5 Challenges Of Entrepreneurs In Nigerian Business Environment
in a quest to answer the question what are the problems confronting entrepreneurship development in Nigeria? i decided to look into research that people have done and found something interesting.
There are the 5 major challenges of entrepreneurs in Nigerian business environment as seen form the research repost of Orugun, Juwon Johnson, Nafiu and Akeem Tunde in An Exploratory Study Of Igbo Entrepreneurial Activity And Business Success In Nigeria As The Panacea For Economic Growth And Development. In the report, it was made known that;
Due to Nigerian political and economic voodoo, most entrepreneurs or would-be entrepreneurs, including the Igbo entrepreneurs face some challenges. These challenges are highlighted and briefly discussed below.
- Financial Challenge
Fund accessibility obviously constitutes a confronting problem for translating business idea and plans in Nigeria business environment. Financial institutions in Nigeria either make funds unavailable for would-be entrepreneurs or scare them away by way of hiking the cost of capital. This cold attitude may be attributed to uncertainty concerning the future of businesses and its resultant bad debt from mortality. Some entrepreneurs have no property to mortgage, and therefore source for fund through:
- contributions from friends and family
- personal savings through paid jobs and/or gift
- loans from non-financial institutions (group local savings, cooperative society, etc.)
- deferred payment (debt owed to be paid later in the future)
- Power Supply Challenge
If an entrepreneur must operate a business in Nigeria without bottleneck, then he/she must devise means of generating a power supply. Most multi-national firms in Nigeria have mini power plants as an alternative to avoid the embarrassment of power failure that can hinder the production process or service delivery. Small business firms with limited financial strength face doom due to persistent failure of this power supply.
The major means of transportation in Nigeria are by road, sea, rail and air. Most firms restrict their business activities (of supplying raw materials and finished goods to their target market) to transportation by road within the locality due to its cheap nature. One militating factor against this choice of transportation is usually the condition of Nigerian roads. This poor road network has been problematic for the application of Just-In-Time delivery. This makes the intelligent entrepreneurs today to locate their business:
- near raw materials
- near producers and consumers market
- near labour market
- in the urban and not the rural settlement.
- Security Challenge
In Nigeria today, insecurity is a critical bone of contention, and this creates tensions concerning the lives of businesses and business owners. But ample experiences of some entrepreneurs relocating their businesses have shown that not all the parts of the country are terrorized or violent-filled. Doing business in northern Nigeria may be lucrative, but highly risky. Security challenges in Nigeria may span beyond terrorist activities and include:
- Financial insecurity (fraud perpetrated by hackers called yahoo-yahoo and by fraudsters called 419)
- Robbery attacks
- Employee crime (arson, destruction of properties, etc.)
- Threat to life of the entrepreneur
- The dark aspect of justice (in Nigeria, Justice is fair, but justice is as dark as charcoal)
- Government Ill-Support
Observably, the contributory negligence of the government concerning the growth of SMEs and the economy is on the high side. Little attention is often rapture with artificial lips, and there are almost daily commitment by the sweet words of the mouth concerning business well being in Nigeria. Funny enough, Nigeria most known footballers will always want to retire to politics and not to entrepreneurship. It is observed also that being a successful entrepreneur nationwide will premise on your ability to incorporate business with politics. SMEs face:
- High taxation
- Frivolous levies and duties
- Disturbance from government agencies (Corporate Affair Commission, Standard Organization of Nigeria, National Agency for Food and Drugs Administration Control, etc.)
These are the factors affecting entrepreneurship development in Nigeria and need urgent attention.
Solution to Problems of Entrepreneurship in Nigeria
to solve the problems of entrepreneurship in Nigeria, the;
- Government should look into diversification of the economy, Nigeria and Nigerians cannot in this method and still remain the best nation she ought to be among her equals, it is time to move away from the sole source of income to the nation, this method is having a lot of issues with the entrepreneurs and their services.
- Also, the facilities for accessing credits should be made readily available by the governments, also for the existing ones should be improved upon, they should be designed in such a way everyone with good and productive ideas can easily have access to all of these credits.
- Secondly, the government should look into the issues of multiple taxation levy on different market and businesses in Nigeria. This is having an invariably bad effect on the income and efficiencies of most entrepreneurs. There should be special markets for entrepreneurs where they can access whatever they will be needing for their products without or with a just one-time tax on all of the goods they will be accessing.
To round it up, government if the issues of infrastructure cannot address generally, there should be a special area where most of these facilities can be made available for all business owner to access. Also, the roads to major roads that serves commercial purposes should be constructed.