SMALL AND MEDIUM-SCALE ENTERPRISES AS THE FULCRUM OF ECONOMIC GROWTH IN NIGERIA

Abstract

In recent times, small and medium-scale enterprises and their operations have assumed prominence especially in developing nations, such as, Nigeria, Ghana and Uganda. These small businesses have been recognized in some quarters as essential for economic growth.  Other researchers view their operations as far from contributing significantly to economic growth especially those small businesses operating in the informal sector. This article therefore examined the merit of small and medium-scale enterprises (SMEs) as the fulcrum of economic growth. The study sought to examine firstly, how the activities of SMEs enhance the quantum of products and services available for consumption, secondly, how the SMEs contribute to creation of employment opportunities and thirdly, how the operations of SMEs enhance the standard of living of people in the society. Survey research design was adopted in this paper.  A total of 120 small-scale enterprises engaged in agriculture, manufacturing, provision of services and trading activities in Lagos, Nigeria and Accra, Ghana were selected through random sampling and the data obtained were used to accomplish this study.  Three hypotheses were formulated and tested using Statistical Package for Social Sciences and regression analysis to consummate the study. The results obtained from the hypotheses tested revealed that the activities of SMEs have significant effect on the quantum of products and services available for consumption, the operations of SMEs have significant effect on the creation of employment opportunities and the activities of SMEs have significant effect on the standard of living of people in the society. Based on the findings of the study, the paper recommended that the government of developing nations should put in place sound policy guidelines aimed at creating enabling environment for more SMEs to be established to enhance economic growth and influence substantial rise in the standard of living in the society.