Failure of start-ups underscores need for capacity development
The continued failure of start-ups and small businesses in Nigeria underlines the need for entrepreneurship training, capacity development and mentorship in the country.
Unconfirmed data say that one out of three Nigerian start-ups goes under within three years. The high rate of failures in the country indicates that many business owners, particularly young ones, go into entrepreneurship without adequate capacity to handle crisis is in a complex and unpredictable environment.
“We have been trying to push entrepreneurship education. Young Nigerian businesses need the education to succeed,” said Friday Okpara, director, strategic partnership, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), at the FATE Foundation Dialogue Series held in Lagos.
Okpara said many young Nigerians ran away from capacity training programmes even when they were sponsored by the government.
Henrietta Onwuegbuzie, academic director, Owner-Manager Programme, Lagos Business School, who moderated the panel discussion, said there was a need for policy makers to understand that they could not do without entrepreneurship education.
“We cannot do without entrepreneurship education,” Onwuegbuzie said.
Entrepreneurship education involves capacity development, training and mentorship. Experts say it also incorporates skills needed to identify opportunities within a market.
“Capacity development will enable a start-up to learn how to package bankable proposals to banks, obtain book-keeping and accounting skills, understand man management as well as identity opportunities,” said Chukwubuike Nnoli, CEO, Zubnol Ventures, in a chat.
Tom Ogboi, district coordinator, SW7, during the Full Gospel Businessmen’s Fellowship International 2015 business seminar held at the National Art Theatre, Igamu, Lagos, said:
“We try and identify opportunities in the environment and educate our members on how to exploit them,” Ogboi said.
“We train our members to tap into sectors that are untapped. Take for instance, the housing has a shortfall of 17 million annually. There is an opportunity here. Agriculture is a sector that has not been tapped. Agric has several value chains and it takes training and information to understand the opportunities,” he added.
Nigeria is in dire need of proactive initiatives as high unemployment rate, rising inflation rate and weak economic growth caused by over 50 percent fall in price of oil continues to stunt growth prospects.
The International Monetary Fund (IMF) has cut its economic growth forecast for Nigeria in 2015 to 4.8 per cent, up from 7.3 per cent it forecast in October of last year.
The country relies on oil for 95 percent of foreign exchange earnings and 70 percent of government spending. At the moment, government is grappling to pay workers salaries as external reserve continues to receive punches owing to falling oil price.
Analysts say for the country to reach its full potentials, reduce poverty to the barest minimum and diversify the economy to reduce reliance on oil, more business owners have to be trained to take advantage of the country’s growing population that crave for consumption.
Nigeria has a population of 174 million. Over 60 percent of this population comprises the youth.
“We need to train these young entrepreneurs. We need to rehabilitate training centres. I always believe that government is a continuum. You don’t just come in and kill the good policies of people before you,” said Gbenga Ashiru, commissioner for commerce and industry, Ogun State, at the FATE Foundation conference.
Paul Malherbe, CEO and managing director, African Management Services Company (AMSCO), recently enumerated three key issues that required special attention for Nigeria to reach its private sector development agenda to include: a change of focus from youth education to youth entrepreneurship, increased interventions that promote gender empowerment and directly developing SMEs with limited skills.
“Most Africans SMEs are faced with growth challenges because there is a dependency on large companies or cooperates to educate them. Our business landscape can only improve if we don’t wait but rather place our lens on collaborations to develop human capital at SME level, matching the right skills to the right jobs, training the management of those businesses and helping them access financial capital to reinvent themselves, this is our core focus at AMSCO” said Malherbe.
ODINAKA ANUDU