INSECURITY, INFLATION AND SUSTAINABILITY OF SMALL AND MEDIUM ENTERPRISE IN NIGERIA – International Journal of Social Sciences and Management Review

INSECURITY, INFLATION AND SUSTAINABILITY OF SMALL AND MEDIUM ENTERPRISE IN NIGERIA

Authors: Kolade Akinpelu Ayobami, Abiodun-afolabi Fadekemi Omogbonjubolanle, Abey Samuel Taiwo & Oyedokun Godwin Emmanuel

ABSTRACT

This study examined the impact of insecurity and inflation on the sustainability of Small and Medium Enterprises (SMEs) in Nigeria from 2008 to 2023. Using time-series data obtained from the National Bureau of Statistics and the Global Terrorism Index, the research focuses on three key variables: SME growth (SMES_G), insecurity (INS), and inflation rate (INF). A quantitative research approach is employed, utilizing E-views version 10 for data analysis, including descriptive statistics, correlation analysis, and multiple linear regressions. The Augmented Dickey-Fuller (ADF) unit root test is conducted to assess the stationarity of the data. The results reveal that insecurity has a significant negative impact on SME growth, with a regression coefficient of 5.1759, indicating that an increase in insecurity corresponds to a 51% decline in sustainability. Additionally, inflation shows a significant adverse effect on SME growth with a coefficient of -0.0404. The Jarque-Bera test confirms the normality of the residuals, ensuring the validity of the regression results. The findings support the hypothesis that insecurity significantly hampers the sustainability of SMEs in Nigeria, highlighting the need for improved security measures to create a conducive environment for business growth. This research underscores the critical role of security in promoting SME sustainability and calls for government intervention to address the rising insecurity that threatens socio-economic development in Nigeria. Recommendations include enhanced security measures, job creation, and strengthening intelligence and counter-terrorism strategies.

Keywords: Insecurity, Inflation Sustainable entrepreneurship, SMEs growth, Nigeria

REFERENCES

Adamu, A. (2022). Addressing insecurity in Nigeria: Strategies and implications. Journal of Security Studies, 12(1), 45-67.
Adewale, O.T., Oyedokun, G.E. & Adewumi, MA. (2022). Income Taxes and Financial Performance of Small and Medium Enterprises in Nigeria. in M. A. Mainoma, G. E. Oyedokun, S. A. S. Aruwa, T. O. Asaolu and R. O. Salawu (Eds). Taxation for Economic Development. OGE Publisher, Lagos. Nigeria.404 ISBN 978-978-978-734-0
Adeyemi, S. L. (2022). The impact of inflation on SMEs in Nigeria. African Journal of Business Management, 16(3), 78-89.
Bamidele, O. (2023). Insecurity and its effect on business operations in Nigeria. Nigerian Journal of Entrepreneurship Studies, 5(2), 112-123.
Bello, S.A. & Oyedokun, G.E. (2023). Effect of Micro, Small and Medium Enterprises Access to Credit Services and Employment Creation on the Poverty Level in Nigeria. Lead City Journal of the Social Sciences (LCJSS), 8(1), 28-47, a publication of the Faculty of Social and Management Sciences, Lead City University, Ibadan, Nigeria
Eze, O., Nnaji, C., & Ogunleye, O. (2022). The role of SMEs in job creation and economic growth in Nigeria. International Journal of Business and Management, 10(4), 202-215.
Fagbemi, A. D., Onyekachi, A. I., & Usman, M. (2023). Building resilience in SMEs: The role of government support. Journal of Small Business and Enterprise Development, 30(2), 156-174.
Ilemona, S.A., Nwite, S., & Oyedokun, G. E. (2019). Effects of multiple taxation on the growth of small and medium enterprises in Nigeria. Journal of Taxation and Economic Development, 18(2), 1-8. A publication of Chartered Institute of Taxation of Nigeria
Nnaji, C., & Ogunleye, O. (2023). The impact of insecurity on business growth in Nigeria. African Journal of Economic Review, 11(1), 234-250.
Ogundajo, G.O., Odunayo, J., Osunsusi, A.K., Desi, A. & Oyedokun, G.E. (2023). Digitalized Accounting System: Revamping Small and Medium Enterprises Financial Reporting System. The American Journal of Humanities and Social Sciences Research (THE AJHSSR) 6(30), 99-113. www.theajhssr.com DOI: https://doi.org/10.56805/ajhssr
Ogunsanya, K. (2022). Insecurity in Nigeria: Implications for economic development. Journal of Economic Perspectives, 36(2), 189-205.
Ojo, S. (2021). Challenges facing SMEs in Nigeria: A systematic review. Nigerian Journal of Business and Social Science Review, 9(1), 1-15.
Okonkwo, I., & Ibrahim, M. (2021). Investment patterns in insecure environments: Evidence from Nigeria. Journal of Investment Management and Financial Innovations, 18(3), 43-55.
Oyedekun, G.E., Naburgi, M.M., and Haruna J. (2020). Determinants of small and medium enterprises financing by deposit money banks in Nigeria. Being a Lead Paper presented at the 2nd International Conference of Management Sciences, organized by the Faculty of Management Sciences, Kaduna State University, Kaduna on February 23-25, 2012
Oyedokun, G.E. & Amoo, A.A. (2023). Financial inclusion and Performance of the Small and Medium Enterprises in Ibadan, Oyo State, Nigeria. Asian Journal of Social Science and Management Technology. 5(6), 183-203. http://www.ajssmt.com/current-issue.html www.ajssmt.com
Oyedokun, G.E. & Taiwo, A.O. (2022). Tax incentives and financial performance of small and medium enterprises in Nigeria. Journal of Taxation and Economic Development, 21(2), 62-78. A publication of Chartered Institute of Taxation of Nigeria (CITN). ISSN 1118-6017.
Oyedokun, G.E. and Bello, S. A. (2020). Crowdfunding and Micro, Small and Medium Enterprises Growth in Nigeria: A review of Literature. LASU Journal of Accounting & Finance, 6(1), 90-100, a publication of the Department of Accounting, Banking & Finance and Insurance, Lagos State University, Ojo Lagos Nigeria
Salawu, A., Yusuf, M., & Fagbemi, A. (2021). Insecurity and economic sustainability in Nigeria: An overview. Journal of African Business, 22(4), 487-502.
Taiwo, A. O. & Oyedokun, G. E. (2022). Corporate taxes and financial performance of small and medium enterprises in Nigeria. Journal of Accounting and Taxation, 107 – 122. https://doi.org/10.47747/jat.v2i3.910
Usman, M., & Bello, I. (2023). Economic impact of banditry and armed robbery on SMEs. International Journal of Management Research and Business Strategy, 12(1), 66-79.
Yusuf, S. (2023). Challenges of insecurity in Nigeria: Policy implications. African Journal of Political Science, 15(1), 102-118.