ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA (A CASE STUDY OF MICRO AND SMALL ENTERPRISES)
1.1 Background to the Study
Small and micro scale enterprises
constitute indispensable ingredients in the development of any economy.
Small and medium scale enterprises (SMEs) have been recognized as main
sustenance of the national development because of their capacity in
enhancing the economy output and enhancing human welfare (Akingunola
2011). Muritala Awolaja and Bako (2012), posited that there is the
greater likelihood that SMEs will utilise labour-intensive technologies
thereby reducing unemployment particularly in developing countries and
thus have an immediate impact on employment generation. The role of
small and medium scale enterprises in the economic and social
development of the country is well established. The sector is a nursery
of entrepreneurship, often driven by individual creativity and
innovation (Ariyo, 2008; Ayozie and Latinwo, 2010).
MSMEs have contributed
greatly to Nigerians development by the provision of employment,
marketing of goods and services and the growth and development of the
rural areas. It has also brought about the growth of indigenous
entrepreneurship in Nigeria and is the real engines of growth. According
to Awe J. (2012) on E-business Nigeria Small business move faster, are
more flexible, more innovative and more daring. Unlike the government
official or large corporation executive, small business entrepreneurs
focus on wealth creation and driving change rather than fighting
bureaucracy Micro, Small and medium-sized enterprises (MSMEs) are
non-subsidiary, independent firms which employ less than a given number
of employees. This number varies across countries. The European Union
places the upper limit designating an MSME as 250 employees. The
National Council of Industries defines Micro, Small and Medium
Enterprises (MSMEs) as business enterprises whose total costs excluding
land is not more than two hundred million naira (N200, 000,000.00) only.
becoming a household name in the economy of Nigeria. This is due to the
fact that the so-called white collar jobs that people are clamouring for
are no longer there. Even the much touted sectors (banks and
manufacturing companies) known to be the longest employers of labour are
on the down turn following the consolidation crises and fraudulent
practices of the high and mighty in the banking sector. The companies of
course are folding up as a result of erratic power supply, insecurity
and persistent increase in interest rate which has led to high cost of
production and undermines their profit making potentials. This has
resulted in massive unemployment which is detrimental to the economic
development in the country.
The advantages of SMEs to any country
are definitely obvious. These include contribution to the economy in
terms of: output of goods and services increment; generation of jobs at
moderately low cost of capital, particularly in the rapid growing
service sector; offer a medium for lessening disparities in income;
develop a collection of skilled and semi-skilled workforce as a
foundation for imminent industrial expansion (Iromaka 2006). Others:
include enhancing forward and backward linkages between economically,
socially and geographically different segments of the economy; offer
opportunities for enhancing and adapting suitable foreign and indigenous
technical methods; provide an outstanding breeding ground for
entrepreneurial and managerial ability, the significant shortage of
which is frequently an immense restriction to economic growth and
The contribution of SMEs to economic
development is such that a country can only ignore to its own peril. In
conclusion, emphasis must therefore be focused on micro and small
business enterprises in developing nations like Nigeria. They aim at
rapidly achieving self-sustaining growth and by extension, self-reliant
development. This study therefore examined the role of entrepreneurship
development in using micro and small business as a case study.
1.2 Statement of the Problem
Small and medium enterprises form an
important part of the economy and they play an important role in the
growth of both the developed and developing economies. The contribution
of Small and micro business enterprises towards national income and
creation of employment is numerous. Despite these advantages which SMEs
offer and the potential which SMEs have, there are many barriers and
risks which SMEs face in today’s market which has caused them not to
completely contribute to national development, such problems include:
lack of fund, political instability, inadequate of managerial expertise,
poor record keeping, deteriorated infrastructural facilities etc. Thus
the study seeks to investigate the effects of small and micro business
enterprises on national development.
1.3 Research Questions
The following are some of the questions which this study intends to answer:
i) what are the things that can cause the failure in small and micro scale enterprises?
ii) what are the current legislations guiding the development of micro and small enterprises in Nigeria?
iii) what are the contributions of micro and small enterprises towards the development of the Nigerian economy?
1.4 Objectives of the Study
The main objective of this study is to
to investigate small and medium enterprises and national development.
The specific objectives are:
i) to survey the things that can cause the failure in small and micro scale enterprises
ii) to evaluate the current legislations guiding the development of micro and small enterprises in Nigeria
iii) to investigate the
contributions of micro and small enterprises towards the development of
the Nigerian economy
1.5 Research Hypothesis
The research hypotheses to be tested include:
i) there is no correlation between small and micro business enterprises and employment opportunities
ii) there is a significant relationship between small and micro business enterprises and economic growth
iii) there is a
significant relationship between small and micro business enterprises
and cheap cost of goods and services
1.6 Significance of the Study
This study was designed to investigate
the role of entrepreneurship on economic growth using small and micro
business enterprises. The study shall give an insight on how job
opportunities can be created and how poverty rate can be drastically
reduced in the country. The research work will further provide useful
information for policy makers for further development of SMEs through
Microfinance activities with the view to enhancing both institutional
and policy frame work in the sector. The major value-added of this
research work will be the proffering of suggestions that will help
policy makers in formulating policies that will help improve the growth
of entrepreneurial skills among the citizens of Nigeria.
1.7 Scope of the Study
This study covered some entrepreneurs who are selling spare parts at Ladipo street, Mushin area of Lagos state.
1.8 Limitation of the study
The researcher was constrained with the
busy attitudes of the respondents but was still able to gather the
intended data required for successful completion of the project.
However, the above limitation notwithstanding, the researcher is
optimistic that the present study will be adequate to serve the purpose
for which it is intended.
1.9 Definitions of Terms
The following terms were used in the course of this study:
Economic development: This is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time
capacity and willingness to develop organize and manage a business
venture along with any of its risks in order to make a profit.
refers to an organization that applies commercial strategies to maximize
improvements in human and environmental well-being, rather than
maximizing profits for external shareholders.