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FOREIGN CAPITAL INVESTMENT AND ENTREPRENEURIAL DEVELOPMENT IN NIGERIA (A CASE STUDY OF EBONYI STATE)

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Abstract

This work deals, with the topic, the role of foreign capital in Entrepreneunal development in Nigeria (a case study of Ebonyi State). The study set out to unravel the place, opportunities and challenges in Nigeria with particular reference to Ebonyi state. Among the issues raised as necessitating this study include: Inadequate financing from local financial institution The rate of foreign investment in the economy. The presence of internal organization through which capital can be channeled into the economy . In view of these, the study examines the institutional arrangements for development of entrepreneurship in Nigeria, to determine the role of foreign capital in entrepreneurship development etc. The study among other things found that Nigeria investor can raise foreign capital from internal capital market provided that the basic requirements are met. Thus, it concluded that foreign capital is available for entrepreneurship development in Nigeria but accessibili

1.1     BACKGROUND OF THE STUDY

The current emphasis on entrepreneurship development is infirmed by the protracted economic downturn which has not only retarded economic growth but aggravated unemployment situation in the country, many Nigerian did not think of self employment as an alternative to government employment.  But the worsening unemployment situation currently playing the country has changed this thinking, short of alternative many graduates and school leaver as well as other Nigerians are now moving in quest for business venture (Eze, 2010:34).

In recognition of the need of foreign, the federal government has introduced a series of policy packages that are designed to attract foreign investment in the

 

Nigeria small and medium enterprises sub-sector. In an attempt to diversify the economy and stimulate foreign private institutions are having with international organization to enhance the later participation in different entrepreneurship development activities in Nigeria (onyishi,2011:19) there are international  organization such as the international labour Organization involved in promoting small business and entrepreneurship in different part of the world. (Afolabi 2010) it is against this background that this study is set to examine the role of foreign capital in entrepreneurship development in Nigeria.

 

1.2     STATEMENT OF PROBLEMS

Entrepreneurship development is providing self employment opportunities for millions of the unemployed in Nigeria.  However, this has not been effectively achieved in Nigeria because of the following;

1. Inadequate financing from local financial institution.
2. The rate of foreign investment in the economy and inadequate provision of foreign capital to supplement the available domestic capital for entrepreneurship development.
3. The presence of international organization through which foreign capital can be channeled into the economy. All these constrain the rapid growth of entrepreneurship development in Nigeria.

 

1.2  OBJECTIVES OF THE STUDY

1. To examine the nature of entrepreneurship development in Ebonyi State.
2. To examine the institutional arrangement for development of entrepreneurship in Nigeria.
3. To determine the role of foreign capital in entrepreneurship development.
4. To determine the extent of foreigners participation in entrepreneurship activities.
5. To examine the challenges of entrepreneurship development in Ebonyi State.

 

1.4  SCOPE OF THE STUDY

The scope of this study covers the nature of entrepreneurship development and the impact of foreign capital. In this research, however, the study is concentrated in Ebonyi State.

 

1.5  RESEARCH QUESTIONS

1. What is the nature of entrepreneurship development in Nigeria?
2. What is the institutional arrangement for entrepreneurship development?
3. What is the role of foreign capital in entrepreneurship development?
4. To what extent do foreigners participates in entrepreneurship activities?
5. What are the challenges and prospects of entrepreneurship development in Ebonyi State?

 

1.6  RESEARCH HYPOTHESIS

Hypothesis One

H

0

:  Nigeria entrepreneurship does not have access to foreign capital.H

1

:  Nigeria entrepreneurship have access to foreign capital.

 

Hypothesis One

H

0

:  Foreign capital does not contribute significantly to entrepreneurship development in Nigeria.

H

1

: Foreign capital contributes significantly to entrepreneurship development in Nigeria.

 

1.7  SIGNIFICANCE OF THE STUDY

This study will be useful as it will serve various purpose firstly, graduates and school leaves will be encouraged by this study to take the existing opportunities to entrepreneurship development to be self determining. In this way, they can stop washing their time waiting for non-existent jobs in public service understand the challenges of entrepreneurship and how they can be overcome.  Thirdly, private institutions, government agencies and Nigeria businessmen study.  They will understand from this study and need for them to attract or bring foreign investors into Nigeria to form partners.  This will be a very significant way of making foreign capital to flow into the country for the purpose of entrepreneurship activities. Foreign capital will enable the local entrepreneurs to acquire or procure adequate equipment and infrastructures required for small business or entrepreneurial operation.

Fourthly, the government will also benefit from the study.  The role of foreign capital in entrepreneurial development can not be over emphasized.  The government will see in this study the need to enter into agreements with government of the Western and Eastern Europe as well as the far cast and American on the funding of entrepreneurial programme in Nigeria will also benefit from the study.  This is because it will make them understand the need for increased emphasis and exploration into entrepreneurial venture and how sustained entrepreneurship activities will enhance industrial development in Nigeria.

Finally, the study will be useful for academic purpose.  It will provide useful data and information for all those who will carryout related studies in the future.  Besides, the research finding can provide recommendations for further studies.

 

1.8  LIMITATION OF THE STUDY

The major limitation of the study is the relative scarcity of data on the involvement of the foreigners in entrepreneurial activities in Ebonyi State.

Consequently, the researcher involved in entrepreneurship funding in the state.  Even this was not the employees of the incorperative attitudes of some of the employees.

Secondly, the concentration of the study in Ebonyi state was because of financial constraints.  The researcher did not have adequate finance to cover other states of the federation.

Finally, because of time constraint the researcher was bounced by time to complete this study within a stipulated;

 

1.9  DEFINITION OF TERMS

Entrepreneur:  This refers to any individual who create

new business and manages it until it succeed.

Entrepreneurship:  This includes all the physical facilities, regulations opportunities and risk there is.

Venture Capital: This is funds which investments loan not for investment purpose.

Business Up Capital: This is the capital needed for initial take off of business.

Business Opportunities: This is a potential profitable event.

Innovation: This is the development of a new product from an old one.