CHAPTER ONE

INTRODUCTION

1.1      BACKGROUND OF THE STUDY

In recent times entrepreneurs have been referred to as necessary necessity to mobilize capital, exploit natural resources and make markets to carry out or hold unto trade. Entrepreneurs are agents who perform a significant role in the economic process of a country and are linked to the general industrial development of a nation. Entrepreneurship is crucial for the economy as entrepreneurship is an engine of economic progress, job creation as well as social adjustment. The growing need to hasten economic development by generating new ideas and to translate into profitable ventures makes entrepreneurship an attention for the scholars as well as the policy makers. Entrepreneurship, with all attendant ingredients, is one of the best means of triggering socio-economic development in developing nations like Nigeria, thus a catalysing the process of Entrepreneurship in developing countries will accelerate the process of economic growth and social development (Thomas and Mueller,2011). The importance of entrepreneurship development through new business formation for economic growth has been recognized since (1934) by economist named Schumpeter. Entrepreneurship is powerfully linked to small and medium scale enterprises (SMEs), which are the most developing force of the developed market economies that provides the spring board for industrial development and economic growth. According to the Global Entrepreneurship Monitor Report (2011), about 70% of an area’s economic performance and well being is dependent upon how entrepreneurial the area’s economy is. Ogundele, Olajide and Ashamu (2008) argue that entrepreneurial activities are very fundamental to any meaningful development of an economy. The great need for entrepreneurial development in Nigeria today, more than ever, is necessitated by the rate of unemployment and its effect on both the people and the nation and the need for small and medium enterprises. In spite of the fact that entrepreneurial development has been regarded as the bulwark for employment generation and technological development in Nigeria, the sector nevertheless has had its own fair share of neglect with concomitant unpleasant impacts on the economy (Okpara, 2011). All over the world, Small and Medium Enterprises (SME’s) are treated as backbone for economic development. It is widely believed that entrepreneurship is beneficial for economic growth and development. Moreover, studies had shown that Small Medium Enterprise has the propensity to drive the Nigerian economy and data reveal that there are currently about 17 million SMEs employing over 31 million Nigerians. The SMEs accounts for over 80% of enterprises that employ about 75% of the Nigeria’s total workforce and innovative ways of building the Capacity, creating job – opportunities, thus helping Nigeria realized its quantity advantage. An increase in the number of entrepreneurs leads to an increase increased in economic growth, because entrepreneurship is increase recognized as a primary engine of economic growth. The primary concern of the entrepreneur is to create something new, involving the motivation to overcome obstacles, the willingness to run risks, and the desire for personal prominence in whatever is accomplished. A strong need to build something and to feel that what was billed is due to personal efforts is a primary motivation. Therefore, by combing new and existing resources with innovative ideas, entrepreneurs add value through the commercialization of new products, the creation of new jobs and the building of new firms. It has been asserted that nations with higher levels of entrepreneurial activity enjoy strong economic growth because entrepreneurs are the link between new ideas and economic growth. Entrepreneur is the reformer, revolution and the Kingpin of the economic growth process. He is the propeller of change and a catalyst. Therefore, development does not occur spontaneously as a natural consequence when economic conditions are in some sense right, a catalyst or agent is needed, and this requires entrepreneurial activity. The economic development or under-development is the reflection of the abundance or scarcity of entrepreneurship in any society.

1.2 STATEMENT OF THE PROBLEM

Entrepreneurial development heretofore has been proven to be a catalyst of a sustainable economic growth of a nation (Ebiringa, 2012). To this effect, the federal government had on several occasions initiated various programmes in a bid to empower and encourage entrepreneurial activities, taking cognizance of the pivotal role it plays in economic development necessary for enhanced standard of living of the people. Yet, the aim for creating the aforementioned programmes was defeated orchestrated by the inability of those initiated programmes in providing the necessary financial assistance to entrepreneurs. Entrepreneurs are experiencing difficulties in borrowing money from banks because of their stringent policy on lending. The borrowing conditions of the banks had discouraged many entrepreneurs from borrowing of which some who may have conceived creative idea that would have revamped the economy could not put it into use due to dearth of finance. In addition, one of the challenges that are encountered by entrepreneurs is the issue of multiple-taxation. Although entrepreneurs in a country have a responsibility of funding the government through payment of taxes, most of the taxes charged on entrepreneurs are not lawful and have the effect of increasing the cost of doing business. Although Nigeria's Companies Income Tax Act (CITA) has approved several taxes and levies, there are too much levies and taxes that are imposed by state and local government agents on entrepreneurs. The government anticipated drive for job creation; therefore, citizens are encouraged to create job and wealth entrepreneurship drive. Entrepreneurial developments are encouraged and so how does the increase in entrepreneurs affect the economic growth or development of the country. It is interest of the paper to look at how entrepreneurial development positively affects the economy of Nigeria.

1.3AIMS OF THE STUDY

The major purpose of this study is to examine entrepreneurial development and its impact on Nigerian Economy. Other general objectives of the study are:

1. To examine the extent of entrepreneurial development in Nigeria.

2. To examine whether entrepreneurial development promotes the economic growth rate of Nigerian economy.

3. To examine the impact of entrepreneurial development on the economic growth of the country.

4. To examine the role of the increasing impact of entrepreneurial development in Nigerian Economy.

5. To examine the relationship between entrepreneurial development and economic growth of Nigeria.

6. To examine how to proffer solutions to the problems that militates against entrepreneurial development in Nigeria.

1.4 RESEARCH QUESTIONS

1. To what extent is the entrepreneurial development in Nigeria?

2. Has entrepreneurial development promotes the economic growth rate of Nigerian economy?

3. What is the impact of entrepreneurial development on the economic growth of the country?

4. What are the roles of the increasing impact of entrepreneurial development in Nigerian Economy?

5. What is the relationship between entrepreneurial development and economic growth of Nigeria?

6. What are the solutions to the problems that militate against entrepreneurial development in Nigeria?