PROBLEMS AND PROSPECTS OF ENTREPRENEURS IN NIGERIA

PROBLEMS AND PROSPECTS OF ENTREPRENEURS IN NIGERIA

(A STUDY OF SMALL SCALE BUSINESSES IN AKWA IBOM STATE)

CHAPTER ONE

INTRODUCTION

1.0   Background of the study

The small business sector is the fastest growing segment of Nigeria’s economy. It is a strategic sector which is the engine for national development. Indeed, it plays a crucial role in both stability and the health of the national economy in terms of employment, taxes, competition, support to local communities, gross national product, sectoral shift from manufacturing to services, globalization as a result of international trade agreement and the emergence of the niche marketing concept. Further, massive lay offs, down-sizing, restructuring in large organizations, public organizations and unemployment have helped spur interest in small business and entrepreneurship.

Who is an Entrepreneur? Reviewing the literature reveals that there is no generic definition of the entrepreneur. Many scholars from different schools of thought have defined the phenomenon as follows: Ibrahim and Ellis (2002) “for Economists such as Jean Baptist and J. Schumpter view the entrepreneur as the fourth factor of production who is rewarded by profit for his innovation and risk taking activity. Sociologists regard him as a deviant individual who is driven by a number of factors such as personality, family and society, towards a particular pattern of behaviour. Psychologists have turned their attention to the personal characteristics of the entrepreneur. A broad profile of an individual with a high need for achievements and autonomy” Drucker (1983) defines entrepreneur as “any person who coordinates other factors of production and bears the risk or uncertainty by investing his scarce resources in business ventures. Onuaha (1998) defines him as the “one who takes managerial decisions of planning, organizing, staffing, directing and controlling the business”.

Obviously, the nagging complaints of entrepreneurs have been a matter of increasing concern to the government, business organizations, individuals, researchers, international commitments/organizations. These complaints are found to militate against the development of entrepreneurship and hence retarding the nation’s growth. The major factors militating against entrepreneurial development in Nigeria will be the theme of the study coupled with the prospects of entrepreneurs.

1.1   Statement of the Problem

Nigerian entrepreneurs are faced with numerous operational obstacles, among which include: financial management, insufficient capital, poor credit facilities, and unstable government. Some of the small scale business organizations are located in areas without good communication network, inconsistent electricity supply and bad roads. Moreover, inability to operate computers and other machines still cripple the operations of entrepreneurs because they could not use technology for creativity and innovation. It is against this background that the researcher sought to investigate the prospects and problems of entrepreneurs in Akwa Ibom State.

1.2   Objectives of the Study

The followings are the objectives of the study:

1. To examine the effect of financial inadequacy on entrepreneurial development in Akwa Ibom State.
2. To find the extent in which investment infrastructure affects the performances of entrepreneurs in the State.
3. To identify the extent which technology affects entrepreneurship in Nigeria.
4. To appraise the effects of excess credit sales on business growth.
5. To evaluate the extent to which operational environments affect entrepreneurial development.

1.3   Research Questions

1. Does funding inadequacy affect entrepreneurial development?
2. Does lack of investment infrastructure affect the performances of entrepreneurs?
3. Does technology affect entrepreneurial development in Akwa Ibom State?
4. Does excess credit sales affect business growth in Nigeria?
5. Does operational environments have impact on entrepreneurial development?

1.4   Research Hypotheses

The following research hypotheses were formulated to facilitate the realization.

H₀ 1:     There is no significant deference between poor funding and entrepreneurial        development.

H₀ 2:   Lack of investment infrastructure has no influence on entrepreneurial        development.

H₀ 3:     Entrepreneurial development is not affected by technology.

H₀ 4:   Excess credit sales has no effect on entrepreneurial development.

H₀ 5:   Operational environments have no impact on the development of entrepreneurship.

1.5   Significance of the Study

The study is significant since it investigates the various problems and prospects of entrepreneurship. The investigations will be important to the government to encourage intensive funding of small scale enterprises. To the unemployed, there are many opportunities to be explored rather than waiting for government offer. To entrepreneurs there should be credit sales management to avoid winding off and expose them to growth impediments and to the researchers a reference material. The entrepreneurs should note that excess credit sales is detrimental to business growth and can result in business closure or bankruptcy. The study will also provide data for further research on the topic or relevant topics.

1.6   Scope of the Study

The study is limited to small scale businesses in Akwa Ibom State cutting across manufacturing and servicing businesses.

1.7   Definition of Terms

Environment: The surroundings and atmosphere that affect business transactions.

Operational Environment: This includes government laws, change of governments, political factors and legal factors which influence the performances of entrepreneurs.

Investment Infrastructure:  These include good roads, steady electricity supply, and good telecommunication networks.

Technology:  Machine, tools, skills and methods of doing business.