IMPACT OF GOVERNMENT INCENTIVES ON THE INFLOW OF PRIVATE ENTERPRISES INTO NIGERIA (A CASE STUDY OF CALABAR SOUTH LGA, CROSS RIVER STATE)

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

As part of the efforts to provide an enabling environment that is conducive to the growth and development of private enterprises in Nigeria, improve inflow private enterprises through foreign direct investment (FDI), shield existing private enterprises from unfair competition, and stimulate the expansion of domestic production capacity; the federal government of Nigeria has developed a package of incentives for various sectors of the economy. These incentives, it is hoped, will help improve the economy from recession, accelerate growth and development and reduce poverty.

The government is of the view and accepts that the private sector as the engine of growth and the creator of wealth, while the government's major responsibility is to provide the enabling environment for the private enterprises to operate. In this regard, laws which had before now negatively affected private sector investments have been either amended or repealed and a national council on privatisation has been established to oversee orderly divestment to private operators in vital areas of the economy such as mining, transportation, electricity, telecommunications, petroleum and gas and trade.

Nigerian government's policy of economic deregulation and liberalisation has opened up new windows of opportunity to all private investors wishing to invest in the country's economy. In this connection, an interest rate regime supportive of the real sector of the economy as well as an exchange rate that is market determined are the object of government policy. The security of life and property of the citizens are being vigorously pursued by the government with the reorganization and strengthening of the Nigerian police force and related agencies.

In addition, the Nigerian Investment Promotion Council (NIPC) has been re-energized to enable it serve as a one-stop office for clearing all the requirements for investment in the country. The tariff structure and tax incentive are being reformed with a view to boosting local production. Government has introduced a new visa policy to enable genuine foreign investors to procure entry visa to Nigeria within hours of submission of required documentation. Existing "expatriate quota" requirement for foreign nationals working in Nigeria is in the process of being replaced with "work permit" which will be administered by the Nigerian investment promotion council (NIPC). Government has taken all these necessary steps as it hopes that it would stimulate a quick recovery from the economic recession that has been underway in recent months through the private sector as this sector has proven over the years its importance towards economic development of any economy in the world.

STATEMENT OF THE GENERAL PROBLEM

The poor performance of private enterprises in Nigeria has risen over the years as there are no conducive environment for the establishment and growth of private enterprises. This has resulted to the increase in unemployment which has been a major cause for the increase in crime and social vices in the society. The poor performance and closure of private enterprises has also contributed to Nigeria’s economic recession since the private sector is known as the major driver of the economy.

PURPOSE OF THE STUDY

The major aim of this study is to examine the impact of government incentives on the inflow of private enterprises into Nigeria. othger specific objectives of the study include;

1. To examine the government incentives in Nigeria that affects private enterprises.
2. To determine the importance of favourble government incentives on economic growth and development.
3. To determine the importance of inflow of private enterprises and job creation in Nigeria.
4. To assess the relationship between government incentives and inflow of private enterprises into Nigeria.
5. To highlight the advantages of effective inflow of private enterprises in Nigeria.
6. To assess the challenges to existing private enterprises in Nigeria

RESEARCH QUESTIONS

1. What are the government incentives in Nigeria that affects private enterprises in Nigeria?
2. What is the importance of favourble government incentives on economic growth and development?
3. What is the importance of inflow of private enterprises and job creation in Nigeria?
4. What is the relationship between government incentives and inflow of private enterprises into Nigeria?
5. What are the advantages of effective inflow of private enterprises in Nigeria?
6. What are the challenges to existing private enterprises in Nigeria?

RESEARCH HYPOTHESIS

H01: Government incentives has a significant impact on the inflow of private enterprises in Nigeria

SIGNIFICANCE OF THE STUDY

The study would be of immense importance to policy makers, government at all levels and the all related stakeholders as it would unveil the impact government incentives have on the inflow of private enterprises in Nigeria with the sole purpose of improving the development and growth of private enterprises in Nigeria. The study would also benefit students, researchers and scholars who are interested in developing further studies on the subject matter as it would serve as a source of literature in the subject matter.

SCOPE AND LIMITATION OF THE STUDY

This study is restricted to the impact of government incentives on the inflow of private enterprises into Nigeria using Calabar south LGA of Cross River state as a case study.

LIMITATION OF THE STUDY

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)

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.