NIGERIAN GOVERNMENT HAS NOT DONE ANYTHING WORTHWHILE IN ENTERNCHING ENTREPRENEURIAL CULTURE IN THE COUNTRY
A TERM PAPER DEFENDING THE ABOVE ASSERTION
Entrepreneurship is an important factor in the development of any nation. Entrepreneurs are responsible for taking calculated risks that open up doors to progressively higher levels of economic growth. If it were not for them, the world would never have known such marvels as the wheel, electricity or the Internet, to name just a few. Entrepreneurs are the veritable backbone on which the world and modern ideas continue to develop. The magnitude and reach of their contributions, however, extend much beyond the world of business and economy, and to them goes irrefutable credit for the growth and evolution of societies at large. Developed nations across the world owe their current prosperity to the collective effort of intrepid entrepreneurs, on whose innovation also rests the future prosperity of much of the developing world.
The need for entrepreneurship development in Nigeria has never been so high in the history of the country, the government has done anything to help citizens in have good knowledge about entrepreneur.
The Nigeria business environment is characterized by political uncertainty, increasing insecurity, poor product innovation, stiff competition, depressing customer income and increasing cost of operation. To improve in these areas we need the government, stakeholders and event interpreters on board.
Nigeria is a country of many diverse opportunities. A country with a population of over 150 million individuals should be every entrepreneur’s paradise. Nigeria has however created a hostile environment that is unfavorable for youth to achieve entrepreneurial success. No doubt, the government has gone a long way to encourage entrepreneurship and has implemented some programmes to aid young Nigerians create jobs for themselves and also support their businesses.
However these programmes have very little impact. Take for example the “YOUWIN” programme, the flagship entrepreneurship programme of the last administration. The programme has only celebrated 1,200 awardees since its inception about three years ago. The figure, broken down, comes to 400 awardees a year with only a minor percentage below 30 years of age. There are around 80 million youths in Nigeria today with approximately 50 percent of that number unemployed. If the government carries on at that pace, it will probably solve the problem of unemployment in the next 50,000 years –assuming there are even 20 million unemployed youths in Nigeria!
The country needs a much bigger programme that will accommodate a much larger percentage of the Nigerian young entrepreneurs. There are other programmes that are already ongoing such as the Bank of Industry loans and the Central Bank of Nigeria’s intervention funds for entrepreneurs. The problem with these programmes is that they prioritize only women and agro-businesses.
Many of our talented youths today are into several other businesses such as retail, food, fashion and even real estate and they also equally require the same financial assistance from the government. We live in the most dynamic period in Nigerian history; the richest black man and the richest black woman in the worldare both of Nigerian heritage. The youth are beginning to convert their excuses in to productive means and should be encouraged; the government needs to domore.
The Muhammadu Buhari-led administration seems eager to promote youth development and also create jobs. It should bear in mind that this cannot happen without aligning its programme with those of the states. It will be impossible to implement an effective umbrella programme run from one office somewhere in the federal capital territory in a country with our population. Imagine the raw talents we have in Aba and what they can achieve with proper guidance and encouragement. Entrepreneurship and innovation courses should be taught right from secondary schools as it is key to our economic survival. I do not see how the government can employ all the 80 million or so unemployed Nigerians. Unfortunately those are the standards we have created for ourselves – waiting for the government to provide jobs for us!
The first thing that comes to the mind of a student on leaving the university is which is the juiciest government agency they can work for? There is no security in government jobs; if in doubt, try interviewing retired civil servants. The youth must be encouraged; they cannot be confined to a failed process.
Entrepreneurship is the foundation of any developed nation. For Nigeria to reap the full benefits of a dynamic and evolving economy however require the overcoming of entrenched social, financial and political hurdles. The government must increasingly work to improve the ease of doing business by developing and implementing more pro-market policies and making the entire business environment more attractive to investors. Also, improvements and reforms in education and international participation are crucial for Nigeria to shake off its third world heritage and achieve the full breadth of its economic potential.
10 Key Factors Affecting the Nigerian Business Entrepreneurs
1. Problem of Inadequate Capital: Money is the life wire of every successful business. The major reason that often kills great business ideas or dreams of Nigerian entrepreneurs is their inability to raise capital to start or grow their businesses. Most Nigerian Banks and investors are now refusing to take the risks and provide business loans to private ventures – who do not have the required collaterals. Banks do cite that average entrepreneurs misuse business loans for other purposes, but behind the scenes, most Nigerian Banks are taking the available funds for gambling on the global real estate and oil markets. There is the high commercial interest rates which also pose a barrier for entrepreneurs to access capital and grow their businesses. If the Nigerian Banks are going to give you a loan as a small business owner, you have to really convince them that your business is highly profitable. Which of course due to harsh economic conditions, most SMEs in Nigeria rarely turn in good profits that could make them attract loans. Again, Going by the level of complaints and alleged ‘excess deductions’ on loan facility, a growing number of Nigerians are now afraid to borrow money from the banks, not just because of their inability to pay back, but that they would pay twice what they are supposed to pay at the end of the transactions. A former banker that worked in the control units of several banks with nearly two decades’ experience told The Guardian that this “over-deduction” or “excess deduction” on loan facility is subtle and normal thing done by every bank, but being discovered by few customers recently. “The truth is that only few of the borrowers crosscheck their overall transactions, whether periodically or at the loan term. Some banks, if not all, even make provisions to suppress any protest, depending on the value involved. Some settle it quietly”. The excess deduction means that apart from the agreed terms, changes in inflation level and any change in the Monetary Policy Rate during the period of the loan, banks deduct more money from the account of borrowers than what is due to them even without their notice. This development where banks are taking advantage of the low knowledge-base of their customers to enrich themselves portends eroding confidence in banking relationship; and set back the level of progress reached in the financial inclusion drive. As long as these scenarios prevail, small business owners and startup entrepreneurs must focus on high-defined activities that can create immediate growth and profits for their businesses.
2. Lack of Incentives and Government Protection: Small scale industries in Nigeria are not protected by government neither are they encouraged by any form of special incentives. Even where these incentives exist, problems caused by cumbersome and costly bureaucratic procedures, especially in getting necessary approvals, licences or loans still prove otherwise. For example, tax holidays and special concessions that can reduce the cost of doing business are not being extended to Small and Medium size Enterprises, SMEs. The administrative process of starting a business and registering a business in Nigeria took months to complete and often required paying for more. Some government policies and regulations also generate market distortions and unnecessary sentiments. Even, some government agencies prevent critical business activities like placing of billboards at the expense of huge tax collections form business owners. Businesses still face the risk of being buried under the weight of multiple levies and taxes from several government agencies which could force them out of business.
3. Shortage of Technical and Technological Infrastructures: In addition to poor access to useable funds/capital; difficulties in procuring raw materials, lack of access to relevant business information, low technological capabilities, high cost of transportation, etc., are major problems. Aside the government statutory responsibilities in the provision of infrastructural facilities like adequate electricity, roads and water supply to SME and industries; Having the right strategies, infrastructures and service experts are paramount if a business is to control budgets and maximize returns on investment. A good security systems (including access controls and CCTV cameras), internet access and uninterrupted power supply are going to be the most important parts of any business, so we want these to be as reliable as possible.
4. Expatriate Market Competitions: Like Shell in downstream oil sector, MTN in telecommunication sector and Shoprite group of stores in the Nigeria retail businesses; Many foreign companies currently in Nigeria have high-jacked some of the Nigerian economic environments. Some of them have over 20-years history of success and have gained good brand reputation, making it difficult for local and upcoming investors to compete. Thus, an entrepreneur having interest in related economic sectors must have a good funding mechanism in place to enable the company step-up with its competitors in the industry it has chosen.
5. Lack of Organizational and Management Skills: New businesses have failed; some of which were necessitated by several reasons, whether it’s government’s failure to provide the requite infrastructure or the business owner’s poor decision making abilities. Knowledge they say is power! Before proceeding further in your business, it is always important to “get completely qualified”. Many entrepreneurs today never care about this aspect before jump-starting and running their own businesses. However, the problem of providing technical and managerial know-how is being tackled through various schools, training institutions and respective industries, so acquire the knowledge you need for your business success.
6. Entrepreneurs Inability to Form Partnerships: Partnership involves two or more individuals, investors, shareholders, or suppliers who agreed to share the responsibilities, gains, funding and liability of a business. Most Nigeria business men and women are having hard times creating collaborative engagements that can strengthen the future of their businesses. Why? This is because most business partnerships are negotiated through third-party involvements, legal business structuring and formatted partnership agreements that entrepreneurs ordinarily find difficult to understand and implement. Having and working with investment partners that will take advantage of you and don’t contribute as much as expected is going to be a no for young entrepreneurs. In our future training you will learn how to find and settle with the right partners that can grow your business.
7. Problem of Identifying a Potentially Viable Project: The challenge of most entrepreneurs begins with what to produce, to whom to produce, and where to locate the businesses. With the number of businesses already existing out there; it is always difficult to come up with the right business idea – one that the customers will accept. However, these choices are usually informed by the needs and desires of the target market, or the prospective customers through marketing research and feasibility studies. Your business effort will no doubt be a waste if you find it difficult securing sales for your products or services.
8. Career, Personal and Financial Risks: Majority of people do not have the luxury to quit their day jobs to pursue starting a business. However, there is this worry about how to meet their personal or family financial obligations – without additional means of income? When entrepreneurs decide to be in business, they are putting some (if not all) of their net worth that risk. While starting a business, an entrepreneur may run the risk of living a stressful life that is out of balance, with working hours taking away other family or personal activities .Nevertheless, with good management support and outsourcing, emerging businesses can consider hiring someone to take out some of these tasks on your behalves.
9. How to Market their Products or Services: Businesses of all sizes are in constant need of getting increased customers and providing real value for a competitive price. The critical success factors for a product business are well known: — starting with selling every unit with a gross margin of 50 percent or more, establishing brand reputation, and continuous product improvement. On the other side, if your area is a service business, it’s relatively hard to find guidance on what will get you funded, and how you can scale your business. Most service businesses don’t have the physical products to offer investors. So, a good business development, management and marketing strategies are critical.
10. How to Hire the Right Employees: Getting the right people who can do the job is a challenging process for most entrepreneurs. Many businesses in Nigeria are having issues about hiring great people, building a strong production team, and implementing good customer service systems. While hiring the wrong employee is expensive, costly, and time consuming. A happy customer means a returning customer – with more money to the business. Today, many Nigerian graduates will have the high certifications needed; yet lack the hard skill sand experiences for the jobs. A good and qualified employee will pay back in productivity, successful customer relationship, and a positive impact on your total work environment.
Entrepreneurial forces are relatively strong in this country, as the lack of jobs and a rise in poverty leave few other options for the Nigerian people. Although difficult due to a lack of resources, there are non-profit organizations such as the Fate Foundation in Nigeria that are dedicated to promote entrepreneurship.
Entrepreneurship is an important factor in the development of any nation. Entrepreneurs are responsible for taking calculated risks that open up doors to progressively higher levels of economic growth.