Effect Of Government Policy On Entrepreneurship Development
The study sought to investigate the effect of government policy on entrepreneurship development in Ifako-Ijaye, Local Government Area, Lagos State. The specific objectives that guided the study are to; ascertain if government policies has significantly impacted on entrepreneurship development in Nigeria; evaluate the relationship between government policies and economic growth in Nigeria; and also ascertain the long-run relationship that exists between government policy and entrepreneurship development in Nigeria The study adopted a descriptive research design using a well structured questionnaire to gather the data.
One hundred and fifty (150) questionnaires were administered, while one hundred (100) was duly completed and returned by the respondents. The data was analyzed with the aid of statistical package for social sciences version 23. Furthermore, the formulated hypotheses are: government policies have no significance effect on entrepreneurship development in Nigeria, there is no significant relationship between government policies and economic growth in Nigeria, and there is no long-run relationship between government policies and entrepreneurship development.
The first hypothesis, government policies have no significance effect on entrepreneurship development in Nigeria was tested with Chi-square test statistics , while the other two hypotheses were tested with Karl Pearson’s Product Correlation Analysis. The result of the first hypothesis showed that there is convincing evidence that government policies have significant effect on entrepreneurship development in Nigeria (P value < 0.05. Since 0.000<0.05).
The result of the second hypothesis also revealed a strong positive association between government policies and economic growth as the correlation r (63) = .856) with p(0.000)< .001. Lastly, the result of the third hypothesis also revealed that, correlation between government policies and entrepreneurship development was significant, as correlation r (63) = .831, which is interpreted as a very strong positive association between government policies and entrepreneurship development with p(0.000)< .001. Therefore, it is established that entrepreneurship development is dependent upon government policy as the study revealed that; creation of skill acquisition centers, promulgation of suitable policies, fair tax imposition, were the reason for the reduction in poverty level, increased standard of living as well as reduction in over dependence on paid employment.
The study therefore recommends that government policies should increase the creation of skill acquisition centers; encourage fair tax imposition; encourage local technologies, innovations and creativity; and more importantly government should set up monitoring committee/teams to oversee and evaluate the practical implementation of policies and programmes on entrepreneurship development as all these were the reasons for the increase in economic welfare in Ifako-Ijaye local government area of Lagos state.
This part of the work serves as the introductory paragraph, thereby connoting the foundation upon which this work is built. Other aspect to be discussed are as follows; background to the study, statement of problem, research objectives, research hypotheses, significance of the study, limitations of the studdy and operational definition of terms.
1.1 Background to the Study
Entrepreneurship Development in Nigeria – The entrepreneur plays a vital role in the process of economic growth and development. Iwu Eze (1986) in Olorunshola, (2013) in a paper presented in on entrepreneurship development in Nigeria said that an entrepreneur is a contractor, an organizer of an enterprise for the public, a resourceful person with a dream. Entrepreneurs are bold men and women who have initiative and the ability to lead, manage and take the consequences.
They are men of action, risk takers, missionary, creative and highly respected of their ability to effectively and efficiently concubine the functions of management to achieve the goals. He also noted that during the colonial period, only few of Nigerians could boast of personal or family capital to start off any meaningful business and hence the next place of call for business and financial was bank.
According to Ani (1999) in Olorunshola, (2013) said that entrepreneurship started when people produced more products than they needed and as such, had who also these surpluses with others who also wanted to dispose of their surpluses. For instance, if a black smith produced more hoes then he needed, he exchanged the surplus he had with what he specialisation. This process is known as trade by barter before the advent of any form of money. All these have been made to ensure the sustainance and growth of small and medium scale enterprises in the country.
One of the goals of economic development strategies pursued by successive Nigerian Governments has been the reduction of poverty through job creation. Many government policies over the years for the achievement of that objective have been based on the development of indigenous entrepreneurship. Of course, Nigeria is not along in pursuing this strategic option.
The Reagan administration in the USA also pursued similar policies in the 1980s “Reaganomics” as it was dubbed worked on the supply side of the economy. The concept of government policy has been analysed by Dye (1965) who quoted Jones (1977) as cited in Olorunshola, (2013) as a public decision to achieve a purpose.
However, policy only lays down the general directive rather than detailed instructions or strategies on the line of action to follow to achieve the objective. Basically, government policies are formulated by the three arms of government working in concert.
But, policies can be initiated from various institutional sources and from private persons. Ultimately all government policies in Nigeria derive their legitimacy from the constitution (Uchendu, 1989 in Akanle & Ejiofor, 2014).
Dutz, (2000) simply defines government policy as a guiding principle which governs action especially repetitive actions, it is decision as to what should be done and how, when and where. Entrepreneurship on the other hand refers to the activities of the entrepreneur as the initiator, organiser, innovator and risk bearer in production or business, (Vesper 1982 in Akanle & Ejiofor, 2014).
The entrepreneur is the person whose activities create wealth and employment which can be measured either directly or through economic growth rates. Entrepreneurship development (ED) refers to the process of enhancing entrepreneurial skills and knowledge through structured training and institution-building programmes.
Entrepreneurship development aims to enlarge the base of entrepreneurs in order to hasten the pace at which new ventures are created. Entrepreneurship development focuses on the individual who wishes to start or expand a business. Small and medium enterprise (SME) development, on the other hand, focuses on developing the enterprise, whether or not it employs or is led by individuals who can be considered entrepreneurial.
1.2 Statement of the Problem
The Nigerian economy has been characterised with a lot of inefficiencies; public sector dominance, over reliance on oil as the major revenue earner and this has typically affected the country’s course of development.
However, since the mid-1980s, Nigeria has introduced some structural economic reforms, abolished polices and structures which prevented entry into certain industries, and opened up its markets to competition from domestic and foreign entrepreneurs.
The government have also introduced and pursued a number of entrepreneurship encouragement policies aimed at reducing the high rates of unemployment and poverty.
Though, Nigeria is still plagued by many development challenges, “preliminary evidence suggests a favourable response by the private sector to the new entrepreneurial opportunities thus created” (Elkan, 1988 in Akanle & Ejiofor, 2014)).
Nigeria is naturally endowed with entrepreneurship opportunities; however the realisation of the full potential of these opportunities has been dampened by the adoption of inappropriate industrialisation policies at different times.
Several policy interventions that were aimed at stimulating entrepreneurship development via small and medium scale enterprises promotion, based on technology transfer strategy, have failed to achieve the desired goals as it led to the most indigenous entrepreneurs becoming distribution agents of imported products as opposed to building in-country entrepreneurial capacity for manufacturing, mechanised agriculture and expert services.
1.3 Objectives of the Study
The primary objective of this research work is to examine the effect of government policies on entrepreneurship development.
While the specific objectives of this research work are to:
- Ascertain if government policies has significantly impacted on entrepreneurship development in Nigeria.
- Evaluate the relationship between government policies and economic growth in Nigeria.
- Ascertain the long-run relationship that exists between government policy and entrepreneurship development in Nigeria.
1.4 Research Questions
The questions that will form the basis of this research work include the following;
- What has been the impact of government policies on entrepreneurship development as measured by the rate of growth of the key sectors of the economy?
- Is there any causal or bi-directional relationship between government policies and economic growth in Nigeria?
- What is the extent of relationship between government policy and entrepreneurship development in Nigeria?
1.5 Research Hypothesis
The following hypothesis will guide this research work;
- Ho1: Government policies have no significance effect on entrepreneurship development in Nigeria.
Ha1: Government policies have a significant effect on entrepreneurship in Nigeria.
- Ho2: There is no significant relationship between government policies and economic growth in Nigeria.
Ha2: There is a significant relationship between government policies and economic growth in Nigeria.
- Ho3: There is no long-run relationship between government policies and entrepreneurship development in Nigeria.
Ha3: There is a long-run relationship between government policies and entrepreneurship development in Nigeria.
1.6 Significance of the Study
This research work is aimed at improving government policy through entrepreneurship development. It is also aimed at highlighting the relationship between government policy and entrepreneurship development.
It will also serve as reference document to students, government, and other researchers as an advancement of knowledge in management and other field.
1.7 Limitation of the Study
The researcher encountered the following constraints in the course of this work, data constraint, financial constraint, limited information due to the type of research work and time constraint.
This research work is also limited to the use of secondary data gotten from secondary sources, as such if there are any errors made by those who generated these data; this research work incorporates such errors.
- Time: Time has been a major constraint that has militates against the realisation of the objectives of the research; especially as the researcher had to carry it out in the midst of academic pressure.
- Finance: Finance being the life wire of any business and any research work, has posed a major barrier that has immensely militates against the realisation of researchers objectives. The researcher faced inadequate finance for the acquisition of the necessary stationery for the work.
- Negative attitude of some people interviewed some of the people interviewed were not ready to give out the required informations needed due to the fact that, they think, the researcher wants to know about their privacy, this issue militates against the realisation of researchers objectives.
1.8 Operational Definition of Terms:
For easy and concise understanding of this work, it is necessary that vital terms be defined.
It is the capability of reaching or functioning in two, usually opposite, direction.
An entrepreneur means a person who starts, organise a commercial enterprise especially one having financial risk. An entrepreneur as an individual who has the ability to see and evaluate business opportunities gather the necessary resources to take advantage of them and initiate appropriate action to ensure success and he is a risk taker.
This is the coming into existence in society of the class of individuals, who are not limited to pace odds.
It is a declaration of a government political activities, plan and intention relating to a concrete cause or, at the assumption of office, on entire legislature session.
Is an observance and measurable and results having one or more objectives to be achieved within a more or less fixed time frame.
It is the mass transfer of ownership and control of economic organisation from foreigners to nationals. It is a situation where a deliberate effort is made with a backup of government regulation to transfer proprietary interest of man.
Refers to the fundamental facilities and systems saving a country city, or area, including the services and facilities necessary for its economy to function.
This is defined as process of combining and utilising of an organisation inputs [men, materials and money] by proper planning organising, directing and controlling for the purpose of producing outputs [good & services] desired by customers to that the organisation economic growth al goals or objective are accomplished.
Planning can be defined as a process in which managers visualize and determine in advance, the objectives of an enterprise or organisation and select future course of action for the accomplishment.
Policies are generally adopted by the board of or senior governance body within the organisation whereas procedure or protocols would be development and adopted by senior executive officers.
Small Scale Business:
Small scale business are those enterprises that have relatively little capital investment, that produce in small quantities and as a result control a small share of market that employ not more than fifty workers  and in which management marketing and entrepreneurship functions are used in the proprietor.
Source of Fund:
It means any means of gathering money e.g vulture, capital, donations, grants, savings subsidies and taxes.
Conclusion and Recommendation
This research studied the effect of government policy on entrepreneurship development in Nigeria, using opinion survey research design.
he findings of the study reveal that.
- Financing enterprise investments is very important to the Nigerian economy.
- The government has initiated policies and programmes to finance entrepreneurship like small and medium industries equity investment scheme (SMIEIS)
- There is no strong basis to contend that entrepreneurship are facing any serious problems in financing their investment in Nigerian.
- There is clear evidence that entrepreneurship encounter many problems in accessing finance from government policies, schemes and programmes.
The role of government in micro, small and medium enterprise financing cannot be over emphasized by creating/initiating policies and programmes geared towards easy flow of funds to entrepreneurship sector of the economy.
The government, entrepreneurs and all other stakeholders should consider following recommendations asareas of improvement needed to aid the smooth running of entrepreneurship, since they need each other.
Since, micro, small and medium enterprise business have an impact on the economic development, the government should create better terms and conditions for granting loan to entrepreneurs by commercial financial institution.
There should be strict supervision on projects for which loans are provided for. It is a necessary strategy that should be used in preventing the mis-use of funds, inspectors from government agencies issuing loans should be on ground to see the actual execution of the project through and after going through the feasibility study of such project.
The government through it agencies, should not relent in human capital development of whom to be micro, small and medium enterprise operator in the country, and also it staff in granting and recovering of such loans issued to entrepreneurship, this can be achieved through having interaction with educational and training institutions.
Lastly, the government should also not relent in it effort of creating awareness about its policies and programmes to the public at large through the media, print and electronic etc. because majority of whom to be entrepreneurs are not aware of those policies, schemes and programmes of the government toward the operation financing.
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