Reworking Youth Entrepreneurship in Nigeria To Drive Growth

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Wednesday, August 07, 2019 /  07.30PM / Nifemi Taiyese for Proshare WebTV / Header Image Credit: @TonyElumeluFDN


Building the framework for growing a sustainable succession of successful entrepreneurs is at the heart of a credible youth employment strategy, says Tony Elumelu, CON, Founder The Tony Elumelu Foundation (TEF) Entrepeneurship Programme. According to Elumelu , “Young entrepreneurs and those they inspire are the lifeblood of Africa’s rise.”

 

He insists that, “Entrepreneurship means that young Africans no longer have to find a job or be trained to be employees. Instead, it will enable our young people to create their own jobs, become employers, and take charge of their futures, instead of letting the future happen to them.”

 

This indeed marks a significant shift from an Africa that is shaped by dependency to a continent that rises to the level of sustainability and shared prosperity.

 

It is noted that MSMEs in the country contribute over 76% of the nation’s Gross Domestic Product (GDP) with an estimated 30 million small businesses operating in the country, according to the Small Medium Enterprises Development Agency of Nigeria, SMEDAN.


 

Demography


Nigeria has 36 states, with over 500 different ethnic groups. The Nigerian population is over 200.96 million. Nigeria has the highest population of any African country.

 

The median age of the Nigerian citizen is 18.4 which means that most of the population are relatively young.

Nigeria’s population is projected to grow to 392 million people in 2050, which will make it one of the top 7 most populous nations on the globe.

 

The labor force statistics for unemployment in Nigeria as at Q3 2018 was 23.1%,

compared to South Africa’s 29% in 2018.


 

Entrepreneurship Initiatives


Enterprise development in Nigeria has become a vital tool for galvanizing economic development, with enormous opportunities for the young to turn ideas and talent into viable ventures.

 

In Nigeria several Non-Governmental Organizations, the Federal Government, State Governments and Government Developmental Financial Institutions are exploring ways of providing strategic interventions in support of young entrepreneurs.


 

Fate Foundation


The Fate Foundation is dedicated to promoting  entrepreneurship in Nigeria, it is a non- profit organization founded in 2000 by Mr. Fola Adeola Co-Founder Guaranty Trust Bank, an accomplished banker, businessman and philanthropist . The aim of the foundation is to help start, grow and scale businesses to enable a thriving economy.


 

FG GEEP


The Muhammadu Buhari administration launched the Government Enterprise and Empowerment Programme, executed through the Bank of Industry(BOI)  called trader moni, market moni and farmer moni which are designed to empower 2m petty traders across different local value chains.

 

The goal of trader moni, for example, is to take financial inclusion to grass-root levels.

This initiative is geared at fostering the economy through empowering MSMEs. By 2023 the programme aims to reach 10 million people.

 

MSME Clinic


The National Micro Small and Medium Enterprises Clinic is an initiative of Vice President Office in partnership with Federal Ministry of Industry, Trade and Investments as well as 11 other federal agencies.

It is designed to promote the activities of the MSMEs and create opportunities for them to scale and contribute to the diversification of the Nigerian economy.

The areas include access to finance, business registration, access to market, tax compliance and others.


 

BOI Interventions


FGN Special Intervention Fund for MSME (National Enterprise Development Programme) This initiative is to provide subsidized loans at single digit all inclusive interest rates, in order to stimulate economic activity in the SME sub sector.

 

Tony Elumelu Entrepreneurship Programme, TEEP


The Tony Elumelu Entrepreneurship Programme, TEEP is an initiative founded in 2010 by Mr.  Tony O. Elumelu, a local billionaire and philanthropist. Funded with $100m TEEP is designed to discover and support 10,000 African Entrepreneurs in a decade (2015-2025), with a target of creating over 1m new jobs for Africa’s social and economic development.

 

Since 2015, over 5,000 entrepreneurs in Africa have been empowered to transform their ideas into strategic business ventures that can create jobs and transform the socio-economic landscape of the continent.

 

Nigeria is a major beneficiary and the TEEP initiative has received remarkable support and partnerships with the likes of the International Committee of the Red Cross, ICRC, United Nations Development Programme, UNDP, African Development Bank, AfDB, French Development Agency, FDA, Bill & Melinda Gates Foundation, Africa Export-Import Bank, AFREXIM, amongst others.


 

State Entrepreneurship Initiatives


Lagos State takes the lead with the Lagos State Employment Trust Fund, established in 2016 with an initial capital of N25bn to provide  loans with low interest rates  to young entrepreneurs to scale their businesses.

So far over 7,817 MSMEs have been empowered with over 90,000 jobs created by the beneficiaries.

 

Edo State, Akwa Ibom and Ekiti are also adopting the model of the entrepreneurship empowerment initiatives to support young entrepreneurs in their respective states.

 

Tech Hubs


Tech hubs are physical spaces developed to help start-up companies succeed. Technology is important in nation building and an avenue to solve national problems using technology.

 

 The Federal Government, State Governments, Self-Regulatory Organizations and the  Private sector are getting involved in creating an enabling environment and establishing tech hubs, to tap into the developments around the global fourth industrial revolution driven by digital technology.

 

With emerging technologies like Blockchain, Artificial Intelligence, Big Data, Analytics, Robotics, the use of Drones and Fintech, Nigeria has to be well positioned to utilize this technologies for its economic advancement.

 

Some of the tech hubs supporting young entrepreneurs include the Co-Creation Hub, Nigeria Stock Exchange Enterprise Innovation Hub(Lagos), Ventures Park(FCT Abuja), Africa Fintech Foundry(Powered by Access Bank, Lagos), Wema Bank ALAT Tech Hub(Lagos), PriceWaterHouse Coopers Experience Centre (Lagos), amongst others.


 

Reworking Youth Entrepreneurship in Nigeria


A good number of the entrepreneurship initiatives by both government and individuals are making it possible for start-ups to thrive and scale.

 

In order to rejig youth entrepreneurship in Nigeria, there should be increase in the public private sector partnership, as this will help sprout more initiatives to lift the nation out of economic instability, through the empowerment of MSMEs.

 

To achieve this a number of key options are to be considered;

 

  • A Vibrant Capital Market: The Nigerian capital market framework should be structured to support the growth of small businesses in Nigeria, and their capacity to raise funds to expand their operations. Already the Nigeria stock exchange has its planned “Growth Board” which is geared towards encouraging MSMEs led by young Nigerians.

  • Supportive Monetary Policy: The Monetary policy direction in the country  must be supportive to the growth of MSMEs and youth entrepreneurship in the country. So far the Central Bank of Nigeria

  • Attracting More PEs and VCs: The Governments at the Federal and State should work out modalities in their enabling business environment reforms, to attract more Private Equities and Venture Capital firms to invest in the Nigerian MSME space.It will also  serve as an avenue for financing the growth and development of the MSMEs

  • Scale the Ease of Doing Business Reforms: The Ease of Doing Business reforms from the Federal,  State to Local government levels must be scaled to address the issues of registering a business, cost of registration, permits, enforcement of contracts amongst others.

  • Signing of the Re-enactment/Repeal of CAM Bill 2018: The Companies and Allied Matters Bill 2018, repealed and re-enactment was passed by the National Assembly, and is now awaiting the assent of the President. Stakeholders are expecting that the President will sign the bill to transform the Nigerian business environment.

  • Repositioning Youth Schemes and Initiatives: Initiatives like the National Youth Service Corps, NYSC and the Industrial Training Fund, ITF should be repositioned to boost youth entrepreneurship skills and capacity. This should also involve the engagement of the private sector in terms of support.

 


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