ABSTRACT
This study examined entrepreneurial performance and its determinants among cassava processing entrepreneurs in Abia State, Nigeria. It specifically examined socio-economic characteristics, types and sizes of businesses, entrepreneurial characteristics possessed by entrepreneurs, the determinants of performance, and profitability of value added activities. Multistage sampling techniques were used to select 120 cassava processors. Descriptive statistics, multiple regression, likert scale, and enterprise analysis techniques were employed to analyze the data collected. Six business types (3 sole, and 3 combination businesses) namely garri only, fufu only, abacha only, garri and fufu, garri and abacha and garri and flour were identified. All the businesses identified were at the micro level, employment ranged from 1 to 9. Entrepreneurs possessed all six entrepreneurial characteristics included in the study. The overall mean score for individual characteristics was 3.45 for innovation,3.45 for creativity, 3.37 for perseverance, 3.49 for self-criticism, 3.51 for leadership, and 3.48 for market orientation. The mean scores of the characteristics were compared using t-test and it was shown that there were no differences in means. Level of education, venture capital, volume of credit and household size were significant at 1% level of significance while marital status, experience, and membership of business association were significant at 5%. Age and extension contact were not significant. R2 was 0.624. Average Net Income (NI), profitability Index (PI) and Rate of Return on Investment (RRI) in the sole businesses were highest for abacha only (N 379428.60k, 0.469, and 88.415 respectively) and lowest for garri only (N 263,112.00k, 0.336, and 50.532 respectively) while in the combination businesses they were highest for garri and abacha (N 640,850.00k, 0.416, and 69.643 respectively) and lowest for garri and flour (N 348,900.00k, 0.239, and 32.402 respectively). Comparing profitability across businesses/enterprises showed significant difference in profitability across many businesses. The study therefore concludes that entrepreneurs were performing given the limited resources available to them. They possessed positive personal characteristics which enabled them run profitable businesses against all odds. It was however found that cassava-processing and value-addition were still at primary level, a situation which is traceable to lack of adequate investment capital and other factors external to the entrepreneur and his business. It is therefore recommended that more investment be made by government and other stakeholders (especially in provision adequate credit and training) to enable entrepreneurs in the sub-sector acquire necessary capacities to engage in more meaningful and industrially-significant value-adding processing.
TABLE
OF CONTENTS
Title page i
Certification ii
Declaration iii
Dedication iv
Acknowledgements v
Table of Contents vi
List of tables x
Abstract xii
CHAPTER
1: INTRODUCTION 1
1.1
Background Information 1
1.2
Statement of Problem 4
1.3 Objectives of Study 7
1.4
Research Hypotheses 8
1.5
Justification for the Study 8
CHAPTER
2: LITERATURE REVIEW 10
2.1 Conceptual
Framework 10
2.1.1 Concept of entrepreneurship and the entrepreneur 10
2.1.2. Functions of the entrepreneur 13
2.2 Overview
of theoretical framework on entrepreneurship 15
2.2.1
Economic, socio-cultural and political
theories of entrepreneurship 16
2.2.2 Psychological, ecological and historical
theories 16
2.2.3
Managerial, development, and
educational theories 17
2.2.4
Experiential, innovation and network
theories 18
2.2.5 Structural and technological theories 19
2.2.6 Multi – factor approach 19
2. 3. Sizes
of Entrepreneurs Business 19
2.3.1 Entrepreneurial
characteristics 20
2.4 Entrepreneurial Characteristics and the
Determinants of Entrepreneurial
Performance 21
2.4.1 Entrepreneurial
characteristics 21
2.4.2 Determinants
of entrepreneurial performance 23
2.5. Value Trends in Cassava-Based Industry 25
2.6. Review
of Performance Measures and Indicators 27
2.7. Profitability
of entrepreneurial activities 28
2.8. Review of Previous Empirical Work on
Entrepreneurship 31
2.9 Cassava Value-Added Processing
32
2.10. Causes of Entrepreneurial Failure in
Nigeria 34
CHAPTER
3: METHODOLOGY 35
3.1. The Study Area 35
3.2
Sampling Selection 36
3.2.1
Sampling procedure 36
3.2.2
Data collection 36
3.3
Analytical Techniques 37
3.4 Model
Specification 37
3.4.1 Likert-type of scale analysis for the level of entrepreneurial
characteristics of respondents 37
3.4.2. Estimation of the determinants of entrepreneurial performance
using multiple regression model 39
3.4.3. Profitability of value-addition activities 40
CHAPTER 4: RESULTS AND DISCUSSION 42
4.1. Socio-economic
Characteristics of Respondents 42
4.1.1. Age of entrepreneurs across businesses 42
4.1.2. Sex of entrepreneurs across businesses 43
4.1.3. Marital status of entrepreneurs across businesses 43
4.1.4. Level of education of entrepreneurs across businesses 44
4.1.5. Household size of entrepreneurs across businesses 46
4.1.6. Business experience of entrepreneurs across businesses 47
4.1.7 Membership
of cooperative/ business 47
4.1.8 Membership
of cooperative/ business 48
4.1.9. Entrepreneurs’ access to credit across businesses 49
4.2 Types
of and Sizes of Businesses 50
4.2.1 Types
of businesses 50
4.2. 2 Size of business 51
4.3 Entrepreneurial Characteristics Possessed
by Entrepreneurs 52
4.3.1
Likert-scale analysis for
entrepreneurial characteristics 52
4.3.2 Comparing
of means for entrepreneurial characteristics 55
4.4 Determinants of Entrepreneurial
Performance for Cassava processing
Entrepreneurs 56
4.5 Profitability of Value-Added Processing
Activities 58
4.5.1.
Quantity of cassava handled by
entrepreneurs 58
4.5.2
Profitability analysis for
entrepreneurs value-added processing activities 59
4.5.3 Comparison of profitability of
businesses/enterprises in the study 64
4.6. Performance
of Entrepreneurs in the Study 67
4.7. Constraints
to Cassava-Processing in the Study Area 69
CHAPTER 5:
SUMMARY, CONCLUSION AND RECOMMENDATIONS 71
5.1 Summary 71
5.2 Conclusion 73
5.3 Recommendations 74
References 76
LIST OF TABLES
Table Page
|
2.1
Classification Of Entrepreneurs Business Size
|
|
4.1
Distribution of Respondents’ Age across Business Types
|
|
4.2 Distribution of Respondents
According to Sex
|
|
4.3
Distribution of Respondents according to Marital Status
|
|
4.4
Distribution of Respondents Level of Education across Enterprises
|
|
4.5
Distribution of Respondents Household size According to Enterprises
|
|
4.6
Distribution of Respondents’ Business Experience Across Business Types
|
|
4.7
Distribution of Respondents According to Membership of Business Associations
|
|
4.8
Distribution of Respondents According to Extension Contact
|
|
4.9
Distribution of Respondents According to Access to credit
|
|
4.10
Distribution of Respondents According to Enterprises
|
|
4.11 Distribution of Entrepreneurs
across the Businesses According to Number of Employees
|
|
4.12
Analysis of Entrepreneurial Characteristics Possessed by Respondents
|
|
|
|
4.13
Comparing Means for Entrepreneurial Characteristics
|
|
4.14
Multiple Regression Result for Determinants of Entrepreneurial Performance
|
|
4.15 Showing Average Tonnage of Tubers
and Finished Products across the Business Types
|
|
4.16 Analysis of the Profitability of
Entrepreneurs’ Value-Added Activities across Businesses/ enterprises
4.17 Comparing Profitability of
Entrepreneurs Activities across Businesses and enterprises
4.18
Examining Performance Status of Entrepreneurs
|
|
4.19 Constraints to Cassava-based
value-added processing
|
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND INFORMATION
The
cassava sub-sector is a major area of Nigerian agriculture (Baruah, 2010). The
sub-sector is currently becoming a vast business area embracing input
development and supplies, field production, processing/manufacturing and
distribution. Cassava-based agribusiness therefore reaches far beyond the farm
to include all those who are involved in bringing cassava-based food and fibre
to consumers (Baruah, 2010). The changing taste and fashion of cassava
consumers on the one hand and introduction of substitute, cheaper and better
competitive goods on the other hand gave rise to challenges that led to
competition and development of new products.
Nigeria
is the largest producer of cassava in the world. Total production in 2013 was
54 million tons showing an increase of 16 million tons from total production of
38 million tons in 2005. (Olaniyan 2015; Food and Agriculture Organization,
2006). Cassava is a very versatile crop with numerous uses and by products
(Truman et al., 2004). Each component
of the plant can be valuable to its cultivator. The leaves may be consumed as a
vegetable, or cooked as a soup ingredient or dried and fed to livestock as a
protein feed supplement. The stem is used for plant propagation and grafting.
The roots are typically processed for human and industrial consumption. In
Nigeria, the consumption pattern varies according to ecological zones. Garri, a roasted granule is the dominant
product and is widely accepted in the rural and urban areas. It can be consumed
with or without additives. Fufu, a
fermented product of cassava in wet paste or dry flour type is widely
consumed throughout the country especially in the southeastern zone. Most
processors of cassava complain that the wet paste and ready to eat forms of fufu that are currently sold have a very
short shelf life. Generally, consumers prefer well preserved and well packaged
cassava products. This preference points to increased and improved value
addition needs of cassava products via processing. Only about 16 percent of
cassava roots were processed into industrial products in 2004 leaving about 84
percent to consumption in form of garri,
fufu and abacha (FAO, 2004).
Estimates of industrial cassava use suggest that approximately 16 percent of
cassava root production was utilized as an industrial raw material in 2001 in
Nigeria. Ten percent was used as chips in animal feed, 5 percent was processed
into a syrup concentrate for soft drinks and less than one percent was
processed into high quality cassava flour used in biscuits and confectionary
(Kormawa and Akoroda, 2003). The need for innovative cassava processing
technologies is therefore enormous. Traditional cassava processing has a number
of undesirable attributes. It is usually time consuming, provides low yields,
lacks storage capacities and does not provide adequately for industrial
utilization.
Entrepreneurship
is essential for the continued dynamism of the economy and a greater entry rate
of new businesses in the cassava sub-sector can foster competition and economic
growth (Klapper, et al., 2007;
Djankov et al., 2002). From an
evolutionary economic perspective, new research suggests that disparities in
economic growth between advanced and less developed countries can narrow owing
precisely to the growth of entrepreneurial activity (Galor and
Michalopoulos,2006).Entrepreneurship in cassava
processing entails innovation in processing into products and by-products (for
example starch, ethanol, animal feed, food, etc.), and distribution of the products
to consumers (for example restaurants, supermarkets, factories, individual
buyers, etc.). Previous researches suggest that disparities in economic growth
between advanced and less developed countries can narrow owing precisely to the
growth of entrepreneurial activities (Galor and Michalopoulos, 2006; Klapper, et al 2007; Djankov, et al, 2002). Entrepreneurs can
therefore take advantage of existing opportunities in the sub-sector to provide
better products both for consumption and for industrial utilization through
value- added processing. In recent times, government has encouraged the use of cassava
for the production of a wide range of industrial products such as ethanol,
glue, glucose syrup and bread. There is also a policy to make it compulsory for
bakers to use composite flour of 10 percent cassava and 90 percent wheat for
bread production (Bamidele et al.,
2008).
Processing reduces the bulkiness and extends the shelf life and
therefore reduces the transportation cost, as well as adding value to the
product. The present cassava processing methods are highly labour intensive and
expensive. Manual processing requires a minimum of 4 person-days to peel and
wash, 23 person-days to chip one ton of fresh cassava roots which translates to
approximately $65/t of flour in preparation because appropriate processing
technologies, machines and tools are not easily affordable and sometimes
unavailable at the farm level (Kormawa and Akoroda, 2003). Among other
principal constraints to cassava processing are the absence of efficient
dryers, peeling machines, and pelletizers. Almost all the processes of cassava
transformation require peeling of the roots at one stage or the other. Perhaps,
the greatest constraint to cassava processing is drying which takes up to 4
days to complete. Drying is a key process for making virtually all cassava
products. This is because the major cassava producing zones are also the
relatively high rainfall zones and have longer rain fall months.
Cassava
is a major food crop consumed by the people of Abia State. The state cultivates
about 15,700 hectares of cassava per annum, producing 265,000 metric tons of
cassava with a mean yield of 16.9 metric tons per hectare (Cassava Master Plan,
2006; International Institute of Tropical Agriculture, 2004).
1.2 STATEMENT OF PROBLEM
Researches
done in recent times have shown that cassava products are currently
underutilized for income generation in Nigeria (Saidiman, et al., 2015;
Muhammad-Lawal, 2013; Lawal and Jaiyeola, 2007). This means that income
generated from the processing of cassava into its products is small compared to
investments made. Cassava roots are prone to wastage due to inefficient
post-harvest handling. Furthermore, there is inadequate information on income
opportunities that exist in cassava processing activities (Muhammad-Lawal,
2013). Lawal and Jaiyeola, (2007) opined that value added processing improves
the shelf life of agricultural products and generates income for participants. Since
government interventions and policies are aimed at integrating the rural poor
into the mainstream of the economy, it becomes important to add value to crops
like cassava in such a way that incomes and profits accruing to the processor
are improved. A study on the performance of the cassava processor in the area
of value addition to cassava roots is therefore imperative so that rural
communities whose livelihoods depend on it will benefit from the present
traditional food market and new emerging markets.
Aside
from improving farmers’ incomes and increasing foreign earnings through exports
of cassava products, value addition is one of the best ways to address the
increasing level of unemployment in Nigeria. It will help turn around the
fortunes of farmers. Cassava offers tremendous opportunities that would broaden
economic viability and improve competitiveness particularly in the non-oil
sector. Nigeria in general and Abia State in particular can benefit immensely
from this great crop if concerted efforts are made at harnessing its numerous
potentials including entrepreneurship (IITA, 2011).
The
performance of entrepreneurs is crucial in placing any sector of the economy on
the path of progress (Ogundele, 2007). The agricultural sector in Nigeria like
every other sector cannot run productively without the entrepreneur. The
entrepreneur is the king pin of any business. This is because without him the
wheels of industry cannot move in the economy. Africa as a continent has had a
long tradition of entrepreneurship (Economic Commission for Africa, 1997). Creating
of an appropriate and enabling environment is therefore very necessary for the
entrepreneur to perform effectively and efficiently (Ogundele, 2007).
The
cassava sub-sector is a key area of comparative advantage to Nigeria. It is
therefore critical to the agricultural transformation agenda of the government
considering the position the country occupies in the sub-sector at the world
level. The government has made great strides in the sub- sector especially in
boosting agronomic efficiency. Many good varieties of the crop have been
developed and released. Consequently, field outputs have received a boost.
Howbeit, the future calls for a stronger and more coordinated deployment of
investments to sustain the achievements to scale up to greater annual outputs
and diversified usage and more strategic storage. An analysis of the actual
potential size of the market for cassava and cassava-based products reviewed
what was required in terms of economic, social and physical investment to
develop an efficient cassava industrial sector. The outcome of the study sought
to encourage an environment whereby industry agents initiate and activate the
market corrections within their power. Breeding alone cannot make the
difference. Not much can be achieved without a holistic consideration of the
value chain of the crop with plan to adjust even slightly every aspect of the
chain (Kormawa and Akoroda, 2003).
In
cassava sub-sector, the largest category of private investors is the small
scale farmers. The market of cassava can be divided into two categories, the
traditional food oriented market and the new emerging market for industrially
processed cassava. None of the domestic market demand of industrially processed
cassava is being met today in Nigeria. Domestic prices of these products-
chips, starch, flour and ethanol are higher than international prices due to
high cost of processing traceable to high energy cost and other factors.
Competitiveness in the global cassava subsector demands that we focus attention
in improving efficiency in domestic market for industrial products of cassava
which are in high demand. For Nigeria to meet the national demand for these
products, there is need to establish and effectively run more small and medium
scale processing plants. This apart from making cassava products available will
support employment for the teeming unemployed persons in Nigeria.
Though
the country ranks top in the production of cassava in the world, it is yet to
harness the maximum benefits of this unique position mainly because of
inadequate processing facilities and skills which render cassava vulnerable to
seasonal gluts. Cassava processing has therefore remained at the primary level
of processing into consumables like garri
and fufu. Estimates of industrial
cassava use suggest that only 16 percent of cassava root production was
utilized as industrial raw material in 2001 (Kormawa and Akoroda, 2003). This
estimate leaves 84 percent of all cassava root production to food consumption.
In view of this primary and industrially non-significant level of processing,
there is doubt if entrepreneurs in the sub-sector are really performing in
terms of innovating profitable and diversified value-adding businesses. This
study therefore examines processors’ performance and its determining factors in
a bid to finding solution to income and profit gaps.
1.3 OBJECTIVES OF STUDY
The
broad objective of this study was to analyze entrepreneurial performance and
its determinants among cassava-based processing agribusiness entrepreneurs in Abia
State.
The
specific objectives included to;
(i)
examine the
socio-economic characteristics of cassava-based processing entrepreneurs in the
area.
(ii)
determine the types and
sizes of cassava-based processing businesses run by the entrepreneurs.
(iii)
analyze entrepreneurial
characteristics possessed by entrepreneurs in the study area.
(iv)
estimate the determinants
of entrepreneurial performance in the study area.
(v)
determine the
profitability of entrepreneurs value-added activities in the study area.
(vi)
determine the constraints
facing entrepreneurship in cassava-based processing.
1.4 RESEARCH HYPOTHESES
Ho1: Age, marital status,
household size, level of education, extension contacts, business experience,
membership of business association/cooperative, volume of venture capital, are
not significant determinants of performance of entrepreneurs at 1% or 5% in the study area.
Ho2:
The mean scores for entrepreneurial characteristics of respondents in the study
area do not differ significantly.
Ho3:
Profitability does not differ significantly across businesses/enterprises
1.5 JUSTIFICATION FOR THE
STUDY
Nigeria’s
cassava sub-sector is strategic in rapid economic transformation, poverty
alleviation, stable democracy and good governance (Baruah, 2010). By
implication, the development of the sub-sector is vital if agriculture will
sustainably and progressively play its role in the economy. It is true that
efforts at political levels have been intensified to increase the agricultural
sector’s contribution to economic growth and various programmes designed to
achieve sustainability but these efforts have mainly focused on increasing
field production through the maximization of agronomic efficiency. Efforts to
promote the development of value-added agro-processing have not received
adequate attention. Consequently there has been no significant impact made on
employment creation and improvements in rural incomes (IITA, 2000).
Nweke
et al. (2002) maintained that Nigeria
is the most advanced of the African countries poised to diversify the use of
cassava as a primary industrial raw material and livestock feed. The country
has a comparative advantage in rapid adoption of improved cassava varieties and
has been able to develop small scale processing technologies including the
cassava grater. Despite this development, cassava is still consumed majorly as
food while the absence of agro-industrial markets remains the major constraint
to further development of the crop. Insufficient processing options for roots
and tubers remain a major factor preventing greater profitability for producers
and processors. The targeted development in the cassava value chain will to a
large extent depend on the quality and role of entrepreneurs in the sub-sector.
The entrepreneur’s actions are critical determinants of the level of success,
prosperity, growth and opportunities in any economy. The outcome of this study
on the analysis of performance and its determinants among cassava-based agribusiness
entrepreneurs will provide knowledge which will be useful to credit
institutions, policy makers, social groups, prospective investors and
entrepreneurs, input and service providers and other stakeholders. It will also
provide relevant information for further research.
Login To Comment