BACKGROUND OF STUDY
In recent time the
world economy has developed tremendously and this has been linked with
activities of Small and Medium Scale Enterprises (SMEs) that signified how
importance the role of small and medium scale enterprises (SME) in the world
economy, especially in developing countries. A Study carried out by the Federal
Office of Statistics shows that in Nigeria, Small and Medium Scale Enterprises
make up 97% of productive units of the economy (Ariyo, 2005). Although smaller
in size, they are the most important enterprises in the economy due to the fact
that when all the individual effects are aggregated, they surpass that of the
larger companies. The social and economic advantages of small and medium scale
enterprises cannot be overstated. Panitchparkdi (2006) sees SMEs as a source of
employment, competition, economic dynamism, and innovation which stimulates the
entrepreneurial spirit and the diffusion of skills. Because they enjoy a wider
geographical presence than big companies, SMEs also contribute to better income
distribution. Over the years, small and medium scale enterprises have been an
avenue for job creation and the empowerment of Nigeria’s citizens providing
about 50% of all jobs in Nigeria and also for local capital formation. Being
highly innovative, they lead to the utilization of our natural resources which
in turn translates to increasing the country’s wealth through higher
productivity. Small and Medium Scale enterprises have undoubtedly improved the
standard of living of so many people in Nigeria today, especially those in the
rural areas .(Ariyo, 2005).
However, the mortality
rate of these small firms is very high. According to the Small and Medium Scale
Enterprises Development Agency of Nigeria (SMEDAN), 80% of SMEs die before
their 5th anniversary. Among the factors responsible for these untimely
close-ups are tax related issues, ranging from multiple taxations to enormous
tax burdens among other issues etc. In many government policies, small and
medium scale enterprises are usually viewed and treated in the same light as
large corporations. However, their size and nature make them unique. Therefore,
in dealing with small and medium scale enterprises, these unique qualities need
to be considered. In levying of taxes for these enterprises in particular,
issues that need to be considered are how these tax policies can be designed to
bolster the growth of SMEs and the most effective ways to administer them. The
importance of SMEs as a mechanism of economic growth and development is often
They are perceived as
minute establishments that have minimal effect on the state of the economy.
However, if favorable environment is created for these SMEs to grow through
proper regulation, the SMEs sector has the highest propensity to transform our
economy. In the same light, taxes are important for the government as they are
the major source of funds for government expenditure. Income obtained from
taxation of individuals and businesses are used to run governments as well as
provide infrastructure such as good roads, water supply, and electricity which
are essential for the smooth running of these businesses that are mainly
manufacturing companies and as such rely on these commodities to survive.
education as part of the total educational system is the type of education that
involves the acquisition of skills, ideas and management abilities necessary
for job creation. An entrepreneur promotes employment rather than seeking for
an employment. Therefore, there is a need to embrace this type of education and
provide all the necessary resources needed to make functional. Quality
entrepreneurship education could be used as a tool for fighting the war against
poverty and unemployment in Nigeria. Entrepreneur is simply that student,
employee, unemployed, politician, teacher, nurse, doctor, lawyer, engineer,
accountant, manager and indeed anyone who is able to employ the tools of
entrepreneurship namely innovation and uniqueness, to translate his ideas into
income generating economic activities which the society benefits from (Udu and
entrepreneurship education will enhance job creation which will subsequently
reduce unemployment, poverty and social vices in Nigeria. This will also help
to improve the standard of living; hence promote social economic and political
development in Nigeria which is the cardinal objective of Millennium
Development Goals (MDGs). Also, for the recipient of entrepreneurship education
to be a job creator rather than job-seeker, he might acquire essential basic
skills and attitudes which will enable him to function as an entrepreneur.
There is now a very
serious attention paid to entrepreneurship education in tertiary institutions
in Nigeria and the world-over. Gibson (2001) defined entrepreneurship as the
process of using private initiative to transform a business concept into a new
venture or to grow and diversify an existing venture or enterprise with high
great potential. The reason for this off-course is obvious, Nigeria educational
system that turns out graduates from about 150 Universities and 50 Polytechnics
and Monotechnics have not trained our graduates to be self reliant, but to
depend solely on white collar jobs for sustenance. As a result, there are
several graduates from Nigerian Universities today who are not gainfully
employed. Apart from the book knowledge that they gained there are no requisite
skills to make them self dependent. There is therefore the need to engage the
youth who constitute over 60 percent of the population in meaningful engagement
to avoid unhealthy alternatives for this group of people.
Henry (2003) views
entrepreneurship as the engine driving the economy of nations, creating new
industries, young entrepreneurs, employments and wealth. Also in the view of
Agbionu (2008), entrepreneurship involves a process aimed at creating wealth
for the purpose of growth, development of the environment and sustaining SMES
for national sustainability.
The 2010 Global
Monitoring Report (GMR) of the United Nation Education, Scientific and Cultural
Organization (UNESCO), revealed that about 92 per cent of Nigerian population
survive on less than 2 dollar daily, while about 71 per cent survives on less
than 1 dollar daily – a condition many have described as inexcusable judging from
the abundant natural deposits and high human population at the country’s
disposal. With an estimated population of about 167 million people
(2011) and crude oil selling as high as
$104 dollar per barrel in the global market as at July 2012, the high level of
poverty in comparison to the abundant resources available in Nigeria is highly
unacceptable. There is therefore the urgent need for government and individuals
to create more job opportunities for the teaming youths.
It is believed that
employment of Nigerian graduates part-time, full-time or even underemployment
can be said to have eluded Nigerian youths with Nigeria said to have one of the
highest rates of youth unemployment in the unindustrialized world. Despite
strong economic growth, youth’s full-time unemployment rate for 2006 – 2008 in
Nigeria was put at 55.9% while countries like Japan, China, India, Korea, have
joined community of industrialized nations by strengthening their small scale
industries. Nigeria is yet to understand the relevance of this subsector.
is based on the above that the researcher wishes to evaluate entrepreneurship
as a major approach in solving unemployment and sustainability of SMES in Lagos
1.2 STATEMENT OF PROBLEM
As should be expected,
the lack of employment potential, make crime a more attractive option for some Nigerian
university graduates. It is common to find some graduates still roaming the
streets, five years after graduating in search of jobs that either is not there
or for which they are not qualified. It is therefore no coincidence that crimes
such as kidnapping which is now a new and attractive industry is a thriving
especially in the South-Eastern part of Nigeria. Other crimes include armed
robbery, car snatching, pipeline vandalization, oil bunkering, and prostitution
and so on.
competition for economic resources and services, over-dependence on a single
natural resource (oil) and the neglect of other crucial sectors of the economy
also contribute to youth unemployment in Nigeria.
Have Nigerian policy
makers been able to see through the connection between entrepreneurship and
unemployment? Have they been able to conceive and formulate effective policies
aimed at frontally addressing unemployment among the youths? While entrepreneurship
may not be the absolute panacea to youth unemployment, an enabling environment
that nurtures entrepreneurship is capable of reducing youth unemployment by at
least half. It was argued that entrepreneurship is capable of providing the
platform towards efforts aimed at reducing unemployment as well as promoting
economic growth and development.
is in the wake of the above that this study aimed at evaluating the possibility
of entrepreneurship as a major
approach in solving unemployment and sustainability of SMES in Lagos State,
1.3 RESEARCH OBJECTIVES
The broad objective of this research
is to evaluate green entrepreneurship as a tool for reduction of unemployment
and sustainability of SMES in Lagos State, Nigeria.
specific objectives are
To find out the possibility of solving the unemployment and sustainability of
SMES in Lagos State, Nigeria through Green Entrepreneurship.
To also examine the extent to which different Green Entrepreneurship programmes
have been able to lessen the unemployment problem in Lagos state.
1.4 RESEARCH QUESTIONS
The following research questions are
formulated for the purpose of the study
What is the possibility of Green
Entrepreneurship programs sustaining Small Medium Enterprise Scales in Lagos
To what extent have different Green
Entrepreneurship programs lessen the problems of unemployment in Lagos state.
1.5 RESEARCH HYPOTHESIS
the purpose of this study, the following hypotheses were formulated to guide
Green Entrepreneurship has not contributed to solving unemployment problem in Lagos
Green Entrepreneurship has contributed to solving unemployment problem in Lagos
Green Entrepreneurship programmes of government have no significant impact on
the sustaining SMES in Lagos state.
Green Entrepreneurship programmes of government have a significant impact on
the sustaining SMES in Lagos state.
OF THE STUDY
study covers the evaluation
of entrepreneurship as a tool for reduction of unemployment and sustainability
of SMES in Lagos State, Nigeria. In the course of the research work, effort
shall be made to evaluate the relationship between Green Entrepreneurship and
so, the research work shall examine ways through which strategic government
entrepreneurship programs will help curb unemployment in Lagos state.
The study is limited to Lagos State,
the researcher consulted books, journals, magazines, newspapers and other
documents not within the mentioned categories to source for his secondary data.
Secondary data were sourced from both public and private resourced within the
1.7 SIGNIFICANCE OF THE STUDY
The relevance of this
study can be viewed in two perspectives – practical and academic.
This study will assist
the policy makers, Nigerians and government in the following ways;
To highlight the
importance of Green Entrepreneurship and its relevance in the dynamic and
unpredictable nature of our economy, it will also help the policy makers and
regulators to objectively analyze the impact of Green Entrepreneurship in
assisting government to wage war against unemployment in Nigeria and it will
provide useful information to entrepreneurs all over Nigeria, and encourage
entrepreneurship study for a better and enabling environment.
It will contribute to
the variety of literature on Green Entrepreneurship, it will serve as a
reference material for researchers interested in further studies on the topic.
1.8: LIMITATIONS OF THE
the limited scope of this study, certain constraints were encountered during
the research of this project; some of the constraints experienced by the
researcher were given below:
This was a major constraint on the researcher during the period of the work,
considering the limited time given for this study, there was not much time to
give this research the needed attention.
Owing to the financial difficulty prevalent in the country and its resultant
prices of commodities, transportation fares, research materials etc. The
researcher did not find it easy meeting all financial obligations.
there are problems placed in the limitations in this study, but it did not
prevent the researcher from carrying out an effective and comprehensive
research work on the subject matter.
1.9 OPERATIONAL DEFINITION OF TERMS
this something valuable that an entity owns, benefits from, or has use of, in
generating income. Asset is also referring to something that an entity has
acquired or purchased, and that has money value (its cost, book value, market
value, or residual value).
is the money owed by a business to its suppliers shown as a liability on a
company''s balance sheet. It is distinct from notes payable liabilities, which
are debts created by formal legal instrument documents.
Account Payable Management: is
the administration of a company''s outstanding debts, or liabilities, to vendors
for purchases of goods and services made on credit
is the money which is owed to a company by a customer for products and services
provided on credit. This is often treated as a current asset on a balance
sheet. A specific sale is generally only treated as an account receivable after
the customer is sent an invoice.
Cash Management: this
refers to a broad area of finance involving the collection, handling, and usage
of cash. It involves assessing market liquidity, cash flow, and investments.
this is an individual who, rather than working as an employee, runs a small
business and assumes all the risk and reward of a given business venture, idea,
or good or service offered for sale. The entrepreneur is commonly seen as a
business leader and innovator of new ideas and business processes. The
entrepreneur perceives an opportunity and often exhibits biases in taking the
decision to exploit the opportunity.
Entrepreneurial: is a person who organizes, operates, and
assumes the risk for a business venture.
is the process of starting a business, typically a start-up company offering an
innovative product, process or service.
Growth refers to a positive change in size, often over a period of time. Growth
can occur as a stage of maturation or a process toward fullness or fulfillment.
is activities employed in maintaining the optimum number or amount of each
is the ability to convert an asset to cash quickly. It is a measure of the
extent to which a person or organization has cash to meet immediate and
short-term obligations, or assets that can be quickly converted to do this. It
is the ability of current assets to meet current liabilities.
is an asset designation applicable to all debts, unsettled transactions or
other monetary obligations owed to a company by its debtors or customers.
Return on Investment:
return on investment (ROI) is the benefit to the investor resulting from an
investment of some resource. It is a financial ratio that is intended to
measure the benefit obtained from an investment.
Return on Assets (ROA):
In the context of this work, return on assets is the ratio of annual net income
to average total assets of a business during a financial year. It measures
efficiency of the business in using its assets to generate net income. It is a
profitability ratio. Return on assets indicates the number of kobo earned on
each naira of assets. It is an indicator of how profitable a company is
relative to its total assets. Return on assets provides an insight as to how
efficient management is at using a firm’s assets to generate earnings. It is commonly
referred to as return investment. Return on assets eliminates the effect of
leverage, positive or negative, when a business uses debt financing (Oyebamii,
Return on Equity (ROE):
Return on equity (ROE) is a performance metric which focuses on return to the
shareholders of the company. For the purpose of this study, ROE is computed by
dividing the profit attributable to equity holders by either the book value
Small or Medium Scale Enterprises
(SME): these are the organisations with maximum of 199
workers and N500m in assets in line with the definition of NTWG (2009),
Working Capital: is
a financial metric, which represents operating liquidity available to a
business, organization or other entity, including governmental entity. Along with
fixed assets such as plant and equipment, working capital is considered a part
of operating capital.
OF RELATED LITERATURE
CONCEPT OF ENTREPRENEURSHIP
definition of entrepreneurship has been debated among scholars, researchers,
practitioners, and even policy makers since the concept was first established
in the early 1970s. Steinfioff and Burgers (1993) view entrepreneurship as the
ability to develop a new venture or apply a new approach to an old business.
According to Gana (2001), entrepreneurship is the
ability to seek investment opportunities and persisting to exploit that
opportunity. On the other hand, Adeniyi (2013) sees the entrepreneur as one who
chooses or assumes risks, identifies business opportunity, gathers resources,
initiates actions and establishes an organization or enterprise to meet such
demand or market opportunity. Allawadi