Promotion of Small and Medium Scale Enterprises: A Pathway to Nigeria Economy Growth

Abstract

Small scale business remains the most popular business sector in virtually all the economies all over the world. Numerous studies have asserted that SMEs act as stimulus for economic growth and development, however; to add to existing body of knowledge, this study investigated the SMEs and economic growth of Nigerian over the period of 35 years spanning from 1981-2015. This study adopted ex-post-facto research design and econometric method of data analysis. Time series data was obtained from the Central Bank of Nigeria (CBN) statistical Bulletin and Nigeria Bureau of statistics. The method engaged for the data analysis was error correction model using Johansson co-integration test which was complimented with Vector Auto Regression (VAR). The result portends a significantly positive co-integrating relationship between SMEs and economic growth in the short and the long run. Based on the findings, it was concluded that SMEs are essential for rapid and sustainable economic growth and development; and in line with this it was recommended that Government should provide enabling environment for SMEs to thrive and provide accessible funds for SMEs.