1.1 Introduction
The National Directorate of Employment is a Nigerian government agency tasked with designing and implementing policies and programs to tackle unemployment and promote employment opportunities. The NDE focuses on creating job opportunities through vocational training, entrepreneurship development, and employment services (NDE, 2020). Entrepreneurship has emerged as a critical solution to the growing unemployment crisis in Nigeria. With an increasing population and a limited capacity of the formal sector to absorb new labor market entrants, entrepreneurship offers a viable alternative for job creation and economic development. According to the National Bureau of Statistics (2021), Nigeria’s unemployment rate stood at 33.3%, signifying the urgent need for innovative approaches to tackle joblessness. The National Directorate of Employment (NDE) was established to provide entrepreneurship training and support, aiming to reduce unemployment by empowering individuals with the skills and resources necessary to start their own businesses.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background of Study
Over the years, the Nigerian government has launched numerous entrepreneurship initiatives in response to the unemployment challenge. For instance, in the 2000s, there was a renewed emphasis on entrepreneurship as a tool for economic growth and poverty alleviation. Programs such as the Youth Enterprise with Innovation in Nigeria (YOUWIN) and the Graduate Internship Scheme (GIS) were launched to encourage entrepreneurship among young people (Oyelola et al., 2013). These initiatives, along with the NDE’s continued efforts, have sought to address unemployment by fostering entrepreneurial skills and supporting small business creation. Despite these efforts, entrepreneurship in Nigeria continues to face significant challenges. Factors such as inadequate infrastructure, poor access to finance, and an unstable business environment have limited the effectiveness of these programs (Adejumo, 2018). Nevertheless, entrepreneurship remains a crucial strategy for tackling unemployment in Nigeria, and the historical role of the NDE highlights the importance of institutional support in promoting job creation through entrepreneurial ventures.
The issue of unemployment in Nigeria has been a persistent challenge, with far-reaching socio-economic implications. The Nigerian economy, while abundant in natural resources, has struggled to provide enough jobs to match the growing labor force. The National Bureau of Statistics (2021) reports an alarming unemployment rate of 33.3%, one of the highest in Africa. This situation is exacerbated by a rapidly increasing population, an education system that does not adequately equip graduates with employable skills, and an overdependence on the oil sector, which employs a small fraction of the workforce. Consequently, there has been a growing recognition of the need to promote entrepreneurship as a sustainable means of reducing unemployment and fostering economic growth.
Entrepreneurship, defined as the process of identifying, creating, and exploiting business opportunities (Shane & Venkataraman, 2000), is seen as a vital tool for job creation, especially in developing countries like Nigeria. The National Directorate of Employment (NDE) was established in 1986 by the Nigerian government with the primary goal of tackling unemployment through skills acquisition, job creation, and entrepreneurship development programs (Akinwale, 2019). Through various initiatives such as vocational skills training, agricultural employment schemes, and small-scale enterprise programs, the NDE has sought to provide Nigerians, particularly the youth, with the tools necessary to create their own employment.
According to Oyelaran-Oyeyinka (2020), aspiring entrepreneurs face difficulties such as limited access to finance, inadequate infrastructure, poor power supply, and bureaucratic bottlenecks. These barriers hinder the success of small and medium enterprises (SMEs), which are critical drivers of job creation in most economies. Furthermore, there is a lack of a supportive entrepreneurial ecosystem that fosters innovation and business growth. The NDE’s establishment and its sustained efforts over decades represent a significant part of Nigeria’s response to the unemployment crisis, marking a critical point in the history of entrepreneurship in the country. However, the persistent challenges that entrepreneurs face underscore the need for continuous reforms and support to improve the entrepreneurial ecosystem. Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the entrepreneurship challenges of unemployment.
1.3 Statement of Problems
Investigation revealed that the issue of unemployment in Nigeria is a major socio-economic problem, with significant implications for the country’s development. Despite various governmental efforts, including the establishment of initiatives like the National Directorate of Employment (NDE), unemployment rates remain high. One of the core problems is that the entrepreneurial environment in Nigeria is not conducive to fostering sustainable business ventures. Entrepreneurs face numerous obstacles, including poor infrastructure, limited access to financing, inadequate training, and an unstable business environment (Adejumo, 2018). These challenges make it difficult for potential entrepreneurs to start or sustain businesses, thereby limiting their capacity to contribute meaningfully to employment generation.
The problem of insufficient access to credit is particularly significant, as many entrepreneurs lack the necessary funds to scale their businesses. Financial institutions are often reluctant to provide loans to small-scale entrepreneurs due to the perceived risks associated with start-ups and the lack of adequate collateral (Oyelola et al., 2013). Moreover, inadequate infrastructure, such as unreliable electricity and poor transportation networks, further stifles entrepreneurial activities, making it difficult for businesses to thrive and expand.
Another critical issue is the mismatch between the skills acquired by graduates and the demands of the labor market. Many young Nigerians leave school without the entrepreneurial or vocational skills required to create self-employment opportunities (Ekpo, 2014). As a result, they are often ill-equipped to navigate the complexities of business management, further exacerbating the unemployment problem. Despite various training programs provided by the NDE and other governmental bodies, these efforts have not fully addressed the skill gap needed for successful entrepreneurship.
1.4 Aim and Objectives of Study
The aim of the study is to examine the challenges of entrepreneurship in addressing the issue of unemployment in Nigeria. In achieving this aim, the following specific objectives were laid out as follows:
- To assess the impact of government policies and support programs on entrepreneurship development and unemployment reduction.
- To analyze the extent to which access to financing and infrastructure affects the ability of entrepreneurs to generate employment.
- To identify the major challenges faced by entrepreneurs in Nigeria in their efforts to create employment opportunities.
- To explore the role of entrepreneurial training and skill development in mitigating unemployment in Nigeria.
- To evaluate the effectiveness of the National Directorate of Employment (NDE) in promoting entrepreneurship as a strategy for reducing unemployment.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- How effective is the National Directorate of Employment (NDE) in promoting entrepreneurship as a strategy for reducing unemployment?
- How does access to financing and infrastructure affect the ability of entrepreneurs to generate employment in Nigeria?
- What are the major challenges faced by entrepreneurs in Nigeria in their efforts to create employment opportunities?
- What role does entrepreneurial training and skill development play in addressing unemployment in Nigeria?
- What impact do government policies and support programs have on entrepreneurship development and unemployment reduction?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: Government policies and support programs do not play a critical role in promoting entrepreneurship and reducing unemployment.
- H1: Government policies and support programs play a critical role in promoting entrepreneurship and reducing unemployment.
Hypothesis Two
- H0: Access to financing and infrastructure does not significantly impact entrepreneurial success in generating employment opportunities.
- H1: Access to financing and infrastructure positively impacts entrepreneurial success in generating employment opportunities.
1.7 Significance of Study
The findings of this research will assist policymakers in developing more effective strategies and programs to support entrepreneurship and tackle unemployment. Also, the study will provide valuable insights to government agencies, such as the National Directorate of Employment, enhancing their efforts to implement targeted interventions and support mechanisms for entrepreneurs.
Furthermore, the research will benefit educational and training institutions by highlighting the areas where entrepreneurial training and skill development can be improved to better prepare individuals for successful business ventures. It will also offer critical information to financial institutions, helping them tailor their lending and support services to better meet the needs of emerging entrepreneurs.
Lastly, the study will be a valuable resource for entrepreneurs and small business owners, offering them a clearer understanding of the challenges they will face and the resources available to overcome them.
1.8 Scope of Study
The scope of the research is focused on entrepreneurship challenges of unemployment in Nigeria using National Directorate of Employment as a case study.
1.9 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work.
- Insufficient data was a significant challenge, as it hindered the ability to draw comprehensive conclusions about the entrepreneurial landscape.
- Frequent power failures affected the consistency and reliability of data collection and analysis processes.
- Delays from respondents also impacted the timeliness of the research, causing potential delays in data acquisition and analysis.
- Additionally, financial and time constraints limited the scope of the study, restricting the breadth of research and the depth of analysis that could be conducted.
1.10 Definition of Terms
Entrepreneurship: Entrepreneurship refers to the process of starting and operating a new business, typically with the goal of achieving economic growth and innovation. It involves identifying opportunities, taking risks, and managing resources to create and grow new ventures (Schumpeter, 1934).
Unemployment: Unemployment is defined as the condition where individuals who are capable of working, are actively seeking work, but are unable to find any employment. It is an important economic indicator that reflects the health of an economy (ILO, 2017).
National Directorate of Employment (NDE): The National Directorate of Employment is a Nigerian government agency tasked with designing and implementing policies and programs to tackle unemployment and promote employment opportunities. The NDE focuses on creating job opportunities through vocational training, entrepreneurship development, and employment services (NDE, 2020).
Entrepreneurial Challenges: Entrepreneurial challenges are the various difficulties and obstacles that entrepreneurs face when starting and managing a business. These challenges can include financial constraints, regulatory barriers, market competition, and lack of access to resources (Kuratko, 2016).
