ABSTRACT
Unemployment is a global challenge and
has continued to be unabated, particularly in Nigeria. The rate of unemployment worldwide according
to the International Labour Organization was estimated to be 5.8% and in
Nigeria it was estimated to be 31.2%. The increasing level of unemployment in
Nigeria had culminated in increasing rate of youth restiveness, armed robbery,
drug trafficking, prostitution, Internet fraud and emergence of terrorist
groups. Government through its policies has embarked on job creation and
entrepreneurship scheme. Despite the effort, the problem seems to persist.
Hence, the study examined the administration of entrepreneurship policy and
employment generation between 2004 and 2014 in South West, Nigeria.
The
survey design was adopted for the study. The population was the Micro, Small
and Medium Enterprises (MSMEs) of Small Medium Enterprise Development Agency of
Nigeria (SMEDAN) and Bank of Industry (BOI) in South-West, Nigeria. Three
states: Lagos, Ogun and Ondo were purposively selected and respondents enrolled
by simple random sampling technique. A validated questionnaire measuring data
collection regarding entrepreneurship development and employment generation was
developed. Reliability test for each construct was conducted with the following
Cronbach’s alpha coefficient values of 0.89 for Role of Entrepreneurship
Policies (ROL-EP), 0.87 for Relevance of Entrepreneurship Policies (REL-EP),
0.91 for Impact of Educational System of on Entrepreneurship Development
(IES-EP) and 0.88 for Challenges of Entrepreneurship Development (CED).
Response rate of 94.8% was obtained from 1,014 copies of the questionnaire
administered. In addition, in-depth interview was conducted with 12 officials
of BOI and SMEDAN. The quantitative data collected were analyzed using
descriptive statistics while correlation and regression analyses were used in
the testing of hypotheses at 5% level of significance. The qualitative data
from the interviews were transcribed and content-analyzed.
Findings
revealed that the entrepreneurship policies formulated by government in order
to reduce unemployment had positive significant effect on the entrepreneurship
development and employment generation (r =0.346; R2=0.119;
p<0.05). Furthermore, the regression analyses revealed a significant impact
on entrepreneurship development policies and employment generation (β=2.962;
β=0.099; R=0.7320; R2=0.752; p<0.05).Similarly, the correlation
analysis showed a positive significant association between entrepreneurship
education and entrepreneurship development in empowering prospective
entrepreneurs towards addressing unemployment (r=0.054; p<0.05).
The study concluded that the entrepreneurship policy and
employment generation are connected. If the Administration of Entrepreneurship
Policies is strengthened and enabled, there will be a corresponding improvement
on employment generation. It was therefore recommended
that government needs to formulate relevant policies and proactive in the
implementation mechanisms in reducing the level of unemployment to augment the
role of SMEDAN and BOI. The educational system needs to encourage aspiring
entrepreneurs through workable and valuable curricular content reform which
could reduce the rate of unemployment.
CHAPTER
ONE
INTRODUCTION
1.1 Background
to the Study
In this era of
globalization, entrepreneurship has an important role to play in employment
generation. The experiences of developed economies in relation to the roles
played by entrepreneurship buttresses the fact that the importance of
entrepreneurship cannot be over emphasized especially among the developing
countries. The quintessence of
entrepreneurship is paramount in every economy that targets economic growth and
development. However, no economic growth and development may be achieved
without changes in factors of production and economic activities. These
economic activities are best driven by entrepreneurs as agents of economic
growth and development. Without adequate information and knowledge, the impact
of entrepreneurship on generation of employment in any nation may be less than
optimal. The import of entrepreneurship knowledge was identified by Block,
Thurik and Zhou (2012) when they
recognized that knowledge was “dispersed” throughout society with each person
having a unique stock of information. Consequently, individuals or
entrepreneurs bringing their varied talents, knowledge and skills to bear on
the society would advance the economic standing of that society. One of the major
roles of entrepreneurship is job creation, to reduce unemployment rate in the
economy.
Unemployment is a universal challenge
except that the rate of prevalence differs from one economy to the other. The
World Bank reports (2016) on unemployment revealed that the rates of
unemployment in some African nations like Cote d’Ivoire (4.0 per cent), Ghana
(2.4 per cent), Guinea (1.8 per cent) can compare favourably with some
developed economies like Spain (24.7 per cent), United States of America (6.2
per cent), United Kingdom (6.3 per cent) and France (9.9 per cent). However,
the challenges of unemployment are more pronounced in the developing economies
than the developed economies where social security and other poverty
alleviation programmes for the unemployed are in place. In Nigeria,
unemployment which as reported by the National Bureau of Statistics was 31.2
per cent as at the end of September, 2016, against world unemployment rate of
5.8 per cent (ILO, 2016). According to Bassey and Atan (2012), there has been
an alarming increase in the rate of youth unemployment as thousands of
university graduates are roaming the street without jobs. In spite of the
enormous natural and human resources in the country, unemployment still remains
a challenge. For instance, the South-West geopolitical zone is rich in cash
crops such as cocoa, cola nuts, coffee and rubber. The greatest source of
wealth for the Northern states is massive fertile land conducive for wide range
of agricultural activities while the South-South states like Rivers, Delta and
Akwa Ibom are blessed in petroleum reserves (Badmus, Olurin, Ganiyu and
Oduleye, 2013); (Alabi A. B et. al. 2013), yet there is high incidence of
poverty and high rate of unemployment (Yakubu and Akanegbu, 2015; Uzoigwe,
2007). Nigeria is still one of the
poorest countries in the world and has one of the highest rates of youth
unemployment in the sub-Sahara Africa (Ucha, 2010; Amaghionyeodiwe and
Adediran, 2012; Chukwuma, 2013).
The predicament of Nigeria as a developing
economy with a lack of impactful entrepreneurship policy after over 55 years of
independence can be traced to the deficit that we have experienced in
governance and unfriendly
entrepreneurial environment. The importance of entrepreneurship development was
not appreciated until many employable Nigerians could not find jobs to the
embarrassment of the government and at threat to national security. This
situation propelled the government to initiate one form of entrepreneurship
policy and/or job creation scheme or the other.
One of government’s attempt towards policy
implementation to address unemployment in Nigeria led to the introduction of
Entrepreneurship Development Programmes (EDP) as a panacea to economic
development and growth (Osemeke, 2012). These programmes are usually targeted
at owner-managers of small business firms as well as those identified to
possess potentials for self- employment (Dandago and Muhammad, 2014). For instance, participants in Nigeria's
National Directorate of Employment (NDE) and similar programmes in the country
are expected to undergo EDP training. This usually includes entrepreneurial
tools which range from the preparation of a business plan with emphasis on
production, management and marketing, identification of new business opportunities,
alternative suppliers and market, sources of finance, cash flow analysis and
record keeping to train people to think and act like successful entrepreneurs
(Amaeshi, 2007).
The importance of entrepreneurship
development cannot be overemphasized. Its contributions are quite obvious and
visible in economic transformations.
This is why almost every successive government emphasizes it (Arowomole,
2000). The Federal military government in 1976, under General Olusegun Obasanjo
introduced Operation Feed the Nation (OFN) scheme. In 1985, the General Ibrahim
Badamosi Babangida administration introduced a programme tagged Mass
Mobilization for Self Reliance and Economic Recovery (MAMSER). All of these
were aimed at stimulating economic growth and boost entrepreneurial spirit
among the people.
Toma, Grigorea and Marinescu (2014), in
their studies of economic development and entrepreneurship, argued that no
nation would break the barriers of development without a critical mass of
entrepreneurs. This orientation has helped many developed and developing
nations to accelerate their pace of development by focusing on appropriate
incentives to support entrepreneurship activity. Mmadu (2014) argued that the
factors of production formed the bedrock of Schumpeterian model and that it is
the entrepreneur who generates the critical momentum an economy requires for
economic growth by breaking new grounds in human endeavour as a result of the
vital characteristics or attributes they possess. Entrepreneurship should be
paramount to Nigeria, judging by the number of individuals being certified
yearly by various Educational institutions. Unemployment rate among the youths
in Nigeria especially the graduates, is put between 32.8 per cent and 56.1 per
cent (National Bureau of Statistics, 2016). People go into one entrepreneurial
venture or another because of that, but unfortunately they are not adequately
prepared to face the challenges of venturing into such enterprise. This
underscores the expediency of expanding entrepreneurial know-how, for instance,
by accommodating it in the curricular of these graduates whilst in educational
institutions. Entrepreneur development should be about helping people to start
and grow dynamic businesses that add immense value to the nation’s economic
growth.
However, the Nigerian entrepreneur is
constantly faced with daunting challenges; a cursory look at the Nigerian
predicament throws up ironies. There are abundant mineral deposits that remain
largely untapped; about 60% of Nigeria’s arable land is uncultivated but there
are over a hundred tertiary institutions turning out more than 200,000
graduates every year. An estimated 17
million highly skilled Nigerian professionals live and work outside the
country. In spite of these resources, Nigeria remains stagnated. The poverty
situation has consistently deteriorated such that by 2010, the incidence of
poverty was 69 per cent (National
Bureau of Statistics, 2010). The absence of adequate infrastructure compounded
by poor maintenance and policy summersault present great challenges to emerging
entrepreneurs in providing jobs for the teeming population.
1.2
Statement of the Problem
The high level of unemployment in Nigeria
has been a major economic and social challenge to the government. The
unemployment rate in Nigeria was 13.4 per cent in 2004 and averaged 14.60
per cent from 2006 to 2011, reaching all-time high of 31.2 per cent in May,
2016 (National Bureau of Statistics, 2016). In South-West, Nigeria (Lagos,
Osun, Ogun, Ondo, Ekiti and Oyo States), the average unemployment rate was 5.82
per cent, 14.08 per cent and 27.74
per cent in 2004, 2009 and 2010 respectively (National Bureau of Statistics,
2012). The figures revealed clearly the rising and worrisome trend in the unemployment
rate in Nigeria and the need for realistic government interventions to abate
the tide. The increasing rate of unemployment and poverty is not only
embarrassing, given the country’s enormous potentials in human and natural
resources but has also become a huge security problem across the entire nation.
However, various entrepreneurship policies
have been put in place before and after 2004 to address these challenges:
National Directorate of Employment (NDE) 1986, Mass Mobilization for
Self-Reliance and Economic Recovery (MAMSER) 1986, The National Economic
Reconstruction Fund (NERFUND) 1989, Bank of Industry (2001), Entrepreneurship
Development Centre (EDC) 2003, Small and Medium
Enterprises Development Agency of Nigeria (SMEDAN) 2003, Youth with Innovation
(YOUWIN) 2011, and National Enterprise Development Programme (NEDEP) 2013. They
were focused primarily on entrepreneurship development and employment
generation. In spite of these policies, the rate of unemployment continues to
escalate (Adebayo, 2015). In fact, some unemployed youths formed a pressure
group known as National Association of Unemployed Graduates in 2013 with the
aim of drawing government attention to the problem. (Punch Newspapers, 2013).
The high level of unemployment culminated in
the high turnout of a large number of job seekers in the March 15, 2014
recruitment exercise by the Nigerian Immigration Service. With less than 4,000
to be employed, over a million applicants turned up in all the 36 states and
the Federal Capital Territory, Abuja. The scramble for the few vacant positions
left over 20 people dead and others seriously injured (Punch Newspapers,
2014). It is, therefore, apparent that
the nation is inundated with an acute problem of gross unemployment. In spite
of the efforts of successive government in Nigeria to ameliorate this scourge,
Nigeria is facing growing levels of unemployment.
The
security challenge posed by the restive, active but unemployed youths and the
effect of the various entrepreneurship agencies such as Bank of Industry (BOI)
and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN)
informed this study which examined the
administration of entrepreneurship policies in Nigeria and the extent to which
they have addressed the unemployment problems between 2004—2014.
1.3 Objective of the Study
The
general objective of this study is to examine the effectiveness of the
administration of entrepreneurship policies on employment generation in
South-West, Nigeria. The specific objectives are to:
1. identify
the causes of unemployment in South- West, Nigeria;
2. evaluate the effects of Bank of
Industry and SMEDAN on the implementation of the National Policy on Micro,
Small and Medium Enterprises in addressing unemployment in South West, Nigeria;
3. examine
the entrepreneurship policies of government aimed at promoting employment
generation in Nigeria since 2004;
4. determine
the role of entrepreneurship education in addressing unemployment in South
West, Nigeria, and
5. identify
the challenges of entrepreneurship development in addressing unemployment in
South-West, Nigeria.
1.4 Research
Questions
Consistent
with the problems identified above, the following are the research questions addressed in this study:
1. What were the causes of unemployment
in South-West, Nigeria?
2. To what extent did the Bank of Industry
and SMEDAN’s implementation of National Policy on Micro, Small and Medium Enterprises address the
issues of unemployment in Nigeria?
3. How
did the various entrepreneurship policies assist in addressing
unemployment?
4.
What role did entrepreneurship
education play in addressing unemployment in Nigeria?
5. What
are the challenges of entrepreneurship development in addressing unemployment
in South-West, Nigeria?
1.5 Hypotheses
H01: Bank
of Industry and SMEDAN have no significant effect in adder ssing issues of
unemployment in Nigeria
H02: The
administration of the entrepreneurship development policy has no impact on unemployment in Nigeria
H03: Entrepreneurship
education has no significant effect in addressing unemployment in Nigeria
1.6
Significance of the Study
The study would be of assistance to policy
makers on issues of entrepreneurship development and employment generation and
how to avoid the cause of failures of previous policies on the issues of
unemployment. The study would assist the government, relevant agencies and
ministries to evaluate the effectiveness of their entrepreneurship policies in
promoting entrepreneurship development and addressing unemployment problems in
Nigeria. The study would give existing and potential investors and other
stakeholders a better understanding of the need to develop and implement sound
and effective entrepreneurship policies that would maximize the rate of
employment generation in the country. The study also contributes to existing
literature on formulation and implementation of entrepreneurship policies that
are expected to minimize the rate of unemployment in the Nigerian economy.
1.7 Scope of the Study
The study focuses on the activities of the
Bank of Industry and SMEDAN as they affect entrepreneurship development and
employment generation in South-West Nigeria. The study covers issues of
unemployment and the significance of entrepreneurship development on the two
agencies from 2004 to 2014. The scope of this study covered between 2004 and
2014 because of data availability from the two entrepreneurship agencies of the
government. The Bank of Industry which was reconstructed in 2001 from the
defunct Nigeria Industrial Development Bank did not commence full operations
until 2003 while SMEDAN that was established in 2003 did not commence capacity
building programmes until January, 2004. This period of 10 years gives the
study the sufficient period coverage needed to make valid observations.
The South-West, especially Lagos State, is
seen as the commercial nerve centre of Nigeria which attracts the highest
number of individuals who are in search of employment and a better life.
However, the study selected three States in the South-West, namely: Lagos, Ogun
and Ondo. This is because, majority of businesses are located in Lagos and Ogun
States while Ondo is highly endowed with many natural resources that could be
gainfully explored to create employment.
1.8
Operational Definition of Terms
The frequently used discipline-specific
terms in this study are defined as follows:
- Administration: This
is the act of organizing public policies and programmes to achieve
specific goals of the government
ii.
Capacity
Building/ Training: This refers to
intentional training and mission driven efforts aimed at improving an
individual’s ability to exploit his or her potentials in the aspect of human
endeavor.
iii.
Entrepreneurship:
This refers to a person’s capacity and
willingness to develop, organize, and manage a business venture along with any
of its risks in order to make a profit
iv.
Public
policy: This is a series of programmes and
decisions put in place by the government for the benefit of the general public
or part thereof as it affects socio-economic development of the country.
- Unemployment: This
refers to situations where people who are willing and capable of working
are unable to find suitable paid employment(s).
vi.
Unemployment Rate: This is the number of
unemployed people as a percentage
of labour force which comprises the
employed and unemployed (i.e. those seeking
employment but could find none).
1.9 Outline of the Study
This study is discussed in six chapters.
Chapter one is the introduction and it contains background to the study, the statement
of problem, the objectives of the study, the research questions, the hypotheses
and the significance for the study. Chapter two is a review of literature and
relevant theories and also provides the theoretical framework for the study.
Chapter three presents the research design, population of the study, sample
selection, sample size, sources of data and validity and reliability of
research instrument. The chapter also contains data sources, collection and
analysis techniques. Chapter four presents the analysis and interpretation of
data collected while chapter five presents findings. Finally, chapter six
provides the summary of the study, conclusion and recommendations.
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