title: Government Fiscal and Monetary Policy Framework: Challenges for SMEs and Entrepreneurship in Nigeria’s Developing Economy
Creators: name: Nwosu, Kevin Okey
Publisher: name: University of Liverpool Repository
Year: 2021

description: Government Fiscal and Monetary Policy Framework: Challenges facing SMEs and Entrepreneurship in Nigeria’s Developing Economy by Kevin Okey Nwosu This action research study explores various solutions to address problems faced by the researcher’s business in Nigeria and possibly other businesses mostly Small and Medium Enterprises (SMEs) in the country over the years arising from ineffective government fiscal and monetary policies. Successive governments in Nigeria have made efforts to create conducive environments for SMEs to contribute adequately to growth and development of the economy. Several studies have shown that despite government’s best efforts, SMEs still face significant challenges especially those outside their control (external to the SMEs) and occasioned by government policy decisions. These challenges militate against their survival and contribution to the country’s economic growth. One of the early findings of this research is that government policy framework in general plays a central role in such SME challenges. The aim of this research is to explore the root causes of these external challenges within the context of government fiscal and monetary policy framework development by working closely with stakeholders, engaging them in an action research context, identifying underlying causes of these problems, making relevant recommendations and taking appropriate action through active engagement with policy decision makers for enactment of changes. The study adopted an action research methodology with a qualitative approach to data collection at the initial stage of engagement with SMEs. A multi-site and coalition based AR approach (Fuller-Rowell, 2009) was used for engagement between SMEs, their umbrella organisations and selected government parastatals, ministries, departments and agencies. The study involved a number of participants, mainly SMEs and their umbrella organisations. The study analysed their concerns and engaged government agencies and policy makers with those findings. The initial research stage starts with first level interviews for qualitative data collection involving 19 participants using in-depth one-on-one interviews. Apart from data collection, a critical aim of this phase is to enlist their eventual participation in an action research. During this phase, one group interactive discussion was facilitated by an SME umbrella organisation for some participants. Further interviews were held with principal officers of umbrella organisations and data collected from these three stages were used to engage policy makers in various government ministries, agencies and departments. The engagements with government agencies provided opportunity for more in-depth analysis, deeper reflectivity, sense-making and critique of the findings. Following these engagements, the research articulated key issues for consideration and enactment which became the springboard for active participation of SME umbrella organisations in government fiscal, monetary and other policy making process for the benefit of SMEs. The study noted four critical inhibitors to growth and development of SMEs in Nigeria and concluded that these are symptoms of more deeply rooted problems of inconsistent and unstable policy environment. The first inhibitor is poor and inadequate infrastructure availability for businesses, secondly inadequate financing and lack of access to finance and thirdly prevalence of multiple regulatory agencies. Finally, high incidence of multiple taxation, multiple levies, duties and charges inhibit SME growth. Although inconsistent and unstable policy environment was also identified as a key theme, the research concluded that this critical inhibitor contributes significantly to the existence and negative impact of the previous four on growth and development of SMEs in Nigeria. The challenges of inadequate infrastructure, poor access to finance, prevalence of multiple regulatory agencies, incidence of multiple taxation, etc. can be attributed to poor and inconsistent fiscal and monetary policy development initiatives by government. Although the research focuses on fiscal and monetary policy issues, the importance of addressing the problem of inadequate infrastructure became central during the research. The research explored policy development framework and identified participatory policy development approach as a possible way to achieve positive outcomes for SMEs. The resulting AR focus contributed positively to engagement between SME operators, SME umbrella organisations and policy makers within government agencies participating in the research. This group transformed into a useful platform for engagement among members and with stakeholders, reflection and sense making between various stakeholders. This engagement process partly influenced the following key actions by policy makers; (i) enactment of extensive participatory policy development approach with government co-opting SME umbrella organisations and embarking on SME Clinics in all states across the country seeking wider consultations and input from the stakeholders; (ii) Adopting an integrated policy development approach recommended and canvassed through the research participants following extensive engagement and reflexivity with key government agencies.