5 Factors Affecting Entrepreneurship in Nigeria

An entrepreneur is a person is a person who organizes and operate a business venture and assumes much of the associated risk. Entrepreneurs in Nigeria include Small and Medium Enterprises (SMEs).

In economies all over the world, it has been proven that entrepreneurship is critical to national development and this is why entrepreneurs will need the right environment,resources and people to ensure the success of their businesses.

Generally, entrepreneurship is influenced by these four unique factors; namely, economic development, culture, technological development and education.

Looking at these factors carefully, we realize that wherever they are available in good measure, viral and consistent entrepreneurship is present.

Their positive influence create a conducive conditions for entrepreneurship success.On the other hand,wherever one or all of these above mentioned factors are lacking, the environment is oppressive and discourages as well as snuff the life out of entrepreneurship.

In Nigeria,entrepreneurship faces myriads of negating factors which makes it seem like always swimming against the tide.

Although efforts are ongoing through our government and foreign governments partnership to help create a conducive environment for entrepreneurs by way of grants, soft loans etc,entrepreneurs in the country are still affected by several factors.

From the great Western World economies such as the United States of America, Canada, the United Kingdom, European Union as well as vast Russia to the great Asian Tigers’ economies like big China, Japan, South Korea, Singapore, Malaysia and other world viable economies, entrepreneurship has and continued to contribute immensely to various national prosperity and make up a great percentage of their economies.

We can confidently conclude that without entrepreneurship, which is a private enterprise, these enviable world economies would not have reached their lofty heights.

Back here in Nigeria,entrepreneurship forms the largest chunk of the business world,employing the highest percentage of the Nigerian Labour force.

Below are several factors which affect entrepreneurship in Nigeria.

1.Accessibility to Working Capital

Capital, I mean money,is a major factor of production essential for the establishment and running of a business. The more the capital available for an entrepreneur, the greater its chances of survival and success. There will be an acceleration of the capital formation process.

This economic factor of capital brings about the most direct and immediate influence on entrepreneurship moreso because money is a major lubricant to the machinery of entrepreneurship.

Alas, the major problem that negates against the business ideas of entrepreneurs in Nigeria is their inability to raise capital to start or grow their business.

Most Nigerian banks and investors are not willing to take risks associated with providing loans to private ventures who often do not have the required collateral. Where loans are granted, high interest rates weigh down on prospective entrepreneurs and this discourages most of them from obtaining loans.

Another scenario is that an entrepreneur has to prove their business is highly profitable in order to convince Nigerian banks to give out loans.

Whereas the harsh economic conditions in the country usually prevent most entrepreneurs from turning in good profits that can attract good loans. With such prevailing conditions, entrepreneurs especially start-ups would rather focus on high-defined activities that can create instant growth and profits for their businesses.

If we consider countries like France and Russia where at a period in the past unavailability of money inhibited and discouraged entrepreneurship, it is on record that once adequate cash was made available for aspiring and willing entrepreneurs, the trend changed and entrepreneurship has since been thriving and helps in nourishing their economies.

Should our government and banks follow this example,entrepreneurship certainly would greatly lift the Nigerian economy.

2. The Problem of Hiring the Right Employees

Labour, another essential factor of production,without which entrepreneurship is impossible.With easy availability of the right type of workers, an entrepreneur has higher chances of success hence, need for the Nigerian educational system to be more practical oriented and train students based on needed skills as well as skills required in emerging businesses.

Getting the right people who can do the job is a challenging ordeal for most Nigerian entrepreneurs many of which are known to have hard times hiring great people,building a strong production team,and implementing good customer service systems.

It cannot be overemphasized that the right employee determines customer satisfaction to a large extent. Of course a happy customer means a returning customer and recommending customer meaning more money for the business.

It is a disheartening reality today that many Nigerian graduates, though possessing high certifications,lack the skills and experiences for the available and emerging jobs. Whereas a good and qualified employee will pay back in productivity, successful customer relationship, and a positive impact on an entrepreneur’s total work environment.

3. Inadequacy or Lack of Organizational and Management Skills

Many Nigerian entrepreneurs are not adequately qualified with certain skills that are key to business running.A lot of people jump-start and run entrepreneurship without the needed organizational and managerial skills.Some even assume they know it all rather than seek professional advice or hire the right person for the job.

Relevant organizational and management skills would help avert costly mistakes that make businesses nosedive and crash,but rather would nurture entrepreneurship through the tender stage until it takes a firm root and takes its solid place in the business arena..

4. Lack of Incentives and Government Protection

Without the much-needed government protection and government-supplied incentives, most Nigerian entrepreneurs are exposed to economic predators. Even where incentives are provided, cumbersome and costly bureaucratic procedures such as getting necessary approvals, licenses or loans pose often insurmountable barriers.

Some government policies and regulations also create market distortions and unnecessary sentiments which could mean huge losses to entrepreneurs.

As if this is not enough,some government agencies also bar critical business activities like billboards through huge tax collections on such activities thus, most entrepreneurs would rather do without billboards for instance.

Furthermore. multiple levies and taxes from several government agencies negate against entrepreneurship and pose a constant threat to force entrepreneurs out of business.

5. Inadequate Technical and Technological Infrastructure

These include difficulties in getting raw materials, inaccessibility of relevant business information, low technological capabilities, high cost of transportation,erratic electricity supply, poor road networks and bad roads, inadequate and inefficient public health clinics, and absence of water supply to entrepreneurs.

All these makes it impossible for entrepreneurs to set up their businesses especially in rural areas where market opportunities are present.

Having the correct strategies, infrastructures,and service experts are essential if an entrepreneur is to work with prepared budgets and maximize investment returns.

Not leaving out good security systems(including business arena access controls and CCTV cameras),internet access and uninterrupted power supply, which are all vital for entrepreneurship well being.

The reality on ground in Nigeria is that an entrepreneur has to provide virtually for all the above mentioned necessities by themselves if they truly desire to remain in business.

culled from https://infoguidenigeria.com/factors-affecting-entrepreneurship-nigeria/