Joint ventures and Business enterprise

Meaning of Joint Ventures

Joint ventures or enterprises can be defined as those businesses in which private investors and governments are in partnership. In other words, these are ventures which are set up by government in collaboration with private firms.

One of the major purposes of setting up a joint venture is to combine some of the advantages of government and private ownership and reduce the problems of complete government or private ownership. It also eliminates the inefficiency associated with public corporations.

General Sources of Finance for Business Enterprises

1. Personal savings
2. Bank loans
3. Borrowing from relatives or friends
4. Ploughed back profit/ retained profit
5. Loans and overdraft from banks
6. Equipment leasing
7. Hire purchase
8. Sales of shares
9. Tax holiday
10. Grants from other financial institution
11. Credit purchase of trade items

General and Specific Problems of Business Enterprises

1. Shortage of Raw Materials: Business organizations in West Africa find it difficult to acquire the necessary raw materials.
2. Low level of Technology: High level of technology is yet to be developed which can facilitate functioning of business enterprises.
3. Political Instability: A political atmosphere with incessant coups and counter-coups which is common in West Africa will stifle any meaningful business activities.
4. Problem of smuggling: Government and its agents are still unable to stop smuggling, and it is seriously affecting business enterprises in West Africa.
5. Problem of infrastructural facilities: The infrastructural facilities needed by these business enterprises for their effective functioning are either inadequate or nowhere to be found.
6. Inadequate Capital: Inability to source for more capital poses challenges to business enterprises.
7. Inadequate Skilled Personnel: The necessary highly skilled personnel needed by these business enterprises are in short supply
8. Irregular power supply:  The supply of electricity that is so important for the effective and smooth running of the business enterprises is irregular and this will distort the performance of the business units.
9. Inefficient Management:Poor management can lead the business to serious problem.
10. Government Policies: Government policies like high tax, high tariff and some policies of government may not favour the expansion of business in a particular area.