Policy reforms & entrepreneurship in NigeriaPresentation Transcript
REFORM POLICIES, MANUFACTURING ENTREPRENEURIAL ACTIVITY AND ECONOMIC GROWTH: EMPIRICAL AND QUALITATIVE OBSERVATIONS ON NIGERIA Egbetokun, A.A., Adelowo, C., Oladipo, O., Adepoju, A.O., Isola, O.O. & Olamade, O.O. National Centre for Technology Management (NACETEM), Federal Ministry of Science & Technology (FMST), Obafemi Awolowo University, Ile-Ife, Nigeria
Reforms in Nigeria
Focus: Entrepreneurship & Manufacturing
When a great number of new businesses enter the market, competition and economic growth are enhanced.
Business entry and density rates are significantly related to country-level indicators of economic development and growth (Klapper’s et al (2008).
Important among these country-level indicators are policy-related predictors & reforms (Jovanovic, 1982).
A reform-entrepreneurship-growth nexus is apparent.
This paper attempts to explore this relationship in the context of a large developing economy – Nigeria.
How have the structural adjustment programme (SAP), the indigenisation decree and the small and medium enterprise equity investment scheme (SMEEIS) impacted entrepreneurial activity?
Is there any noticeable impact of the foregoing on economic growth?
REFORMS IN NIGERIA
In the mid-1990s the government introduced a series of reforms, including an allowance for greater foreign ownership in Nigerian industries, a loosening of controls on foreign exchange, and the establishment of an export-processing zone at Calabar (Stock, 2007).
In December 1999, Bankers’ Committee proposed that banks should contribute 10% of their profits. This fund formed the basis for the small and Medium Industries Equity Investment Scheme (SMIEIS).
The indigenisation decree which was promulgated in 1977.
The Structural Adjustment Programme (SAP).
FOCUS: ENTREPRENEURSHIP & MANUFACTURING
Particularly for operationalisation purposes, entrepreneurship is characterised in this paper simply as the creation of a new enterprise or venture, whether in the formal or informal sector.
In today’s globalised world, manufacturing plays a key role in development.
The data employed for our empirical analyses came mostly from two sources:
The National Bureau of Statistics (NBS, 2009); and
The Central Bank of Nigeria (CBN, 2004).
We implemented descriptive, correlation and regression analyses
GDP is significantly related to nearly all of the measures of entrepreneurial activity that were used.
Relationship exists between GDP growth and manufacturing firm entry.
FINDINGS (Contd.) * Correlation is significant at the 0.05 level 2-tailed. ** Correlation is significant at the 0.01 level 2-tailed. Table 1: Correlation of reform and economic growth variables, Nigeria (1980 - 2003) 1 2 3 4 5 6 7 8 GDP GDPGROWTH 0.429* MANGDPGROWTH 0.102 0.412 NENTRY 0.840** 0.424* -0.059 NSLT10ENTRY 0.802** 0.398 -0.123 0.988** PERCENTSLT10ENTRY 0.607** 0.281 -0.290 0.774** 0.822** NENTRYTREND -0.025 0.276 -0.215 0.383 0.435* 0.430* NSLT10ENTRYTREND 0.015 0.129 -0.367 0.391 0.453* 0.540** 0.953** ICU -0.433* -0.059 0.367 -0.453* -0.488* -0.314 -0.125 -0.097