Impact of Exchange Rate on the Performance of Small and Medium Enterprises in Nigeria

Nigeria is currently experiencing an unprecedented fluctuation in the price of oil and Naira-Dollar exchange rate depreciation, with exchange rate volatility being more pronounced as it concerns the issues of macroeconomic financial stability, thus, affecting the performance of small and medium enterprises in Nigeria in terms of survival rate and contribution to GDP, this study examines the impact of exchange rate on the performance of small and medium enterprises in Nigeria using econometric regression model of the Ordinary Least Square (OLS). Findings revealed that exchange rate, capital, tax, managerial skill, market size, infrastructure and level of education conform to the a priori expectation of the study and are statistically significant in explaining the SMEs performance in Nigeria. In the light of the above empirical findings in the analysis carried out, the study therefore recommends that government should as a deliberate policy, encourage rural based industrialization whereby investors in different communities would be encouraged to establish small and medium scale industries that would be based entirely on local raw materials including machines and equipment. This will boost and develop the local market. There should be policies that focus on technical education at all levels for the development of human capital. Finally, the government should vigorously seek to improve the international stand of the economy with other economies of the world so as to enlarge the market for Nigerian exports. It should also re-orient its policy towards the external sector and ensure that the sector contributes optimally to output growth. Edoko, Tonna David | Nwagbala, Stella Chinelo | Okpala, Ngozi Eugenia"Impact of Exchange Rate on the Performance of Small and Medium Enterprises in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-4 , June 2018, URL: http://www.ijtsrd.com/papers/ijtsrd14449.pdf http://www.ijtsrd.com/management/business-administration/14449/impact-of-exchange-rate-on-the-performance-of-small-and-medium-enterprises-in-nigeria/edoko-tonna-david