CHAPTER ONE

INTRODUCTION

1.1       Background of the Study          

Despite the enormous natural resources, Nigeria ranks low on the human development Index with 160 percent income distribution gap at the household level that suggests a bias against rural and uneducated households (Human Development Report 2010). This is consistent with rising poverty data, which increased from 54.4% (in 2004) to 69% in 2010 according to official government report in “the Nigeria Poverty Profile 2010”. According to the National Bureau of Statistics (NBS) more than 100 million citizens earn less than $1 per day, thereby further widening the inequality gap. Following the increasing rate of poverty, majority of citizens, mostly unskilled and poor, with low level of education and lack of asset control are therefore confined to the informal sector for survival due to necessity. The informal sector, which largely comprises trade, agricultural businesses and services related to repairs, is estimated to provide 80% of non-agricultural employment and 60% urban jobs. Unfortunately, this category of business remains at the subsistence level, constrained to the poverty corridor due to poor motivation.

The importance of the informal sector in boosting employment generation and consumption activities in a developing country like Nigeria cannot be underestimated.

The informal sector, which is characterized by informal activities and absence of government regulation, is inclusive of transactions not accounted for in the Gross Domestic Product (GDP) of the country. Though the informal sector, to a larger extent provides jobs to a great number of households in Nigeria, the main policy challenge according to Ajayi and Ademokun (2010) is supporting the informal sector to promote more employment opportunities, productivity, and income for the poor. Akintoye (2008), also suggested that poverty and unemployment be reduced through a well managed and supported informal sector.

In Nigeria and other African countries, poverty is described as a socio-economic problem that affects growth and development in the region. The government of these countries have designed and embarked on several measures to reduce the degree of poverty and improve the social well-being of the people. In Nigeria, the federal government has initiated several ensures and policies to reduce the level of poverty among the masses.

Entrepreneurship is one of the measures embraced by the government to reduce mass poverty and unemployment in the country. This study is not established to evaluate past measures of poverty reduction in Nigeria, but aim at investigating the effect of entrepreneurship development on job creation and poverty alleviation. Entrepreneurship development entails philosophy of self-reliance such as creating a new cultural and productive environment, promoting new sets of attitudes and culture for the attainment of future challenges (Arogundade, 2011).

1.2       Statement of the Problem

In separate reports, the National Institute for Social Research (NISER) and the World Bank revealed that over 55 per cent of Nigerians of working age are unemployed, representing one in five adults. The World Bank report also indicated that only one in every ten graduates get a job while a recent report by the National Directorate of Employment (NDE) indicated that over 200,000 Nigerian graduates who completed the National Youth Service Corps (NYSC) in the last five years, remained unemployed.

Given the challenges that bedevil Nigeria, this study advocates for the inclusion of entrepreneurship development at the forefront of its economic development agenda.

Several studies on entrepreneurship concentrate on the contribution of entrepreneurship to sustainable economic development, job creation, innovation and resource allocation, but there is a little attention on effect of entrepreneurship training and education on poverty alleviation, especially in Kaduna State and specifically Ankpa particularly. The success of entrepreneur in business depends on many factors including training and development, but these are often negligible. Also, most of the government efforts to reduce poverty in the country were not tailored towards entrepreneurship development and organization of training for the unemployed people in the society. These problems therefore prompt the need for current study.

1.3       Objectives of the study

The objective of this study is to examine the impact of entrepreneurship development on job creation and poverty reduction in Ankpa Local government area, Kogi State. Other objectives are

I.          To investigate the relationship between entrepreneurship development and job creation.

II.         To inspect the relationship between entrepreneurship development and poverty alleviation.

1.4       Research Questions

In line with the above overture, the research will make an attempt to answer the following questions

1)         What is the impact of entrepreneurship development on job creation and poverty alleviation in Ankpa Local government area, Kogi State?

2)         What is the relationship between entrepreneurship development and poverty alleviation in Ankpa Local government area, Kogi State Area?

1.5       Research Hypothesis

The null hypotheses to be tested against the alternative hypothesis for the study

Ho: ?? = 0: state that: Entrepreneurship development does not have any significant impact on job creation and poverty alleviation in Ankpa Local government area, Kogi State

H1: ?? ? 0: state that: Entrepreneurship development have impact on job creation and poverty alleviation in Ankpa Local government area, Kogi State

1.6       Significance of the Study

Entrepreneurship as a cornerstone of development strategies for emerging economies has garnered support among a broad spectrum of scholars, policymakers and governments. [UNDP, Nigeria, 2009] and UNIDO-Nigeria, 2012].

The relevance of this study is implicitly based in its ability to assist policy makers to formulate policy supportive of informal sector operators especially against the background that knowledge acquired from entrepreneurship development sharpens the sector operators thereby leading to increased job creation as well as alleviating poverty in the society. The significance of the study cannot be overstressed. The study is also significant in the following way:

1.         It will also add and improve the existing literature on the issue of entrepreneurship development in relation to job creation and poverty alleviation

2.         The findings are expected to guide government/policy makers in drawing policies that has to do with encouraging entrepreneurship development and by implication opportunities for employment and;

3.         It is also significant because it is a requirement in partial fulfillment of the award of the degree of Bachelor of Science (BSc.)

1.7 Scope of the Study

The study will cover only Ankpa Local government area, Kogi State area as a result of the inherent difficulty of studying the entirety of the state and country at large. It will also make use of both primary and secondary data which will reflect a sizeable number for a better result.

1.8. Limitation of the Study

The study is expected to be constrained by a number of problems which include the difficulty of obtaining relevant data. It is so because some of the information necessary for the study may be considered confidential and as such inaccessible to the researcher. Time and finance are other constraints that constitute major limitation of the study. This is because the duration for the research work is barely less than seven months and above all disrupted by the long ASUU strike action. And also, the financial difficulty which may arise during the process of gathering the necessary information is also not a light burden.

Another limitation that can impact negatively on the results of the study is the educational status of the population (unlearn staff) of the study.