This study examines the firm-level cost implications of fuel subsidy removal on the viability and adaptive strategies of micro, small, and medium-sized enterprises (MSMEs) in Nigeria. Using a qualitative interpretivist approach, data were collected from 15 MSME owners and managers through semi-structured interviews and open-ended questionnaires. The findings show that subsidy removal led to systemic cost escalation, characterised by supply-chain inflation, rising raw material price, workforce contraction, and significant threats to business viability. MSMEs responded by deploying strategies including internal cost management, business model adjustment and diversification, and shifts towards alternative energy sources to reduce fuel dependence. The effectiveness of these responses is constrained by structural conditions, particularly inadequate infrastructure and energy instability. The study provides firm-level evidence of how cost pressures translate into business survival outcomes through adaptive strategies, clarifying how MSMEs sustain operations under reform-induced economic conditions. Drawing on these findings, the study develops the GROWTH Framework, which integrates firm-level practices like Governance, Resilience, Opportunity, Wealth, and Technology Hubs to strengthen MSME resilience and provide policymakers with a structured basis for systemic reform. The framework shows how these strategies support the transition from short-term survival to more sustained performance under economic stress and provides direction for improving enterprise responses to systemic shocks.
Osho et al. (Tue,) studied this question.
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