For a proper explanation of entrepreneurship, we would look at its definitions, early stages and history and how it affects the economy of a nation and in particular, Nigeria.
History of Entrepreneurship in Nigeria
What is Entrepreneurship?
Entrepreneurship is regarded as the major basis on which the market economy of a country is built on. It is also known as a business with high risks, this is because it involves trust yet with a goal of profit from production and sales of goods and services.
Entrepreneurship is when a business minded individual finds a means of providing or designing unique product either as goods or services usually to solve problems and make a profit off it
Entrepreneurship also has to do with the intentional establishments of small scale businesses with the aim of growing it into a larger business that will run the nation’s market economy.
Nigeria has a large business sector with many setting up their personal businesses so as to obtain profits. Below is a history of this fast-growing sector of the Nigerian economy.
History of Entrepreneurship in Nigeria
Entrepreneurship began when people produced by themselves more products than they needed. This made them seek for ways to get it out of their stock. Therefore, they exchanged these surpluses with others who were in need of it. For example, if a farmer produced more potatoes than he needed, he exchanged the extras he had with a blacksmith’s extra axes which were what he needed. This way, Nigerians in the olden times were involved in entrepreneurship.
This is also called the trade by barter system which began even before the advent of money.
Individuals could focus on their areas of production; be it crafts, arts or other businesses and then earn a profit in the form of other goods.
Generally, entrepreneurship is characterized by small capital start-ups and this was the same in the colonial era. During this period, only a few Nigerians had the privilege of kick-starting a business in buying and selling. At this time, it was important to make use of the banking sector to either obtain loans or help save money. This was only made available to those who settled in the urban areas or those with adequate people connections. More so, these banks majorly sought to increase profits for the colonial rulers.
The colonial rulers also brought in their wares and used Nigerians as their middlemen. After the colonial era, entrepreneurship was not encouraged due to the bad experiences of many entrepreneurs. The foreign entrepreneurs at the time set up business strategies that were non-beneficial to Nigerians. For example, the United African Company (UAC) which was at the time responsible for a large percentage of imports and exports in Nigeria refused to make use of the services of local entrepreneurs; deciding to deal directly with producers. This was detrimental to the local entrepreneurs and did not allow for growth and expansion. Due to this factor, many businesses folded up and those that didn’t had enough resentment and reservations about entrepreneurship to be passed on to prospective future entrepreneurs.
This means that at that time there were only a few who could start businesses and see it through. This was a setback on the Nigerian economy until the colonial era ended.
Also, the introduction of formal education discouraged the flow of entrepreneurship. This is because formal education brought with it the opportunity of being employed in the civil service or to work for other organizations. It is important to note that back then, the economy was large enough to accommodate many into prestigious occupations.
However, there came a time and even now when things were not so anymore. With more people being educated, the Nigerian government did not have the capacity to employ many graduates and this encouraged many to make attempts at being self-employed. Therefore, many have come to the conclusion that entrepreneurship in Nigeria is based on necessity.
Entrepreneurial forces are moderately strong in this country, due to the lack of jobs and a rise in poverty. This leaves very few other options for the Nigerians.
After independence, the federal government began the privatization and indigenization scheme to promote the businesses of Nigerians so as to allow for a more stable and independent economy and for the alleviation of poverty.
Other economic policy programs have also been put in place by the government to assist entrepreneurs in Nigeria. Such programs include Open Apprenticeship Scheme, Graduate Employment Programs etc. This gears the economy towards a self-reliant stand. There are other policies that also make it easy for entrepreneurs to obtain needed funds. Such policies include Peoples Bank of Nigeria, Funds for Small-Scale Industries (FUSSI), co-operative societies etc.
PRESENT BARRIERS TO ENTREPRENEURSHIP IN NIGERIA
Other barriers that discourage the Nigerian people from engaging in entrepreneurship include:
- Difficulty in obtaining venture capital to finance businesses.
- The policies of the Nigerian government that are detrimental to the success of large scale businesses. These include repealing laws that will promote free enterprise.
- The inability to enforce Nigerian patent laws discourages many from commercializing their ideas and inventions.
- The constant political instability in the country discourages foreign investors
- The high level of religious intolerance and ethnic warfare discourages investors and also hinders progress as it affects existing businesses.
Entrepreneurial activities in Nigeria
Nigeria has gone through its own share of economy decline since the 1980s and this has created a not too pleasant environment for businesses. Also, the high cost of doing business in Nigeria, which is due to such reasons as the lack of adequate electricity and other basic needs also stifle entrepreneurial efforts. However, lower taxes have encouraged many to look into starting up their own businesses. The Nigerian government has also put in place a process that promotes exports from Nigeria to other countries. This will help entrepreneurs who seek to do business in Europe or the United States. Also, with the Nigerian government increasing investments in modern technology, this will create a more conducive environment for businesses to thrive. Entrepreneurial activities are high in Lagos, the commercial hub of the nation and also in Abuja, the capital of Nigeria.
How does an Entrepreneurship Business Operate
- To achieve success in any entrepreneurial work, there is the need for proper analysis; of market, goals, strategies and opportunities.
- Make sure to have a backup plan in case things do not turn out as you expect.
- Have a financial focus; entrepreneurship business is not just about being one’s own boss but comes with the discipline to come at success.
- Ensure proper risk management techniques
Although it comes with its own barriers, entrepreneurship is crucial to a nation’s development and must be encouraged.