Small and Medium Enterprises(SMEs): Key to Socio-Economic Development of Nigeria

International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue XII, December 2021 | ISSN 2454–6186

Small and Medium Enterprises(SMEs): Key to Socio-Economic Development of Nigeria

Aikor, Shirgba Timothy Ph.D
Department of Supply Chain Management,
School of Logistics and Innovation Technology,
Federal University of Technology, Owerri, Nigeria

ABSTRACT
In Nigeria, as in many other developing and emerging economies, Small and Medium Enterprises (SMEs) contribute to their socio-economic development and growth hence, successive governments have invested resources in intervention programs aimed at stimulating the sector to achieve sustainable development. The main objectives of the study are to; review the role of SMEs to the socio-economic development of Nigeria, identify current government efforts and challenges to stimulating SMEs performance especially as it relates to wealth creation and employment generation. The study found that; SMEs play a key role in socio economic development of the country especially in the area of employment generation and wealth creation. However, there are prevailing economic and political conditions that have not given room for SMEs to thrive, as evidenced in the internal and external challenging factors they are currently facing in the country despite the enormous government intervention initiatives. It is recommended that government should reform the implementation of these initiatives, ensure programmes continuity due to change on government, fight corruption and insecurity, improve on the business environment and evolve youth re-orientation programme to cause them to embrace entrepreneurship. The methodology adopted for this work is narrative textual case study.

KEY WORDS: SMEs, Socio-economic development, wealth creation and employment generation.

INTRODUCTION

In developed and developing nations as well as emerging economies, the significant role of Small and Medium Enterprises (SMEs) to social and economic growth and development is highly underscored. In this respect, SMEs are considered as the necessary mechanisms for realizing such national developmental goals as poverty reduction, democratization and economic participation, job creation, harnessing industrial development and local production, knowledge development and innovation and employment generation (karadag, 2015). SMEs have so far played a significant role in the economies of the Organisation of Economic Cooperation and Development (OECD) and Asia-Pacific Economic Cooperation (APEC) countries (Fjose, Grunfeld & Green, 2010). In the same vein, Beck, Demirguc-Kunt &Leine (2005) indicated that healthy competition and entrepreneurship development in emerging economies are developed and enhanced through SMEs. Owualah & Obokoh, (2017) also postulated that by adding vitality and flexibility to business activities, SMEs help to improve economic performance. Uduak and Ekong (2016) estimated that about 70% of the people in sub-Saharan Africa rely on SMEs and informal establishment for their livelihood. In Botswana, small businesses contributed between 30-45% to the nations GDP and accounted for more than 60% of wage employment. Thus, any increase in the activities of small enterprises will lead to corresponding increase in employment. As employments are generated, there is increase productivity, thus raising the level of wealth creation in a given economic environment. This is why the productiveness of an economy is related to increasing income and improving standards of living. Businesses combine human and material resources to create value.

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