ENTREPRENURSHIP AND SOCIO-ECONOMIC INSTABILITY IN NIGERIA By

ENTREPRENURSHIP AND SOCIO-ECONOMIC INSTABILITY IN NIGERIA

By

AGBOOLA, O. D. AND AKANMU, A. A. [email protected] and [email protected] Department of Urban and Regional Planning, The Polytechnic, Ibadan, Nigeria.

Being a paper presented at the First International conference organised by The Vocational Skills and Entrepreneurship Study Centre on June 10-14, 2013 at The Polytechnic, Ibadan, Ibadan, Nigeria.

ABSTRACT The assertion that Nigeria is blessed with abundant natural resources, favourable climatic condition and huge human population exceeding 140million (NPC, 2007) is not in doubt. With this, the country had promising social and economic features that prospered during the pre-colonial to the end of the first republic in 1962-1966. However, the sharp gap and decline in socio-economic phenomena of the country could be seen as the failure of the country as a system to build on the legacy left behind by the colonial and first republic administrations. Based on concept of entrepreneurial education/technical education, the paper is anchored on previous but related researches and publications couple with prior knowledge. Such publications were extensively reviewed and provided basis of inferences. The current socioeconomic gap that culminates to socio-economic instability in the country is manifested in multi-various ways and dimensions such as poverty, quest for paid-employment, uneven wealth distributions, food insecurity, retrenchment, joblessness, kidnapping and extremist activities among others. It is in view of the above that this paper examines Nigeria socioeconomic instability and the need to integrate and intensify entrepreneurship into national life towards wealth creation, self-reliance and socio-economic stability. Therefore, the paper explores the existing socio-economic situations in Nigeria and canvasses for rebirth of vocational

and

technical/technological

education

as

an

integral

component

of

entrepreneurship towards reversing the current trend of socio-economic instability in the country. Keywords: Socio-Economic, Resource endowment, Technical education, Entrepreneurship and Nigeria.

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INTRODUCTION The assertion that Nigeria is blessed with abundant natural resources, favourable climatic conditions and huge human population exceeding 140 million (NPC) is not in doubt. With this, the country had a promising social and economic feature that could be presumed to have facilitated her colonialisation. During the colonial era, Nigeria’s economy seemed stabled as the level of external trade was anchored on agricultural activities and production. Manufacturing and mining were relatively at very low levels as agricultural commodities such as cocoa, groundnut and palm produce among others dominated the export trade (CBN, 1993). In addition to agricultural production, the colonial and regional governments embraced entrepreneurship through the promotion of traditional vocations such as weaving, artworks, crafts, gold-smithing and the likes. The promotion of vocational and technical education by the colonial and regional governments were reflected in the establishment of Federal School of Surveying, Oyo in 1908, Samaru College of Agriculture, Zaria in 1921, Federal Cooperative College, Ibadan in 1943, Yaba College of Technology in 1947, School of Health Technology, Akure in 1962 and several Technical Colleges to propel the country into greatness (NBTE, 2011). Nigeria economy was therefore presumed prosperous during the colonial period, although it was still rudimentary at the period prior to 1960 (Dappa and Daminabo, 2008); but experienced structural transformations immediately after the independence. However, the inability of first republic administration and subsequent leadership to sustain the traditional vocations vis-a-vis agriculture led to the current socio-economic turmoil being witnessed in all facets of national life. It is in view of the above that, this paper examines socio-economic instability in the country and proffer working strategy to have a more prosperous society 2

anchored on entrepreneurship through functioning vocational/technical educational policy in Nigeria. THE STUDY AREA-NIGERIA Nigeria is a bundle of opportunities and potentials due to its strategic location in the Africa couple with numerous environmental resources that abound in it in commercial quantities. The country, Nigeria, is located between longitude 30E-16E0 and latitude 40N and 140N with a territorial coverage of 923,768.64km2 (FGN, 2010). According to Akanmu (2008), the spatial area of Nigeria comprises of 910,768km2 of total area, 13,000km2 of water and 853km2 of coastline, while maritime claims 200m depth continental shelf and 200 nautical mile exclusive economic zone. With favourable climatic conditions that consist of equatorial in the south, tropical in centre and arid in the north, Nigeria is blessed with the southern lowlands merge into central hills, and plateaus with mountains in south-east and plains in the north. Numerous natural resources endowment in Nigeria aside crude oil includes tin, columbite, iron ore, coal, limestone, lead, zinc, natural gas and water. These are complimented by vast arable land and favourable renewable resources to support human population and the country as a whole in global market. Economically, Nigeria is the 13th largest oil producer in the world with an estimated proven reserve of 32 billion barrel and 174 billion cubic feet of gas reserves, and the 6th in the Organization of Petroleum Exporting Countries (Ogunleye, 2006). Combining this with the green and fertile vegetation as well as abundant human resources of over 140 million (NPC, 2007), there should not have been any cause or reason for the persistence of prevailing socio-economic instability which manifest in abundant poverty and impoverishment in the country.

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MATERIALS AND METHODS The materials and methods employed for this paper majorly centered on secondary data through publications and published materials. Related and relevant publications on socio-economic stability, technical/vocational education, entrepreneurship and natural resources endowment of the country were sought from relevant sources. These materials provide basic and wider perspectives on the context of the paper. Publications of government institutions and documented programmes were also consulted to provide theoretical background for the study. This gives a detailed insight into historical perspective of Nigeria socio-economic instability and various measures taken in recent decades by different government administrations in transforming the socio-economic misfortunes of the country. It was from this that the shortcomings of such policies were identified as basis for future measure to propel the country into socio-economic prosperity. All these form the context of the paper that gives wider perspectives of entrepreneurship and socio-economic instability in Nigeria. CONCEPT OF ENTREPRENURAL/TECHNICAL EDUCATION Entrepreneurship is an important aspect of any organization and economies that contributes largely towards creating new jobs, wealth, income generation and poverty reduction for individual and government. However, education is a precondition for entrepreneurship development especially where the spirit and culture is very minimal (Ossail and Nwalado, 2012). Thus, there is a positive relationship between education and individual’s clone to become an entrepreneur which results in entrepreneurial activity. According to Aladekemo (2004), entrepreneurial education is a concept entrenched in Nigeria Policy on Education as it emphasized the need for functional, practical and acquisition of appropriate skills and development of competencies as equipment for 4

individuals to live in towards contributing to societal development. Therefore, entrepreneurship education offers functional education, training, skills and creates employment opportunities as well as reduces rural-urban drift by providing young graduates with required training and support needed to establish a career in small and medium sized business (Paul, 2005). Hence, it reduces high rate of poverty and creates smooth tradition from traditional to modern industrial economy, while inculcating spirit of perseverance in the youths and adults. Therefore, the concept of entrepreneurial/technical education in Nigeria had long time ago been infused into the national life as several technical and vocational institutions were established during the colonial and regional governments. Historically, the establishment of Federal School of Surveying, Oyo in 1908, Samaru College of Agriculture in 1921, Federal Cooperative College, Ibadan in 1943 and Yaba Higher College (now Yaba College of Technology) in 1947 among others (NBTE, 2011) marked the beginning of entrepreneurial cum technical education in Nigeria during the colonial era by the Colonial Government. This was complemented by establishments of similar institutions by regional government at the three regions in existence then when Aikperan Orshi College of Agriculture, Benue in 1926, Kaduna Polytechnic in 1956, School of Health Technology, Akure in 1962, Institute of Management and Technology, Enugu in 1965 and several others. Similarly, several Technical Education and Trade Centres were equally established for overall industrial growth and development of the country as a result of multidimensional nature of natural resource endowment of the country and the need to take adequate care of the growing population. According to the National Board for Technical Education (2011), there are over 366 entrepreneurial/technical institutions in Nigeria comprising of 75 Polytechnics, 31 Colleges of Agriculture, 13 Colleges of Health Sciences, 18 Specialized Institutions, 80

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Innovation Enterprise Institutions, 94 Technical Colleges and 55 Vocational Enterprise Institutions. Finally, considering the numerous natural resources that are available cross geographical territory of Nigeria, couple with abundant human population (market) and numerous technical/vocational institutions, there should not be any basis for the present socio-economic instability being experienced in the country in recent decades. BASIS FOR SOCIO-ECONOMIC INSTABILITY The 1945 promotion of import substitution for industrialization could be seen as the genesis of the current socio-economic instability in Nigeria. Similarly, the oil boom of 1973/74 worsened the economic situation as entrepreneurial, technical, creativity and vocational potentials of the people, especially the youths were jettisoned for paid employment. Thus, the multi-various opportunities and potentials that abound in the nations’ environment were not only abandoned, but forgotten. Therefore, the socio-economic instability being experienced in Nigeria in recent years actually began in the early 1980s (Dappa and Daminabo, 2008) with sharp fall in price of crude oil in the international markets. Worsening the situation was the economic depression of the 1980s which led to introduction of various economic measures. The austerity measures of late 1970s and Structural Adjustment Programmes of 1985-1993 among others which led to massive retrenchment from public service in the country had not only failed to arouse the entrepreneurial potentials in the country, but tactically promote socio-economic crisis in numerous forms. At the peak of the socio-economic instability, mass-sack, downsizing, retrenchment, right-sizing and several related slogans (Alabi et al, 2013) dominated Nigerian socio-economic environment courtesy of strict limited employment space in the public service and other private establishments. With heavy dependence on imported inputs and 6

products, external stocks definitively ushered in instability in the domestic economy. Thus, policies such as Stabilization Act (1982), Budget Tightening Measure (1984), Structural Adjustment Programme (1986) and commercialization, privatization cum deregulation seem incapable and ineffective to transform the socio-economic chaos into prosperity. Giving a conceptual view of macro-economic instability, Nembe and Madume (2011) account that, market demand; inflation, fiscal deficits, foreign exchange rate, interest rate and political climate among others are various forms of instability common in Less Developed Countries. With this, it is deduced that almost, if not all these parameters manifest in Nigeria’s socio-economic climate, coupled with mono-economic and the import dependent posture of the country over the decades despite the enterprising natural resources that are in abundant quantities. Over all, the

dismal performance of national institutions such as

power, energy, transportation, politics, financial systems and investment environment have been deteriorating and inefficient with cumulative consequences on entrepreneurial spirits in the country. Nigeria in the last four decades has not made judicious use of her immense human population, favourable climate, vegetation and fertile territory spanning over 910,768km2 (FGN, 2010). This is evident in the astronomical rise in prices of consumer goods and unaffordability of relatively scarce agricultural produce. Thus, there is massive reliance and overdependence on importation of foodstuffs, textiles and other consumer goods instead of exploring abundant entrepreneurial potentials in agriculture and other supporting natural resource endowment. Several financial foreign resources/assets (Table 1) of the country are channelled annually on the importation of rice, wheat, beans and other products that can be entrepreneurially and commercially produced in the country.

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Table 1: Financial Implications of Nigerian Foods’ Importation Year

Amount

Annual increment

Percentage increment

1998

#116.40b

-

-

1999

#119.87b

#3.47b

6.0

2000

#134.81b

#14.94b

25.60

2001

#174.76b

#39.95b

68.40

Source: Dappa and Damiabo (2008); Authors’ computation (2013) It is inferred from Table 1 that, Nigeria annual food importation between 1998 and 2001 was increasing geometrically. Thus, the country is potentially the largest consumer market in the continent (ADB/ADF, 2010). Considering this trend, large external reserves would have been expended on such wasteful importation till date (2013). This means a huge fiscal and external deficit on the nation’s foreign reserves if the trend is unchecked. Supporting the above illustration, the ADB/ADF (2010) is of the view that Nigeria economic growth is not sufficiently job-creating. Hence, the current socio-economic gap that culminates to socio-economic instability in the Nigeria manifest in multi-various ways and dimensions such as poverty, quest for paid-employment, uneven wealth distributions, food insecurity, retrenchment, joblessness, militancy, frustration, stress, kidnapping and extremist activities among others. There is need for total shift from the unproductive approaches being sought from the socio-economic instability being experienced in the country over the years. Hence, this calls for unlocking the entrepreneurial potentials and curiosity that abound in the nations’ human population, natural resources endowment, climatic favourism and technical/vocational education among others.

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RECOMMENDATIONS Since there is a significant positive relation between entrepreneurship and socioeconomic stability, it is imperative that transforming the present instability into prosperity will require the following among others: i.

The need to exploit domestic entrepreneurial potentials rather than the nation’s consistent pursuance of foreign direct investment. This is as a result of the presumed tendency of Foreign Direct Investment (FDI) to be parasitic and retarding the development of domestic industries for export promotion. This may therefore quench the entrepreneurial curiosity of the people. The abundant natural resources aside from crude oil are more than enough to propel the nation into greatness through entrepreneurial spirits of the people.

ii.

Collaboration

between

technical/vocational

institutions

with

the

existing

entrepreneurs should be encouraged. This shall ensure the harnessing and use of the enterprise facilities of the institutions and make schools work closely with industries to establish curriculum and programs to meet industrial-skill demands. iii.

Re-orientation of societal values cum flair for university education, public employment and imported commodities as well as the consistent preference for university education due to unceremonious dichotomy that exist between the university education and vocational/technical/polytechnics education.

iv.

The rebirth of vocational, trade centres and technical/technological education in the country is essential and viable tool towards Nigeria’s realization of her Vision 20:2020. Such should be strengthened legally and make more attractive for prospective students. The existing vocational, trade centres and technical 9

/technological institutions should be optimally utilized as they have potentials of making technological inventions required to make the country compete with developed economies. v.

Workable monetary/financial policy is required from the Central Bank of Nigeria to facilitate entrepreneurship through small and medium scale investment in the country. This is necessary as economic instability also result from imposition of high interest rate on loan which is consequently passed on to the cost of commodities to final consumers.

vi.

Diversification of the nation’s economy by government will go a long way in harnessing the entrepreneurial spirit of the people. This should include viable and workable socio-economic policies that will improve the energy supply such as electricity and water with affordable transport services.

vii.

Promotion of agriculture and mineral resources: The diversification of Nigeria economy from oil-based to non-oil based as articulated in the Nigeria Vision 20:2020 document (FGN, 2010) should be vigorously pursued. Agriculture, industries and local manufacturing are other major potentials for entrepreneurs that are capable of empowering people as well as transforming the socio-economic instability into prosperity.

viii.

Improved infrastructure and affordable energy supply: The present state of energy and other public infrastructure in the country is a major setback to existing entrepreneurs and also a source of discouragement for the prospective entrepreneurs in the country. Operative business and investment of private sources of power is capital consuming. Thus, government has to intensify her investment in these critical factors that would have multiplier impacts on entrepreneurial activities and the socio-economic stability of the country. Thus, improved energy sources that are cheap and affordable as well 10

as good transport facilities and services will go a long way in promoting and sustaining entrepreneurial activities in the country. In supporting the above, ADB/ADF (2010) state that the binding constraints such as physical infrastructure, low access to finance, poor investment climate and labour skills are major structural challenges to Nigeria economy. ix.

Government and political office holders should henceforth desist from the existing strategy of distributing tricycles, motorcycles, ‘Keke NAPEP’, helmets and conditional cash to the people in their quest to alleviate poverty in the country. Hence, there should be a shift towards encouraging them to initiate and generate investment ideas which could be translated into small and medium scale enterprise later.

CONCLUSION Entrepreneurial activities have the capability of making positive impacts on the nation’s economy as well as quality of life of people, provided that the political will required to achieve it is propelled by the government. The current socio-economic gap that culminates to socio-economic instability in the country is manifested in multi-various ways and dimensions. These include poverty, quest for paid-employment, uneven wealth distributions, food insecurity, retrenchment, joblessness, kidnapping and extremist activities among others. Tackling these instability require calculated attempt devoid of political manipulations. This is imperative as numerous studies have shown that viable entrepreneurship have the capacity to stimulate economic growth, generate wealth and employment as well as facilitating the empowerment of the disadvantaged people in the society. Conclusively, to have sustainable development in Nigeria shall definitely anchor on viable entrepreneurial activities in which natural resource endowment of the country is widely and judiciously explored to propel the country into greatness; and not at expense of the over-reliance on imported commodities and mono-economy. 11

REFERENCES Africa Development Bank/Africa Development Fund (2010) Federal Republic of Nigeria Extension to 2011 of the 2005-2009 Country strategy Paper, Regional Department, West Africa. Alabi, F. M., Ogunsesan, D. K. and Akanmu, A. A. (2013): Eradicating Poverty Through Entrepreneurship Development in Nigeria: The Missing Gap; Being a paper presented at the 1st International Conference of the Faculty of Financial Management, The Polytechnic, Ibadan held on May 7-9. Aladekomo, F. O. (2004) Nigeria Educational Policy and Entrepreneurship, in Ezema Priscilla, N. et al (ed), Entrepreneurship in Vocational education, Enugu 02YBEI publisher. Akanmu, A. A. (2008) Trends and Challenges of Parcel Delivery Service in Nigeria, PGD Project submitted to the Department of Geography and Regional Planning, Olabisi Onabanjo University, Ago-Iwoye, Ogun State. Ayandike, N. Emeh, I. and Ukah, E. O. (2012) Entrepreneurship Development and Employment Generation in Nigeria; Problems and Prospects, Universal Journal of Education and General Studies, vol. 1, No. 4,pp 88-102. Ayanwale, A. B. (2007) Foreign Direct Investment and Economic Growth; Evidence from Nigeria, AERC Research Paper 165, African Economic Research Consortium, Nairobi. Dappa, T. G. and Daminabo, D. (2012) Deregulation of the Nigeria Economy, The Theoretical Milieu, proceedings of the 1st International Technology, Education and Environment Conference, pp 123-128. Duru, M. (2011) Entrepreneurship Opportunities and Challenges in Nigeria, Business and Management Review Journal, vol.1, No. 1, pp 41-48. National Planning Commission (2011): Annual Performance Report of the Nigerian Economy, The Presidency, Abuja. National Population Commission (2007) 2006 National Population and Housing Census Provisional Results, Government press, Lagos. NBTE (2011) Directory of Accredited Programmes in Polytechnics, Similar Tertiary Institutions, Technical Colleges, and Vocational Enterprise Institutions in Nigeria 16th Edition, Kaduna. Nembe, S. G. and Madume, J. V. (2011) The Impact of Monetary Policy on Nigeria Macroeconomic Stability (1970-2009), International Journal of Economic Development Research and Investment, vol.12, no. 2, pp 174-183. Ossai, A. G. and Nwalado, E. N. (2012) Entrepreneurship Education; a panacea for Sustainable Development in Nigeria, Journal of Resourcefulness and Distinction, vol. 1, no. 1, pp 78-86. Paul, E. O. (2005) Entrepreneurship Education in Ezema Priscilla, N. et (ed)Entrepreneurship in Vocational education, Enugu, OZYBEI publisher.

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