Government policies and entrepreneurship development in nigeria

Project Abstract

<p> This study investigated on the government entrepreneurial policies that facilitate entrepreneurship and how effective these policies are on organizations. It focused on the empirical study of creating knowledge about entrepreneurship development in Nigeria. It studied the government efforts towards resolving the problems of entrepreneurship <em>lack of finance, managerial and technological know how,</em>&nbsp;<em>education and training, lack of experienced expatriate and local completion, inadequate infrastructure leading to high cost and finally high burden of taxation</em>. The major findings of this research include; Government entrepreneurial development policies have immensely improved entrepreneurial organizations, these organizations in turn have contributed a lot towards economic and national development especially in the aspect of reducing unemployment and generating income. The most important incentive given to entrepreneurs by government is finance. The entrepreneurs still encounter other problems in areas of technical and managerial known how, employee training and development, poor supply of infrastructure. Based on these findings, the researcher strongly recommends that entrepreneurial organizations should be included in training and development of their managers and other staff to acquire managerial and technical know how to enable them cope with the challenges of modern management. For the maintenance of human variable, there is need for human resource improvement. I humbly recommend to the Government to draft programmes like workshops, seminars, and career development programme which should have incentives attached to them. I humbly recommend to the Government to compel the environment to be supportive to entrepreneurs e.g. finance houses and banks should grant them loans. I humbly recommend to Government to equally give them grants from time to time, reduce the burden of tax and implement already made policies for the entrepreneurs. I equally recommend to Government to provide basic infrastructure like electricity, pipe borne water, boreholes, access roads, suitable spaces, market places for these products especially in the rural areas to reduce the cost encountered by the entrepreneurs. The researcher therefore concludes, that as the “foundation for growth and national development”, entrepreneurs are indispensable and must be given paramount attention by the government. <br></p>

Project Overview

<p> </p><div><p><strong>INTRODUCTION</strong></p><p><strong>1.1</strong>&nbsp; &nbsp; &nbsp; &nbsp;<strong>Background of the Study</strong></p><p>The history of big enterprises and industrial revolution started with persons whose imaginative ventures into business gave rise to the present day technology. It dated back to the olden days, when people engaged in farming, herding, crafts etc and commodities were traded mainly on barter and later on precious metals. In the colonial era, the tempo of business then was set and controlled by the colonial government. Prominent European firms that were highly integrated and dominated commercial and merchandising activities in Nigeria were John Holt, Paterson, Zochoris, Leventis, Leverbrothers, PZ, Campaignie Francaise du L’Afrique Occidentale (CFAO,) the Royal Niger now United African Company (UAC), Societe Commerciale de L’ Ouest Africain (SCOA) etc. Some of these Companies grew so large that few, if any of the economic decisions could be wisely initiated and instituted in Nigeria without soliciting and obtaining their co-operation. Apart from trading, colonialism also accounted for the development of quasi-technical business and semi-skilled labour in Nigeria. About this time, many of the Nigerian entrepreneurs were still gasping for breath. They did not benefit much from the liberal attitude of the government because they lacked political persuasiveness resulting from their lack of political power, low status, lack of cohesion and also</p><p>1</p></div><div><p>because the coming of independence created an insatiable demand for trained and qualified nationals. Thus, there was a limit to their ability to pressurize the government into favourable action or to threaten non co-operation in the attainment of national priorities. Their impact was insignificant and as a result, in the administrative bureaucracy of the colonial government (the civil service, public sector utilities established by them e.g Public Works Dept [PWD], Post and Telegraph [P&amp;T], Railway, Electricity Corporation and other multinational Organization) Nigerian workers served as the cronies of the white colonial masters as messengers, clerks, semi-skilled technicians and craftsmen. Some of these workers later established micro scale business in line with their trade.</p><p>From 1950’s, Nigeria began to make an unprecedented effort to encourage economic growth and development. National consciousness was at its peak. In 1952, the pioneer industries ordinance was introduced. It gave certificates of recognition to specified industries and exempted them from paying taxation for two years. In the same year, the income tax ordinance was passed which allowed companies accelerated amortization. In 1957 and 1958, the government gave import relief taxation to foreign companies and liberalized the granting of pioneer certificate, thus making the offer more attractive. In 1959, the Nigerian Industrial Development Bank (NIDB) was established to assist entrepreneurs engage in business. In 1960, political independence was granted and Nigeria witnessed an</p><p>2</p></div><div><p>expansion in business. The indigenization exercise started in 1972 with the introduction of the Nigerians enterprises promotion Decree or the indigenization Act of 1972 with the major objective of encouraging indigenous participation in ownership and management of business. Maost of the Nigerian businessmen who were apprenticed and agents of the “Colonial Lords” blossomed into large-scale entrepreneurs. This Act also compelled some foreign organizations to share the ownership of their business with Nigerian. The indigenization Act of 1977 known as the Nigerian’s Enterprise Promotion’s Act specified the equity participation of Nigerians in those companies which are broken into three categories (100% for schedule 1, 60% for schedule II, 40% for schedule III). By virtue of this indigenization exercise, Nigerians dramatically displaced the expatriates in ownership, management and control of the business organization in Nigeria. On the whole, a little over 700 alien dominated companies are expected to comply with this decree (Bus Times, Vol. 3, No. 41 July 25, 1978 P.I). By this exercise also Nigerians in one fell swoop, became owners of large business and started conducting business activities at national and global levels.</p><p>What constitute a small scale business differ in terms of quantitative, qualitative, technological or labour intensive methods. The Nigeria Bank for Commerce and industries define small scale business as an indigenous firm or company having assets, inclusive of working capital but excluding land or land worth, not above</p><p>3</p></div><div><p>N750, 000, and a paid employment not exceeding fifty persons at a time. The Nigerian Enterprises Promotion Decree defines it as one capable of having assets more than N750,000 and a paid employment of more than 50 persons provided that its output is small to the prevalent size of plant, technology and labour. CBN defines it as firm or company whose annual turnover ranges between N250,000 to N500,000 while SAP defines it as having N150,000 to N500,000 as minimum and maximum capital level.</p><p>According to the Minister for Industry, Kola Jamodu (2001), entrepreneurship in Nigeria accounted for over 95% of non-oil productive activities outside Agriculture. Some of the government efforts towards their development include financial, fiscal, export incentives and technical assistance. These government policies will lead to the growth in entrepreneurship and also create and distribute the economic wealth of Nigeria thereby fostering national growth and development. Also to ensure continued stay in business, there is the need for corporate appraisals from time to time.</p><p><strong>1.2</strong>&nbsp; &nbsp; &nbsp; &nbsp;<strong>Theoretical Framework</strong></p><p>A conceptual framework for this research is drawn from Entrepreneurship development theory. Entrepreneurship is the process of initiating and managing business organizations to accomplish societal objectives. It is also the willingness and ability of an individual, group of individuals or government entity to seek out</p><p>4</p></div><div><p>investment opportunities, establish and run an enterprise successfully. An entrepreneur therefore is an individual, a group of individuals or government entity who undertake the responsibility of making innovations in the economy (developing a new source of supply of raw material, new methods of production or distribution, introducing new goods/ service and opening a new market) or carries out a new organization of an industry.</p><p>The purpose of entrepreneurship is to diversify economic activities and also to create opportunities within the economy. Government entrepreneurial development policies include those policies which have been put in place by the government to enhance the productivity of entrepreneurs. Empirical studies in the performance of organizations as a result of these government interventions are rare. This study would make significant contributions to the existing stock of knowledge in the study of entrepreneurship.</p><p><strong>1.3 STATEMENT OF THE PROBLEM</strong>:</p><p>The poor performance of entrepreneurial organizations are due to lack of finance, managerial and technological know how, education and training, experienced expatriate and local completion, inadequate infrastructure leading to high costs and huge burden of taxation.</p><p>5</p></div><div><p>The statement of the problem in this study is therefore to investigate the ways in which government policies have improved the performance of entrepreneurial organizations. It studies the government efforts towards resolving the problems of entrepreneurs and thus developing them to take up the challenges thrown to them as the ENGINES OF NATIONAL DEVELOPMENT AND THE “LAST RESORT” in the privatization exercise.</p><p><strong>1.4 OBJECTIVES OF THE STUDY</strong></p><p>The objective of this study is to investigate:</p><p>1. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Those government positive interventions that can develop the entrepreneurs to attain their peak in corporate performance.</p></div> <br><p></p>