Macro-Economic Variables Fluctuations and the Growth of Micro, Small and Medium Scale Enterprises in Nigeria

This study examines the Impact of Macroeconomic variables fluctuations on the growth of Micro, Small and Medium Scale Enterprises (MSME) in Nigeria covering the period between 1986 to 2023. Data was collected from Central Bank of Nigeria’s Statistical Bulletin and National Bureau of Statistics publications. In this study, we applied the Autoregressive Distributed Lag technique to analyse and establish the relationship among the variables of the model. The result show that the Macroeconomic variables such as exchange rate, interest rate and government tax have significant impacts on the growth rate of MSME outputs in Nigeria. The result of Interest rate coefficient agreed with a’priori expectation and displayed inverse and significant relationship with growth of MSME output. The study concluded that whereas interest rate revealed an indirect relationship, exchange rate and government tax revenues have direct relationships with growth rate of MSME output in Nigeria. Hence it is correct to state that the macroeconomic environment has diverse effects based on peculiarities on the growth rate of MSME output in Nigeria. The study recommends that the Central Bank of Nigeria should leverage more on selective monetary policies such as reduction in tax rates for newly established business ventures as well as credit control and minimum interest rate. More so, there is the need to discourage importation of goods related to MSME products in order to continually stimulate growth of Micro, Small and Medium scale Enterprises in Nigeria.