ASSESSING ENTREPRENEURSHIP DEVELOPMENT AS FISCAL POLICY OF GOVERNMENT IN OFU LOCAL GOVERNMENT AREA OF KOGI STATE

ASSESSING ENTREPRENEURSHIP DEVELOPMENT AS FISCAL POLICY OF GOVERNMENT IN OFU LOCAL GOVERNMENT AREA OF KOGI STATE

ABSTRACT

Generally this study seeks to assess entrepreneurship development as fiscal policy of government in Ofu local government area of Kogi State. To find out if there is significance in the role played by entrepreneurship in Nigeria, also to emphasize the need for entrepreneurship in an economy, examining the participation of government in the development of entrepreneurship  through fiscal policy of the government in the country. This review the deliberate act or policy of government at all level in the federation initiated and executed, aiming at promoting the growth and development of entrepreneurship in the society. The researcher used both primary and secondary data collection to gather information for analysis. Base on statistical test carried out using X,² hypothesis shows that the inconsistency of the government to provide serious support for business sectors has contributed to the underdevelopment of the economy. Recommendations were made that government should at all level establish a strong support to small scale industries in the society.

CHAPTER ONE

INTRODUTION

1.1      Background of the Study

Entrepreneurship is generally described as the ability of an individual or a group of individuals to create or discover an opportunity and utilize it to the benefit of the society, which will yield success to the innovators and their organization. According to Dau and Cuervo-Cazurra (2017), the authors take a legalistic view of entrepreneurship and define it ‘as the creation of fresh businesses a stable collection of people who coordinate their efforts to produce new value-added economic activity’. The relationship between entrepreneurship and economic growth of a country has increasingly gained a lot of interest from economists and policy makers over the years.

The dynamic role of entrepreneurs and small business owners in emerging economies has contributed to vast development opportunities in these markets. Over the past decade, the evolution of entrepreneurs has been at the heart of Africa’s growing economy. The International Monetary Fund (IMF) Regional Economic Outlook for Sub-Saharan Africa (SSA) indicates that small and medium-sized enterprises (SMEs) create over 80% of the region’s employment. Thus revitalizing the working-class population and encouraging opportunities for robust economic interactions across borders. Hence, entrepreneurs are increasingly recognized as seeds of economic revival within the African region (Bouazza, 2015).

Entrepreneurship development performs a vital role on the growth and development of any modern economy. Entrepreneurship is viewed as the engine of economic growth and a main thrust of economic restructuring, decentralization and development toward market economy. In Nigeria, government of every states and local government embarks on policies and programs aimed at influencing the direction of economic progress towards a rapid and sustainable economic growth through entrepreneurship development (Ogundele et al., 2012; Sule, 2014).

The use of fiscal policy is very paramount in every society most especially in the less developed countries (LDCs) as a major tool for stabilization and for development to be sporadic. Fiscal policy as in many texts and literatures could mean the government actions affecting its receipts (revenue) and expenditure which is taken as ordinarily a measure by the government’s net receipts, its surplus or deficit. The government may offset undesirable variations in private consumption and investment by anti-cyclical variation of public expenditure and tax revenue. Simply put, when the government uses government revenue and expenditure policies to regulate and stabilize the economy toward development, the action is fiscal policy. It thus serves as an economy’s “shockabsorber” in specific areas of development.

Fiscal policy is essentially concerned with manipulating the financial operations of the government with a view to furthering certain economic policy objectives. In other words, it consists of government decisions to vary certain fiscal aggregate such as total government spending and tax revenues as opposed to some other aspects of public finance which are primarily concerned with the effect of specific government expenditures and taxes (Stein 1968). Fiscal policy is majorly measured in terms of government expenditure, tax revenue, government investment, budgeting and debts.

Fiscal policy fosters economic growth and development through a number of different channels. These include the macroeconomic (influence on budget deficit on growth) as well as micro (influence on efficiency of resource use).  While in the developing economies, the economic policy objectives of fiscal policy have been pursued to a greater or lesser degree, the one and overriding objective, the furtherance of which has relied greatly on fiscal policy, is economic development, defined not only as a continuous and sustained growth in total output as well as in output per head, but also as the structural transformation from the basically underdeveloped agricultural economies to fully industrialised ones. The reliance on fiscal policy in developing economies for the achievement of the economic development objectives in particular and other objectives in general, has been particularly great in relation to the use of other policies such as monetary policy in the entrepreneurship development (Olaloku, 1987).

 Ojo (2009) put forth one of the solutions to the problems of entrepreneurship development in Nigeria is the promotion of entrepreneurial development scheme through fiscal policies. A veritable way to do this is government promotion of small scale businesses. Entrepreneurship has been identified as vital for the continued vitality of the modern market for more businesses to emerge; hence, competition and economic growth are improved (Klapper & Love, 2011). Efforts have been taken by the Nigerian government for the development of small scale businesses over the years. The realisation of the Millennium Development Goals (MDGs) and the vision of the Nigerian Government to be rated among the top 20 economies in the world is considerably determined by how government has recognised SSBs as drivers of economic growth and key strategy for poverty alleviation. However, the over-reliance on natural resources especially crude oil as the mainstay of the economy is capable of making the attainment of their desires an illusion. Government, through its actions may be a hindrance or promoter of small scale businesses; thus, this study seeks to assess entrepreneurship development as fiscal policy of government with particular reference to Ofu Local Government Area of Kogi State

1. 2 Statement of the Problem

The policy uncertainty and related decline in entrepreneurship development and small business startups is taking a toll not only on the traditional lower wage occupations, but on college graduates as well. According to Sum (2013) 36% of college graduates were working in jobs that did not require a college degree. The business environment is dynamic and competitive in such an environment an organization can be best achieved it’s good through a well established leadership style and good managing director that will manage business organization such as; Entrepreneurship development. The small scale business would have been a source to Nigeria economic development. But today, entrepreneurship development are not yielding positive result due to poor performance and lack of government intervention. Therefore, this project will source for various solutions to these problems that militate against entrepreneurship development. These are Entrepreneurship development which includes:

Poor Management:

The most critical problem affecting of almost all indigenous enterprise in Nigeria is poor management. The lack of efficient organizational structure and the practice of modern management techniques. If enterprises could be ascribe to two factors, first, if the limited understanding modern management practices by owners managers could be with their strong desire to run the business alone.

• Lack of Management Skills:

Also the problem facing entrepreneurship development include stress primarily arise from the need of hire skilled and qualified personnel to assist in the running of the industries demands the greatest problems of entrepreneurship development is lack of necessary skill in the management group. In every entrepreneurship development, the entrepreneur is one person management team. This makes it difficult for the effective operation of the enterprises.

• Individualism of management of entrepreneurship development:

This is the characteristics of individualism among entrepreneurs. The owner bears the management burden alone. The jobs varies and likes managerial responsibilities are few, if any. The managers are called “Jack of all trades and master of none”.

• Difficulty in services of qualifies personnel: Another factor which leads to managerial problems with entrepreneurship development is difficulty in securing the services of qualified personnel.
• Lack of training and development of personnel: Lack of training and developments of personnel is another factor which compounds the managerial problems of entrepreneurship development in Nigeria. Training provide employees change in job requirement and new technology. It equally serves as motivation of incentive for the existing employees, which increase their productivities. In essence, lack of training and development for the existing workers made replacement of vacant for the existing position difficult.
• Financial Problem: The capital for entrepreneurship development industries are very small. This is because most Nigerian business men and women operate in a low income economy. They are unable to generate sufficient funds through personnel savings which involved huge capital equipment or other fixed assets.

1. 3      Objective of the Study

The general objective of this study is to assess entrepreneurship development as fiscal policy of government in Ofu Local Government Area of Kogi State.

The specific objectives include:

1. To find out the significant role of entrepreneurship in economic development of Ofu Local Government Area of Kogi State.
2. To ascertain the extent that government policies have improved entrepreneurship development in Ofu Local Government Area of Kogi State.
3. To identify the challenges of entrepreneurship development in Ofu Local Government Area of Kogi State.

1.4      Research Question   

The following research question will serve as a guide to the researcher in attempt to achieve the objective of this study.

1. Does entrepreneurship play significant role in economic development of Ofu Local Government Area of Kogi State?
2. To what extent do the government policies improved entrepreneurship development in Ofu Local Government Area of Kogi State?
3. What are the challenges of entrepreneurship development in Ofu Local Government area of Kogi State?

1. 5      Research Hypothesis

H₀₁: Entrepreneurship does not play any significant role in economic development of Ofu Local Government Area of Kogi State.

H₀₂: Government fiscal policies does not have significant impact on entrepreneurship development in Ofu Local Government Area of Kogi State.

H₀₃: There are no challenges of entrepreneurship development in Ofu Local Government Area of Kogi State

1. 6      Significance of the Study

The study is significant in a number of ways to the following people:

• Students: The study would be of immense significant to the students of management, economics/political economy and sociology as the findings of the study will serve as source of secondary data for further studies.
• Entrepreneur: Entrepreneurs will find the findings of this study to be very useful as it will educate them on the role of entrepreneurship development to the development of Nigeria Economy. This will also enable government agencies and policy makers to make favourable policies that encourage the development of entrepreneurship in Nigeria.
• Academicians: The study is significant in that it would contribute to the growth of literature in the area of entrepreneurial culture/entrepreneurship and it will be very useful for all those who want to carry out research in the same area.

1. 7      Scope of the Study

The scope of this study is limited to assessing entrepreneurship development as fiscal policy of government in Ofu local government area of Kogi State. The study will cover the role entrepreneurship development plays in economic development of Nigeria, the extent that government policies have improved the performance of entrepreneurial organization in Ofu local government area of Kogi State and finally identified the challenges of entrepreneurship development in Ofu local government area of Kogi State.

1. 8      Definition of Terms  

For easy and concise understanding of this work, it is necessary that vital terms be defined.

1. Entrepreneur: An Entrepreneur means a person who starts, organize a commercial enterprise especially one having financial risk. Meredith et al (2018) look at an entrepreneur as an individual who has the ability to see and evaluate business opportunities gather the necessary resources to take advantage of them and initiate appropriate action to ensure success and he is a risk taker.
2. Entrepreneurship Development: This is the coming into existence in society of the class of individuals, who are not limited to pace odds.
3. Small scale business: Ejiofor (2017) defines small scale business as those enterprises that have relatively little capital investment, that produce in small quantities and as a result of controlling a small share of market that employs not more than fifty workers (50) and in which management marketing and entrepreneurship functions are used in the proprietor.
4. Economic Development: The improvement of the individuals, society well being, such that the GDP of such people/societies equals or greater than the United Nations standard.

Fiscal Policy: Fiscal policy refers to the use of government spending and tax policies to influence economic conditions, especially macroeconomic conditions, including aggregate demand for goods and services, employment, inflation, and economic growth.