The success enjoyed by most industrialized countries can be credited to the role played by technological innovation and entrepreneurship, both of which continue to excursion their economies today. These two factors are seen as meaningful elements for the industrialization and development of African countries. The Nigerian government has recognized this fact and has taken measures aimed at promoting and cultivating the entrepreneurial culture in our country. by the Nigerian Investing Commission (NIC), our government has in the past introduced a policy that required university students in spite of of their area of study to take courses in entrepreneurship. While our government is putting additional effort in promoting entrepreneurship in Nigeria, there are nevertheless a number of problems that a Nigerian Entrepreneur faces. Below are some of the problems encountered and possible solutions.
* Diversifying the Economy
Though our country’s economy has over the last associate of decades relied heavily on its oil production, we must find ways to diversify our economy and avoid the over reliance on oil. Like other developing countries, Nigeria is facing an increase in its unemployment rate that is now at 6 % and is on the increase, with many graduates finding it hard to get jobs while most of those who get jobs are underemployed. This coupled with the global financial crisis in which enormous numbers of employees are being laid off; entrepreneurship is seen as an basic meaningful if we want our country to unprotected to its goal of being an industrialized nation by the year 2020.
* Unfriendly Business Climate
Being an entrepreneur in Nigeria requires great determination as practicing and possible business owners are faced with countless challenges. Nigerian’s business climate should be made welcoming to those in the Micro, Small and Medium Enterprises (MSMEs). The role played by these MSMEs should not be underestimated since majority of the thriving businesses fall in this category and for us to unprotected to our goals, adequate attention and sustain must be directed towards these institutions. To be able to help and protect entrepreneurs, we must first have a clear idea of the challenges facing our entrepreneurs in their pursuit of making Nigeria a thriving country.
* without of Credit Facilities
possible Nigeria entrepreneurs go by many hardships when trying to access credit for their businesses. Though there is a wide range of financial institutions that offer business loans, they usually charge high interest rates deterring aspiring entrepreneurs. for example, major edges have pegged their lending rates to as much a 28% deterring possible entrepreneurs who are mostly low income earners. Other obstacles faced by our entrepreneurs include harsh collateral conditions set by edges and other lending institutions. Though our government by the Central Bank and the Banker’s Committee came up with guidelines requiring edges to set aside 10% of their profits for funding MSMEs, majority of these edges have been reluctant to do so. This has led to the emergence of micro-finance institutions which though helpful are not sufficient for meeting the financial requirements.
* Multiple Taxation
One other sensitive challenge that is encountered by majority of Nigerian entrepreneurs is multiple taxation. Although we have a responsibility of funding the government by paying 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 only 39 taxes and levies, there are over 500 various levies and taxes that are imposed by state and local government agents. These taxes are questionable and in the case where they are genuine, they are mostly duplicated and this has the effect of increasing the cost of doing business.
* Poor State of the Country’s Infrastructure
The state of our infrastructure can be deemed to be a nightmare to both entrepreneurs and the rest of the country’s population. With the existing infrastructure deteriorating and in some places it is non-existent; the cost of doing business has tremendously gone up. The state of the country’s road network makes it hard for entrepreneurs in the agricultural sector to transport harvested produce from farms to processing factories. According to a report released by the World Bank, Nigeria’s speed of socioeconomic development and growth is way below what we can unprotected to. This is mostly because of the inconsistent supply of electricity which has negatively affected many businesses. The outcome of strength problems has prompted entrepreneurs to generate strength by expensive ways that have in turn increased their production costs and made their products uncompetitive due to high prices. Our government should put policies in place to perk up Nigeria’s infrastructure so as to promote successful entrepreneurship.
* Failure to Adapt to the Changing Business ecosystem
Majority of those who venture into MSMEs (Micro, Small and Medium Enterprises) do so because of their need to make money and in almost all situations, such entrepreneurs without applicable and adequate information about the businesses they include in. In the event where problems arise, most of these business owners without sufficient problem solving skills and in the end they find it hard to survive. With the telecommunications sector having grown by about 206.5 % between 2002 and 2004 and is continually expanding, Nigeria has become one of the fastest growing ICT market not only in Africa but also worldwide. This presents a challenge to entrepreneurs who have not embraced technology, and who are now finding it hard to keep applicable in the competitive business ecosystem. For existing and possible MSMEs to survive and be applicable, we must adapt to the changing business ecosystem and embrace technology.
* Addressing the Challenges
Solving the problems encountered requires a combined effort by both the entrepreneur and all concerned stakeholders. As Small and medium business owners, we need to increase our knowledge and skills of the market by acquiring applicable and up to date education particularly in your area of business. Our entrepreneurs need to collect information about their target market by seeking help from consultants and professionals who have experience in the particular market.
One strategy that can be used by our small and medium entrepreneurs to keep applicable and competitive in today’s market is to come up with fresh and creative ideas of doing business. Due to the increase in technology, business is fast changing, consequently our MSMEs need to regularly re-invent the way they do business.
There is a great need of creating a strong link between MSMEs and supporting institutions if Nigeria is to fully assistance from such businesses. Though some financial institutions are nevertheless reluctant to provide financial assistance to MSMEs, there are some that give out loans at reasonable rates provided the business sounds viable. The meaningful challenge is for our entrepreneurs to prepare sound business proposals. For our country to unprotected to its goals and stop relying on oil alone, we need to focus much attention needs on the private sector and our government must create a conducive air for such businesses to thrive and excursion the country towards economic wealth.