Tuesday, February 27, 2024

What Nigeria Can Learn from Asia’s Successful Entrepreneurship Policies

By: Abdulmalik Adetola

 

The entrepreneurial sector is deeply woven into the fabric of the Nigerian economy. Consequently, the proliferation of small businesses and entrepreneurship in Nigeria is on the rise. This trend is a response to the scarcity of traditional “corporate positions” that many aspire to, but which are no longer available in sufficient numbers. As a result, the government has introduced policies aimed at facilitating the establishment of micro and macro-scale enterprises. These enterprises play a pivotal role in sustaining the Nigerian economy and providing much-needed employment opportunities.

This article explores the potential of entrepreneurship policies to reduce unemployment and address economic disparities. It delves into the impact of government policies in Nigeria, encompassing areas such as taxation, free trade, access to financing, promotion of innovation, and structural fund support. We will provide a detailed overview of government entrepreneurial initiatives and analyze their significance on the economy and job creation. Our focus will encompass both public and private elements of entrepreneurship in Nigeria, setting a course to alleviate future stress and confront the pressing issues of poverty and unemployment on a national scale.

Undoubtedly, the Nigerian government’s entrepreneurial initiatives have significantly promoted entrepreneurship by providing resources such as funding, education, legal guidance, and market access. These efforts have given rise to various initiatives and programs that support small businesses, startups, and entrepreneurs, helping them overcome challenges and achieve success across diverse industries. However, challenges persist in the concrete implementation and investment of these policies.

To encourage businesses and offer financial support, the government introduced programs like the “Nigerian Youth Investment Fund,” which offered grants and loans. In 2022, venture capital investments in Nigerian companies reached a record high of $200 million. While over 2,000 young entrepreneurs received grants and loans totaling $10 million from the Nigerian Youth Investment Fund, this effort has fallen short of expectations. An analysis revealed that only 395 youths benefited from the Fund since its establishment in October 2020. The Fund aimed to empower Nigerian youth to create a minimum of 500,000 jobs between 2020 and 2023, yet its impact remains relatively insignificant amid rising unemployment rates.

Furthermore, policies were enacted to equip university graduates with entrepreneurial skills. The Skill Acquisition and Entrepreneurship Development (SAED) initiative, initiated in 2012, stands as a prime example. While it has benefited over 971,272 corps members and facilitated more than 7,000 startups, recent statistics show that unemployment rates have increased since its inception. This suggests a potential issue with the SAED program, which aimed to train approximately 200,000 graduates annually.

The government has also established institutions like the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), offering a range of programs and initiatives to support SMEs. Despite the presence of over 36.9 million MSMEs in Nigeria, accounting for 96.7% of all businesses and contributing significantly to GDP, challenges such as high fuel prices, taxes, electricity tariffs, interest rates, and insecurity have led to the closure of over 1.8 million businesses. This alarming trend underscores the need for effective policy implementation and support to sustain these crucial enterprises.

Drawing lessons from successful entrepreneurial initiatives in countries like the USA and China, Nigeria can benefit from streamlined policies with reduced bureaucratic hurdles and improved access to funding. The USA, with its diverse population and innovative culture, offers an entrepreneurial-friendly environment supported by organizations like the Small Business Administration (SBA), which provides loans, grants, and mentorship to small firms. Similarly, China’s centenary goals emphasize poverty reduction measures and have yielded positive outcomes.

To accelerate economic development and job creation in Nigeria, it is essential to incorporate entrepreneurial education into university curricula, transforming graduates into job creators. Existing industries, such as those producing beverages, textiles, and body creams, should be refurbished and expanded to boost employment. Additionally, promoting commercial agriculture can create opportunities for the youth and supply inputs to selected manufacturing sectors.

In conclusion, Nigeria must learn from successful international models to refine its entrepreneurship policies and overcome past shortcomings. By doing so, the country can pave the way for economic growth and a brighter future for its citizens.

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