The Impact of Exchange Rate Depreciation on Small and Medium Sized Enterprises Performance and Development in Nigeria - Research

This paper examines the impact of exchange rate depreciation on the performance and development of Manufacturing Small and Medium Sized Enterprises (SMEs) in Nigeria. Data were obtained from a questionnaire survey of 500 manufacturing SMEs in Nigeria and analyzed using descriptive statistics. Chow test was used to determine whether there was structural change in Nigeria's non-oil export after the deregulation of exchange. The results of the data analysis suggest a very high sensitivity of SMEs' performance and cost of operations to exchange rate fluctuations. The results further suggest that SMEs' efficiency did not improve; neither were they able to take advantage of the liberalized trade to export their products. The policy did not positively affect Nigeria's non-oil export. Considering Nigeria's re-basing of its GDP and in effect becoming Africa's largest economy, there is a real interest in understanding how fluctuations in exchange rates impact on SMEs activities which account for a substantial part of Nigeria's economic activities.