Exchange Rate Fluctuation and Sustainability of Small Business Enterprises in a Developing Nation

The consistent decline of the Naira against the US Dollar has had severe consequences for a developing nation like the Nigerian economy, especially for small and medium-sized businesses (SMEs). The study investigated the impact of exchange rate fluctuations on the sustainability of small and medium-sized enterprises in Anambra State, Nigeria. A primary source of data was used. The descriptive survey research method was used through the distribution of questionnaires to skilled workforce of selected small and medium scale enterprises in Anambra State. The population of the study consisted of 548 skilled workers of selected small and medium scale enterprises in Anambra, and 246 sample size was derived from Taro Yamane formula and 240 copies of questionnaires were recovered. Linear regression analysis was used to test the hypotheses. It was found that the fluctuations in the dollar exchange rate have a significant effect on the competitive advantage of small and medium-scale enterprises in Anambra, and market speculation has a significant impact on the profitability of small and medium-scale enterprises in Anambra. The study concluded that fluctuations in the dollar exchange rate significantly impact the sustainability of small and medium-sized businesses in Anambra State, Nigeria and recommends that Anambra SMEs diversify their supply chains by sourcing raw materials locally, thereby reducing reliance on imported goods vulnerable to dollar exchange rate fluctuations, and emphasizing the importance of acquiring accurate market intelligence to enable informed decision-making and minimize speculative losses.