Economic Environment and the Performance of Small Scale Enterprises in Nigeria

Abstract

The study examined Economic environment and the Performance of Small Scale Enterprise in Nigeria. The study employed quantitative research design of which secondary data were collected from journals and Central Bank of Nigeria’s Statistical Bulletin for the period of1986-2020. Data collected were analyzed using descriptive statistics and regression analysis aided by Eviews7.Four null hypotheses were developed and tested to examine the impact of selected components of economic environment on the performance of small scale enterprisesin Nigeria at 0.05 significant levels. The study found that inflation rate has a statistically insignificant positive effect with a coefficient value of 0.001154 and probability value of 0.9025. whereas, interest rate, with a negative effect has a statistically significant effect with coefficient value of -0.124756 and the probability value of 0.0010. Exchange rate and money supply have statistically significant positive effect on the growth of small enterprises in Nigeria with coefficients of 0.014658 and 0.000142 and probability values of 0.0003 and 0.0010 respectively. The study therefore concludes from the findings, that the economic environment of small enterprises in Nigeria between 1986 and 2020 have impacted significantly on the performance of small scale enterprises via their contribution to GDP. The study recommends that government should come up with measures to ensure that price level does not fluctuate significantly in such a manner that can lead to poor small enterprise’s performance.