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ASSESSMENT OF INDIGENEOUS ENTREPRENEURS IN INTERNATIONAL BUSINESS (A STUDY OF COAL- CAMP), ENUGU

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CHAPTER ONE

INTRODUCTION

1 .1 Background to the Study

The role of indigenous entrepreneurs in developing countries, Nigeria in particular is progressively becoming significant. It is significant in the sense that all available resources in any given situation in the economic wellbeing of a nation must be developed for industrialization and ultimately consumption through the small and medium scale businesses. Hence, the impact and potential contribution of small scale businesses on a broad and diverse base as well as their accelerated effect in achieving macro-economic objectives pertaining full employment, income distribution and the development of local technology, make the existence most inevitable. Therefore, the importance of small and medium scale enterprises in particular to the general economic development of any nation especially a developing one like Nigeria cannot be over emphasized (Osalor 2012).

Indigenous enterprises have been recognized as indispensable components of natural development in both developed and developing economies. This sub-sector of the economy is globally acknowledged to contribute substantially in enhancing employment creation or generation, poverty alleviation,, equitable distribution of resources, income redistribution, technical and technological innovation, entrepreneurial skills development, more uniform industrial and economic region- moreover, they have been touted strategic in ensuring food security and encouraging rapid industrialization and reversal of rural-urban migration (Balunywa

2010).

Although indigenous enterprise are seen as veritable engines of economic development, the growth and development of small and medium scale enterprises in Nigeria have been slow and in some cases even stunted, due to a number of problems and challenges confronting this all important sub-sector of the economy. Some of the problems highlighted in the body of literature as being responsible for the slow growth and development of the small and medium scale enterprises include: deplorable infrastructural facilities funding and financing challenges; inadequate managerial and entrepreneurial skills; corruption and lack of transparency arising from government regulation and regulators etc. It had been argued that the most disturbing among these challenging is funding, but concedes that most new small business enterprises are not attractive prospects for banks as they want to minimize their risk profile (Abereijo 2014).

Indigenous enterprise in Africa have therefore been found to rely largely on own savings, not only to grow, but also to innovate, whereas firms often need real services support and formal finance assistance, failing which under investment in long term capabilities (Training, Research & Development) may result on the other hand, indigenous enterprise in Nigeria had been blamed for poor performance on management practices, poor access to funds, low equity participation from stakeholders, poor infrastructural facilities, shortage of skilled manpower, multiplicity of regulating agencies and the over-bearing operating environment, societal and attitudinal problems, little access to markets and lack of access to information. In spite of these problems and challenges, Government and other financial institutions had held out programmes for the prospects of indigenous enterprise in Nigeria (Aigboduwa 2013).

The current economic reform process ongoing in Nigeria aimed at reducing poverty, unemployment and strengthening of basic institutions and sub-sector of the economy target at improving and enhancing the capacity of indigenous enterprise as instrument of economic growth and development. A lot has been said and written about indigenous enterprise in the world. It has also formed the subject of discussion in so many seminars and workshops both locally and internationally. In the same token, government at various level (Local, State and federal levels) have in one way or the other focused on the indigenous enterprise. While some governments had formulated policies aimed at facilitating, empowering the growth, development and performance of the indigenous enterprise to grow through soft loans and other fiscal incentives. International agencies and organizations (World Bank), United Nations Industrial Development Organisation (UNIDO), International Finance Corporation (IFC), United Kingdom, Department for International Development (DFID), European Investment Bank (EIB) etc are not only keenly interested in making indigenous enterprise robust and vibrant in them. Locally, the several non-governmental organizations such as fate foundation, Support and Training Entrepreneurship Program (STEP), the Nigeria Investment Promotion Commission (NIPC), the Association of Nigeria Development Finance Institution (ANDFI), as well as Individual Development Finance Institution (IDFI) have been promoting the growth of indigenous enterprise in Nigeria through advocacy and capacity building imitative and have continued to canvass for better support structures for operator in the indigenous enterprise subsector (World Bank 2011).

In the context of this study, indigenous enterprise has been referred to as SMEs. Small scale could therefore be referred to as cottage industry. And they can be best described based on some of their characteristics:

  • Few numbers of employees
  • Amount of investment and annual business turnovers
  • Small in size within the industry
  • Managers are also owners, etc (Aladekomo 2013).

The 3rd Nigerian National Development Plan (2011) defined small scale industry as a manufacturing establishment that employs less than 10 people and whose investment on machinery and equipment do not exceed N600,000 (six hundred thousand naira). From another perspective, the Central Bank of Nigeria in 2001, in its credit guidelines defined Small Business Enterprises as any business organization with an annual turnover of less than N500,000 (Five hundred thousand naira).

Alawe (2013) defined Small Scale Enterprises as organizations employing a minimum or rive employees and with a minimum initial capital outlay of not less than N5000 five thousand naira). Alas (2011) noted that an additional requirement to be tagged Small Scale Enterprises in Nigeria is that the number of employee is not greater than 50 in any situation and the financial capital outlay is not more than N150, 000 (one hundred and fifty thousand naira).

From the foregoing definitions, it could be seen that different individuals, institutions, or bodies and countries have given definitions to small scale enterprises. Therefore, as with entrepreneurship, it is difficult to have a generally acceptable definition of small scale enterprises, the best one can say is that small scale enterprises may be viewed as a business unit which is independently owned and managed and which does not dominate its relevant market segment of interest (Abriel 2015).

In Nigeria, the recent economic submit recommended the creation of 500,000 entrepreneurs on the assumption that if each entrepreneur employs 100 workers, a total number of 50 million jobs be created with the time frame.

Although, all these developments as commendable, however, the best way to eradicate poverty is not to throw money at if but to grow out of it. The various efforts of the government on the development of small and medium scale enterprises through various initiative and well- structured programs to encourage vocational educational centre in the state, with an interest of setting up those apportioned individuals as independent entrepreneur after successful completion of course proved abortive, the rate of survival of these newly set up enterprises are still very low which makes the effort of the government to result in futility and also making individuals to still became job seekers as against the normal goal of being an employer of labour and definitely still giving chance to poverty. However, this project work examines the respective strengths and drawbacks associated with the historical trends and efforts at developing indigenous enterprise. It identifies and analyses the opportunities provided for the promotion of indigenous enterprise in international business. Here, this study titled “the performance of indigenous enterprise in international business in Enugu coal camp spare parts”.

1.2 Statement of the Problem

The Nigerian National economy is characterized by mirage of problems which has constituted a sleepless night to developmental oriented governance. The most disturbing problems are that government has not played a favourable role towards the promotion and development of small and medium scale enterprises, in the sense that government creates unfavourable fiscal policy inconsistencies and lack of the infrastructural facilities by the government, which have stunted and stagnated the growth of indigenous enterprise in international business (Arriyo 2010).

Indigenous entrepreneurs are seen as veritable engines of economic development, but the growth and development of indigenous entrepreneurs in international business have been slow and in some cases even stunted, due to a number of problems and challenges confronting this all- important sub-sector of the economy. Some of these problems includes: financial problems, poor management expertise, poor accounting system, lack of materials etc, which the researcher tends to find solution to them. More so, in Nigeria, most small enterprises are folding up or lack competitiveness because they lack the much required financial capacity to prosecute their manufacturing concern. Another challenges facing international business is the use of language. Being an international business person who is not fluent in the local language such as having the ability to directly communicate with employees and customers, understanding the manner of speaking within business in the local area to improve overall productivity, gaining respect of customers and employees from speaking with them in their native tongue.

1 .3 Objectives of the Study

The objective of the study was to ascertain the performance of indigenous enterprise in internationally business a case study of coal camp spare part. The spe

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