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Chapter one

1.1 Introduction

The fact that entrepreneurship in Nigeria as a whole implies taking risks and gaining rewards later requires government backing. This is due to the fact that Nigerian entrepreneurs were mostly ignored in the development plan until recently, when the government introduced measures to encourage them.

In the 1981-1983 plans, the government’s growing understanding of the need to boost – not – the oil industry prompted it to focus on entrepreneurial development. As a result of this decline, they would import more than they export, incurring massive debts and causing balance of payment problems in the Nigerian economy.

This helps to explain the widespread interest in the growth of entrepreneurship in our period of production among Nigerian governments. It must be understood by Nigerians who are actively pursuing the growth of entrepreneurship manufacturing industries, which account for much of the tremendous wealth of developed countries such as Japan, the United States of America, Germany, and France.

Therefore, in any economy (both developed and developing) that has many company units of all types and sizes, one can observe that entrepreneur enterprises are rapidly rising nowadays, since they can be found everywhere, particularly in urban areas.

There aren’t as many restrictions or regulations as there are in large-scale businesses. Furthermore, they grow and develop rather quickly, however this development growth may not be reflected in size, structure, or other external factors. Rather, their progress is demonstrated inside.

Most countries, particularly advanced nations, frequently make provisions such as bank credit facilities and development to aid in the growth of entrepreneurship.

1.2 Background of the Study

At one point, it was thought that the commanding heights in the private sectors of the economy should no longer be an opportunity to play their proper roles in the development of their economy.

The underlying ethos was that only Nigerians could build Nigeria, and that foreigners were there for their personal profit rather than the country’s. In this perspective, indigenization should be understood as governmental actions aimed at increasing Nigerian participation in the ownership and administration of business firms in Nigeria. Individual Nigerians in the private sector either own the bulk of the company or are the sole shareholders.

The Nigerian Enterprise Promotion Decree of 1972 was the first attempt to ensure that their country’s tr-b commercial firms were controlled and managed. The decree guaranteed Nigerian citizens full ownership of small businesses and 40% involvement in large businesses.

The small-scale firms listed in the decree’s schedule are restricted to Nigerians. These include advertising agencies, pool betting, casinos and cinemas, blending and bottling of alcoholic beverages, assembling radios made of black brick and tiles, clearing and forwarding, manufacturing of conventional garment services and tours, hairdressing, retail trade, and rice milling.

If a foreigner or alien possessed such firms, the Decree compelled him to transfer ownership to a Nigerian citizen or association by March 1974.After nearly two decades of implementing an indigenization policy on medium and small-scale firms, the majority of which are assembly plants

Nigeria has only achieved shaky industrial development. Indigenous firms that use the country’s resource endowment in an inefficient and capital-intensive manner.

Their capital equipment and technical manpower have remained mostly imported. As a result, the triple goal of establishing a plant, which was to attain high-level local resources, save foreign exchange, and acquire transferred technology, did not materialise.

For example, assembly plants have not achieved a 15% local raw material procurement rate. Instead, they are more or less systematic foreign guzzlers with neither the will nor the capacity to transfer any meaningful technology beyond the primitive type.

In response to the weakness of indigenous enterprises, the government has sought to promote them as a strategy for achieving self-reliance. The indigenous entrepreneurs have potential worth given for promoting self-reliance in a developing economy, such as Nigeria.

However, this in particular has not been fully established in Nigeria. Thus, in the second development plan (1964-1974), both the federal and state governments were expected to aggressively support and promote the development of entrepreneurship.

1.3 Statement of the Problems

i. Failure to link equity control with management control led in management control continuing in foreign hands notwithstanding indigenization of business firms.

ii. The technology, raw materials, and replacement components required to support indigenous businesses were not available in Nigeria. As a result, foreign providers of these inputs delivered their services on terms that guaranteed their direct or indirect control over the business company. As a result, indigenous businesses could only produce at relatively high costs.

iii. It discouraged international investment, depriving the country of the foreign cash required to spur economic progress. For example, if complex technology was involved, Nigerian businessmen were unable to source it and arrange for its importation and maintenance at a reasonable rate.

iv. When evaluated in light of the quick drop in domestic output of products and services and the resulting high prices, the indigenization programme tended to be a disincentive for economic development.

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