July 18, 2024


Savvy business masters

Understanding Entrepreneurialism and Its Relevance to Nigerian Society

Understanding Entrepreneurialism and Its Relevance to Nigerian Society

Entrepreneurialism 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 weren’t for them, the world would never have knows 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 larger rewards of risk-taking, starting an enterprise and developing it into a successful business venture extend well past its immediate beneficiaries. The scope of financial freedom and flexibility that entrepreneurialism allows is a means to simultaneous individual and national prosperity. If this holds true for economies around the world, it has especially relevance for Nigeria, which is at the cusp of a new era of progress.

History of Nigerian Entrepreneurship

Nigeria is home to people of the Ibo culture, an extremely resourceful ethnic group that is known for its traditional entrepreneurial prowess. Consequently, this well-endowed sub-Saharan nation has a strong undercurrent of enterprise running through its veins, which has helped it survive and emerge out a long and difficult history.

Inheriting a fortune in oil and gas reserves after ceding from British colonial rule in 1960, Nigeria’s early regimes banked heavily on non-renewable resources to generate rich returns. The oil boom of the 70’s marked a period of tremendous national profit – an aggregate of more than $600 billion over four decades. However, civil strife and political uncertainty spawned an atmosphere of disregard for inclusive growth, eventually brining about a steady decline of agriculture and traditional industries. The outcome was the creation of the ‘Nigerian Paradox’, a situation of huge economic disparities that drove most of this resource-abundant country’s population into desperate poverty.

Traditional Nigerian entrepreneurship began in a climate of economic stagnation and as a purely survivalist endeavour. Dismal human development indices, unemployment and infrastructure deficits resulted in the evolution of a massive informal economy that depended almost exclusively on personal initiative and hazardous risk-taking capacity. This vast, unorganised sector, covering a wide range of products and services, quickly filled the gap left by subsequent decades of misrule and failed economic policies. It is ironic, to say the least, that the Nigerian informal economy has now grown to a stage where it contributes over 65% of Gross National Product, and by the government’s own admission, accounts for 90% of all new jobs in the country.

Entrepreneurial resurgence

The return of democracy in 1999 ushered in a period of economic reforms and a renewed focus on enterprise development as the only viable means to sustainable growth. Nigerian leaders initiated a massive programme of disinvestment and financial deregulation aimed at boosting business development across the Micro, Small and Medium Enterprise (MSME) space. Progress has been hampered by institutional deficiencies and widespread bureaucratic and political corruption, although it is still too early to comment on the long-term accomplishments of Abuja’s renewed efforts at jumpstarting the economy.

One of the primary reasons why the country struggles to keep up with the developed world despite its considerable human and natural resources is a lack of progressive and holistic policies. Nowhere is this more apparent than in the case of education. However, in pursuance of the Millennium Development Goals and its indigenous 2020 target, the Nigerian government has in recent years made tangible efforts to enforce universal basic education and mass adult-literacy programmes that it hopes will allow Nigerians to compete in the business world. The focus on education, particularly on vocational training and skills-development, is a conscious effort to engender entrepreneurial vigour among its substantial population of 148 million, more than half of which lives in extreme poverty. Private and international aid agencies have collaborated and extended support in this direction: the United Nations Transfer of Knowledge through Expatriate Nationals scheme, for instance. Educating potential entrepreneurs and equipping them with the skills necessary for success remains a key priority.

The final aspect of Nigerian entrepreneurship is export, which has primarily been limited to non-renewable resources. However, export in the non-oil sector is an equally vital instrument for accelerated growth, and a significant area for emerging entrepreneurs to get involved in. Trade with countries in Europe, Asia and the Americas is a potential boom sector, more so in light of a new tax regime that is intended to promote emerging businesses.

Challenges Facing Enterprise Development

Despite recent achievements that prove Nigeria’s potential for entrepreneurial triumph, there is little doubt about the severity of constraint on the road ahead.

One of the principal problems is very simply the fact that Nigeria is not perceived as a promising business destination. The high cost of doing business, corruption and systemic flaws in the country’s economic policies have cumulatively succeeded in keeping off potential investors. Massive infrastructural deficits, particularly with regards to roads and electricity, are further turn-offs. The most significant aspect of the problem, however, is Nigeria’s nascent and shaky polity, constantly under threat from civil intolerance and rising religious extremism.

Social problems, growing out of deplorable human development indicators in the absence of inclusive growth, form the second significant obstacle for Nigeria. The status of women and their traditionally limited involvement in entrepreneurial activities is a significant drawback from the perspective of rapid social and economic growth. The issue is further compounded by a catastrophic divide in the condition of rural and urban populations.

Entrepreneurialism is the foundations of any developed nation. For Nigeria to reap the full benefits of a dynamic and evolving economy however requires the overcoming of entrenched social, financial and political hurdles. Informed government policy, education and international participation are crucial for Nigeria to shake off its third world heritage and achieve the full breadth of its economic potential.