Entrepreneurship and Economic Development in Nigeria

Introduction

Entrepreneurship has long been regarded as a practice in which an owner or manager of a business enterprise makes money by taking risks and initiative (Deakins and Freel, 2009, p. 4). Traditionally, entrepreneurs have been seen as individuals who are willing to launch a new venture or enterprise and accept full responsibility for the outcome (Levesque and Minniti, 2010, p. 305). Such business maneuvers and strategies employed by entrepreneurs have the capacity to shape an area's entire economic standing. Countries with strong entrepreneurial backgrounds have had the capacity to both develop quickly and maintain a significant economic standing in international and domestic markets alike.

The utilization of a true entrepreneurial spirit has long had the capacity to shape a country into the entity the world sees today, and such spirit has long been evident within Nigeria. By examining the history of entrepreneurship in Nigeria, one gains a better understanding of the country's economic development and its standing in the business world. It can also be seen that entrepreneurship in Nigeria is a concept that stretches back for centuries and continues to develop today.

Early Entrepreneurship in Nigeria and Economic Development

Individuals of the Nigerian Ibo community are considered some of the oldest entrepreneurs in history, with their expertise stretching back to times before modern currency and trade models had developed anywhere else on the planet (Osalor, 2009, p. 1). Nigeria is a country rich in the natural talents of its citizens and their crafts, and the utilization of such strengths has long sustained most of the country's rural and urban poor for much of the last half century. In a country largely inhabited by varying tribes prior to the influx of European settlers in the late 1800s, entrepreneurship in Nigeria was based on the primal factors of necessity and survival. Largely rural, certain tribes utilized tactics for hunting while others focused on the harvesting of grains. Trade and the utilization of services were treated as commodities to be exchanged and bartered. Characterized by production and manufacturing, entrepreneurship did in fact exist across Nigeria in these forms and was utilized widely throughout the country, extending internationally in the years to come.

For example, the entrepreneurial ability of the Ibo has been traced back to the beginnings of direct trade with Europeans as early as the 1870s. Upon discerning the fundamental values of trade and survival, the Ibo had gained significant headway in trade, business, and entrepreneurial values that would continue to develop and shape the modern use of entrepreneurship in the country (Olutayo, 1999, p. 149). Such tribal entrepreneurship was significantly depleted upon the arrival of European colonial powers in the late 1800s. European traders largely utilized Nigerians — including the skilled Ibo — as middlemen. In this way, modern entrepreneurship in Nigeria was conceived, with many Nigerian entrepreneurs subsequently engaged in retail trade or sole proprietorship (Bizcovering, 2008, p. 1).

Economic development in Nigeria has largely been influenced by entrepreneurship, from the postcolonial agrarian economy through to the present economy, which is heavily reliant on oil and gas (Ahiauzu, 2010, p. 278). The development of entrepreneurial activity throughout the ages has been significantly vital in promoting Nigeria's economic growth. As the country continued to develop over the decades, entrepreneurship began to extend beyond rural areas and into cities. Between 1970 and 1985, industrial productivity increased sharply, largely due to the involvement of entrepreneurs who aided in the development of the newly utilized oil industry (Mongabay, 2010, p. 1). Nigerian entrepreneurship up to this point had largely been driven by necessity, and the economic decline ongoing since the 1980s created an environment generally unfavorable to entrepreneurial success, largely due to infrastructure limitations within the country (IE, 2010, p. 1).

Aids and Barriers to Continued Entrepreneurial Development

Viewing the current landscape of Nigeria, certain factors can be identified as either aids or barriers to the continued development of entrepreneurship in the country. Many of the barriers to successful entrepreneurial development — and therefore to economic improvement — lie with the high costs of doing business in Nigeria, as well as the fundamental requirements needed to sustain entrepreneurial activity. For example, a lack of adequate electricity in rural areas, and therefore for a large portion of the population, is an extreme hindrance to increased entrepreneurial ventures (Mat and Razak, 2011, p. 124). Additionally, while the government continues to promote the need for entrepreneurs within the economy, the instability of the economy itself proves a massive deterrent for individuals who might otherwise take on such undertakings. In order for entrepreneurship to flourish as it did before widespread government intervention, entrepreneurs depend on the promotion of free enterprise by a government that has largely neglected it (Meagher, 2011, p. 54).

Despite these barriers, Nigeria possesses certain governmental and social characteristics that can aid in the further development of entrepreneurship, and therefore the country's broader economic growth. For instance, Nigeria has the second-largest GDP in Africa, which is an added benefit to those who may choose to enter the business world (Ogunrinola, 2011, p. 55). The Nigerian government has also put in place a program that promotes exports from Nigeria to other countries, which can be exceedingly helpful for entrepreneurs looking to do business in Europe or the United States (Singh, 2011, p. 202). Nigeria is also directing significant attention toward incorporating aspects of entrepreneurship that have proved vital elsewhere in the world, such as modern technology, and is promoting its use in the educational system.

Conclusion

While Nigeria faces significant barriers in becoming a more relevant actor in the world economic arena, its history of skilled entrepreneurship — and the contribution that such entrepreneurship has made to the country's development and economic framework — proves to be a meaningful foundation for looking toward the future. With the implementation of new programs that support entrepreneurship, along with lessons drawn from past successes, Nigeria has taken key steps toward the economic progress it is seeking.