ISSN 1596-6666
THE ABUJA MANAGEMENT
REVIEW (AMR)
VOL. I ISSUE VOL. I MARCH 2003
JOURNAL OF THE FACULTY OF
MANAGEMENT SCIENCES,
UNIVERSITY OF ABUJA,
ABUJA, NIGERIA.
Published & Printed for the copyright owner
by
JOYCE GRAPHIC PRINTERS & PUBLISHERS CO.
SS. 4 Nassarawa Road, Beside Belmont Hospital,
Kaduna - Nigeria.
Tel: 062-245126,243535, E-mail:joycegraphic@yahoo.com
EDITORIAL
The Abuja Management Review (AMR) is a quarterly journal of the Faculty of
Management Sciences University of Abuja, Abuja. The Journal is expected to play an
active role in the promotion of die course of management scholars and practitioners
in Nigeria and other countries of the World in the area of research and publication.
Management Science is aimed at optimum utilization of available human
and material resources in order to achieve the purpose of the enterprise. Therefore,
for human and material resources to be properly utilized to obtain the desired result,
sound ideas, proper planning, good knowledge of labour relations and application of
management techniques and processes are basic necessary conditions. It is against
this backdrop that the journal featured the following thought provoking articles.
*
The Legal and Institutional Framework of Collective Bargaining
*
Organisational Effectiveness Study of Joint Admissions And Matriculation
Board's Operations in University Admissions
*
Performance of Capital Market in Reducing Growth of External Debt in
Nigeria
*
Implementation of Government Industrialisation Policies in Nigeria: A Case
Study of Small and Medium Enterprises
*
Toward a Theory of Management Techniques: An Overview
*
Entrepreneurship Development in Macro-Enterprises in the Nigeria Federal
Capital City, Abuja.
*
Public Policy Making and Implementation: The Petroleum Trust Fund (PTF)
of Nigeria in Perspective
*
Frauds in the Nigerian Banking Industry: Forms, Causes and Prevention
*
Ethnic Militia and National Security in Nigeria, 1999 - 2002
*
Agricultural Sector and Economic Growth: Priority for Rural Sector in
Nigeria
*
Extensive Supervision of Instruction: A Viable Tool for Effective
Educational Management
*
A Financial Justification for Training
*
Strategies in Petroleum Products Supply and Distribution in a Deregulated
Economy
*
Enhancing Organisational Performance Through Strategic Management:
Conceptual and Theoretical Approach
*
Managing Quality Improvement in a Democratic Setting: Lessons from
Japanese Experience
Some of these articles are empirical in nature while others have theoretical
base. Each of them focused on one specific management problem or the other; trying
to proffer solutions to them.
Readers are therefore advised to make proper use of the ideas presented by
the various authors.
Dr. Ekhator, Victor Eghe
Editor-in-Chief
ii
EDITORIAL BOARD MEMBERS
Editor-in-Chief:
Dr. Ekhator, Victor Eghe Dean, Faculty of management
Sciences, University of Abuja, Abuja, Nigeria.
Associate Editor.
Abuja, Abuja, Nigeria.
Prof. A.A Ujo Dept. of Political Science, University of
Associate Editor.
Prof. Bimaje Akpa Director of Academic Planning, Benue
State University, Makurdi, Nigeria.
Associate Editor.
Prof. W. Herbert Education Bank, Abuja, Nigeria.
Associate Editor.
Akwa, Nigeria.
Prof. Osisioma Benjamin Nnamdi Azikwe University
Associate Editor.
Sokoto, Nigeria.
Prof. Aminu Shiedu Usmanu Dan Fodio University,
Associate Editor.
Prof. F. lyoha Ambrose Alii University, Ekpoma Nigeria.
Associate Editor.
Prof. J. Maga University of Nigeria Nsukka, Nigeria.
Associate Editor.
Abuja, Abuja, Nigeria.
Dr. N.C Ozigbo Dept. of Business Admin. University of
Associate Editor.
Dr. Sani Abdullahi Dept. of Business Admin, Ahmadu
Bello University Zaria, Nigeria.
Associate Editor.
Abuja, Nigeria.
Dr. I.I Uke Dept. of Political Science, University of Abuja,
Associate Editor.
Nigeria.
Dr. Dan Aighewi Federal Character Commission, Abuja,
Associate Editor.
Dr. A,B. Anyebe Dept. of Public Admin., Ahmadu Bello
University. Zaria, Nigeria.
Associate Editor.
Dr. Olujide Jackson, Dept. of Business Admin. University
of Ilorin, Ilorin, Nigeria.
Associate Editor.
Abuja, Abuja, Nigeria.
Dr. Ogbu S.O. Dept. of Political Science, University of
iii
REVIEW EDITORS/ASSESSORS POR THIS EDITION
Dr. Ekhator, Victor Eghe University of Abuja, Abuja, Nigeria.
Dr. Ozigbo N.C. University of Abuja, Abuja, Nigeria.
Dr. Ogbu S.O University of Abuja, Abuja, Nigeria.
Dr. Uke I.I University of Abuja, Abuja, Nigeria.
Dr. (Mrs) Igube R.B University of Abuja, Abuja, Nigeria.
Dr. Alanaha Otaki University of Abuja, Abuja, Nigeria.
Dr. Aigber K. University of Abuja, Abuja, Nigeria.
Dr. Ndulue Jude University of Abuja, Abuja, Nigeria.
Mr. Uremadu S.O University of Abuja, Abuja, Nigeria.
Mr. Ojobo J. University of Abuja, Abuja, Nigeria.
Mr. Aghahowa J.O University of Benin, Benin City, Nigeria.
Dr. Olaniyi Oyinlola, University of Abuja, Abuja, Nigeria.
Dr. Aiyedun E, University of Abuja, Abuja, Nigeria.
Dr. Idisi P.O University of Abuja, Abuja, Nigeria.
Dr. Haruna Dlakwa University of Maiduguri, Maiduguri, Nigeria.
Dr. Olujide Jackson University of Ilorin, Ilorin, Nigeria.
Dr. Anyebe, A. A Ahmadu bello University Zaria, Nigeria.
Dr. Aighewi, Dan Federal Character Commission, Abuja, Nigeria.
Dr. (Mrs) \fasuf, O.M. University of Abuja, Abuja, Nigeria.
Mr. Siyan Peters University of Abuja, Abuja, Nigeria.
Dr. Ikerionwu J.C University of Abuja, Abuja, Nigeria.
Prof. Agboola B.A University of Abuja, Abuja, Nigeria.
Dr. Akpotor S. Ambrose A1U University, Ekpoma, Nigeria.
Dr. Igbinosa A.S Ambrose Alii University, Ekpoma, Nigeria.
Prof. Longe J.B Ambrose Alii University, Ekpoma, Nigeria.
Prof. Ujo, A. A University of Abuja, Abuja, Nigeria.
Prof. W. Herbert, Education Bank, Abuja, Nigeria.
Prof. Aminu Shiedu, Usmanu Dan Fodio University Sokoto, Nigeria.
ANNUAL SUBSCRIPTION RATES
PERSONAL: Nigerian and West African N500. Other parts of Africa 50
US Dollars. Other countries 100 US Dollars (including postage).
INSTITUTIONAL: Nigerian and West African N 1,000. Other parts of Africa 100
US Dollars. Other countries 200 US Dollars (including postage).
Orders are to be sent to the Editor-in-Chief, Abuja Management Review (AMR),
Faculty of Management Sciences, University of Abuja, P.M.B 117, Gwagwalada
Abuja, FCT, Nigeria.
iv
TABLE OF CONTENTS
The Legal and Institutional Framework of Collective
Bargaining by Femi Wewe Esq.
Page
1-10
Organisational Effectiveness Study of Joint Admissions
And Matriculation Board's Operations in University
Admissions by Dr (Mrs.) Hauwa Imam
11 -23
Performance of Capital Market in Reducing Growth of
External Debt in Nigeria by Dr. Samson E. Edo
24-36
Implementation of Government Industrialisation Policies in
Nigeria: A Case Study of Small and Medium Enterprises
by Siyan Peter
37-47
Toward a Theory of Management Techniques: An
Overview by Dr. Ekhator Victor Eghe
48-56
Entrepreneurship Development in Macro-Enterprises in
the Nigeria Federal Capital City, Abuja by
Farohunbi M.A. & Dr. Olujide O. Jackson
57-70
Public Policy Making and Implementation:
The Petroleum Trust Fund (PTF) of Nigeria in Perspective
by Solomon Ogbu, Ph.D
71-81
Frauds in the Nigerian Banking Industry: Forms, Causes
and Prevention by Ayangeadoo, A. Hur-Yagba
82-92
Ethnic Militia and National Security in Nigeria, 1999 - 2002
by Dr. Anyebe, A.A.
93-107
Agricultural Sector and Economic Growth: Priority for Rural
Sector in Nigeria by Park O. Idisi, Ph.D
108-120
Extensive Supervision of Instruction: A Viable Tool for
Effective Educational Management by Rosemary K. Udeozor, Ph.D
121-129
A Financial Justification for Training by Iyoha Odianonsen Francis
130-140
Strategies in Petroleum Products Supply and Distribution in a
Deregulated Economy by Dr. (Mrs.) Yusuf O.M.
141-151
Enhancing Organisational Performance Through Strategic Management:
Conceptual and Theoretical Approach by Aremu M. Ayanda
Managing Quality Improvement in a Democratic Setting:
Lessons from Japanese Experience by Dr. Ozigbo N.C.
152-162
163-179
v
ENTREPRENEURSHIP DEVELOPMENT IN MICROENTERPRISES IN THE NIGERIA FEDERAL CAPITAL
CITY, ABUJA.
M.A. FAROHUNBI, Federal Ministry of Industry Abuja
And
JACKSON .O. OLUJEDE, Department of Business Administration
University of llorin
Abstract
In Nigeria today micro-enterprises are catalyst for accelerated growth and
development job creation opportunities and a general improvement in the
level of living of people engaged in this sub-sector. To enhance their
relevance therefore, this study critically examined issues concerning the
growth and sustenance of entrepreneurship development in the Federal
Capital Territory (FCT) Abuja.
Data were collected using structured interview based on a form-type
format from 150 micro-enterprises selected from eight economic activities
in Garki and Gudu districts in Abuja Municipality. Data obtained were
analyzed using statistical summarization techniques, ratio and correlation
analyses. Result showed that performance of this breed of enterprises were
dismal and mediocre and despite the growing number of people engaged
in this sub-sector, micro-enterprises could not alleviate poverty, boost
employment and skill acquisition, transform and diversify the local
economy, develop domestic linkages and a broader based indigenous
entrepreneurial culture for the FCT and the country.
Introduction
After political independence, Nigeria in her quest to industrialise and
modernise her economy employed the strategy of import-substitution. But
unfortunately, this industrialization strategy did not yield the expected
dividends in terms of employment generation, skill acquisition,
transformation of the economy and high value- added of industrial
production to the gross domestic product.
Faculty of Management Sciences, University of Abuja, Nigeria
57
Entrepreneurship Development In Micro-Enterprises In The Nigeria Federal Capital City, Abuja.
The failure of this strategy of import substitution in Nigeria to
rapidly transform the economy has led to the adoption of an economic
reform programme which started about two decades ago. The reform has
encouraged a decisive switch of emphasis from the grandiose, turkey,
capital-intensive, large-scale industrial project- based on the philosophy of
import-substitution to micro and small scale enterprises with immense
potentials for developing domestic impetus for rapid sustainable industrial
development. Apart from their potential for ensuring a self reliant
industrialization, in terms of their ability to rely largely on local raw
materials, micro enterprises are also in a better position to boost
employment, guarantee a more even distribution of industrial development
in the country, including the rural areas, and facilitate the diversification of
the country’s revenue base and growth of non-oil exports. Thus, in the
light of recent economic realities, the Nigerian government has now
accorded a high priority to the development and growth of micro
enterprises. The importance of this policy is based on the belief that such
enterprises are likely to facilitate the development of a broader based
indigenous entrepreneurial culture for the country and a higher value
added to domestic production, furthermore, the promotion of micro
enterprises is seen as a major tool for booting employment, as they employ
a larger number of people per unit of investment capital than the large
scale capital intensive enterprises.
In the light of the foregoing, this study is designed to examine the
factors that promote and nurture entrepreneurial development in micro
enterprises in Abuja Municipality, the new Capital City of Nigeria.
Objective of the Study
Objective of this study include the following:
To identify factors that promote forester and nurture
entrepreneurship in micro enterprises in the FCT; and
Identify environmental and managerial problems that hinder the
growth of entrepreneurship in micro enterprises, in the FCT.
Proffer policy recommendation, based on the findings of their
investigation.
Faculty of Management Sciences, University of Abuja, Nigeria
58
Abuja Management Review {AMR) Vol. I. Issue No. 1 March 2003
Research Methodology This study was conducted in Abuja, the new
Capital City of Nigeria. The choice of Abuja is significant in that when the
seat of the Federal Government moved from Lagos to Abuja in 1991, there
has been an unprecedented influx of people from all areas of the country in
search of jobs and the goods things of life.
The selection of the target population was done using a sample
frame consisting of the list of businesses derived from a National
integrated Survey of establishments conducted in 1994 by the Federal
Ministry of Industry, Abuja-. However, owing to time lag, there was the
need to update the sample frame in order to make it more current so as to
obtain information that are current and reliable for the study.
After a careful examination of sample frame, a two-stage sampling
techniques was adopted. The Primary Sampling Unit (PSU) consist of the
different business area in Abuja Municipality while the micro enterprises
selected therefore constituted the Secondary Sampling (SSU). The Abuja
Municipality has 16 business areas known as shown in table 1, which have
been classified as the enumeration areas in this project.
TABLE 1
Enumeration Area
District
Business Area
Area 1, Area 2, Area 3, Area 7, Area 8 Area
10, Area 11, Garki II
Garki Wuse and Gudu
Wuse New Markt, Old Market, Wuse Corner
Shops, Apo Technology Village
Sampling Method:
With the updated sample frame, the first stage was selected using the
systematic sampling, given K= 3. This means that if any business area is
selected between the first and third enumeration areas (i.e. 1-3), the nest
ones will be every third business area. Consequently, these are the
following are: Garki Area 1; Garki Area 7: Garki Area 10.
Given the diverse nature of micro enterprises, we have limited the study to
the following selected areas in Garki and Gudu districts:
Faculty of Management Sciences, University of Abuja, Nigeria
59
Entrepreneurship Development In Micro-Enterprises In The Nigeria Federal Capital City, Abuja.
i.
ii.
iii.
iv.
v.
vi.
vii.
Vehicle maintenance
Hair dressing /barbing saloon
Tailoring
General trading/ grocery;
Restauration/food/ snails
Vehicle spare parts; and
Furniture/carpentry.
Data were collected by means of personal interview based on a
form-type questionnaire with the proprietors/entrepreneurs of microenterprises who responded to questions Gaps in the responses were filled
by an examination of company records and books of accounts. Data
collected were analyzed using summarization techniques like percentages,
means, standard deviation etc, ratios and correlation analysis.
Literature Review on Entrepreneurial Motivation
In the simplest of theoretical forms for studying entrepreneurship
entrepreneurs cause entrepreneurship, that is entrepreneurship is a function
of the entrepreneurship. Thus Gartner (1989) states that the continuous
examination of entrepreneurial characteristics does help in the evolving
understanding of entrepreneurship. Clayton (1981) characterized the
entrepreneur as aggressive, competitive, goal- oriented, risk- taller,
dreamer and some one with a desire to achieve. The need to achieve has
been well documented in the entrepreneurial literature, beginning with
McClelland (1961-1962) pioneering work on motivation in the 1960s.
Heron and Sapienza (1992) state further that an examination of why
people start business and how they differ from those who do not (or those
who start unsuccessful business) may be useful in understanding the
Amotivation that entrepreneurs exhibit during start up as a link to the
sustaining behaviour exhibited later. They stated further that A because
motivation plays an important part in the creation of new organizations,
theories of organization creation that fail to address this notion are
incomplete
Bradley (1990) in his review of achievement motivation and the
entrepreneur stated that it remains worthwhile to carefully study the role of
the individual, including his or her psychological profile. Individuals are,
after all, the energizers of the entrepreneurial process.
Faculty of Management Sciences, University of Abuja, Nigeria
60
Abuja Management Review (AMR) Vol. 1 Issue No. I March 2003
Thus, Shaver and Scott (1992) recognizes that while research on
the psychological characteristics of entrepreneurs has not provided an
agreed upon A profile of an entrepreneur, it is still important to recognize
the contribution of psychological factors to the entrepreneurial process. In
fact, the quest for new venture creation as well as the willingness to
sustain the venture is directly related to an entrepreneurs motivation.
Therefore, one research approach is the motivation process that an
entrepreneur experiences.
The decision to behave entrepreneurially is the result of the
interaction of several factors. One set of factors includes the personal
characteristics of the individuals personal environment, the relevant
business environment, the individual, the individuals personal
environment, the relevant business environment, the individuals personal
goal set, and the existence of a viable business idea. In addition, the
individual makes comparisons between his/ her perception of the probable
outcome and the personal expectation he/she has in mind. Finally, an
individual looks at the relationship between the entrepreneurial behavior
he/she would implement and the expected outcomes which would result.
From the foregoing, the entrepreneur's expectation are then
compared with the actual or perceived outcome of the firm. Future
entrepreneurial behaviour is based on the result of these comparisons.
When outcomes meet or exceed expectations, the entrepreneurial
behaviour is positively reinforced and the individual is motivated to
continue to behave entrepreneurially, either within the current venture or
possibly through the initiation of additional ventures, depending on the
existing entrepreneurial goal. When outcomes fail to meet expectations,
the motivation of the entrepreneur will be lower and will have a
corresponding impact on the decision to continue to act entrepreneurially.
These perceptions also affect succeeding strategies, strategy
implementation and management of the firm.
Result And Discussion
The study identified from the review of literature, the following variables
of interest which formed the basis of analysis:
i.
Performance or loss level of micro-enterprise
ii.
Literacy level of proprietor
iii.
Personality traits profile of entrepreneur
iv.
Financial capabilities/personnel management
Faculty of Management Sciences, University of Abuja, Nigeria
61
Entrepreneurship Development In Micro-Enterprises In The Nigeria Federal Capital City, Abuja.
v.
The role of government.
Measurement of Performance: For any business enterprises, profit Q is a
major indicator of business success. In this study, profit is used to
measure, the performance of micro enterprises and profit level is estimated
using the data obtained from responses to item 8 (I) in the questionnaire,
records and books of accounts of these micro enterprises. Our results show
that the mean profit is expressed
Profit( )= Sale- (Wages/Salaries+ other express)
The profit/ loss level using the grouped data frequency distribution
is shown in table 2 below:
Table 2
Frequency Distribution of Profit/Loss
Profit Range/Loss Level (N'000)
01-05
06-10
11-15
16-20
21-25
26-30
31-35
36-40
41-45
46-55
Loss
Total
Source: Survey
Frequency
21
26
14
09
17
06
16
09
05
01
16
15
Our analysis of performance of micro enterprises in Abuja
Municipality shows profit (mean) of N 18,600 per annum. This result
shows that the average returns on investment by the entrepreneurs in this
sector is very low. It also suggests a high rate of poverty amongst the
operators of the informal sector.
Faculty of Management Sciences, University of Abuja, Nigeria
62
Abuja Management Review (AMR) Vol. 1 Issue No. 1 March 2003
Literacy Level as a Factor
For this survey, possession of Post Primary Certificate has been used as
the minimum qualification to determine level of literacy of the
respondents.
To determine if there is any relationship between literacy level and
profit making the Rank Correlation Co-efficient was computed for our
responses, and this gives a Co-efficient of correlation of r=0.94
The result r= 0.94 shows a strong correlation between level of
literacy and performance of the enterprise. Therefore it can be concluded
that the level of education of the entrepreneur is a strong determinant of
viability and survival of micro enterprises.
From the survey, data were also obtained on whether microentrepreneurs received special training on the skill required in the business
operation.
We computed the co-efficient of correlation, r=0.91.
This result gives a clear picture of the relationship between those
who have acquired business/technical skill and the degree of success of
micro enterprises. Therefore, possessing relevant skill in business
promotes entrepreneurship.
Personality Trait Profile of Entrepreneurs
In determining if this variable is a factor for promoting
entrepreneurship, the scope of analysis was restricted to measuring the
level of awareness of the entrepreneurs about the business ventures as well
as the drive for achievement of the business owners.
Level of Business Awareness:
Responses on whether proprietors of micro enterprises have prior
knowledge and training in the business they engaged in were analysed and
the purpose was to distinguish between those who entered into business on
the account of merely possessing cash and those who had prior knowledge
of the business opportunities and are motivated into venturing into them.
From the responses we generate the data in Table below:
TABLE3
Entrepreneurs who have Bus ness Awareness.
A
B
C
D
Total
40
15
59
12
116
34%
13%
51%
10%
100%
Faculty of Management Sciences, University of Abuja, Nigeria
63
Entrepreneurship Development In Micro-Enterprises In The Nigeria Federal Capital City, Abuja.
From the above table, 116 respondents who made profit claimed that they
had some awareness about the business before they commenced their
operation. This figure represents about 77% of the total respondents (150)
covered in the survey. The balance 23% are those respondents classified as
having no prior knowledge and training in the business.
The conclusion is that awareness about a business is one of such
factors that promotes entrepreneurship in micro business.
Further analysis of the data also revealed that about 51 % of those
who made profit also had special interest or a flair for the business. The
ratio of other responses indicated that 34% obtained business ideas from
their friends, 13% and 10% were those who have domestic experience and
expert advice respectively. This signifies that in micro business, those who
have special interest in a particular trade have higher chances of making
success than others. In other words, entrepreneurs who have strong
feelings or attachment to a trade can easily translate the will into business
success.
Drive For Achievement
This is an indicator that has also helped to strengthen the thesis that
personal characteristics of an entrepreneur contribute to building
entrepreneurship in business. We computed the rank correlation coefficient and we got r=0.86. The interpretation of the outcome is that those
who re-invest are more likely to continue in business and make profit. On
the whole, it can be concluded that personality trait of the individual
entrepreneur is a major factor that may stimulate entrepreneurship growth
and development in micro enterprises.
Gender Factor
Analysis of respondents on gender distribution of respondent was
undertaken and using simple proportion, 70% of the respondents who
recorded profit were male while 305 were female. This analysis shows a
clear picture of sex differential and therefore it may be inferred that, all
things being equal, male entrepreneurs are more aggressive and by
implication more enterprising. The reason for this outcome may not be
unconnected with the busy schedule of most women who besides the
demands of their business have to also perform their traditional domestic
responsibility such as, cooking for the household, house keeping, child
rearing to mention just a few.
Faculty of Management Sciences, University of Abuja, Nigeria
64
Abuja Management Review (AMR) Vol. 1 Issue No. 1 March 2003
Financial Capability Management
There are three major sources of capital indicated in the responses. These
are loans from friends, personal savings and sponsorship. It is necessary to
point out that some respondents indicated more than one source of their
business funds. The summary of the data generated is as tabulated is table
4 below:
Using simple proportion, it is evident from the table that loan
represents an important source of capital to micro entrepreneurs, (19%),
while personal Savings, (23%) also ranked below sponsors hip (66%). The
reason that may be advanced for this trend is that there may be a general
unwillingness among the financial institutions to give loan facilities which
may be due to lack of acceptable collateral security and absence of a fixed
business location. On the other hand, the effect of high rate of poverty may
have accounted for the low percentage of entrepreneurs= capital coming
from savings; it accounts for only 23%. However, 66% of them raised
their funds through sponsorship from business partners, parents, friends
and relations. The conclusion here is that there is a limit to the amount of
funds that can be generated for smooth business operations. This may be
one of the reasons why the profit mean is as low as N l8,600 per annum.
Table 4:
Source of Capital Business Funds.
Fit Level (N'00) SOURCES
LOAN
01-05
3
06-10
3
11-15
2
16-20
0
21-25
4
26-30
0
31-35
3
36-40
3
41-46
0
46-50
1
TOTAL
19
27
% of Total
17%
PERSONAL
SAVING
7
7
4
4
2
1
0
0
1
0
70
23%
SPONSORSHIP
TOTAL
10
12
5
5
11
5
12
6
4
0
20
22
11
9
17
6
15
9
5
1
116
60
100%
Source: Survey.
Faculty of Management Sciences, University of Abuja, Nigeria
65
Entrepreneurship Development In Micro-Enterprises In The Nigeria Federal Capital City, Abuja.
Role of Government
Government plays a major role in the allocation of resources and
stimulating business activities in an economy. One of such ways is by
rendering specific assistance through established institutions. Assistance
rendered by government include among others provision of infrastructure,
extension services, of equipment and input at subsidized prices. Responses
of business owners who received assistance from government or its
agencies show that 16% of respondents got assistance from government as
against 84% who did not. Among those who did not receive assistance,
39% had their profit level below the profit mean. Furthermore, about 20%
of them recorded losses. These outcomes show that a reasonable
proportion of the respondents who did not receive assistance from
government and also did not perform very well. Based on - this, it may be
concluded, therefore, that government assistance to micro enterprises is
very important and required to boost activities in the sector.
Problem Encountered by Micro Entrepreneurs.
The other part of this study identified the critical problem that
micro entrepreneurs encountered. The survey obtained responses on 5
problem areas. The responses are presented in table 5 below.
It should be noted that this survey covered 150 micro enterprises
and some of them identified more than are problem affecting their business
operations. The result of the analysis of data in table 5.
Table 5: Analysis of Problem:
lack of capital
Lack of Business Site
Lack of Equipment
Insufficient profit
Harassment by govt. officials
Total
Respondents who Respondent
Made Profit (%) who made loss(%)
46
69
18
12
2
7
5
8
19
12
100
100
Further analysis was done on the cost/profit of entrepreneurs. This
is to assist in establishing if they have been prudent in the utilization of
their scare resources. Out of the 22 respondents who complained that they
were not making enough profit, 47% of them had between 4 to 5 workers.
It is obvious
Faculty of Management Sciences, University of Abuja, Nigeria
66
Abuja Management Review (AMR) Vol. 1 Issue No. 1 March 2003
from this revelation that the proceeds or income generated were mostly
being spent on payment of wages or allowances for members of staff.
Moreover, about 33% of the respondents incurred high bills on other areas.
These two instances must have accounted for the depletion of their profit.
To be able to increase the level of profit, some of them may need to
increase their sales volume either by seeking new markets or adopting
strategies that will enable them penetrate the existing market. This may be
the best practicable solution since some of the workers can not be laid off
due to the strong family ties they have with the owners of the business.
Another problem area in the financial management of micro
enterprises is the alarming rate of poor record keeping of business
transactions. Analysis shows that 80% of entrepreneurs do not keep
records of their business transactions. The danger here is that there is the
tendency for them to spend their income and /or capital on things other
than those required for business operations/activities. This is a dangerous
trend for to the survival and viability of micro enterprises.
Summary of Findings and Policy Recommendations: The results of this study
bring to the fare the factor highlighted hereunder as impeding entrepreneurial
growth in micro enterprises in Abuja FCT. These factors include:
1.
Low level of literacy which is reflected in
Poor record weeping
Low technical and managerial skill, and
Low capacity for opportunity identification.
2
Low Capital Base Arising from
Low propensity to save
Stringent lending policies of financial institutions.
Lack of government attention and assistance.
3
Harassment by the Task for on environmental sanitation.
4
Lack of business site.
The study makes the following policy recommendations:
i.
Micro-enterprises in similar trade especially in merchandising should be
encourage to adopt the franchising method. This approach represents an
instrument for promoting business co-operation among similar local
small businesses. It is a form of co-operative effort that will
Faculty of Management Sciences, University of Abuja, Nigeria
67
Entrepreneurship Development In Micro-Enterprises In The Nigeria Federal Capital City, Abuja.
ii.
iii.
iv.
v.
enable small or local businesses to compete against larger enterprises
thereby promoting entrepreneurship development. For instance, the small
spare parts shops in Apo Technological village can, under franchise
arrangement, create a central buying agency thereby encouraging bulk
purchase. This will reduce their operating cost and facilitate the
generation of economies of bulk purchase and also, through regular
interaction between the co-operating owners (i.e. entrepreneurs), their
knowledge about business undertakings, environmental scanning efforts
and managerial abilities would be upgraded. This arrangement has been
successfully introduced in Europe and some developing economies in the
ASEAN region.
Government, through enlightenment programme, should encourage
micro-enterprises in the same trade to form voluntary associations
through which they can jointly raise fund, or pool their resources for
improved performance.
The people's Bank, Community Bank, FEAP, NDE etc which are
government institutions for economic empowerment of the poor and the
low income earners should be overhauled. This is to enable them perform
their traditional role of providing target group access to credit and
business information/ideas. In particular, efforts at creating aware ness
about business opportunities should be intensified through a broad
spectrum approach e.g. mass media, through which current opportunities/
potential in business can be disseminated to the people;
Non-governmental Organization (NGOs) and community based
organizations should also channel their financial technical and moral
support towards promoting the growth and survival of micro-enterprises.
Government should develop industrial site in all the phases of the city
development for the informal sector and assistance should be given by
providing basic infrastructure that will facilitate their business
operations; Government should take appropriate disciplinary measures
against its officials who arrogate more power to themselves by unduly
exploiting micro enterprises. It is believed that with the new civil society
under a democratic tradition, law enforcement officers would be made to
know the limit of their authority and power;
Faculty of Management Sciences, University of Abuja, Nigeria
68
Abuja Management Review (AMR) Vol. 1 Issue No. 1 March 2003
vii
Frantic efforts must be made by the three tiers of government and
the organized private sector to give tremendous support to micro
enterprises. Policies and strategies must be formulated to
strengthen them and packages of incentives should include
leadership and management training as well as other technical
assistance. Similarly, both legal and administrative procedures
should be reformed to allow for an unhindered growth in the sector.
viii. Industrial Development Centers should be established in Federal
Capital Territory like in other state of the Federation. In addition to
other statutory duties, the center should evolve an entrepreneurial
initiative programme in each area council of the territory where
services such as management advice, technical assistance, book
keeping techniques, support in accessing finance and identification
of marketing opportunities among other can be offered: and
ix.
Management Development Institute (MDIs) such as industrial
Training Fund, Agricultural and Management Training Institutes
(ARMTI) National Directorate of Employment (NDE) should
develop grass-root oriented programmes to meet the training needs
of micro-entrepreneurs.
Conclusion
This study on micro enterprises has demonstrated that this form of
enterprises can be viable and can provide a formidable economic base for
the upliftment of the mass of people in Abuja and serve as a vehicle for
poverty alleviation. Therefore, any measure aimed at fostering the growth
of micro enterprises is desirable and a setup in the right direction. Thus, it
could be said that many people the world over have found solace and
means of survival in informal business activities. In Nigeria and many
other developing countries, the bulk of economic activities in cities, urban
center and rural communities revolve around the micro business. In the
light of this, it has therefore become imperative for special attention to be
focused on the sector in terms of formulation of policies, strategies and
packages of incentives that will stimulate and sustain its growth.
Abuja, the Federal Capital of Nigeria is an emerging cosmopolitan
territory. The prospects of development activities will continuously attract
people from all walks of life in a bid to take advantage of the potentials in
Faculty of Management Sciences, University of Abuja, Nigeria
69
Entrepreneurship Development In Micro-Enterprises In The Nigeria Federal Capital City, Abuja.
commerce and industry. This calls for a special focus and indeed, a new
vision on the informal sector so that it role can be recognized, its future
brightened and the socio-economics well-being of it operators improved
upon.
References
Choy, C.L. and Mark G. (1997), Franchising, A Vehicle for
Entrepreneurship Development in Singapore Small Enterprises
Development, vol 8 No.2
Clayton, O. (1981), Planning an Career a Business Owner Business
Education Forum 36, pp 23-25.
El-Namaki, M.S. (1992), A Comparative Analysis of Small Enterprises
xs Development Policies in Selected Countries in South and East
Asia, RVB Research Paper Vol, xii, No.2
Foree, L.C. (1998), Are Women's Micro Enterprises Profitable? A Case
Study of Cameroon, Small Enterprises Development vol.9 No. 3.
Gartner, W.B. (1989), Some Suggestions For Research on Entrepreneurial
and Characteristics, Theory and Practice pp. 27-38
Harigopal. K. and V. Kishore (1992): Small Enterprises: Sustaining and
Enhancing Growth Potential, RVB Research Paper Vol, xii No. 2.
Heron, L. and Sapienza, H.J. (1992), The Entrepreneur and the Initiation
of New Venture Launch Activities, Entrepreneurship Theory and
Practice, V pp. 49-55
McClelland, D.C. (1962), Business Drive and National Achievement,
Business Review pp. 99-112.
Johnson, B.R. (1990), Toward a Multidimensional Model of
Entrepreneurship: The case of Achievement Motivation and the
Entrepreneur, Entrepreneurship: Theory and Practice. Pp 39-54.
Riley, T.A. and William F.S. (1998), Development of Micro Small
Enterprises and Rural Finance in Sule- Saharan Africa, the Punch,
p. 17.
Shaver, K.G. and Scott, L.R. (1991) Person, Process, Choice: The
Psychology of New Venture Creation: Entrepreneurship theory and
practice pp. 23-45.
Socten, O. (1997) Women Entrepreneurs in Nigeria Small Enterprises
Development vol. 8 No. 1.
Faculty of Management Sciences, University of Abuja, Nigeria
70