THE IMPACT AND ROLE OF ENTREPRENEURSHIP ON THE ECONOMIC GROWTH OF NIGERIA
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The role of entrepreneurship in the growth and development of our dear nation cannot be overlooked and as a result of the consistent rise in the level of unemployment and the upward increase in the level of poverty in Nigeria, it has become crucial for Nigerians to quit searching for white collar jobs that are not available and start creating employment for themselves. The forces of entrepreneur are strong in Nigeria because most people see entrepreneurial activities as what is primarily based on essential due to the poor economic situation. We do not seem to realise the fact that entrepreneurship development is the base of all economic evolution of any nation. The current Nigerian economy is largely dominated by the oil industry. The labour force is radically growing, as is the unemployment rate currently at 20%, with millions of workers underemployed. Nigeria is endowed with the largest domestic market in Africa a wide range of natural resources coupled with a diversely skilled labour pool. Given these economic realities, the country must constantly create new jobs, and diversify the industrial and commercial sector to take advantage of human and natural
resources. The activities of entrepreneurs have been found to be capable of making impact on the economy of a nation and quality of life of the people through economic growth; employment generation and empowerment of the disadvantaged segment of the population, which include women and the poor. Small and Medium Enterprises (SMEs) is perceived as a pride of basically every country or state. Because of SMEs’ significant roles in the development and
growth of various economies, they have appropriately been termed as the engine of growth and catalysts for socioeconomic transformation of any country. SMEs are perceived as a real instrument for the achievement of national
economic objectives of employment generation and poverty reduction at low investment cost. Other central benefits
of vibrant SMEs are the access to the infrastructural facilities the stimulation of economic activities such as providers
of various items and distributive trades for items produced and needed by the SMEs, stemming from rural urban
migration, enhancement of standard of living of the employees of the SMEs and their dependents as well as those
who are directly or indirectly associated with them.
Various government of the nation have begun to find solutions on how to involve the private sector in the
developmental process of their country’s economy which is one of the responses to the challenges of development of
entrepreneurial in developing countries. Nigeria had even taken a bold step by including entrepreneurial studies in the
academic curriculum of her education system and with the introduction of National Directorate of Employment (NDE)
scheme. The belief of such policy makers is that such decision will inculcate entrepreneurial spirit in the mind of
people so as to prepare them for wealth creation through entrepreneurship (Fasua, 2006). Entrepreneurship is very
crucial to the development of a country’s economy, especially countries like Nigeria. Entrepreneurship is sine qua non
to national development poverty eradication and employment generation it is the bed rock of any nation’s industrialization.
The essential of entrepreneurship for productivity was originally credited to Alfred Marshall in 1990. In his famous
book; Practice Principle of Economics, Marshall ascertained 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. (Marshall, 1994). Therefore, early entrepreneurs
were characterized with production and manufacturing. In a situation like this, the producers often started with small
capital. Early entrepreneurship began with trade by barter even before the advent of money. Therefore most of the
modern entrepreneurs were engaged in retail trade and also sole proprietorship.
1.2 Statement of the Problem
With current challenges in the global economy, new and innovative strategies are emerging in the bid to stimulate and
sustain growth in national economies. Entrepreneurship is one model that is deemed critical to the formulation and
implementation of these strategies. According to a research by The Global Entrepreneurship and Development
Institute, it was found that USA is a world leader when it comes to supporting its entrepreneurs in respect to business
formation, expansion, and growth. They also finance new businesses through venture capital. This type of financial
capital is provided to early-stage, high-potential and riskier start-up companies. Countries like Australia and Sweden
came second and third respectively according to the 2014 statistics. Some of these countries’ economies are ranking
very high because they understand the effects entrepreneurs play in the growth of their economy. Their GDP are
always on the increase thereby increase in their economy.
In spite of this, little is known about the profile of the Nigerian entrepreneur and how they engage with the constantly
evolving policy context. This study therefore aimed at better understanding their characteristics the impact and role of entrepreneurship on the Nigeria economic growth.
1.3 Research Questions
The following are some of the questions which this study intends to answer:
i) what is the prevalence of entrepreneurship on the Nigeria economic growth?
ii) what are the contributions of entrepreneurs to the economic development in Nigeria?
iii) what are the factors that influence entrepreneurs to economic development the Nigerian economic
development?
THE IMPACT AND ROLE OF ENTREPRENEURSHIP ON THE ECONOMIC GROWTH OF NIGERIA