Entrepreneurship plays a vital role in the growth and development of our dear nation, 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. Entrepreneur forces are relatively strong in Nigeria, as most people sees entrepreneurial activities as what is primarily based on necessity due to the poor economic situation. But what we have failed to realise is that; Entrepreneurship development is the bedrock of all economic evolution of any nation.
1. Difficulty in securing loans from financial institutions: the major challenges being faced by entrepreneurs in Nigeria is the issue of start-up capital. You will agree with me that it is very difficult to secure loans from banks as an entrepreneur, because some of these banks sees lending entrepreneur’s money as a huge risk. This is due to the level of uncertainty surrounding the Nigerian economy. From experience, I have been able to discover that these financial institutions tend to frustrate aspiring entrepreneurs with some of their ridiculous requirements in a bid to discourage young entrepreneurs from obtain loans from financial institutions. Some of these financial institutions discourage aspiring entrepreneurs with some of their unrealistic demands such as; huge collateral and their unrealistic interest rate which is aimed at discouraging aspiring small business owners. With these practice by banks, a lot of brilliant business ideas has been washed down the drain due to financial constraints.
2. Poor state of the country’s infrastructure: the absence of good infrastructural facilities has been one of the major problems entrepreneurs are battling in Nigeria. The major one is the issue of ‘epileptic power supply’ that has forced so many businesses to shut down due to the high cost of running them. Imagine when entrepreneurs have to spend extra resources is buying fuel to run their generators. Resources that should have been channelled to other productive areas of the business. Just last week, my neighbour and I were discussing about the issue of the ‘epileptic power supply’. She happens to own a cold room store, and she was lamenting bitterly about the power supply which has affected her goods and has made her lose thousands of naira worth of frozen foods. When she told me the amount she spends on buying petrol, I was perplexed. All these are some of the major issues discouraging entrepreneurship development in our nation.
3. Difficulty in getting venture capital: getting capital to finance entrepreneurial endeavors in Nigeria is extremely difficult, due to the lack of stability in the political and social economic system.
4. Inconsistency in the policies of government: the incessant change in the policies of government is one of the major challenges being faced by Nigerian entrepreneurs. In time past, we found out that there’s inconsistency in the policies of government which is attributed to the constant change of government. Some of the policies made does not even last for more than 4 years before the new administration changes it. There’s no continuity in the policies of government.
5. The desire for quick returns: another major problem facing Nigerian entrepreneurs is the desire for quick returns. The desire for quick returns is inimical to sustain entrepreneurship development. Overtime, I have discover that a lot of businesses fold up due to greed and the urge for quick returns by business owners. A lot of business owners have fallen victims of fraudster who pretend to be business associate and promise to either deliver goods at a very low rate compared to what is obtainable in the market. A lot of unsuspecting business owners have fallen victims to some of these fraudsters, who take advantage of the credulity of business owners and reap them off their hard earned money.
a. Economic development: the role of entrepreneurship in economic development cannot be overemphasised. This is owing to the fact that the profits made by entrepreneurs flows as an increase into the national income and thereby increases the nation’s Gross Domestic Product (GDP). The contribution of SME’s in industrial sector to the Nigerian Gross Domestic Product (GDP) was valued at 37% thereby, making it the second largest contributor to the nation’s GDP after the oil sector – according to SMEDAN in 2009.
b. Creation of employment opportunities: entrepreneurship encourage the creation of employment opportunities for the Nigerian citizens, which in turn increases the participation of small business owners in contributing to the nation’s development, by drastically reducing unemployment in our society. The existence of small businesses in the country has provided her citizens with more jobs than the multinationals. Entrepreneurship is so vast that young entrepreneurs can sit in the comfort of their homes and make legitimate cash.
c. Conservation of foreign exchange: entrepreneurship will reduce the importation of raw materials, machineries, equipment’s, and the payment of foreign experts. The moment Nigerian government starts supporting young and aspiring entrepreneurs, and encourage locally produced goods. We will begin to experience change in various sectors of the economy which will in turn conserve our foreign reserve.
d. Improved standard of living: encouraging entrepreneurship development will go a long way to improve the standard of living of the Nigerians through innovations.
e. Reduction in rural-urban migration: another major reason for promoting entrepreneurship in a developing country like Nigeria, is to downplay rural-urban drift syndrome. The migration of people from rural areas to urban areas in search of white collar jobs which has resulted to high rate of crimes and congestion in cities like Lagos, Abuja, and Port Harcourt will reduce when government encourage entrepreneurship.
Finally, for entrepreneurship to be fully encouraged in a country like Nigeria, government should consider the following: