THE IMPACT OF ENTREPRENEURSHIP ON ECONOMIC DEVELOPMENT IN NIGERIA

THE IMPACT OF ENTREPRENEURSHIP ON ECONOMIC DEVELOPMENT IN NIGERIA

ABSTRACT

The study centered on the impact of entrepreneurship in economic development in Nigeria. The study aims at pursuing the following objectives: to find out the significant role of entrepreneurship in economic development of Nigeria; to ascertain the extent that government policies have improved the performance of entrepreneurial organization in Nigeria; to examine the extent to which macroeconomic policies foster entrepreneurship culture in economic development of Nigeria, and to identify the challenges of entrepreneurship in economic development in Nigeria. The study had a population size of 1100, out of which a sample size of 293 was realized using Taro Yamane’s formula. The study employed a survey research design. The instrument used for data collection was the questionnaire which was structured in line with likert five point rating scale and was validated. A total number of 293 questionnaires were distributed while 285 copies were retrieved. The data from the responses were presented using frequencies, simple percentages and cumulative percentages. The hypotheses were tested using the chi-square (X2) and F-test statistical tools. The study found out that: entrepreneurship plays significant (X2 ccal = 33.125 > X2 t0..5 = 7.962); there are positive significant impact of entrepreneurship in economic development of Nigeria State (X2cal = 15.965 > X20.5 = 7.962); government policies to an extent improve the performance of entrepreneurial Organization in Nigeria (Fc -test = 8.08 > Ft1 = 2.87); macroeconomic policies positively foster entrepreneurial culture (Fc -test = 8.08 > Ft1 = 2.87) entrepreneurship is challenged by finances in economic development of Nigeria. The study, based on the above findings, concluded that a comprehensive approach to the promotion of entrepreneurship rested on favourable economic policies, entrepreneurial skills/culture and improvement of entrepreneurial framework condition. The study recommends that there should be a strict policy framework that can enhance entrepreneurs-government partnership in area of finance, skill development and alliance.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

The socio-economic impact of entrepreneurship on the sustainable economic growth of the Nigerian economy is difficult to accurately measure or estimate, but it is believed to be highly dynamic and significant (Oyelola, Ajiboshin, Raimi, Raheemi, Igew 2013). However, a study estimated that between 45 and 60 percent of the urban labour force work for small private enterprises or what is otherwise called small businesses Nwaka, (2005). Another study suggests that entrepreneurship has been beneficial because the Nigerian private sector comprising of small and medium enterprises provides diverse employment opportunities for 50 percent of the country’s population and 50 percent of its industrial output, Ariyo (2005).

Entrepreneurship may not be regarded as the sufficient condition for the growth and development activities, but it is surely a necessary condition. This perhaps informs why Adeyemi (2012:2) avers that “entrepreneurship is the livelihood of any economy”. It is in line with this position that entrepreneurship is looked at as being imperatives for the economic development of Nigeria. Nigeria, the most populous country in Africa, is naturally endowed with millions and millions of acres of durable land, 38.5 bullions barrels of stated oil reserves, vast gas reserves, a variety of unexploited minerals, and a wealth of human capital by virtue of its estimated population of 150 million (Oteh, 2009:1).

Entrepreneurship also creates goods and services that are capable of satisfying needs. The multiplicity of this creation enlarges productivity. Agbaeze (2007:36) cites John Kendrick as informing that higher productivity is chiefly a matter of improving production techniques and this is entrepreneurial functions per excellence. Two keys to higher productivity are research and development (R and D) and subsequent investment in the plant and machinery.

Furthermore, entrepreneurs are usually, thirsty for innovation and creation in a bid to have competitive advantage over each other’s inventions, new technologies and development. A single creation may lead to a number of other creations and subsequently new products. In the 18th century, James Watt, in England, developed and perfected the steam engine, in a bid to ease the production processes in the factory (Agbaeze; 2007). To take advantage of this intervention and remove some of the bottlenecks associated with it in the mid 1960s, James Hargreaves invented the spinning jenny, an invention linked to the steam engine. Further in 1785, an English clergy man invented the power loom-a weaving machine powered by the steam engine.

Agbaeze (2007:36) cites Zoltan as describing small business, created by entrepreneurs as agents of change in the market economy. Two possible types of technological changes associated with products/services in the market place include quantum technological change that result into quantum product innovation (a shift or jump from the existing product to entirely new product), and incremental technology change – that is change that refines an existing technology and leads to gradual improvements or refinements in products and services overtime. In any of the cases, competition is rejuvenated. Firms are worked up and competitions are renewed. Relay-race is investigated by changes in innovations and counter innovations

From the forgoing, therefore, the assumption and/or hypotheses that entrepreneurship is linked to economic growth finds it’s most immediate foundation in simple intuition, common sense and pure economic observation: activities to convert ideas into economic opportunities lie at the very heart of entrepreneurship. Entrepreneurship is a source of innovation and change, and a such spurs improvement in productivity and competitiveness (Agbaeze, 2007:36 cites Zoltan).

On account of encouraging entrepreneurial initiatives, the country has experienced exponential growth in the number of private firms. However, majority of these businesses are very small when their operations are measured in terms of capital, employment and revenues (Attahir and Minet, (2000). Added to the above is difficulty confronted by small businesses in accessing bank credits, but the most serious and damaging problem threatening the state of entrepreneurship in Nigeria is the poor government interest and support for micro, small enterprises Chu et al., (2008). Besides, entrepreneurship and small and medium enterprises development is hampered by surplus of challenges like bad roads, bribes by government officials, multiple taxes, epileptic power supply and rising overhead costs on transportation and communication. All these challenges and similar others have attracted the interest of the researcher, therefore, this study seek to examine the impact of entrepreneurship on economic development of Nigeria.

1.2     Statement of the problem

Entrepreneurship is often seen as a process of creation with a view to identifying gaps in need, and mobilizing the necessary factors of production to close the gap(s) with a view to profiteering, if not immediately, later. By so doing so many societal problems are solved. The above notwithstanding, in Nigeria over half of the Nigerian’s population lives on less than a dollar a day. Nigeria is one of the top three countries in the world that have the largest population of poor people. In addition, Nigeria remains off track on achieving the millennium development goals (MDGs) especially in alleviating a number of people who live in extreme poverty through entrepreneur ideas. The economic reforms have not been sufficient to reverse years of economic decline, deteriorating capacity, weakened institutions and inadequate infrastructure investment while the recent drama in stock market decline and banking crises and the global economic crises have accentuated the situation.

The enormity of the challenge is corroborated by Nigeria’s low score on human development index (HDI) – an index that measures the average achievement of a country in terms of the welfare and quality of its people. Consequently entrepreneurial development in Nigeria appears to have not performed creditable well and hence not played the expected vital and vibrant role in the economic growth and development of Nigeria. This situation has been of great concern to the government, citizenry, operators and practitioners of the organized private sector. It is thus, against this background problem that this seek to examine the impact of entrepreneurship in the economic development of Nigeria.

1.3     Research Questions

The following research question will serve as a guide to the researcher in attempt to achieve the objective of this study.

1. Does entrepreneurship play significant role in economic development of Nigeria?
2. To what extent do the government policies improved the performance of entrepreneurial organization in Nigeria?
3. To what extent do macroeconomic policies foster entrepreneurship culture in economic development of Nigeria?
4. What are the challenges of entrepreneurship in economic development in Nigeria?

1.4     Objectives of the Study

The general objective of this study is to examine the impact of entrepreneurship on economic development in Nigeria. The specific objectives include:

1. To find out the significant role of entrepreneurship in economic development of Nigeria.
2. To ascertain the extent that government policies have improved the performance of entrepreneurial organization in Nigeria.
3. To examine the extent to which macroeconomic policies foster entrepreneurship culture in economic development of Nigeria.
4. To identify the challenges of entrepreneurship in economic development in Nigeria.

1.     Statement of Hypotheses

H_i1: There are positive significant roles of entrepreneurship in economic development of Nigeria

H_i2: Government policies to an extent improve the performance of entrepreneurial Organization in Nigeria.

1.     Significance of the Study

The study is significant in a number of ways: First, it is hoped that the findings of this study would be of immense importance to government and economic policy makers. On the government side, the study would help government to develop and implement policies that would foster entrepreneurial culture.

Secondly, the study would be of immense significant to the students of management, economics/political economy and sociology. The researcher will use this study as a source of secondary data for further studies.

Thirdly, the study is significant in that it would contribute to the growth of literature in the area of entrepreneurial culture/entrepreneurship and it will be very useful for all those who want to carry out research in the same area.

1.      Scope of the study

This study focused on the impact of entrepreneurship on economic development of Nigeria. Basically the study concentrated on some selected small and medium enterprises in Lokoja town.

1.     Limitations of the study

Certain limitations encountered in the course of the study include:

Attitude of the Respondents: This study was further limited by the attitude of the respondents. Owing to high level of ignorance, many respondents were reluctant to fill the questionnaire and also felt indisposed to provide vital information. The constraints notwithstanding, the researcher successfully overcame and did a good research work.

1.9     Definition of Terms

Business: Is the planned activities of individuals or groups of people aimed at producing and selling, for a profit, the goods and services that satisfy the need of consumers.

Economic Development: The improvement of the individuals, society well being, such that the GDP of such people/societies equals or greater than the United Nations standard.

Economic Structure: Institutional arrangement for deciding on what, how and for whom goods and services are to be produced.