Entrepreneurship Skills And Economic Development Of Anambra State

Entrepreneurship Skills And Economic Development Of Anambra State (A Study Of Nnewi North Lga) 2010-2015



  • Background of the study

Global dynamics have dramatically changed in the last few decades. Many countries in South East Asia and Latin America have become dominant in the exports of manufactured goods and are increasingly becoming key players in global economic environment. Unfortunately there exists a universal pessimism about Africa’s economic growth prospect. Botswana and South Africa remain exceptions simply because of their well calculated policies which direct revenue from diamond exports towards developing infrastructure and human capital. Nigeria is the Africa’s most populous country and its fourth largest economy. Ironically, even with the massive oil revenue accrued over the years, the country is categorized among the poorest in the world.

The problems of the Nigerian economy is structured in nature. The vast population of the country is made up small scale farmers and petty traders. Over time, the performance of the industrial sectors which is expected to create substantial job opportunities and serves as a link to primary sector has not been impressive. Due to low domestic productive capacity living conditions deteriorate. Poverty and unemployment increased while human capital and participation in international trade remain very low. This calls for the need to rethink the nations development strategy by looking inward to create new businesses and develop local talents.

Since the strength of an economy is measured by its physical and human resource endowment and how productively these resources are developed to produces goods and services, task of promoting entrepreneurship at all levels becomes paramount. This is especially so in a country where the unemployed people tend to rely on government and paid jobs rather than on their initiatives.

Today, large organizations have also recognized the need to promote entrepreneurship mind-set in order to explore new opportunities and to avoid complacency. This trend is encouraged by feet that corporate leader who would approach problems creatively and entrepreneurial and also strives on the management of change.

The purpose of this paper is to examine critical factors affecting the survival and growth of new business ventures in Nigeria using six states as reference points. Farmers and small business owners were asked about the activities of various government and institutional financing organs at Bungudu, Gwarzo, Isa, Nsukka, Isiakpo, Ekwisigo areas of Zamfara, Kano, Sokoto, Enugu, Rivers and Anambra States respectively. The goal is to provide a flat form for harmonized various enterprise policies and programmes which would hopefully make entrepreneurship development in the country more focused and result oriented. It is also the objective of this paper to challenges existing business as usual approach to business by individuals and organizational leadership. Perhaps this would enable them stretch their human creative faculties t innovate and grow new business ventures essential for achieving sustainable economic development. Beside utilizing contemporary literature, the paper draws insights South Asia experiences.

Anambra State us a state in South Eastern Nigeria. Its name is an anglicized capital and the seat of government is Awka, Onitsha and Nnewi are the biggest commercial and industrial cities, respectively.

The state’s theme is “Light of the Nation”. Boundaries are formed by Delta state to the west, Imo State and Rivers State of the South, Enugu State to the east and Kogi State to the North. The origin of the name is derived from the Anambra River (Omambala) which is a tributary of the famous River Niger.

The indigenous ethnic group in Anambra State are the Igbo (98% of population) and a small population of Igala (2% of the population) who live mainly in the North Western part of the state (3).

Anambnra is the eighth most populated state in the Federal Republic of Nigeria and the second most densely populated state in Nigeria after Lagos State. The stretch of more than 45km between Oba and Amorke contains a cluster of numerous thickly populated villages and small towns giving the area an estimated average density of 1,500 – 2,000 persons per square kilometer.

  • Statement of the problem

International Labour Organization (ILO) estimates that 300million young people are unemployed or underemployed and 80% of those youth live in developing or transition economics. Although the ILO estimates that 20% of the young unemployed have the potential to become entrepreneurs, less than 5% actually do (Huang, et al; 2010). Programs, such as the ILO’s Youth Business International Program and you win in Nigeria target youth. There seems some levels of agreement that entrepreneurial attribute is four (personality, skills, motivation and attitude) dimensional (Lumpkin and Edrogo, 2004). However, there seem no evidence as to the order of importance and integration of the above in the entrepreneurship development process for it to lead sustainable economic transformation and developments. This may have affected success levels of entrepreneurship development programmes especially in developing countries such as Nigeria. This paper is motivated by the need to empirically as critical success factors of entrepreneurship development.

For decades, one of the principle state and local economic development tools has been tax incentives. Every state offers incentives in one form or another to retain business and attract businesses from other states. According to one survey, 95 percent of U.S municipalities also use such incentives.

Some policy markers have expressed a desire to end this practice but fell stuck in an arms race. They pear they cannot unilaterally forgo incentives because others use them, so they create ever-increasing incentive packages in an effort to compete. Although some incentives may be economically justified in terms of jobs and productivity in the midst of an arms race it’s difficult to tell what is and is not effective in creating jobs.

One thing that is known is that this practice costs taxpayers billions of dollars each year. Estimates put the annual cost near 870 billion. Moreover, incentives targeting existing companies miss the economy’s real engine of job erection new and young businesses, which create nearly all net jobs in the united states, a fact that also holds true at this state and city levels.

Policymaker have heard those arguments before, but need ideas, not criticism. The Kamffman foundation hosted a conference of state legislations, mayors, researchers, and leading thinkers to discuss two themes related to incentives.

Firstly, how can incentive programs be improved to better promote economic growth? Secondly: what alternative strategies exist for promoting economic development through entrepreneurship?

  • Research Questions

In the course of this research, the following questions were generated for analysis.

  1. To what extent does entrepreneurship contribute to economic development of Anambra State?
  2. To what extent does entrepreneurship impact on employment creation in Anambra State?
  3. To what extent does entrepreneurship contribute to increased standard of living?
    • Purpose of the study

The general objective is to develop an entrepreneurship development model that ensures a progressive learning experience, through which beneficiaries are motivated to take socially and environmentally responsive entrepreneurial actions aimed at addressing economic problems of employment and income inequalities in their societies. Hence, the specific objectives include:-

  • To ascertain the role of entrepreneurship in economic development of Anambra State.
  • To find out the role of entrepreneurship in creation of employment.
  • To find out the role of entrepreneurship towards increased standard of living in Anambra State.
    • Significance of the study

Against this backdrop of this G.D.P observed in the Anambra State and the consequences on development prospects. The major significances of this work:

  • It is expected that the study will serve as literature review to other students.
  • Most importantly, it is envisaged that it should be useful to public policy analysts, particularly policy makers etc.
  • It will be of immense help to future researchers on the role of entrepreneurship in socio-economic development of the state.
    • Scope of the study

This research work covers a comprehensive analysis of the role of entrepreneurship in economic development of Anambra state. The research will also provide a brief history of origin of entrepreneurship in Nigeria. As the researcher limits its work to Nnewi North Local Government Area of Anambra State.

  • Limitation of the study

This work is by no means exhaustive but useful attempts to penetrate the core of the issue have been made. The researcher encountered many difficulties in the process of collecting data for his research. These problems invariably formed the basis for limitation of the study.

Firstly: time constraint affected a comprehension review of related literature on the subject after the study. Gathering of materials textbooks, journals etc for the review of literature were time consuming. The researcher being a student has other courses to cover and this had to apportion the time to meet the damage of other courses.

Secondly; the proximity of related literature materials also posed a problem. The researcher was impeded by necessary textbooks, magazine and journals for offered their downside to the study, human beings have never been easy to deal with especially when human behaviours are unpredictable. Some data and questionnaires were bluntly refused by the respondents. Finally, the research was based on the title money they could save. All these limitations, limited the validity of the finding and condition, the research would have been more retained without these constraints.

  • Definition of terms

ENTREPRENEURSHIP: This has been defined as the willingness and ability of an individual to seek out investment opportunities, establish and run an enterprise successfully.

ECONOMIC: Economic is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses.

DEVELOPMENT: Development is a process of societal advancement, where improvement in the well being of people are generated through strong partnership between all sectors, corporate bodies and other groups in the society.

  • Organization of the study

The study was organized into five chapters, one introduced the study by giving the background information on the research problem, objectives, the scope and limitation of the study. Chapter two dealt with the review of relevant literature and the theoretical framework of farmers cooperative society. Chapter three discussed the research methodology adopted for the study and relevant justifications. Chapter four presented the finding on the farmers cooperative society and rural economic development. Chapter five also presented the conclusions drawn from the research finding and recommendations.




                Although there is a vast literature on economic development, there is still no clarity as to its real meaning. This notwithstanding, it is widely agreed that development must be seeing as the general improvement in living conditions of people. It is not merely about the provision of basic necessities such as food, clothing and shelter, but also health, improvement of human capital and redistribution of wealth.

Nayyer, (2003) argues that conventional economic growth theory tends to emphasize increases in per capital income as a measure for development ignoring other essential indicators of development such as reduction in poverty, inequality and employment as well as improvement in quality of life.

Easterly, (1999) and Bartoli, (2000) argue that growth must always be associated with social and institutional progress. It must assume a human dimension which encompasses the enhancement of material well being, health, education and dignity of life. Nabunde, (2002) and Charper (2003) also claims that the most effective means of improving economics performance in poor countries is through industrialization and this cannot be possible without significant rise in the level of literacy and skills, investments and saving rate which would stimulate entrepreneurship and production. Hence, fostering growth require supporting investments and accumulation of human capital.

Although the world has recorded unprecedented economic progress in the last 50years especially in terms of growth in world’s output, capital accumulation and technological advancement, the progress achieved has been uneven between and within industrialized and non-industrialized nations. It is on this basis the advocates of this endogenous growth theory insist that government policy is fundamental in the process of influencing factors determining the long term rate of growth. Soro’s, (2000) observes that government has a unique role in fastering development since the conventional market mechanism are inadequate to cater for the needs and aspirations of the late comers that are essentially poor countries. Development crisis which is the generalized incapacity of an economy to generate the necessary environmental conditions for sustained improvement in the standard of living would persist unless effective intervention mechanisms are put in place (Stein, 2003). In this respect, we could argue that it is the responsibility of the governments to provide an integrated national policy that would faster this development of entrepreneurship in Nigeria. Achieving this task is essential for increased productivity, job creation, and improvement in living condition.

2.1           Entrepreneurship Development

                In today’s world where technological change, liberalization, outsourcing, and restructuring rule, the subject of entrepreneurship has gained greater interest. The discussions centered on what actually contribute entrepreneurship and how far it extends. The term entrepreneurship is derived from the French word entreprendre to undertake. This suggests that entrepreneurship is the process of undertaking activities concerned with identifying and exploiting business opportunities while assuming it’s associated risks. Entrepreneurship is about a kind of behavior that includes initiative taking, reorganizing economic activities and the acceptance of it’s risks (Shapero, 1975) it is important to note that entrepreneurial activities are universal and ca therefore be promoted even in societies that manifest low entrepreneurship activities.

Small enterprises in particular are central in achieving sustainable growth. They constitute about 90% of the business population in North America and they accounted for the most new jobs in the country (Kuratko and Hodyelts, 1998). Entrepreneurship involves taking chances, but new businesses do not emerge by accident (Eyelhoff, 2005). They are usually founded as a result of motivated entrepreneurship gaining access to resources and finding niches in opportunity structures. Hence, entrepreneurship could be seen as the process of identifying and exploiting unique business opportunities that stretch the creative capacities of both private and public organizations. Sue and Dan, (2000) argues that entrepreneurship is influenced by genetic power, family background and economic environment. Since economic environment could support or suppress entrepreneurship, governments world over undertake to develop means economic policies that focus mainly on providing access to resources and support services to individuals and organizations that display flair for expending their business horizons. Poverty among people is usually caused by inadequate income due to shrinking job opportunities as well as high businesses tend to add jobs faster than big companies because they are highly adaptable, innovative and responsive to new business and market challenges (Frese and Rarch, 2005). Thus, supporting entrepreneurs becomes a critical policy issue especially since those new businesses that do survive tend to expand employment and growth of the nations economy. The important question to be asked is why too few young businesses grow in meaningful ways? Bruno et al (1987) maintain that there are three categories of reason for high business failures; product/market problems, financial, difficulties and managerial problems.

This suggests that the responsibility for creating and growing new businesses does not rest entirely on government. Individuals and organizations are required to analyze key success factors in business environment and take personal responsibility for survival and growth of their own ventures. On its part, government is expected to provide adequate infrastructure and friendly policy guidelines.

2.1.2 Relationship between Entrepreneurship and Economic Development

The association of entrepreneurship and economic development of nations has long been recognized by economists of the past such as Jean Baptiste (1803) and Joseph Schumpter (1934): Small firms tend to employ more labour per unit of capital and require less per capital unit of output than do large one (Kuratko and Hodgetts, 1998). Thus, the creation of small businesses and growing the existing one’s is considered to be the fastest way to achieve economic growth. conventionally, ideas about how businesses ideas emerge in society have assumed that the process starts and ends with the individuals character traits (Kilby, 1988). This suggests that an entrepreneurship character is in-born. However, many argues that entrepreneurship, behavior could be stimulated through policy intervention (Chelland and Klinter, 1969). This is the reason why entrepreneurship in increasingly promoted in less developed countries.

There is probably no regime in Nigeria which at one time or another has to emphasized the development of small enterprises. For examples, the need for encouraging increased productivity and self-employment has been recognized since 1970s with formulation of the small scale enterprises promotion policy. Until now, government pronouncement on promoting small enterprises are not always translated into serious policy statements backed by effective implementation mechanisms. In fact, most of the programmes, introduced to assist small enterprises only reached a small portion of the total of small business population. In actual sense, policy makers were more concerned with the establishment of few large enterprises than developing small ones. This was what partly informed the import substitution industry (ISI) strategy of the late 1970s where huge sum of money was spent on unsustainable mammoth companies. For example, a number of automobile assembly, plants were established in various part of the country, many such as Fiat in Kano and Stoyre in Bauchi States have collapsed. Again, government is unable to improve infrastructure, security and general state of the economy which all have devastating effect on small business.

Of course, the inability of business owners to change ineffective traditional management practices and adopt innovative reforms also contribute significantly to their misfortune.

2.1.3   Problems of Small Enterprises in Nigeria            

                There are a number of problems limiting the growth of small and medium size businesses in Nigeria. Our survey reveals that most of the problems exist because of poor policy guidelines while others are attributed to the lack of imagination and expertise by the existing and potential entrepreneurs. Specifically, the problems border the neglect of new business opportunities poor infrastructure and insecurity, lack of government support, neglect difficulties faced by youth, problem of

Entrepreneurship Skills And Economic Development Of Anambra State