ABSTRACT

The study investigated the effect of economic development on SMEs’ performance in Nigeria for a period of 21 years (2000 to 2020). The rationale for the present study is predicated on the fact that economic development plays a significant role in the determination of small and medium scale entreprises in any country across the globe. The study employed the ordinary least square (OLS) econometric technique on variables such as employment generation (EMPG), poverty reduction (POVR) and income growth (INCG).

The empirical results revealed that economic development have a significant impact on SMEs’ performance in Nigeria within the period of investigation. Poverty reduction (POVR) is the only variable that exert significant impact on SMEs performance overtime. The other variables (employment generation (EMPG) and income growth (INCG)) failed the 5 percent significance level. By implication, these variables do not have any significant impact on the overall performance of SMEs in Nigeria.

The study recommends among others that: employment generation should be improved on by engaging in several job creation activities for the unemployed youths; poverty should be effectively monitored and controlled in order for SMEs to continuously enjoy improved performance; and the government of Nigeria should adopt measures targeted at improving the per capital income of the populace as such would ensure that the purchasing strength of the populace is maintained/enhanced.