Indigenous Entrepreneurship Development

Project and Seminar Material for Business Administration and Management BAM

Project and Seminar Material for Business Administration and Management BAM

Chapter One

1.1 Introduction

The fact that entrepreneurship in Nigeria as a whole entails taking risks and reaping the reward at a later date requires support by the government. This, been the fact that the Nigerian entrepreneurs were virtually neglected in the development plan until recently, when the government came up with measures in encouraging them.

In the 1981 – 1983 plans, the increasing recognition by government of the need to boost – not – oil sector, made the government to focus attention on the entrepreneurship development. The result of this reduction, is importing more than their export, hence huge debts will then be incurred, leading to balance of payment problems in the Nigeria Economy.

This partly explains the wide interest In the development of the entrepreneurship business in our time of production in the various Nigeria government. It must be understood by the vigorous Nigeria that are in pursuit of the development of entrepreneurship manufacturing industries, which greatlyaccounts for the great wealth of developed countries like Japan, U.S.A, Germany and France. In any economy therefore (both developed and developing) that contain many business units of all type and sizes from observation, one will find out that entrepreneur firms are fast growing nowadays, as they can be found everywhere, especially in urban areas. There are not much restriction or establishing them as they are in large scale firms. Beside, they also grow and developed relatively fast, although,, this development growth may not be exhibited in the size, structure or other outside factor. Rather, their developments are exhibited internally.

In order to assist the growth of entrepreneurship development, most countries especially the advanced nation often make such provision like bank loan facilities, development.

1.2 Background Of The Study

At one time, it was felt that the commanding heights in the private sectors of the economy should cease to be the opportunity to play their rightful roles towards the development of their economy. The underlying spirit was that only Nigerians can develop Nigeria and that foreigners were in Nigeria for their ownbenefits and not directly for the benefit of the country. In this context therefore, indigenization should be viewed to mean policy initiatives, designed to accelerate the greater participation of Nigeria in the ownership and management of business enterprises in Nigeria. Under indigenization, individual Nigerians within the private sector either hold the majority shares or they are only share holders.

The first attempt to ensure that Nigeria control and run tr-b business enterprises of their country was made with the promulgation of the Nigeria’s enterprise promotion Decree 1972. The decree reserved for Nigeria citizen the whole ownership of small scale business enterprise and for large scale business, 40percent participation.

The small scale enterprises mentioned in schedule of the decree are reserved exclusively for Nigerians. These include advertising agencies, pool betting, casinos and cinemas blending and bottling of alcoholic drinks, assembling of radios of black brick and tiles, clearing and forwarding, manufacturing of ordinary garment services and travels, hairdressing, retail trade and rice milling. If a foreigner or alien owned any such enterprises, he was required by the Decree to transfer the ownership of the enterprises to Nigerian citizen or association by March, 1974.After about two decades of adopting an indigenization policy on medium and small scale enterprises mostly of the assembly plant, Nigeria has achieved only a fragile industrial development. The indigenous enterprises which set up technical to capital intensive and inappropriately the country’s resource endowment.

Their capital equipment and technical man power have continued to be largely imported. As a result, the triple objective of setting up plant which are the achievement of high level local resources, added foreign exchange saving and acquisition of transferred technology have not materialized. For example, the assembly plants have not achieved up to 15 percent in local raw-materials sourcing. Instead, they are more or less systematic foreign guzzlers with neither they will nor have the capacity to transfer any meaningful technology beyond the primitive type in response to the weakness of indigenous enterprises, government has sought to promote them as a strategy for achieving self-reliance, The indigenous entrepreneurs have potential worth given for Tm promoting self-reliance in a developing economy, like Nigeria”. But this in particular, has not been fully developed in Nigeria. Thus, in the second development plan 1964 to 1974, both the Federal and State government were to actively support and promote the development of entrepreneurship.

1.3 Statement Of The Problems

  1. The failure to match equity control with management control resulted in management control remaining in foreign hands even though ownership of the business enterprises was indigenized.
  2. The technology, raw material and spare parts needed to support indigenized business were not available in Nigeria. Therefore, foreign suppliers of these inputs provided their services under conditions which ensured their direct orindirect control of the business enterprise. Therefore, indigenized business were only able to produce at comparatively high costs.
  3. It discouraged foreign investment, thus, starving the country of the foreign capital that is needed to stimulate economic growth. For instance, were complicated technology was involved, Nigeria businessmen was unable to locate it and arrange for its importation and maintenance at reasonable cost,
  4. When viewed from the perspective of the rapid decline in domestic output of goods and services and their attendant high prices, the indigenization policy tended to be a disincentive for economic development.

1.4 Significance Of The Study

All human activities developed through history and precedent activities. This study is important to prospective and existing entrepreneurs, the organization under study and research students.

To the prospective entrepreneurs, this work would act as a guide to the establishment bases of their own enterprise. By looking at an existing example, a concrete bases is formed upon which further ideas can be laid. The story of the organization under study, would give sight to prospective entrepreneurs onproblems they are likely to encounter in the course of their business areas.

The work may be in immense use in consultation upon which new development can be based in related field of study.

1.5 Purpose Of The Study

The various purpose of the study are stated below.

  1. To examine the reasons for indigenous entrepreneurship in the country.
  2. To examine the factors affecting entrepreneurship activities or operations in the country,
  3. To determine the cause of the inability to acquire loan and credit facilities to commence business.
  4. To determine what inadequate supply of skilled labour could cause within the locality where such production process is not found.

1.6 Research Questions

The following questions are to be asked and examined in indigenous entrepreneurship circle, which are listed below:

  1. What are the reasons for indigenous entrepreneurship activities or operations in the economy?
  2. What are the factors affecting entrepreneurship activities or operations in the economy of the country?
  3. What could be inability acquire loan and credit facilities to commence the business due to collateral security cause?
  4. What could the inadequate supply of skilled labour within the locality due to the fact that such production process is not found within caused.

1.7 Scope Or Limitation Of The Study

This is a study on indigenous entrepreneurship development. It will cover the development process, entrepreneurship development policies and programmes, management and the factors accounting for the low performance including its prospects.

1.8 Limitations And Constraints

In a research of this magnitude, it is imperative here to show that this research work faced the following limitations during the process.

The collection of data was confronted with lack of attention on the part of the respondent. They found it hard to spare their time for interview as well as attending to the administered questionnaire.

Secondly, shortage of the financial resources needed to carry out the research work. The researcher has to pay for transport fare, provision of questionnaire to gather information from selected samples and other needed expenses. These resources was not available in abundant during this time.

And finally, the combination of class work with research work is a tedious exercise. Due to the time factor, this work was partly compiled along side other class work which should be attended to as well.

1.9 Definition Of Terms

Various key concepts that may appear unfamiliar to interested readers are defined to ease the understanding of the entire research work.

Some of these terms are defined below:


This is a person who makes money by starting or ruining businesses, especially when this involves taking financial risks.

Organizational goal:

This is a point to which effort of the business is directed or aimed to be achieved.


These are the firms that are producing similar product with the firm and competing as well for the same type of consumers with the firm in the market place.


This refers to the physical cash or money used in starting and improving on the business.


These are the tangible things which the enterprise or business has for sale to the consumers. Some good example of goods ar-3 TV – set, radio, text books, food stuffs and many more.


These are the useful or necessary activities which are not tangible like goods. For instance, the repair, maintenance or replacement of goods that have been sold to consumers.

Product attributes:

The product attributes are the features of any product such as colour, size, quality and many other more.

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