Contributions of SMEs to Employment, Gross Domestic Product, Economic Growth and Development

Abstract

Small and Medium Enterprises (SMEs) play an essential role in the provision of employment, contribute to the growth of GDP, economic growth and development of many countries. The SMEs are considered to be the main foundation and support for economic growth and development. However, with the rapid changes in the external business environment, and coupled with development brought about by ICT, there is always the need for continues studies to keep update possible changes that might occur in the environment and the field. Therefore, firstly, this study examined and analysed the role being played by SMEs toward employment, GDP, economic growth and development in the Nigerian economy. Secondly, the study reviewed the extant literature and empirical research and identified the problems and challenges facing SMEs in Nigeria. The research used data obtained from secondary sources. According to the literature, the problems and challenges facing SMEs are divided into two groups; the internal and external problems. This study attempted to identify the problems and challenges as a positive first step towards formulating a workable framework for the SMEs to overcome the problems and challenges. Hence, it is recommended that government programmes and incentives are either insufficient or not delivered effectively enough to overcome these problems. Consequently, recommendations were given to proffer solutions to the identified problems and challenges facing the SMEs in Nigeria.