Small and Medium Enterprises (SMEs): Veritable Tool for Economic Growth and Employment Generation in Nigeria

Abstract

Over the years, Small and Medium Scale Enterprises (SMEs) have been identified generally as the bedrock of an economy having the potential for employment generation, economic stability, wealth creation, increased Gross Domestic Product (GDP) and Foreign Direct Investment (FDI). Developing and sustaining this sector will greatly impact the economic growth of Nigeria. However, due to the minimal attention that have been paid to this sector over the years, its contribution to the GDP and employment generation has remained relatively non-substantial. Under the right business environment, SMEs can thrive and metamorphose into larger firms, thereby bringing about the much-needed economic revolution, technological advancement, self-sufficiency, poverty reduction and increased security. The success and failure of SMEs are characterized by several factors, both internal and external. This paper considers the importance of developing and promoting sustainable SMEs schemes to attain a competitive position in the local and international marketplace and also examines key determinants influencing the growth and development of SMEs in Nigeria. Several key factors were identified that should be addressed to enable SMEs attain robust growth and recognition, specifically the utilization of technology. Special attention was paid to the infrastructural gaps, the need to bridge the gaps to allow for a more efficient, vigorous and optimal deployment of resources. Key policy recommendations that could foster the development and sustenance of SMEs were proffered.