1.1. BACKGROUND OF THE STUDY
Private business or enterprises has the characteristics of being involved in transfer or exchange of goods and services, as well as human activity directed towards the acquisition of wealth, which will lead to economic growth and development. Apart from this, private enterprises has the aims and objectives of earning profit, manufacture goods and or render services to the society, involving in payment of taxes regularly to generate income for the government, provide job opportunities for the public, improve the standard of living of people in the country thereby resulting in sustained growth or development in Nigeria. In terms of size and its contribution, the private sector in the Nigerian economy is substantial. There are two components: the organized private sector and the informal sector. The organized or formal private sector comprises public limited liability companies, private limited liability companies, sole proprietorship and partnerships, whereas the informal sector consists of peasant farmers, petty traders and artisans. Nigeria, which was one of the richest countries in the early 70s: the sixth largest exporter of oil, turned to become one of the poorest countries at the threshold of the twenty first century. Nigeria is among the 20 countries in the world with the widest gap between the rich and the poor (Igbuzor, 2006). The World Bank in its 2001 report titled ‘Attacking poverty’ proposed a strategy for tackling poverty in three ways: promoting opportunity; (by Encouraging effective private investment; Getting infrastructure etc); facilitating empowerment and enhancing security. All which are to increase private enterprises or business in the country. Nigeria, an Oil-rich country has been restricted by political instability, corruption, inadequate infrastructure, and poor macroeconomic management, but in 2008 began pursuing economic reforms. Lack of infrastructure and slow implementation of reforms are key impediments to private sector growth in Nigeria.
Government has taken conscious steps towards improving private enterprises in Nigeria. Weak infrastructure has been a driver of rising cost of doing business in Nigeria. In order to tackle this problem, government embarked on massive rehabilitation and construction of new infrastructure reinforced by the privatization and deregulation policy for increased participation of the private sector in infrastructure development. National Council on Privatisation was set up to ensure proper implementation of the privatization programme. The policy of deregulation of major sectors of the economy which had been put in place since the Structural Adjustment Programme (SAP) in 1986 was inaugurated. Consequently, the communication sub-sector was the first to beprivatized with the licensing of much global system for mobile (GSM) communication which led to the telecommunication business revolution (Soludo, 2007). The deregulation of the downstream oil sector enhanced private sector participation and put an end to the incessant fuel crises that plagued the economy. Thus, with the various steps taken by the government this study therefore examines the relationship between business and economic development in Nigeria to see the effect of the businesses in Nigeria on the economic development of the country. This is with the desire to examine its ability to achieve the desired objectives in the country; Nigeria.
1.2. STATEMENT OF THE GENERAL PROBLEM
Nigeria is currently witnessing an alarming rate of unemployment rate is growing tin geometric progression. The economy is also increasingly finding it difficult to cope as Nigerian economy is waning. A lot of experts have called for the creation of an enabling environment for small –scale enterprise to thrive. They cited Asian “Tigers” such as Malaysia, China, Sought Korea, Indonesia, Singapore and Thailand where both the government and individuals knowing the importance of small scale industrial development join forces together in fostering effective and sustainable private businesses or enterprises in their countries. Evidence also abound that in the above mentioned places, a lot is being done to empower the growth of this sub sector of the economy.
1.3. AIMS AND OBJECTIVES OF THE STUDY
The major aim of this study is to examine the impact of private enterprises on economic development in Nigeria. Other general objectives of the study include;
1. To examine the effect of private businesses/enterprises on economic growth and development in Nigeria.
2. To examine the challenges of private enterprises in Nigeria.
3. To assess the other benefits of private enterprises in Nigeria.
4. To examine governments effort towards private sector development.
5. To recommend ways of improving the economy through private enterprises.
1.4. RESEARCH QUESTIONS
1. What is the effect of private businesses/enterprises on economic growth and development in Nigeria?
2. What are the challenges of private enterprises in Nigeria?
3. What are the other benefits of private enterprises in Nigeria?
4. What is government’s effort towards private sector development?
5. What are the ways of improving the economy through private enterprises?
1.5. RESEARCH HYPOTHESIS
H0: There is no significant impact of private enterprises on economic development.
H1: There is a significant impact of private enterprises on economic development.
1.6. SIGNIFICANCE OF THE STUDY
The study is thus important because of its potentiality in the development of the private sector which has been characterized as the “man carrier of development and the engine of social and economic growth” in Nigeria. The study will also help in identifying why people don’t go into private enterprise despite its numerous advantages. It will also find our problems of the private sector. The study will help government identify areas requiring attention, thus stimulating government into proper directing of loans and incentives to improve upon existing ventures. It will also provide useful guide for prospective entrepreneur that wish to choose self-employment as a career.
1.7. SCOPE AND LIMITATION
This study is restricted to the impact of private enterprises on economic development in Nigeria using first bank plc Lagos state as a case study.
LIMITATION OF THE STUDY
LIMITATION OF THE STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.