The Influence of Black Tax on Entrepreneurship in Ilorin Metropolis, Kwara State: A PLS SEM Analysis

Abstract

The study under review is strictly analytical about the implications of Black Tax on the performance of businesses among 350 business people located in Ilorin Metropolis in Kwara State in Nigeria. In this respect, Black Tax refers to a set of financial and psychosocial demands on individuals of members of the extended family- a field that has not received enough literature on African entrepreneurship. The research questions the role of three antecedent variables, Financial Obligation (FO), Psychosocial Burden (PB), and Familial Duty (FD) through three outcome variables of Business Growth (BG), Access to Capital (AC) and Entrepreneurial Stress (ES). In addition, it assesses the gender moderating effect. Using the cross sectional quantitative survey design, the data were gathered by use of a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). Results have shown that FO and PB statistically affect BG negatively and at the same time increase ES. The model explains a significant percentage of the distinctions in ES, as well as a moderate one in AC. Notably, there is a moderate effect of gender in the PBES relationship where female entrepreneurs encounter increased stress. Thus, the research arrives at the conclusion that Black Tax is having a strong economic and psychological limitation on the performance of an entrepreneur and recommends specific financial support and psychological help to reduce these pressures and bring it into the stable operation of the company.