Role of entrepreneurial activities for Nigeria’s economic recovery and growth (a case of studying Nigerian enterprises)

Chinazor Franca Obi

doi:10.24143/2073-5537-2021-3-77-87

Abstract

The paper presents the empirical analysis of the effect of entrepreneurship activity on the economic recovery and growth using SMEs in Nigeria. Two cities from each of the six geopolitical zones and four sectors of the economy were selected for the study. The total number of the selected four sectors form the population of the study while the sample size is seven hundred and twenty. The analysis employs the Ordinary Least Square techniques and time-series data for the economic recovery. The study adopts the Phillips-Perron test procedure to examine the stationarity of the study variables. The Johansen Cointegration test was employed to establish the cointegration of the variables and the unrestricted Error Correction Model was used to examine the speed of the alteration to the equilibrium. It has been inferred that the entrepreneurship activity and ERG are integrated of order (1(0)). This is established by the explanatory power of the models result of R value of 0.274 and R2 approximated to 0.075. The result shows a low positive impact of entrepreneurial activities on ERG. The study proves that, despite the crash in oil industry, the entrepreneurship has contributed positively to the Nigerian economy although at a low level. The study suggests that the government should support the development of entrepreneurship

Highlights

Nigeria is the largest economy in Africa with population of about 177 mln [1]
The Nigerian economy is among the middle mixed economy and a developing market that promises a large market for any prospective business
Stimulating Economic Recovery and Growth (ERG) in the COVID-19 era becomes very crucial to scholars, policy-makers and analysts

Summary

Introduction

Nigeria is the largest economy in Africa with population of about 177 mln [1]. The Nigerian economy is among the middle mixed economy and a developing market that promises a large market for any prospective business. The report ranked Nigeria 21st among 181 countries with the unemployment rate of 18.8% (2017), 23.1% (2018), and 33.3% (2020) [3]. The annual ranking report of the economy based on the ease of doing business in 2018 ranked Nigeria 131 among 190 studied countries of the world. The objectives are: 1) to restore growth through macro-economic stability and economic diversification; 2) to build a globally competitive economy through investment in infrastructure, improvement in the business environment, etc.; 3) to invest in the Nigerians through the program on social inclusion, job creations, etc. The ERGP was established to restore Nigeria’ economic growth before the COVID-19 pandemic crises, the economic impact of the COVID-19 pandemic is substantially more serious in Sub-Shaharan Africa compared to other parts of the world due to the pervasive poverty in many economies [4].

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