and made Nigerians their Middlemen. In these way modern entrepreneurs was conceived. Most of the modern entrepreneurs were engaged in retail trade or sole proprietorship. The to incorporate in our system the need to be technologically self-reliant cannot be over-emphasized. The first step is to develop our human and natural resources, thus increasing our per capital income. In the past even years, or more, especially during the administration of Ibrahim Babangida, Nigeria has constantly pursued an economic policy that is geared towards self-reliance for the individual as show by such programmes as the National Directorate of Employment (NDE) which is a graduate assistance scheme aimed at helping young school leavers to acquire necessary skills and funds that will help them to start their own business, other programmes with such mission include the people bank, Family Economic Advancement Programme (FEAP) and Nigerian Association of Small-scale Industrialists (NASSI).

The entrepreneur and his activities forms an integral part in the development of our economy. At this point, it becomes pertinent to define who is an entrepreneur and why we are having an insight into his plight to actualize the aims and objectives of its existence.

Nwana, L.E. (1995:32) defined an entrepreneur as an individual who is willing and able to take business risks for gainful purpose”.

Despite the aspirations of many, only a few people in this country and indeed Enugu our place of concentration has carried out their intention of having business established by them. Studies have been shown that 90% of these who seriously decided to incorporate a company five or more years ago have not yet done so. In Enugu state our emphasis will concentrate on the Nigerian Association of Small-Scale Industrialists (NASSI) Enugu State chapter, formed in 1978 owing to the creation of Enugu State in 1991, the Enugu office was established, to represent the organized small-scale industrialists in the state, thus tries to uplift the status of this sector.

The NASSI has its chapter in all the seventeen (17) local government areas of the state aimed at inculcating into our society, the spirit of owing and controlling business at the grass root level, to facilitate the much desired self-reliance on our locally made goods and services, self-reliance on the national economy as show in the policies of banning the importation of certain goods into this country, the Structural Adjustment Programme (SAP) which among other things aims at sourcing of our own raw materials for the industries locally, though many see it as backward integration the maintenance culture is also part of our attempts so self-reliance.

Based on the indeginisation policy that brought into existence, the Nigerian Enterprise promotion decree of 1972, which aims at encouraging and giving Nigerians the skill and knowledge to own and control their own business. Although all the aims and objectives of this dream has not come to fruition, since about 75% of Nigerians and indeed in Enugu has not realized their dream of owning and controlling a business of their choice (Igboeli J. 1995). (Schumpeter, 2010) short after that the French economist J. B. added to the Castilian definition by including the idea that entrepreneurs has to be leaders. That an entrepreneur is one who builds a single product organism. (Schumpeter, 2010)The necessity of entrepreneurship for productivity was formally recognized by Alfred Marshall in 1990. In his famous practice principle of economics, Marshall ascertains that there are four factors of production; Land, Labour Capital and organization. These factors are properly utilized by an entrepreneur. Thus entrepreneur creates new commodities or improves the plan of producing an old commodity. (Marshall1994).Hence early entrepreneurs were characterized with production and manufacturing. In this case, the producers most often started with small capital. Early entrepreneurship started with trade by barter even before the advent of money. However, modern entrepreneurship in Nigeria started with the coming of the colonial masters, who brought in their wears and made Nigerians their Middlemen. In these way modern entrepreneurs was conceived. Most of the modern entrepreneurs were engaged in retail trade or sole proprietorship. In other words an entrepreneur is a person who starts, organizes, manages and assumes responsibility for a business or other enterprise. If the desire to earn a profit is the driven force in our economy, then the entrepreneur is the spark plug. The entrepreneur takes the lead in combining raw materials, capital, labor and other inputs in the production of goods and services. The entrepreneur is also an innovator and risk taker. Entrepreneurs have no guarantee that their ventures will be profitable. But in organizing a business they risk their time, efforts and money in the hope that they will be able to earn a profit.

The entrepreneur is also defined as either the originator of a new business venture or a manager who tries to improve an organizational unit by initiative productive changes. (Stoner and Freeman 1992:156). Thus the entrepreneur is an individual or group of individuals, who sees an environmental change as an opportunity and uses the factors of production to produce new goods and services. The entrepreneur perceives opportunities that other business executives do not see or do not care about. Some entrepreneurs use information that is generally available to produce something new like inventing a new product in a new way. Other entrepreneurs see new business opportunities such as adopting companies existing products to create new ones. Basically, the entrepreneurs see a need and then bring together the manpower, materials, land and capital required to meet that need (Backman 1983:3).

1.2 STATEMENT OF PROBLEM

When comparing entrepreneurship development in Nigeria with other countries like America, Japan, China etc, we realize that these countries started on the same platform as Nigeria started with trade by barter and then advanced to their present state of economic growth. In fact they are faster in their development of entrepreneurship than Nigeria. Why this differences? This research work will find out to this effect the following:-The general problem encountered by entrepreneurs in Nigeria in establishing business.To find out the basic orientation that should be given to Nigerian entrepreneurs.To discover the rate of unemployment and find out the various business opportunities that will be of help to the Nigerian economy through entreprenurship. To also find how government program has been of help to various entrepreneurs in the country.

1.3 OBJECTIVE OF STUDY

1. To evaluate the contribution of entrepreneurship business to economic development of Nigeria.

2. To find out the basic orientation that should be given to Nigerian entrepreneurs on how best to mobilize savings for growth and establishment of cooperative enterprises in local communities .

3. To discover the rate of unemployment and find out the various business opportunities that will be of help to the Nigerian economy through entrepreneurship.

4. To also find how government program has been of help to various entrepreneurial development in the rural areas of Nigeria .

5. From all that has been mentioned above, it is the aim of the study to find out the or know entrepreneurial benefits on the following:-Small scale business Nigeria economy.

To various employers and employees.

To business organizations.

6. SMALL SCALE BUSINESS- The small-scale business will benefit immensely, if the government is encouraging entrepreneurs in the country and proper orientation on their obligation as an entrepreneur towards business is given. Besides, an enabling environment should be created to enable them to thrive, and also carry out their functions in the business environment. Thus small-scale business in the country will grow if government can also provide financial assistance in order to encourage the individual entrepreneurs.

7. NIGERIA ECONOMY-There will be a tremendous increase or improvement in the Nigerian economy. Entrepreneurship will be of benefit to industrial, household, firms and government. In the area of decision making, organizing the organizational structures, and making out plans are accomplished. Thus, this will go a long way in increasing job opportunities in the country, which in turn will reflect on the country’s capital income, and this will increase the rate of the G. N. P.

8. TO VARIOUS EMPLOYERS AND EMPLOYEES- Entreprenurship will be of importance to employers and employees. In the areas of employers, it will enrich their managerial skills, their vision, purpose and plans for the organization. Also in the area of the employees, there will be job opportunities for the graduates and other school leavers and this will reduce the rate of dependence ratio in the country that is not solely relying on government to provide jobs. To this effect, the government has introduced various programs under the N.D.E.so as to motivate both the employers and employees. Under this program, the N.D.E. provides loans to graduates for the operation of small-scale business.

TO BUSINESS ORGANIZATIONS-Entreprenurship will also be of immense benefit to business organizations because the Nigerian economy and its environment will be an investing area for most investors due to capable skilled workers that will handle the affairs of the organization or company without involving much foreign counterparts on the job. Thus, will in turn create more job opportunities in the country and this will increase the level of organizational profitability ratio.

1.4 RESEARCH QUESTIONS

1. What are the contributions of entrepreneurship business to economic development of Nigeria?

2. How can one find out the basic orientation that should be given to Nigerian entrepreneurs on how best to mobilize savings for growth and establishment of cooperative enterprises in local communities?

3. Is it possible to discover the rate of unemployment and find out the various business opportunities that will be of help to the Nigerian economy through entrepreneurship?

4. How government program has of helped in promoting various entrepreneurial development in Nigeria especially in rural areas?

1.5 RESEARCH HYPOTHESIS

H0: There is no significant relationship between entrepreneurship and economic development of Nigeria.

H1: There is a significant relationship between entrepreneurship and economic development of Nigeria.

H0: One cannot find out the basic orientation that should be given to Nigerian entrepreneurs on how best to mobilize savings for growth and establishment of cooperative enterprises in local communities.

H1: One can find out the basic orientation that should be given to Nigerian entrepreneurs on how best to mobilize savings for growth and establishment of cooperative enterprises in local communities.

H0 It is impossible to discover the rate of unemployment and find out the various business opportunities that will be of help to the Nigerian economy through entrepreneurship.

H1: It is possible to discover the rate of unemployment and find out the various business opportunities that will be of help to the Nigerian economy through entrepreneurship.

H0: Government programs has not in any means helped in promoting various entrepreneurial development in Nigeria especially in rural areas.

H1: Government programs has helped in promoting various entrepreneurial development in Nigeria especially in rural areas.

1.6 SIGNIFICANCE OF THE STUDY

The importance of the study cannot be over-emphasized, since it is expected to affect our economy and also increase the creation of job opportunities in the country especially in Afikpo North LGA. However, this project when completed will be of immense benefits to the following: -The Nigerian economy in general The small-scale industries. The general public creation of job opportunities in the country. Also there will be increase in the managerial skills.

1.7 SCOPE OF THE STUDY

It is an obligation on the part of the researcher to survey and evaluate the purpose of entrepreneurial development and its benefits to the economy. The researcher will also find out the tactics of an entrepreneur in the 2004’s, the causes and the brain behind their failures and success. The researcher will also find out various economics scholars who have contributed immensely to the growth of entrepreneur in the world. The researcher will also find out more information about entreprenurship in the country. However, the study of the researcher covers the purpose of entrepreneur in the country particularly Afikpo North LGA.

The following hypothesis would be tested: –

1.8 LIMITATIONS OF THE STUDY

The study is limited to the benefits and impact of entrepreneurial development with special attention to Afikpo North LGA.Besides, in the course of studying or conducting this research, there are some hindrances like not having enough materials to research on.

Also the researcher is faced with time constraint as it has an effect on my study time in the framework of my school assignments and quizzes.

1.9 DEFINITION OF TERMS

The following terms used in this study should be taken to mean the following.

COMMODITIES: These are articles of trade.

N.D.E. National Directorate of Employment.

NEW PRODUCT: These are new existing products in the market environmentG. N. PGross National Product.

ENTREPRENEUR: This is a person who starts a business and takes the finance risks and personal risks involved in keeping the business going. Or An entrepreneur is an individual agent who buys means of production at a certain price in order to combine them into new product.

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