Government Fiscal and Monetary Policy Framework: Challenges for SMEs and Entrepreneurship in Nigeria’s Developing Economy

Abstract

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…