Entrepreneurship is an important factor in the development of any nation. Entrepreneurs are responsible for taking calculated risks that open the door to progressively higher levels of economic growth. If it weren’t for them, the world would never have known such wonders as the wheel, electricity, or the Internet, to name just a few.
Entrepreneurs are the true backbone on which the world and modern ideas continue to develop. However, the magnitude and scope of their contributions extend far beyond the world of business and economics, and they deserve irrefutable credit for the growth and evolution of societies in general. Developed nations around the world owe their current prosperity to the collective efforts of intrepid entrepreneurs, on whose innovation the future prosperity of much of the developing world also rests.
The greatest rewards of taking risks, starting a business, and growing it into a successful business venture extend far beyond its immediate beneficiaries. The scope of financial freedom and flexibility afforded by entrepreneurship is a means to simultaneous individual and national prosperity. If this is true for economies around the world, it is of particular relevance to Nigeria, which stands on the cusp of a new era of progress.
History of Nigerian Entrepreneurship
Nigeria is home to people of the Ibo culture, an extremely resourceful ethnic group known for their traditional business prowess. Consequently, this well-endowed sub-Saharan nation has a strong entrepreneurial streak running through its veins, which has helped it survive and come out of a long and difficult history.
Inheriting a fortune in oil and gas reserves after caving in to British colonial rule in 1960, early Nigerian regimes bet heavily on non-renewable resources to generate huge profits. The oil boom of the 1970s marked a period of enormous national profits: a total of more than $600 billion over four decades. However, civil strife and political uncertainty created an atmosphere of contempt for inclusive growth, ultimately leading to a steady decline in agriculture and traditional industries. The result was the creation of the ‘Nigerian paradox’, a situation of enormous economic disparities that drove the majority of the population of this resource-rich country into extreme poverty.
Traditional Nigerian entrepreneurship began in a climate of economic stagnation and as a purely survival effort. Dismal human development rates, unemployment, and infrastructure deficits resulted in the evolution of a massive informal economy that relied almost exclusively on personal initiative and dangerous risk-taking. This vast and unorganized sector, encompassing a wide range of products and services, quickly filled the void left by later decades of misrule and failed economic policies. It is ironic, to say the least, that Nigeria’s informal economy has grown to a stage where it contributes more than 65% of the Gross National Product and, by the government’s own admission, accounts for 90% of all new jobs. work in the country.
business resurgence
The return of democracy in 1999 ushered in a period of economic reforms and a renewed focus on business development as the only viable means of sustainable growth. Nigerian leaders launched a massive financial divestment and deregulation program aimed at boosting business development in the micro, small and medium-sized enterprise (MSME) space. Progress has been hampered by institutional weaknesses and widespread political and bureaucratic corruption, although it is still too early to comment on the long-term achievements of Abuja’s renewed efforts to revive the economy.
One of the main reasons why the country struggles to keep up with the developed world despite its considerable human and natural resources is the lack of progressive and holistic policies. Nowhere is this more evident than in the case of education. However, in pursuit of the Millennium Development Goals and its indigenous 2020 target, the Nigerian government has in recent years made tangible efforts to enforce universal basic education and mass adult literacy programs that it hopes will enable Nigerians compete in the business world. The focus on education, particularly vocational training and skills development, is a conscious effort to engender entrepreneurial vigor among its substantial population of 148 million, more than half of whom live in extreme poverty. Private and international aid agencies have collaborated and provided support in this direction: the United Nations Knowledge Transfer program through Expatriate Nationals, for example. Educating potential entrepreneurs and equipping them with the skills necessary for success remains a key priority.
The final aspect of Nigerian entrepreneurship is export, which has been mostly limited to non-renewable resources. However, exporting in the non-oil sector is an equally vital instrument for accelerated growth and an important area for emerging entrepreneurs to get involved. Trade with countries in Europe, Asia and the Americas is a potentially booming sector, even more so in light of a new tax regime intended to promote emerging businesses.
Challenges facing business development
Despite recent achievements that prove Nigeria’s potential for business success, there is little doubt about the severity of the constraints on the road ahead.
One of the main problems is simply the fact that Nigeria is not perceived as a promising business destination. The high cost of doing business, corruption and systemic flaws in the country’s economic policies have had cumulative success in keeping potential investors away. Huge infrastructure deficits, particularly when it comes to roads and electricity, are other turnoffs. The most significant aspect of the problem, however, is Nigeria’s nascent and shaky form of government, constantly threatened by civil intolerance and growing religious extremism.
Social problems, arising from dismal human development indicators in the absence of inclusive growth, constitute the second major obstacle for Nigeria. The status of women and their traditionally limited participation in business activities is a major drawback from the perspective of rapid social and economic growth. The problem is further complicated by a catastrophic split in the status of rural and urban populations.
Entrepreneurship is the foundation of any developed nation. However, for Nigeria to reap the full benefits of a dynamic and evolving economy, entrenched social, financial and political barriers need to be overcome. Informed government policy, education and international engagement are crucial if Nigeria is to shed its third world heritage and reach the full breadth of its economic potential.