Thursday, September 18, 2014
Introduction to Data Management Using Econometric Views (E-Views) Computer Software for Students of Social and Management Sciences
Introduction to Data Management Using Econometric Views (E-Views) Computer Software for Students of Social and Management Sciences By Mustapha Muktar, PhD Department of Economics Bayero University, Kano-Nigeria email@example.com and firstname.lastname@example.org http//:www.mustaphamuktar.blogspot.com Introduction There are several software or packages for undertaking rigorous analysis. These include the Statistical Package for Social Sciences (SPSS), PC GIVE, MICROFIT, STATA and E- VIEWS as major and commonly known ones. The focus here is on E-Views. E- Views provide sophisticated data management and analysis tools on window based computers. With E- Views one can easily develope a statistical relation from a set of data and then use the relation to forecast future values and perform other functions. E- Views have been found useful in the following areas; 1. Scientific Data Analysis and evaluation 2. Financial analysis 3. Macroeconomic Forecasting 4. Sales Forecasting 5. Cost Analysis 6. Profitability Analysis and etc. E- Views is a new version of set of tools for manipulating a set of data developed especially on time series and cross section basis. E- Views have a convenient visual way to enter data series from the key board or from disk files, to create new series from existing ones, to display and print series, and to carry out statistical analysis of the relationship among series. This is made possible as it uses the visual features of Morden windows software. One can therefore use the mouse to guide the operation with standard windows, menus and dialogs. Results appear on windows and can be manipulated with standard windows techniques. Alternatively, one may use E- Views command and batch processing language. Commands can be entered and edited in the command window, one can also create and store the commands in programs that documents information for later execution. E- Views Screen Upon starting E- views the main screen will be presented, it consists of the top menu, command window, middle work area and the lower status bar; The Main Menu File: Basic file operations Edit: Basic editing operations Objects: Commands for creating and manipulating E-views objects View: Viewing options Process: Import and exporting data; sample options Quick: Shortcuts to many E- views operations Options: Set program options Window: Switch between windows Help: Online help system Note: further Details about each of the above items can be found in the help/menu items The command window The command window is the empty area with white background immediately below the main menu. This is where E- Views command is entered. The command typed, is executed immediately the enter key is pushed; this window supports cut and paste which enables the movement of text between the command window. The work area This is the area in the middle of the window where various objects are displayed. If many windows are open, they will overlap each other with the foremost window being in focus or active. A window can be moved by clicking on its title bar and dragging it to a new location. Status line This is divided into several sections. The left section will sometimes contain status messages sent by E- Views. The next section shows the default directory that E views uses to look for data and programs. The last section displays the name of the default database and work file. Help system Since it is window based software, it is user friendly. But in cases of operational problems or difficulties, the help system is always handy to provide useful assistance. To access the help, simply go to the main menu and select HELP and the help topic will appear from there one can search and digest it. The Work File To start any work in E- Views one must create or load a work file. Work file organize and contain the objects that are used in analysis. To create a new work file, use the FILE/NEW/WORKFILE command. This brings up a dialog box where you describe the type of data you will be working with. It allows you to work with time series data, as well as cross sectional data. Date formats Annual example 1999 – 2009, Quarterly example 2000:1 – 2006:4, Monthly 1990:1 – 1990:12 for weekly the week is identified by the first day of the week example 3:10:98 is March 10, 1998. And for the undated observations the start and end observations are applicable. The work file just opened is empty except for two default objects labelled c and resid these are the constant and error terms usually associated with modelling. One may wish to effect a change in the sample period by double clicking on sample command to change it. Saving Work file The work file remains untitled, it can be given title and saved either by clicking save button on the work file tool bar or by choosing File/save from the main menu as below; Importing Data E- Views can easily import excel data the data is organized in rows and columns. Before importing data a work file must have been created. The procedures for creating work file are; Step 1: Click File/New/Work file Step 2: Choose the right frequency for your data (for example annual or monthly) and impute the start date and end date and click OK Step 3: data can now be imported from an external source by clicking file/import/, and choosing the Read-Text-Lotus-Excel... Option; At this stage, the file from which you want to import data is selected and the open button is clicked as below; Entering data from the keyboard As an alternative to importing data, data can also be entered directly into a work file from the keyboard. To do so, a series object needs to be created and then data is entered using the e-views editor. The following steps are required; Step 1: File/New /Work file Step 2: Choose the start and end date Step 3: Select Objects/New objects from the main menu as below; By clicking the ENTER button the new object dialog box is displayed, then the type of object which one needs has to be selected and a title given as well. The empty series will be added to the work file as below; Step 4: To enter data into the series do the following; Double click on the GDP to open the spread sheet view (NA sequences are seen) Click the (Edit +/-) to activate the edit mode Click on the first data cell Enter the data for that cell and press ENTER. Or copy and paste from another source After entering the data press the (Edit +/-) mode to de-activate edit mode and then click the close box. Data Transformation New data sets or variables can be generated from the set of initial data sets or variables. To do this, choose GENR from the work file main menu and the dialog box open as below; The formula for generating new series/variable can be typed in the enter equation space in the dialog box and click OK for example suppose we generate the grow rate of GDP which we call ggdp, the formula is typed as ggdp = (gdp-gdp(-1)/gdp(-1)*100 and then click OK. If we want generate the logarithm of gdp as LGDP, then we type LGDP = log GDP and press OK. Statistical Computations on E- Views Statistical measures are important in data analysis and drawing conclusions. Measures such as descriptive statistics (mean, median, maximum, standard deviation, skewness and kurtosis etc) are very important in data analysis, so also measures of association such as the correlation and regression analysis are crucial in in-depth studies and monitoring/evaluation as well as impact studies. Procedure for Carrying out Statistical Analysis on E-Views The approach for doing this is very interactive using E-Views. To perform statistical analysis such as descriptive statistics (mean median, maximum, standard deviation, skewness etc) on E-Views, one needs to create a work file and enter the data as well. Graphs To represent information on a graph, first one has to generate series, open the QUICK window and select graph then one will be prompted to list the series after listing/selecting it then the OK button is pressed, from there options will be selected of the type of graph as either line scatter, pie chart etc. Descriptive Statistics To compute descriptive statistics, first one has to generate series, open the QUICK window and select SERIES STATISTICS-HISTOGRAM AND STATS then one will be prompted to list the series after listing/selecting it then the OK button is pressed, from there the descriptive statistics will be displayed; After getting the basic descriptive statistics one can obtain a wide range of parameters by clicking on VIEW in the dialog box these include but not limited to bar graph and one-way tabulation and others as below; Correlation Coefficient Correlations are computed between two or more variables to ascertain their co-variability for policy making analysis. To compute the correlation between say GDP and FDI. Go to QUICK –GROUP STATISTICS-CORRELATIONS, then a dialog box will be opened where one will be prompted to list series, groups and/or series expressions: from there the variables that are to be correlated are listed separated by space, and OK is pressed as below; It should be noted that by clicking on VIEW a combined range of measures like N-Way tabulation descriptive statistics, Chi square, Pearson coefficient and so on can be ascertained
Friday, September 5, 2014
INTRODUCTION TO ECONOMIC EVALUATION IN HEALTH CARE By Mustapha Muktar, PhD Department of Economics Bayero University, Kano-Nigeria email@example.com http//:www.mustaphamuktar.blogspot.com Introduction Economic evaluation applies analytic methods to identify, measure, value, and compare the costs and outcomes of alternative interventions. Economic evaluation is a way of using the scientific approach to determine the costs and benefits of public health activities. It can also be viewed as the quantitative analysis of the relative desirability to the whole community of investing in alternative projects or programmes. It is not simple to decide on which alternatives to choose, but with evaluation decision makers can make the difficult choices when resources are limited. Economic evaluation allows us to compare the costs and outcomes of different alternatives. You can then compare programs and give recommendations on the most efficient way to use scarce resources. Process of Economic Evaluation The overall economic evaluation process is to: identify all of the relevant costs and outcomes involved in a program find ways to measure the appropriate outcomes and costs and assign values to them and compare the cost per unit outcome or, in the case of cost-benefit analysis, compare the net benefits between programs. Economic evaluation therefore answers the following questions; how much does it cost to achieve a certain level of program performance? how can a fixed budget best be allocated across program priorities? what are the costs and benefits of choosing one program instead of another? Why use economic evaluation methods In most cases, something can be done in more than one way. For example, there may be more than one way to screen for a disease or different alternative ways to deliver a program or service. Also, you may have few resources, but many things that you need to do: every choice you make has an associated opportunity cost. Trade-offs must be made (for everything you choose to do, something else will not get done). To achieve a particular health objective, you may need to: find the most effective and efficient way to deliver a program or service spend the least possible amount to achieve the objective Justification of Economic Evaluation As early as the seventeenth century, the British physician Richard Petty advocated greater social investment in medicine. This was based on his belief that the value of a saved human life far exceeded the cost. Health care resources are limited by the total funds available, as well as through competition with other areas, such as housing and education. This raises the question of how to decide where the money should be allocated most appropriately. The establishment of a benchmark for an efficient level of health care provision is still to be found, and it must always be questioned whether the allocation of health care resources is efficient and equitable. It has been proposed that, faced with increased demands, but little increase in resources, the National Health Service has several options which include but not limited to; to become more efficient so that more individuals can be treated with the same resources; to extend means testing so that some people may be excluded from certain services due to their wealth; to increase ‘rationing’ or to provide a smaller range of services. However, there is no doubt that resources are scarce and choices have to be made regarding their use. The aim is to maximize health from available resources whilst paying due concern to issues of equity. Economic evaluation is important because without systematic analysis, it is not possible to identify the relevant alternatives. In addition, the assumed viewpoint is important. A programme that looks attractive from a patient's viewpoint may look decidedly unattractive from the government's budget. Advantages of Economic Evaluation It Compels the collection and analysis of information about programs and interventions helps you to organize data helps you to understand that resources are limited and that there are opportunity costs associated with making public health decisions: often, you must give up one thing to get another Makes it possible to demonstrate to policymakers and funders the value of resources used Limitations of Economic Evaluation It Requires the assigning of values to variables that may be difficult to measure (for example, quantifying pain and suffering) It analyzes a limited number of factors It takes time and skill to do properly Common Methods of Economic Evaluation in Public Health Economic evaluations within public health consist of partial economic evaluations and full economic evaluations. Partial economic evaluations assess either the cost or the health outcome components of public health programs, or they assess both costs and health outcomes of a single program without reference to an alternative program. Examples: cost description, outcome description, efficacy or effectiveness evaluation, cost-outcome description, and cost analysis. Full economic evaluations assess both costs and health outcomes; they also compare these across different health interventions or compare a health intervention with a no-health intervention. Examples: cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. The choice of evaluation method is dictated by evaluation objectives, policy priorities, and data availability. The methods that constitute the category of full economic evaluations are the most comprehensive of all methods, with the partial economic evaluations serving as components of the full evaluations. In most studies, the economic evaluations draw on a variety of data types and sources, using program cost and outcome data. The basic task of evaluation efforts are therefore; to identify, to measure, to value, and to compare the costs and consequences of the alternatives being considered. Overview of Cost Analysis Economists define a cost as the value of resources used to produce a good or services. However, the way these resources are measured can differ. There are two main alternatives with respect to measurement of these resources: financial and economic costing. Financial cost represents actual expenditure on goods and services purchased. Costs are thus described in terms of how much money has been paid for the resources used in the project or services. In order to ascertain the financial costs of a project, we need to know the price and quantity of all the resources used or, alternatively, the level of expenditure on these goods and services. Economists define costs in terms of the alternative uses that have been forgone by using resources in a particular way. These economic or opportunity costs recognize the cost of using resources as these resources are then unavailable for productive use elsewhere. The basic idea is that things have a value that might not be fully captured in their prices. It is not difficult in many health programmes to identify resources inputs for which little or no money is paid: volunteers working without payment; health messages broadcasts without charge; vaccines or other suppliers donated or provided at large discount by organizations or individuals. Thus, the values of these resources to society, regardless of who pays for them, are measured by opportunity cost. Economic cost then include the estimated value of goods or services for which there were no financial transaction or when the price of a specific good did not reflect the cost of using it productivity elsewhere. The main ways that financial and economic costs differ is in the way they treat donated goods and services and other inputs. Costs can also be assessed based on costs borne by the ministry of health (like drug and equipment), by patients and their relatives (like transport and food) and by the rest of society (like health education), in monetary terms; direct costs, like wages, indirect costs (like time spent in hospital) . Costs could also be further subdivided in to average, marginal and joint costs, which help decisions on how much of a service, should be provided.There are also capital costs (investment in plant, buildings, and machinery). Costs to be Included in Evaluation If the evaluation is being made from the widest perspective the viewpoint of society as a whole then three main categories of costs must be considered: Health Service Costs, these will include staff time, medical supplies (including drugs), bed and food services in the case of inpatients, use of capital equipment, and overheads such as water, heating and lighting. These items may be divided into variable costs, which vary according to the level of activity (for example, staff time) and fixed costs, which are, incurred whatever the level of activity (for example, heating and lighting). In the long run, practically all costs become variable since those that are fixed in the short run may be varied-for example, by opening and closing wards, and by building new hospitals. In economic evaluation all such health service costs-both fixed and variable-are referred to as direct costs. Costs Borne By Patients and Their Families; These will include out of pocket expenses such as travel, and any cost resulting from caring activities undertaken by the family. These are also direct cost items. In addition, there may also be indirect costs (productivity costs) such as income lost because of absence from work (which is a production loss to society) and any psychological stress experienced by patients, or their families or both. External Costs: These occur when people not directly involved in a programme experience increased costs because of it. For example, public health legislation enforcing antipollution standards or specifying water purification levels may lead to increase in manufacturing costs and consumer prices (as well as providing health benefits). Valuation of Costs The costs identified in physical units (such as hours of staff time, hours of operating theatre use, quantities of drugs and so on) must be valued in monetary terms. For most direct cost items market prices will be available. Consultation time can therefore be valued at the appropriate hourly rate; Medical and surgical supplies can be valued at the prices charged by suppliers; Indirect costs, for which there are no market prices, pose a more difficult problem of evaluation. Some method has to be used to impute values to them. This is known as “shadow pricing”, and time costs provide a good example. When time is spent in hospital by a patient, or on caring by a relative, and this displaces work time, it is usual practice to use the relevant wage to value the lost time.
Thursday, September 5, 2013
INVESTMENT OPPORTUNITIES IN THE PHARMACEUTICAL
SECTOR IN NORTHERN NIGERIA
SECTOR IN NORTHERN NIGERIA
Mustapha Muktar, P.hD
Department of Economics
Bayero University Kano
• The pharmaceutical industry develops, produces, and markets drugs or pharmaceuticals liscensed for use as medications
• Pharmaceutical companies deal in medications and medical devices
• They are subject to vareity of laws and regulations regarding the production, patenting, testing, safety, efficacy and marketing of drugs.
• Pharmaceuticals are crictical for the health and well being of populations
Importance of pharmaceutical Industry
• It contributes significantly to any nation’s economy
• It helps in ensuring the health of citizens
• It helps in wealth creation
• It helps in poverty reduction
• It helps in employment creation
• It helps in improving the general well being of the populace and hence an improvement in the societal welfare
Overview of the Nigerian Pharmaceutical Industry
• The pharmaceutical industry in Nigeria is fairly well developed in comparison to most of the other developing countries in Sub-Saharan Africa
• There are over 200 local manufacturers, some were affiliated with multinational companies
• Some of the companies repackage medicines and/or produce pharmaceutical products from imported raw materials
• The existing large market size, strong demand and the need for management of infectious diseases, especially HIV/AIDS, malaria, TB, and neglected childhood diseases constitute enormous opportunity for pharmaceutical firms to produce drugs to meet the health needs of Nigerians.
Investment Opportunities in Northern Nigeria: The Case of Kano State
• Kano State is the commercial and investment hub of Northern Nigeria and the third largest non- oil and gas economy in Nigeria with an estimated Gross State Product of $15- 19 billion.
• Its economy is driven largely by commerce, manufacturing and subsistence agriculture - which is the dominant activity
• Its huge population of approximately 12 million people would provide enormous market opportunities and serve as a potential reservoir of skills
Investment opportunities in Kano State (Economic factors)
• Large population of approximately 12 million people would provide enormous market opportunities for pharmaceutical products
• potential reservoir of skills; In terms of population Kano State is 7% of Nigeria, 13% of Northern Nigeria and is even bigger than Switzerland, Singapore and United Arab Emirates( Kano Sate investors hand book, 2013)
• Gross State Product of $15- 19 billion.
• Third largest commercial centre in Nigeria
• A pharmaceutical market valued at $ 66 Million (BMI, 2013)
Other factors ( Financial institutions, airport, railway links, road networks, industrial estates etc)
Investment opportunities in Kano State (Medical factors)
• The growth of the pandemics and increasing number of people on treatment
• An improving health insurance and coverage environment, and a consequent increase in the number of people with access to healthcare
• An ageing population leading to increased prevalence of old age disorders
• An increase in lifestyle diseases associated with growing economic prosperity and urbanization
• Health care reforms, by the state government and intervention by NGO’s and etc
Kano State Incentives for Investment
• Availability of land on concessionary basis for the construction of both factories and staff quarters to any investor wishing to invest in the rural areas
• Long lease on land for industrial development
• Fast-tracking the issuance of construction permits and the registration of property by investors
• Establishment of Kano One-Stop Investment Center KOSIC to facilitate ease of doing business for the investors and etc
Kano State Incentives for Investment (Free Trade Zone)
• Access to a large Nigerian Market estimated at about 160 million people
• Nigeria's membership off Economic Community of West African States [ECOWAS] provides access to the West African markets
• Favorable business environment and strong support
by the Government to provide sector initiative through the government economic reform agenda that is private sector driven
• Tax incentives
• Customs and Immigration incentives and etc
Challenges Facing Investment in Pharmaceutical Industry in Kano State
• Inadequate infrastructures which lead to high cost of production
• Influx of foreign brands into the country
• Low capacity utilization due to low demand and poverty
• Influx of counterfeit and fake drugs
• Undercapitalization/weak financial base
• Upward swing in exchange rate
• High interest rate and comparative cost disadvantage
• There exist untapped investment opportunites in pharmaceutical industry in Northen Nigeria that if well utilized will respond to the health needs of Nigerians and will contribute to the overall socioeconomic development of the country and West Africa as well
• Investors need improved infrastructure to enable them produce at low cost so as to compete favourably with the foreign companies (respective governments should make concerted efforts to improve the infrastructures)
• Kano State government should enhence and contenue its anti-counterfeiting and illegal marketing measures as it will make the Nigerian manufacturing companies grow and invest more
• Respective governments should mediate on high interest rate to enable investors access funds and have strong financial base
• The Investors and state government should collaborate with educational institutions to embark on research and development for effecient and profitable investment in the industry
Wednesday, March 6, 2013
THE ROLE OF ENTREPRENEURSHIP TOWARDS EMPLOYMENT GENERATION AND POVERTY REDUCTION: A THEORETICAL DISCOURSE
THE ROLE OF ENTREPRENEURSHIP TOWARDS EMPLOYMENT GENERATION AND POVERTY REDUCTION: A THEORETICAL DISCOURSE
Dr. Mustapha Muktar
Department of Economics,
Umaru Musa Yar’adua University Katsina
A Lecture Presented at First Annual Students’ Entrepreneurship Lecture,
Organized by the Students’ Union Government,
Umaru Musa yar’adua University, Katsina.
The concept of entrepreneurship was first established in the 1700s, and the meaning has evolved ever since. Many simply equate it with starting one’s own business. However, most scholars believed it is more than that. To some, an entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit. Others emphasize the entrepreneur’s role as an innovator who markets his innovation. Still others say that entrepreneurs develop new goods or processes that the market demands and are not currently being supplied. Entrepreneur can also be viewed as a person that wants to works for himself; it is sometimes synonymous with self employment
In the 20th century, economist Joseph Schumpeter (1883-1950) focused on how the entrepreneur’s drive for innovation and improvement creates change. Schumpeter viewed entrepreneurship as a force of “creative destruction.” The entrepreneur carries out “new combinations,” thereby helping render old industries obsolete. Established ways of doing business are destroyed by the creation of new and better ways to do them. Entrepreneurship therefore, is more than simply “starting a business.” It is a process through which individuals identify opportunities, allocate resources, and create value. This creation of value is often through the identification of unsatisfied needs or through the identification of opportunities for change. It is the act of being an entrepreneur which is seen as "one who undertakes innovations with finance and business acumen in an effort to transform innovations into economic goods hence entrepreneurs see “problems” as “opportunities,”
Entrepreneurship therefore by implication is the act of being an entrepreneur, it involves all the activities and function undertaken by an entrepreneur. Entrepreneurship is believed to provide an important avenue for individuals to advance up the income ladder. For some, it may provide a better route than paid employment, while for others, who may be disadvantaged when pursuing paid employment; it may provide the only route. Entrepreneurs are charged with the responsibility of innovating new products, better production method, creation of markets and managing the production process. They are in a nutshell engaged in wealth creation. Financing therefore is needed by entrepreneurs to enable them carry out their function effectively.
WHY BECOME AN ENTREPRENEUR
1. Entrepreneurs are their own bosses they make the decisions, they choose whom to do business with and what work they will do. They decide what hours to work, as well as what to pay and whether to take vacations or not.
2. Entrepreneurship offers a greater possibility of achieving significant financial rewards than working for someone else.
3. It provides the ability to be involved in the total operation of the business, from concept to design and creation, from sales to business operations and customer response.
4. It offers the prestige of being the person in charge.
5. It gives an individual the opportunity to build equity, which can be kept, sold, or passed on to the next generation.
6. Entrepreneurship creates an opportunity for a person to make a contribution. Most new entrepreneurs help the local economy. A few through their innovations contribute to society as a whole.
CHARACTERISTICS OF AN ENTREPRENEUR
1. Creativity: this is the spark that drives the development of new products or services or ways to do business. It is the push for innovation and improvement. It is continuous learning, questioning, and thinking outside of prescribed formulas.
2. Dedication: this is what motivates the entrepreneur to work hard, 12 hours a day or more, even seven days a week, especially in the beginning, to get the endeavor off the ground. Planning and ideas must be joined by hard work to succeed. Dedication makes it happen.
3. Determination: is the extremely strong desire to achieve success. It includes persistence and the ability to bounce back after rough times. It persuades the entrepreneur to put extra effort. For the true entrepreneur, money is not the motivation. Success is the motivator; money is the reward.
4. Flexibility: is the ability to move quickly in response to changing market needs. It is being true to a dream while also being mindful of market realities. A story is told about an entrepreneur who started a provision store, but customers wanted a barbing saloon as well. Rather than risking the loss of these customers, the entrepreneur modified his vision to accommodate these needs.
5. Leadership: is the ability to create rules and to set goals. It is the capacity to follow through to see that rules are followed and goals are accomplished.
6. Passion: is what gets entrepreneurs started and keeps them there. It gives entrepreneurs the ability to convince others to believe in their vision. It can’t substitute for planning, but it will help them to stay focused and to get others to look at their plans.
7. Self-confidence: this comes from thorough planning, which reduces uncertainty and the level of risk. It also comes from expertise. Self-confidence gives the entrepreneur the ability to listen without being easily swayed or intimidated.
8. Smartness: consists of common sense joined with knowledge or experience in a related business or endeavor. The former gives person good instincts, the latter, expertise. Many people have smarts they don’t recognize. A person who successfully keeps a household on a budget has organizational and financial skills. Education and life experiences all contribute to smartness.
Every entrepreneur has these qualities in different degrees. However if a person lacks one or more, then they can be learned. Or, someone can be hired who has strengths that the entrepreneur lacks. The most important strategy is to be aware of strengths and to build on it.
ROLES OF ENTREPRENEURSHIP TO ECONOMIC DEVELOPMENT
Employment Generation/Reduction of Unemployment
Unemployment refers to a situation where people who are willing and capable of working are unable to find employment/jobs to do. It is one of the macro-economic problems which every responsible government is expected to monitor and regulate.
The process of entrepreneurship activity reducing unemployment situation in the economy is termed “Schumpeter effect”. It has been observed that, unemployment is negatively related to new-firm startups, that is, as new businesses are established employment of resources is stimulated and unemployment reduces substantially. In the same vein, it was noted that high unemployment in the society is associated with a low degree of entrepreneurial activities, that is, where propensity to set up enterprises is low; the rate of unemployment would be very high. The implication of the above assertions is that those who are unemployed tend to remain so because they possess lower endowments of human capital and entrepreneurial talents required to start and sustain new firms to keep them going. A low rate of entrepreneurship culture and skills in any society may be a consequence of the low economic growth, which also reflects higher levels of unemployment.
Wealth Creation and Poverty Reduction
Entrepreneurship enables individuals to use their potentials and energies to create wealth through the creation of goods and services. Poverty is a condition of living that is characterized by lack of the basic necessities of life. One of the major cause of poverty is unemployment and since entrepreneurship is preoccupied with employment generation, then by extension the generation of employment will therefore reduce the level of poverty. Wealth if created will definately reduce the incidence of poverty by empowering the citizens and increasing their access to basic necessities of life (food, clothing, shelter, security and education)
Reduction in Rural - Urban Migration: The burgeoning problems of urban un employment and population congestion owing to the rapid rural urban drift find its ultimate solution in the restoration of a proper balance between urban and rural economic opportunity. Rural entrepreneurial activity in generating employment is the link achieving this balance.
Reduction of Crime Rate: It is strongly believed that unemployment is responsible to a large extent for the level of social complication of armed robbery, political thuggery, drugs peddling, prostitution, money laundering, currency counterfeiting, e-mail scam, and other such related crimes. When individuals are unable to satisfy their needs, most often, frustration occurs. These frustrations breed fraudulent practices. Employment generation therefore will reduce the level of frustration and consequently, crime rate.
Raising the Standard of Living: entrepreneurship through job and wealth creation raises the standard of living of people. Owing to higher income earning and availability of disposable income, they can therefore, afford the basic necessities of life such as housing, clothing and food, education, good health care delivery, etc.
Rural Development: Rural enterprises through employment generation stimulate
rural development and the achievement of a meaningful level of broad economic
development. It decreases inequality in distribution of rural income and reduces urban-rural imbalances in income and economic opportunities.
Encourages Capital Formation: One factor responsible for the poor state of an
economy is low capital formation. When individuals are employed, they can afford to save out of their disposable income. Entrepreneurs can therefore, facilitate the use of these savings thereby stimulating capital formation, which is the engine of economic growth and development.
Skills Acquisition and Increase in the Level of Productivity
Employment generated by entrepreneurship can be a training ground where individual acquires and develops skills for creativity leading to a general increase in the level of productivity.
Entrepreneurship has been recorgnized as an important Economic activity that is involved in providing unique product and process of doing things, it is the act of being an entrepreneur and have been playing the role of employment generation, wealth creation, poverty alleviation among others, it is therefore considered to be the engine for growth and development especially in developing countries like Nigeria. Based on its central role in economic development, respective governments, non governmental organizations, community based organizations and other stake holders should promote its development in order to reap its full benefits.
Thank You all for Listening