Nigeria leads the world in enthusiasm for business, according to a survey carried out by Global Entrepreneurship Monitor (GEM). Indeed, the report noted that, all across Africa, a growing wave of grassroots self-starters are taking risks and defying obstacles to bring their money-making ideas to life.

Armed with a can-do attitude and hopes of striking it big, they’re navigating a conundrum of challenges to pursue opportunities at a time when many African countries enjoy unprecedented levels of economic growth.

GEM is the acclaimed largest study of entrepreneurial dynamics in the world, providing information to help policy makers, civil society and the business community understand the obstacles to nurturing entrepreneurship, enterprise promotion and growth. GEM annual surveys arer carried out in 99 countries.

The GEM survey noted that Nigeria leads the world in the proportion of the population who believe they have the skills to run a business, with almost 90 percent of Nigerian adults believing they have the ability to become entrepreneurs. The result of the survey shows that out of every 100 Nigerian adults, 35 are involved in some sort of entrepreneurial activities. It added that Nigerians are not deterred by fear that their new enterprise will fail; only 21 percent were concerned by this risk.

The survey confirms Nigeria as an entrepreneurial nation, where most adult Nigerians see opportunities in entrepreneurship, believe in their own entrepreneurial capacities and declare themselves ready to start and run a business. Indeed, 44 percent of the population intend to create their own businesses within the next five years. Of those surveyed for GEM, almost a quarter (22 percent) said they expected to create between 6 and 19 jobs over the next five years.

Growth and development

In 2012, the report stated, 21.7 percent of Nigerians aged between 18 and 64 years of age were preparing to start a new business, which is the second highest rate in sub-Saharan Africa, after Zambia, and 14.9 percent of adults were actually running a new business.

GEM noted that Nigeria had taken a number of steps to support small and medium-sized enterprises and the federal government has established support for the private sector as a policy priority. “A number of schemes to help small business are in operation such as the Bank of Industry (BoI) and the Bank of Agriculture (BoA).”

Access to finance

All new entrepreneurs report finding financing for their ventures is a barrier to creating and growing an enterprise, while lack of access to finance is the major reason for the discontinuance of an enterprise. There are few domestic equity sources, as well as limited sources of export finance, and SMEs’ participation in the stock market is minimal, due to their inability to meet the listing requirements, as well as their persistent tendency to operate as much as possible in the informal sector.

The commercial banks remain the primary formal source of finance for enterprises. Though banks are already encouraged to give more money to entrepreneurs, but procedures need to be simplified and information about financing schemes should be more widely available.

Gender dynamics

Nigeria stands along with the handful of countries with more women entrepreneurs than men and more early-stage female entrepreneurs than males. Africa leads the world in the number of women starting businesses, with almost equal levels of male and female entrepreneurs. In fact, in countries like Ghana, Nigeria and Zambia the women outnumber the men.

Overall, the continent has a much higher proportion of female entrepreneurs compared to other regions, with Nigeria and Zambia (both 40.7 percent) coming on top and countries like the United States (10.4 percent), the UK (5.5 percent), Norway (3.6 percent) and France (3.1 percent) lagging far behind. According to Mike Herrington, executive director of Global Entrepreneurship Monitor (GEM) and professor at the University of Cape Town in South Africa, the main reason for this is because women in Africa “need to earn an extra income to be able to afford to send their children to school.”

Young entrepreneurs

About 82 percent of Nigerian young people perceive a good opportunity to start a business while 86 percent believe that they have the skills and knowledge necessary to start a business. However, young males tend to have slightly higher intentions and perceptions of good entrepreneurial opportunities and capabilities than the young females.

Over 82 percent of Nigerian youths see entrepreneurship as a good career, 77 percent believe that successful entrepreneurs have high status and recognition and 78 percent are comfortable with the level of visibility that entrepreneurs enjoy in the media. The decision to go into entrepreneurship was mostly influenced by parents and friends. This is reflected in the fact that the majority of young entrepreneurs source their start-up finance from family and friends, and nearly half of them conduct their business from home or on the street.