The Naira exchange rate and the performance of export-oriented small-scale enterprises in Nigeria: 2006 - 2022

Abstract

This study examines the impact of naira exchange rate fluctuations on export-oriented small-scale enterprises (EO-SSEs) in Nigeria between 2012 and 2021. Despite the government's implementation of various policies to stabilize the naira, the exchange rate instability has adversely affected EO-SSEs by increasing uncertainty, inflating import costs, and reducing competitiveness. Using multiple regression analysis, the study reveals that while exchange rate fluctuations negatively impact EO-SSE performance, real interest rates show a mixed effect. Findings indicate that macroeconomic variables like exchange rates and interest rates significantly influence EO-SSE growth but require better management to enhance their contributions to Nigeria's economic development. The study concludes with recommendations for improved fiscal policies, tax incentives, environmental management, and internal controls to bolster the performance of EO-SSEs.