Challenge of entrepreneurship in Nigeria

Challenge of entrepreneurship in Nigeria – Entrepreneurs encounter a lot of challanges in the course of running their businesses. The challenges of entrepreneurship in Nigeria and the solutions to challenges facing entrepreneurs in Nigeria are treated in this article. Also, one of the fundamental pillars on which most economies are establish is entrepreneurship.
Furthermore, a nation’s trade balance, employment situation, and production of tax money are all significantly influenced by entrepreneurs, but they also face challenges and don’t worry because the solution to all their challenges is in this post.

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Challenge of entrepreneurship in Nigeria

Entrepreneurs in Nigeria, like those in other developing nations, confront a series of difficulties, though, some of which are connected to outside forces and others that are not. Several business owners gave it their all, yet there was no success to back up their sacrifices and hardships.

Below are the challenges entrepreneurs face in Nigeria and their solutions:

1. Capital problems

For any entrepreneurial venture to take off, there must be sufficient capital to cater for the wide-ranging startup costs. For most businesses, these initial costs include premise fees, licenses, opening stock, logistics, business registration, hiring, and so on. In Nigeria, the financial sector is hugely biased against startup entrepreneurs. This is because most entrepreneurs who are just starting up often have little to no capital. This comes as no surprise since most are just getting into the business scene. In addition, those who can access loans often find the lenders’ fees and interest rates to be somewhat exorbitant.

Possible solutions

Like in many developed countries, the Nigerian government can come up with ways to alleviate the capital problem amongst beginner entrepreneurs. Here are some possible solutions. Create, facilitate, and sustain a government-owned fund to lend capital to entrepreneurs based on the soundness of their potential ventures. Furthermore, work with private lenders to avail low-interest loans to the owners of promising business ventures. Encourage wealthy Nigerians to create venture capital firms that can then create funding and ownership deals with potential entrepreneurs.

Challenge of entrepreneurship in Nigeria

2. Insufficient business knowledge

A successful business venture largely depends on its founder(s)’ understanding of numerous aspects of the modern-day business environment. To succeed, one must understand how to place and promote their product or service, who to hire, where to market, what to charge, where to source materials, and so on. For some Nigerian beginner entrepreneurs, this knowledge is either lacking or inadequate. With the unforgiving nature of today’s business world, a venture created by an unknowledgeable founder is almost guaranteed to fail.

Possible solutions

Here are some possible solutions that can help improve entrepreneurship in Nigeria.

• The challenges of entrepreneurship education in Nigeria can be alleviated by encouraging entrepreneurs to enrol in online and offline courses on how to start, run, and grow a modern-day enterprise.
• Improve the quality of business education in Nigeria’s universities and colleges.
• Create platforms where students can interact with successful entrepreneurs and begin to hone their business skills while still in school.

Challenge of entrepreneurship in Nigeria

3. Poor infrastructure

This is one of the most prominent government-related challenges to Nigerian entrepreneurship. For enterprises to succeed in a country, there must be adequate infrastructure. Some of the most important infrastructural requirements include good road networks, reliable electricity, and adequate water supply.
Unfortunately, all the above requirements are significantly lacking in Nigeria. Up until recently, power has been quite unreliable in Nigeria, and road networks in some states are barely existent. This means that budding entrepreneurs in such states would be forced to abandon their venture since there would be no means of transporting their finished goods to the market.

Possible solutions

Here are some possible government-initiated solutions to entrepreneurship problems in Nigeria.

• Invest in infrastructure development through external and internal borrowing, public-private partnerships, and internally generated revenue.
• Encourage private power providers to compete with the primary national provider. This will reduce monopoly power and possibly improve the power supply throughout the country.

Challenge of entrepreneurship in Nigeria

4. Multiple taxations

This is a huge hindrance to entrepreneurs in numerous developing countries. In a bid to increase tax revenue, governments in these countries tend to have multiple taxes. A budding entrepreneur, for example, would be required to pay some federal tax for their business, pay VAT for the goods they produce, pay state-based taxes, renew their operating licenses each year, and numerous other tax-related obligations.
Today, Nigeria has over 30 forms of tax and more than 300 levies, most of which affect entrepreneurs in various economic sectors.

Possible solution

The easiest way to deal with these is through tax consolidation. This would mean that a potential entrepreneur will know the exact amount of the only tax they will ever have to pay once their venture is up and running. This would make it easier for such a person to know beforehand whether their venture makes sense considering the payable tax.

Challenge of entrepreneurship in Nigeria

5. Impatience and lack of commitment

Most successful business ventures have a story behind them, often riddled with failure, setbacks, and growth on the entrepreneur’s part. Today’s generation, commonly labelled as ‘the microwave generation,’ likes to have things happen overnight. However, this has led many business owners to abandon their ventures at the first challenge encountered. Also, a successful enterprise calls for a lot of patience and resilience. Most Nigerian youths need to be reoriented and invest some commitment into their new ventures.

Possible solution

This is mostly a mentorship issue. However, people need to be trained that business ventures take time, at times years, to succeed. By encouraging potential business owners to seek mentorship, numerous new enterprises can be saved.

Challenge of entrepreneurship in Nigeria

6. Inconsistent government policies

Businesses usually thrive in an environment with good government policies. When there is a lack of continuity with government policies, entrepreneurs feel the heat. In Nigeria, for example, regimes are known for overturning policies put in place by previous regimes. This puts business ventures in a state of confusion, hampering their growth.

Possible solution

The existing regime should put in place policies enshrined in the laws of the land. This means that the policies will remain in place regardless of the reigning government.

Challenge of entrepreneurship in Nigeria

Read Also:

1. Profitable Business Planning for Startups
2. Business Planing Process for Scale-ups
3. Business planning process: Approved Checklist
4. Other feasibility factors
5. The objectives of feasibility study
6. Apply for Mentorship
7. Endorsed business planning quotes for all

Conclusion:

Finally, on the Challenge of entrepreneurship in Nigeria, This article has shown you the challenges of entrepreneurship in Nigeria and the solutions to challenges facing entrepreneurs in Nigeria. Also, we can give you a good business plan and help with CAC registration. Contact us today at +234 905 313 0518 or [email protected] for more information.