The need to develop the field of entrepreneurship in Nigeria has long been a topic of discussion. Entrepreneurship is instrumental to the economic development of a nation. Benefits of a thriving entrepreneurial sector include:
Creation of employment opportunities
Improvement of the standard of living of Nigerians
Improvement of a nation’s economic development
The Nigerian entrepreneurial sector still needs much improvement. This article points out the problems of entrepreneurship in Nigeria today.
Problems of Entrepreneurship in Nigeria
Read on below:
Lack of capital
Ideas cannot be implemented and brought to fusion without the needed funds. Over the years, many Nigerians have come up with great ideas that could be made into real and thriving businesses. The problem is the unavailability of capital to fund these business ideas. The lack of capital is the major reason for the slow development of entrepreneurship in Nigeria.
Difficulty in securing loans from financial institutions
Since every idea require capitals, one of the most viable sources of funds in any country is loans through financial institutions. Obtaining a loan is near impossible or extremely difficult for an average Nigerian. This is because financial institutions consider it to be such a huge risk to lend money to people to run businesses. There is the risk of the business not flourishing or the person not returning the loan. Another reason for the difficulty in obtaining loans is the impossible demands for securing these loans. Most of the financial institutions demand huge collateral that an average individual starting a business or one who is running a small business cannot afford. The last reason for the difficulty in obtaining loans is the high-interest rate put on loans by financial institutions. that small business owners or start-ups cannot afford. All these discourage most Nigerian entrepreneurs and stifle the development of entrepreneurship in Nigeria.
Poor state of infrastructure in Nigeria
The poor state of infrastructural facilities in Nigeria is another major problem affecting the growth of entrepreneurship in Nigeria. The most prevalent infrastructural problem is that of unstable power supply in Nigeria. Most businesses run on electricity and require stable electricity in order to thrive. Take for example, businesses that deal with perishable foods or those that have to do with printing. Most businesses have to run on a higher cost than they can afford through the use of generators, which leads to the close of many businesses. Another infrastructural problem is the lack of good roads and transport system in Nigeria. Businesses that have to do with transporting goods from one place to the other find it extremely difficult or impossible to do so. The poor state of roads also leads to the destruction of goods and commodities. All of these add up to the high cost of running a business in Nigeria.
Unstable state of Nigerian economy
The socioeconomic and political instability of the country adds up to the problems hindering the flourishing of the entrepreneurship sector in Nigeria. The fall and rise of oil prices, for example, which is the major source of revenue in Nigeria, has a direct impact on the standard of living of Nigerians. This in turn affects businesses in the country. Another problem is political instability in the country. When a new government comes into power, they change policies to suit their interests. This change in policies is another major challenge for entrepreneurs in Nigeria. The unstable socio-economic state of the country’s economy has a significant impact on the progress of entrepreneurship in any country.
Inconsistent government policies
The existence of good policies creates an enabling environment for businesses to thrive. When there is no continuity in government, policies that are put in place today are taken out tomorrow. Thus, business owners are not able to make sustainable and future plans to benefit the company. In Nigeria, inconsistent government policies have stifled the growth of many businesses. The Nigerian government needs to put entrepreneurs in mind when formulating policies and ensure should be put in place to ensure these policies are sustained.
Poor business knowledge and management skills
Often times, many Nigerians who go into businesses are not well versed on how to run and manage businesses. Many lack the technical know-how and management skills to run a business successfully. Even if the right environment is provided, when a person does not know how to manage resources, the business will fail.
This is an offshoot of inadequate business knowledge. Many people do not plan properly before starting a business. the result of the poor knowledge on how to run a business. Most people don’t research properly on important issues before starting their business. Important researches include the market for the business, the cost of production, etc.
Lack of patience and commitment
Business growth takes time, which many young Nigerian business owners are not ready to commit to. Many want to make money quickly and hence drop their business ideas and plans for quick money schemes. Many Nigerian youths are more money-oriented than they are entrepreneurship oriented. There needs to be a reorientation of many Nigerian youths so they understand that entrepreneurship takes time and commitment.
Many are scared of the risks involved in starting a new business, so they shy away from it. This is another reason why there has not been growth in entrepreneurship.
Lack of entrepreneurial mindset
Many people who are intelligent, skilled or talented enough are caught up with the lack of entrepreneurial mindset. Many seek to be in the labour force or find white collar jobs, and even when they do not find jobs, they refuse to look into starting their own businesses.
Lack of access to Local and International Markets
Many entrepreneurs are not able to market their businesses internationally due to the high cost of running a business. Many Nigerian businesses remain small and are not able to expand because they lack access to both international and local markets.
The prevalence of corruption in Nigeria also adds up to the hindrance of the growth of entrepreneurship in Nigeria. For example, business owners find it difficult to procure licenses, permits or needed goods and services from government agencies if they do not give bribes.