SME-Led Non-Oil Export Sector in the Southwest Nigeria: Issues and Challenges

Abstract

This paper explored literary information on the issues and challenges of the SME-led non-oil export sector in the Southwest Nigeria, and provided empirical and descriptive account of the sector as a more viable alternative to the oil-dominated Nigerian international trade. The paper showed literary evidence that the poor performance and the weak positioning of the SME-led non-oil sector in the export market are pertinent issues that require urgent attention; while the challenges of the sector's uneasy access to finance, infrastructural deficits, entrepreneurial incapability, unstable export trade policy, over-dependence on foreign technology, official corruption and the global economic crisis, demand proper understanding and proactive actions. Through an organised field-survey of 300 sampled SME owners/managers, the paper revealed empirically that in spite of the noted SMEs' challenges, about 49% of the firms in the Southwest Nigeria were actively engaging in non-oil product exporting with 78.7% contents of their exports being intermediate and finished products. The mode of entry of these firms into the foreign market were found to be mainly, joint venture and direct exporting through step by step, risk averse, slow, and cautious marketing strategies; while uneasy access to the foreign markets and customers, fear of export risks, difficulties in making profits and stringent export regulations, were the major export barriers against the SMEs. The paper therefore, recommends that there should be a more intensified focus on SME-led non-oil export support promotions in the Southwest Nigeria for better performance.