CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The establishment of an entity to carry out a proposed solution to an identified problem is the

creation of a Special Purpose Vehicle. Special Purpose Vehicles (SPVs) also known as Special

Purpose Entities are legal entities that are established to carry out functions for which they are

created. As the name implies, they are purposefully and specially created entities, which serve as

vehicle for the implementation of solutions to identified problems or challenges. They carry out

specific task for which they are created. SPVs have been used to compliment polices designed to

solve macro-economic problems such as unemployment and poverty and in some cases; they have

yielded the desired result and have caused an overall improvement in the performance of the

economy. The Young Entrepreneurship program for Schools (YES) and SPRING Singapore of the

Singaporean economy and START-UP Chile of the Chilean government are evidences of SPVs that

have successfully promoted entrepreneurship in both countries respectively (Efayomi, Onyekwere,

Uchechi and Chidozie, 2013).

Nigeria is not an exception in the establishment and use of SPVs to proffer and execute solutions to

challenges.     In the year 2010, the Asset Management Cooperation of Nigeria, AMCON was

established to solve the banking crisis. Some others have been established to promote

entrepreneurship, which is regarded as a powerful engine of economic growth. Entrepreneurship

refers to seeking investment opportunities by individuals and firms to make profit (Inegbenebor,

2005) which is feasible in the view of the market as either a creative process or/and a discovery

process. The individuals, who seek out investment opportunities, are known as entrepreneurs. These

investment opportunities leads to the establishment of enterprises and since entrepreneurs cannot

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carry out all the entrepreneurial activities by themselves, the services of others (hired in form of

labour) will be required and thus, employment, income and welfare improvement are derived. This

is further elaborated by Acs (2007), who opined that entrepreneurs create new businesses, new

businesses in turn create job, intensify competition and improve productivity through technological

change. Thus, high measured levels of entrepreneurship will translate directly into high level of

economic growth through its several multiplier effects. This high correlation between economic

growth and entrepreneurial activities, its potency to generate income, employment and improvement

in welfare of the people has made its promotion a major priority for the Nigerian government which

dates back to when Nigeria gained her independence (Olutunla, 2005). Some of the SPVs that have

had programs to foster entrepreneurship include the Nigerian Bank for Commerce and Industry

(NBCI) 1973, National Directorate of Employment (NDE) 1986, Work For Yourself Program

(WFYP) 1987, National Economic Reconstruction Fund (NERFUND) (1989), National Alleviation

and Poverty Eradication Program, NAPEP (2001), Bank of Industry BOI (2001), Small and medium

Enterprise development Agency of Nigeria, SMEDAN (2003).

But despite the continuous efforts, these SPVs seem not to have caused a structural adjustment

impact on the economy in terms of significant decline in unemployment, decline in poverty and

improvement in the general performance of the economy; Nigeria has an average unemployment

rate of 23.9% from 2006 to 2015;specifally, Kaduna state has an unemployment rate of 25.7% well

above the national average and has the second highest incidence of poverty in the North western

zone with 52.4% as core pore and 38.2% as moderately poor, (African outlook online). A W