Thursday, January 20, 2010
By Abdallah Dindi, University of Lagos
By engaging in trade, people permit wealth to flow in the society from those who have to those who do not, but have something of value to exchange for it, whether goods or services. So the more value a person possesses the more needs he can satisfy. Those who have nothing of value to offer in exchange for their needs will suffer lack, or in other words, poverty.
Eradicating poverty through Entrepreneurship To run the businesses of life, the most basic of which is survival, men struggle to satisfy their needs which are numerous and diverse. Yet the resources available to do this are limited. Resources include the fertile land for agriculture and mineral deposits, from which man generates wealth – some which he uses directly to fulfill his needs and others which he exchanges in return for other things.
The material well being of any society is determined by the extent to which its people are able fulfill their needs. And this depends further on the amount of wealth they can generate from their God-given resources – material and non-material – and the adequacy with which such wealth is distributed among its people. By engaging in trade, people permit wealth to flow in the society from those who have to those who do not, but have something of value to exchange for it, whether goods or services. So the more value a person possesses the more needs he can satisfy.
Those who have nothing of value to offer in exchange for their needs will suffer lack, or in other words, poverty.
Poverty is the inability to meet one’s needs. And it comes in different shades depending on the kind of need that is beyond an individual’s reach. What is usually considered as poverty, however, is the inability to meet primary needs of modern living such as food, clothing, and) shelter. It will happen in any society where the wealth generated is insufficient to meet the needs of the members of a society. Or, when enough wealth is produced, it is not well distributed among members of the society. A village whose farmers fail to produce sufficient food will tarve. The same is true when sufficient food is produced but is concentrated in the hands of a
few – so that while some villagers revel in excess food, others wallow in utter lack of the same.
This kind of imbalance in the welfare of people easily becomes a tool of domination- politically and socially- and the society is less free for it.
The scenario painted above portrays the situation of many poor countries in the world today. Productivity is low, and even when it is about average, wealth is skewed towards a particular group – the corrupt ruling elite. In cases like these, charity is not a solution. The only thing it, charity, will do is to attempt to distribute wealth and inefficiently so. Charity is good only as temporary solution suited to such people as have been afflicted by a war or natural disaster and
need help to get back on their feet.
The real solution to poverty, the lack of value with which to take part in profitable exchange to obtain one’s needs, is to create value. And the means by which this is done is Entrepreneurship.
Entrepreneurs create value and thus help to improve the people’s wellbeing and quality of life. It
is the entrepreneur who creates ideas with which limited resources are deployed in the most
efficient and beneficial way to the society. Natural resources alone are not sufficient for the
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attainment of material success. Rather, the human capability to innovate and create ideas which will magnify the value of the scant resources. As can be seen in Japan, an island having scant
natural resources yet boasting huge material success. And in Nigeria, one of the most resourcesendowed nation in the world, having about 45% of its population living below the poverty line.
The economic gains of entrepreneurs cannot be static because they also have needs which must be fulfilled. Hence they readily offer their wealth in exchange for things they need. In this way
entrepreneurship, apart from generating wealth, also results in trade, which is the means by which the wealth is distributed in the society. But trade does not occur between haves and havenots.
Trade only occurs between those who have some valuables like goods or services and thosewho have money which is a store of value.
Therefore, it is only by encouraging people to harness their potentials of creativity, to solve problems and fulfill needs and ultimately create value, that poverty can be eradicated.
Despite being the only effective way to end poverty, entrepreneurship has not enjoyed good promotion in the countries that need it most. The Nigerian government for instance does not
make its business environment friendly to budding entrepreneurs, though it encourages its youth to be self-employed. The production of goods in this century requires power and an efficient transportation system to get products to where they are needed. When these two are not
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sufficiently available, they keep small businesses small because operating costs are high and profit margin is at a minimum. The unwillingness of the government to address these issues shows its indisposition to promote entrepreneurship in the country. Also, prohibitive tariffs, import bans and restrictions, import fees, import and export taxes, weak enforcement of intellectual property rights, corruption, and inconsistent and non-transparent customs administration add to the cost of trade and discourage willing individuals from taking entrepreneurial risks. All these impede the growth of entrepreneurship.
Any government that is serious about making poverty a thing of the past in its soil must embrace entrepreneurship whole-heartedly by clearing these avoidable obstructions such as the aforementioned from its path. I hope the governments of the developing nations can be trusted to handle a transaction of this magnitude.
Abdallah Dindi – Nigeria
abushaqa@yahoo.com