VOA - ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA, THE CHALLENGES

ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA, THE CHALLENGES AND WAY FORWARD

BEING A WORKSHOP PAPER PRESENTED AT A 3 DAYS ENTREPRENEURIAL JOURNALISM

WORKSHOP ORGANIZED BY THE VOICE OF AMERICA (VOA)

INTRODUCTION

• Conventionally, practicing journalists were not expected of to engage in business activities other than journalism, however, the financial situation of traditional media is becoming more and more difficult due to the expansion of the Internet which has redefined journalism. This is leading to a new term being used to indicate what the future of journalism may look like: entrepreneurial journalism

INTRODUCTION (CONT)

• Entrepreneurial journalism basically points to the need for journalists to act in an economic sense, to redefine their profession through innovation and to explore new opportunities for making a living.

BRIEF OF THE LABOUR MARKET

• Information from the National Bureau of Statistics (2015 & 2016) shows that about 2.2 million people are joining the labour force annually between 2014 to 2015. In the same period, the job creation result of Nigeria as published by National Bureau of Statistics (NBS) showed that less than 1.4 million jobs were created annually.

BRIEF OF THE LABOUR MARKET (CONT)

• This is in addition to the following:

a. Growth in working age population to 103.5 million in 2015.

b Huge labour force of 74 million people in the second quarter of 2015.

This invariably means that from the economically active population (working age population) of 103.5 million people in 2015 only 29.5 million people are effectively engaged of which a large chunk of them are under employed.

DEFINITION OF ENTREPRENEURSHIP

• Scholars like Robert Hisrich (1985) defined entrepreneurship as a process of creating something new with value, by devoting time and attention, assuming the accompanying financial, psychological and social risk and receiving the resulting reward of monetary and personal satisfaction that comes with it.

DEFINITION (CONT.)

• Shaw (2004) defined entrepreneurship as an attitude, a way of thinking and learning. It is a state of mind, an artifact, insightful and innovative mentality rather than business administration.

• It is any novel activity that creates value, builds wealth and brings about change.

ENTREPRENEURIAL JOURNALISM

• Entrepreneurial Journalism describes a field of media where journalism is the underlying discipline upon which to create content-based businesses and services that can make money such as blogging.

{Creating contents that people will pay for requires that your content must be engaging, your ideas must be original, you must create strong headlines and your content must be applicable}.

WHY ENTREPRENEURIAL JOURNALISM

• The emergence of the concept of entrepreneurial journalism is consequent on:

a. The short supply of jobs for journalist as a result of the shrinking global economy leading to mass layoff of journalist and the emergences of the new media

b. The migration of journalist to other jobs.

c. New entrants in the field of journalism

d. To be able to convey entrepreneurial information effectively

WHY ENTREPRENEURIAL JOURNALISM (CONT)

• According to the Annual American Society of Newspaper Editors survey, the number of full-time newsroom jobs which were lost from 2003 to 2012, total 16,200. In 2007, there were 52,600 full-time newsroom employees which was pruned by about 20% by 2009.

• In addition, Nieman Lab, in 2014, posited that the number of full-time journalists who worked for about 1,400 dailies in the USA; decreased from 56,900 in 1990 to 32,900 in 2014.

DEVELOPMENTS IN THE MEDIA INDUSTRY

• The traditional media industry such as television, radio, out-door advert and newspapers has been challenged by the internet revolution of this century. The increase in the total number of online media such as Gamji, Sahara reporters, Nigerian village square, and others like Nigerians in America is a pointer to this trend, not to mention the hundreds of blogging sites that appear on the horizon.

DEVELOPMENTS IN THE MEDIA INDUSTRY (CONT.)

• The Economist of London in its report of July 9th 2011, observed that the internet, especially, the social media (Blogs, Twitter, Facebook, Google, etc.) has revolutionized news as we knew it. The report also stated that there is a gradual decline in the news paper business in the developed parts of the world.

ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA

• At independence, the value system of Nigerian supported acquiring western education and securing a good job.

• The economy of Nigeria at inception was large enough to absolve all graduates hence pay little attention to encouraging people to enterprise.

• Those who venture into business are most likely because they are quite unsuccessful in pursuing western education.

ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA (CONT.)

• Educated Nigerians were not interested in entrepreneurship mainly because their focus was on the positions being vacated by expatriates who were leaving the civil service to return to their home country. At this time, the civil service jobs was considered to be more prestigious than business or entrepreneurship.


• At this time, foreigners (GB Olivant, Unilever Plc, Patterson Zechonics, Leventis, UAC etc) dominated entrepreneurial activities. Nwachukwu (1990), reported that the United African Company (UAC) controlled about 41.3% of the total Nigerian import and export trade had the habit of dealing directly with foreign producers hence neglected the use of the services of Nigerians.

• Nigerian entrepreneurs engaged primarily in agriculture, fishing, mining and petty industrial activities such as smelting iron works, bronze works, and crafts, using leather, wood, raffia, clay etc complementing the biggest entrepreneur who in this case is the government. Most enterprises owned by Nigerians quickly failed as they came up because Nigerian entrepreneurs were less motivated, they had limited education, they lacked quality managerial skills


• The development of entrepreneurship in Nigeria is hinged on the shoulders of the government who sustained entrepreneurship development through:

• a. Legislations• b. Through the creation of agencies• c. Through intervention programmes

PROMOTING ENTREPRENEURSHIP DEVELOPMENT THROUGH

LEGISLATION• Ekanem (2005), asserts that entrepreneurship development in

Nigeria started with the Immigration Act of 1963 which made it mandatory for all enterprises in Nigeria to have indigenous participation of up to 60%. Apart from technology intensive business ventures, the Act almost reserved the participation in small scale business for Nigerians only.

• The idea is entirely, to expose Nigerians to the techniques of setting up new businesses which eventually would become big enterprises and subsequently replace public corporations. It was the first bold step, to encourage Nigerians to participate in enterprising the country and providing jobs for themselves and others.


LEGISLATION (CONT.)

Other are:• a. The Company Decree of 1968 which also compelled all foreign businesses to be

registered and incorporated as Nigerian Companies. It aims at accelerating industrialization and dispersal of industries, generate substantial employment opportunities, promote individual initiatives and entrepreneurship among the populace, develop and increase export traders, and complement large scale industries in Nigeria.

• b. The Enterprise Promotion Decree of 1972 which challenged the ingenuity and inventive ability of Nigerians

• c. The Indigenization Decree of 1977

• d. The Commercialization Decree of 1988

• E. The Privatization decree of 1989

PROMOTING ENTREPRENEURSHIP DEVELOPMENT THROUGH THE ESTABLISHMENT OF AGENCIES

• Apart from legislations, government has created several agencies to promote entrepreneurship in Nigeria such as:

Entrepreneurship Development Center (EDC), Centre of Management Development (CMD),National Directorate of Employment (NDE), Bank of Industry (BOI) & Bank of Agriculture (BOA),Nigeria Export-Import Bank (NEXIM), National Economic Empowerment and Development Strategy (NEEDS), National Open Apprenticeship Scheme (NOAS), Industrial Training Fund (ITF), Small and Medium Enterprises Equity Investment Scheme (SMEEIS) &The Small and Medium Enterprise Development Association of Nigeria (SMEDAN) etc. etc

PROMOTING ENTREPRENEURSHIP DEVELOPMENT THROUGH INTERVENTION PROGRAMMES

• In a bid to develop entrepreneurship, government initiated several intervention programmes such as:

• The N200 billion MSMEs Development Fund to provide cheap & long term capital for the MSMEs sub-sector in Nigeria

• The N200 billion Small & Medium Scale Enterprises Guarantee Scheme (SMECGS) of the CBN

designed to promote access to credit by SMEs. • The Subsidy Reinvestment and Empowerment Programme (SURE-P) • The N100 billion Textile Revival Fund (TRF) for the resuscitation of the cotton, textile and

garment Industries • The Public Works and Women/Youth Empowerment Scheme (PW/WYE) was launched to create

immediate employment opportunities for women and youths in labour-intensive public works


INTERVENTION PROGRAMMES (CONT.)

• The Graduate Internship Scheme (GIS) • The Youth Enterprise with Innovation in Nigeria (YouWIN) – an annual Business Plan Competition designed to

provide equity grant of N1 to N10 million to 1,200 aspiring young entrepreneurs in Nigeria. It aimed at generating some 80,000 to 110,000 new jobs for in a three-year period.

• The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) - developed to boost access to

bank financing for agriculture by de-risking the agricultural and financial value chains through the adoption of risk sharing approaches.

• The Niger Delta Amnesty Training Programme designed to boost capacity the Niger Delta people • The Petroleum Technology Development Fund (PTDF) was established to promote and upgrade petroleum

technology and manpower development through research and training of Nigerians as graduates, professionals, technicians and craftsmen in the fields of engineering, geology, geo-sciences, management, economics and relevant fields in the petroleum and solid minerals sectors in Nigeria and other countries of the world.

• The N200 billion Commercial Agriculture Credit Scheme (CACS) finances large ticket projects along the agricultural

value chain

CHALLENGES OF ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA

• Just like all other developing countries, the growth of entrepreneurship in Nigeria is confronted with several challenges which include but are not limited to:

• a. Availability and Source of Start-up Capital• b. Poor Enabling/Operating Business Environment• c. Managerial Skills • d. Lack of Infrastructure• e. The right type of education• f. Poor knowledge of science, technology and innovation

WAY FORWARD

• The solutions to the challenges of entrepreneurship development in Nigeria lies in both the hands of government and the potential entrepreneur. This therefore follows that I will discuss the way forward in two folds:a. The government b. The potential entrepreneur

WAY FORWARD – FROM GOVERNMENT ANGLE

a. Government should create an enabling environment that encourages people to enterprise. Such as:

• An effective criminal justice system• Ease of business registration• Strong patent laws• Providing incentives to encourage start-up• should de-emphasize Class A security (fixed asset)”as collateral.• Should encourage the consumption of locally produced

goods by patronizing local entrepreneurs• Government should provide adequate business information

WAY FORWARD – FROM GOVERNMENT ANGLE (CONT.)

• b. Government should create opportunities for entrepreneurs.

One of the most critical attribute which differentiate an entrepreneur from others is his/her ability to identify viable business opportunities to take advantage of

Opportunities are the extent of possibilities for a new venture to exist. Entrepreneurship depend on the extent of opportunities available in a given society.

Opportunities can be created by government policies and other environmental activities. Entrepreneurial opportunities are more abundant in a free market economy where potential entrepreneurs have to face limited entry barriers.

WAY FORWARD –

FROM GOVERNMENT ANGLE (CONT.)

• Government should develop enterprise pack systems - business cluster

and technology parks to encourage entrepreneurs to venture • Government should create more accessible financial options for the

informal sector as well as sustainable interventions programmes to spur entrepreneurship

• Government should provide effective Business Development Service

(BDS) through private BDS providers

• Government should reward and recognize entrepreneurs publicly

WAY FORWARD – FROM POTENTIAL ENTREPRENEUR ANGLE a. Develop the ability to identify and generate a viable business idea:

A good business opportunity may not necessarily be a viable business opportunity. An idea may be wonderful but the competition is so much making the idea not worth pursuing (NOT VIABLE). Viable ideas have the under mentioned characteristics:

i. Has Real Demand ii. Is competitiveiii. Has acceptable Return on Investmentiv. Availability and affordability of raw material v. Skills required must be availablevi. Capital requirement must be available vii. Infrastructure to support it must be available

WAY FORWARD – FROM POTENTIAL ENTREPRENEUR ANGLE

(CONT.) b. Develop the Right Mindset:

Having the right mindset is as important as having the right opportunities. Entrepreneurship begins with the mind. Entrepreneurial mindset is the way entrepreneurs think especially about business and its opportunities and how the act or behave to take advantage of the opportunity and get the best out of it. The right mindset is that which hungers to succeed, which is self motivating and passionate about its goals while the right opportunities is that which is viable (practicable), profitable and sustainable. This kind of mindset is called the growth mindset.

Characteristics of Growth mindset:• Risk taking: before rejecting a risk, they think about the opportunities• Creativity – the become creative by thinking creatively • They are self starters – work independently • High internal locus of control – they take responsibilities for actions • They are opportunity seekers• They are determined to succeed

WAY FORWARD –

FROM POTENTIAL ENTREPRENEUR ANGLE (CONT.)

c. The potential entrepreneur must develop the Propensity to Enterprise as well as the Ability to Enterprise The propensity to enterprise is the natural inclination to venture into business. These natural inclinations include the psychological and behavioural characteristics such as:a. High needs for achievements, b. Capacity to innovate/createc. Risk takingd. Goal settingf. Need for independenceg. Self confidence etc.

• It is a normal believe, that those with very high urge for excellence, wiliness to take measurable risk and the desire to be independent are more likely to become entrepreneurs because they are more able to perceive the opportunities available in the environment and are more able to turn opportunities into profitable ventures.

WAY FORWARD –


• On the other hand, the ability to enterprise refers to the totality of the technical know-how and business capabilities which is required to start and nurture a new business. The technical know-how refer to a potential entrepreneurs technical capabilities or skills relevant to execute a chosen business opportunity while business capabilities refers knowledge, skills and competences in functional business areas such as planning, product development, marketing, accounting, finance etc.

WAY FORWARD –


d. Ability to source funds for a start-up: Having the right opportunity, the right mindset, high propensity to enterprise and high ability to enterprise without finance is frustrating. A potential entrepreneur must figure out the best way to fund his/her start-up. Most start-ups begin with:

• • a. Personal Savings• b. Funds from Friends and family• c. Starting with a partner who is a co-equity contributor• d. Business Grants• e. Commercial Banks• f. DFI’s• g. Lease Financing

CONCLUSION AND SUMMARY

• Entrepreneurship is essential for rapid and sustained economic growth and

development. It creates the required man power and skills necessary for accelerated growth, reduce unemployment and poverty. It is therefore strategic and wise for Nigeria to assign a significant and increasing role to entrepreneurship in their effort to revamp the economy.

• For the entrepreneurs to be effective in creating wealth and employment

opportunities, the government needs to create an investor-friendly environment encompassing stable macro-economic policies government needs to address urgently the dilapidated infrastructural facilities in the country, starting with the power sector, roads and railways, provide adequate security as well as providing financial support to innovative ideas to translate such ideas into reality.

THE END

THANK YOU VERY MUCH FOR YOUR ATTENTION

GOD BLESS YOU ALL

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VOA - ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA, THE CHALLENGES