Government
Policies and Entrepreneurship Development in Nigeria
Abstract
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: lack of finance, managerial and technological
know how, education and training, lack
of experienced expatriate and local completion, inadequate infrastructure
leading to high cost and finally high burden of taxation. 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.
Chapter
One
Introduction
1.1 Background of the Study
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 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&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. 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 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. 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 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.
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.
1.2 Theoretical Framework
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 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. 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.
1.3
STATEMENT OF THE PROBLEM:
The poor performance of entrepreneurial organization is due to lack of finance, managerial and technological knowhow, education and training, experienced expatriate and local completion, inadequate infrastructure leading to high costs and huge burden of taxation. 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.
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