What type of study is this?

September 10, 2025

Onboarding and Employee Engagement in Deposit Money Banks in Akwa Ibom State

Puntos clave

Naira devaluation negatively affects SMEs in the short-run due to rising import costs, while improving export competitiveness in the long run.
The study highlights significant macroeconomic influences such as inflation and money supply, which hinder SME growth.
A positive correlation between interest rates and SME performance suggests opportunities for export-oriented businesses despite challenges.
Policy recommendations include subsidies and import restrictions to alleviate the adverse effects on import-dependent SMEs.

Resumen

This study investigates the impact of Naira devaluation on the performance of Small and Medium Enterprises (SMEs) in Nigeria from 1991 to 2023 utilizing the Autoregressive Distributed Lag (ARDL) model. The analysis focuses on the relationship between SME performance and exchange rate as well as on other key macroeconomic. Findings reveal that Naira devaluation has a significant negative short-run effect on SMEs due to increased costs of imported inputs. The long run effect is however found to be positive which indicates that devaluation tends to enhance export competitiveness of SMEs in Nigeria. Moreover, while inflation and money supply negatively impact SME, interest rate has a positive effect. The study therefore underscores the dual nature of devaluation on businesses in Nigeria. While it offers opportunities for export-oriented SMEs, it also poses challenges for businesses reliant on imports. Policy recommendations include subsidies and import restrictions to mitigate adverse effects and promote sustainable SME growth in Nigeria.

Preguntar a la IA

Me gusta

Guardar