Impact of small and medium scale enterprises on economic growth : evidence from Nigeria

Abstract EN

Small and medium scale enterprises play an important role in terms of growth and development of an economy.

This is due to the fact that creation, sustenance, and growth of SMEs is believed to be the key ingredient for development of the industrial sector of an underdeveloped economy.

The study examines the impact of small and medium scale enterprises on economic growth of Nigeria using time series data spanning between 1986 and 2016.

The data is obtained from the statistical bulletin published yearly by the Central Bank of Nigeria (CBN).

Regression analysis is employed for interpretation and analysis of the data collected for the study.

The finding of the study reveals a positive and significant relationship between small and medium scale enterprises and output growth indicating that small and medium scale enterprises in Nigeria make positive contribution towards the development of Nigerian economy.

The study recommends that government should formulate new economic policy to restrict massive importation of foreign goods especially those goods that the SMEs can produce locally in order to protect the local producers against competition with foreign firms.

Efforts should also be made to ensure that adequate infrastructural facilities are in place for proper operation of SMEs in the country.