1.1 Introduction
In Nigeria, accurate unemployment rates are difficult to access. However, according to Oyebade (2003), Nigeria’s unemployment can be grouped into two categories: first, the older unemployed who lost their jobs through redundancy or bankruptcy and second, the younger unemployed, most of whom have never been unemployed. Moreover, the educated unemployed tended to be young males with few dependents. There are relatively few secondary school graduates and the lowered job expectations of primary-school graduates. The author, however, admitted that there is no consistent trend of unemployment rates in Nigeria. An increase in one or two years is sometimes followed by a decline in the subsequent years. Nowadays, the use of POS system is not only available in business set ups but also in schools which have gone a long way in impacting schools (Ojo, 2004).
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 technical terms.
1.2 Background of Study
The most pressing problems in Nigeria today and in every developing nation is unemployment. Many people both young and old find it difficult to get gainful employment. Unemployment is a common phenomenon, which every nation strives to eradicate. Events all over the country have confirmed that unemployment situation in this country has reached a crisis level. The labour market is already saturated, yet youths are seen daily in thousands, roaming the streets, in towns and cities looking for jobs which are not there. The increase in demand for solution to youth unemployment in the country arises from the fact that enormous educational institutions are seen every day with their certificates searching for white-collar jobs. It is no gainsaying that in the present economy retrenched, able-bodied people and many graduates with formal training in education are now found taking up teaching jobs in private Nursery, primary, secondary, private lessons of different levels.
According to Berry (2003), unemployment is a condition that exists when there are people who are interested to work but are unprivileged due to lack of opportunity. It is referred to a situation which arises when an employable individual is actively but unsuccessfully seeking work. However, private business sector is seen as small scale business. But what is seen as small scale business in one economy may be seen as medium scale business in another economy (Eze, 2005). In order to clear this confusion between small and medium scale business, some criteria that can be used are relatives in size, type of customers, financial strength and the number of employees available in the business.
According to Njoku and Nwosu (2002), a working definition of small scale business will be one with a working capital of one hundred thousand to one hundred and fifty thousand naira. Norbert (2001) cited in his work that a small scale business is the type of business that is independently owned and operated and not dominant in its field of operation. Therefore, private sector includes tailoring, shoe making, bakeries, wood work, weaving, farming, retailing and among others.
Private Business Sector has been playing significant role in reduction rate of unemployment. The sector contributes about 75% reduction of unemployment in Makurdi Local Government Metropolis and in Nigeria. The sector includes most activities in manufacturing, mining, construction, banking and transportation. The unorganized private sector are agriculture, house-hold, small scale industries and non-governmental organization. It contains millions of individuals proprietor, petty traders, units transport operators and self employed craftsman and artisan (Obado 2000).
Moreover, there are many factors that have hindered the development of private sector in Nigeria. These range from civil disturbances through government harassment and interference to uncertain exchange rates, impassable roads frequent power failure and telephones that do not work or problem of network. Despite those problems, the role of private sector cannot be overemphasized in the reduction of unemployment rate in Nigeria.
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Impact of Private Businesses on the Reduction of Unemployment.
1.3 Statement of Problems
Investigation revealed that the problem of unemployment in Makurdi Local Government Metropolis has attracted great concern. The effect of unemployment on any nation indirectly indicates the sophistication of nation and it has many secondary effects. in the first place as a result of influx for limited wage labour many are found unemployed. The unemployed people resort to various crimes, unemployment leads to overcrowding most especially in Makurdi Local Government Metropolis. Such crowding has negative effects both on the health and the life of the individuals residing in Makurdi Local Government Metropolis.
Many communicable diseases have been associated with overcrowding, as a way of escape from the poverty created by unemployment, many unemployed people in Makurdi Local Government Metropolis resort to smoking marijuana or using some drugs that think less of poor situation. Most of the streets of Makurdi Local Government Metropolis are littered with this set of people who constitute problem both to the economy and aesthetic value of our metropolis environment.
The above problems promoted the researcher to involve the extent private business sectors have contributed in Makurdi Local Government Metropolis.
1.4 Aim and Objectives of Study
The aim of the study is to examine the Impact of Private Businesses on the Reduction of Unemployment. In achieving this aim, the following specific objectives were laid out as follows:
- To find out the level of private sectors establishment in Makurdi urban that have reduced unemployment;
- To determine the causes of unemployment in Makurdi Local Government Metropolis; and
- To investigate the factors hindering the contribution of private sector in the reduction of unemployment in Makurdi Local Government Metropolis.
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:
- Are there factors hindering the contribution of private sector in the reduction of unemployment in Makurdi Local Government Metropolis?
- What are the causes of unemployment in Makurdi Local Government Metropolis?
- To what extent have the problems of unemployment influence the establishment of private sector in Makurdi Local Government Metropolis?
- What is the level of private sectors establishment in Makurdi urban that have reduced unemployment?
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: There are no significant problems of unemployment influence the establishment of private sector in Makurdi Local Government Metropolis
- H1: There are significant problems of unemployment influence the establishment of private sector in Makurdi Local Government Metropolis
1.7 Significance of Study
The following are the relevance of the research work:
- The findings of this study will be significant to the private business sectors, government, unemployed youths and general public.
- This study will encourage individuals in Makurdi Local Government Metropolis to invest in private business in order to reduce accelerating rate of unemployment in the area.
- Government will after reading this project provide credit facilities and remove barriers that hinder establishment of private business in Makurdi Local Government Metropolis.
- Youths and general public will through this study develop themselves for the available job opportunity that exists in private business sectors.
- Nevertheless, researchers will benefit from the contents of this study because it contains some relevant information that will enable them to develop their own businesses.
1.8 Scope of the Study
The scope of the research is focused on the Impact of Private Businesses on the Reduction of Unemployment. This study will focus only on the private businesses in Benue State particularly in Makurdi Local Government Metropolis.
It will consider some selected private business sector in Makurdi Local Government Metropolis. The researcher tries to cover all forms of private businesses within Makurdi Local Government Metropolis ranging from manufacturing, to service firms.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definition of Terms
In the context of analyzing the impact of private businesses on the reduction of unemployment, several key terms are essential for a clear understanding of the subject matter.
Private Businesses: Private businesses refer to enterprises that are owned and operated by individuals or groups rather than the government. These businesses can vary in size, from sole proprietorships and small and medium-sized enterprises (SMEs) to large corporations. They play a crucial role in job creation and economic growth, contributing significantly to the overall employment landscape (OECD, 2020).
Unemployment: Unemployment is defined as the state of being without a job despite actively seeking work. It is typically measured as a percentage of the labor force that is unemployed and looking for employment. Unemployment can be influenced by various factors, including economic conditions, technological changes, and the level of private sector activity (International Labour Organization, 2021).
Job Creation: Job creation refers to the process of providing new employment opportunities within the economy. This can occur through the expansion of existing businesses, the establishment of new enterprises, or government initiatives aimed at stimulating employment. Private businesses are often at the forefront of job creation, driving economic activity and reducing unemployment rates (World Bank, 2022).
