Operations of small and medium enterprises and the legal system in Nigeria

Daniel E Ufua,Mercy E Ogbari,Olusola J Olujobi,Joseph A Dada,Oluwatosin D Edafe

doi:10.1057/s41599-020-00583-y

Daniel E Ufua, Mercy E Ogbari + Show 3 more

Open Access

https://doi.org/10.1057/s41599-020-00583-y

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Abstract

This research explored the effects of the legal system on SMEs operations in the Nigerian economy. The study aimed to address the gap in literature discussing the legal system and SMEs’ operations in Nigeria. It focused on learning about the current level of support of the legal system for SME operations and as well as suggesting an approach to enhance effective SMEs’ operations in Nigeria further. The current study applied a conceptual review, relying on extant literature relating to the antecedence of the Nigeria legal system, focusing on the critical factors affecting SME practices in Nigeria. A key finding is the importance of the legal system functions to SMEs practice in Nigeria. It also highlighted the weaknesses of the legal system in providing the needed backing and conducive business environment for SMEs in Nigeria. A model was proposed, depicting the need for restructuring of the legal system, improvised support of other government functionaries and other relevant stakeholders, to facilitate SMEs’ operations and enhance their contributions to the Nigerian economy. The research ends with the suggestion for further research to consider other research methodological approaches, the development of alternative dispute revolutionary measures, as well as a comparative study involving two or more economies in order to project further learning on the legal system and SMEs’ operations.

Highlights

I n every society, business activities depend on the functioning of the legal system for back up and to regulate interactions between business entities and the environment
A critical question raised in this research is how much can the small and medium enterprises (SMEs) rely on the legal system for backing in the Nigerian economy? The current study is based on extant literature on the subject of the effectiveness of the Nigerian legal system, the relevance, current situations, critical issues and the prospects for the future in offering guidance to business activities among SMEs in the Nigerian economy
This research emphasised on the importance of the legal system functions to SMEs practice in the country

Summary

Introduction

I n every society, business activities depend on the functioning of the legal system for back up and to regulate interactions between business entities and the environment. This ensures that business activities, ranging from negotiations and agreement, promises and fulfilment are made against the backdrop of the functional legal system which acts as an umpire to ensure fairness and legalities in these activities (Abereijo and Fayomi, 2005; Kadiri, 2012) While these operational activities among small and medium enterprises (SMEs) call for caution and alignment with the legal system, the attention of SMEs practitioners is drawn to factors, such as the extent to which the Nigeria legal system can offer SMEs the needed legal provisions. The focus would be on the level of SMEs’ interest and freedom to use the legal system in their operations

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Discussion

Conclusion