In Nigeria, government initiatives and ways to grow and sustain firms have been mapped out to enhance SME entrepreneurial development. This will help SSEs thrive and develop so they can address societal needs. Interest in SSE development, expansion, and promotion as a productive structure to promote economic growth and prosperity has developed in recent years. This research explores how government policies, SSE advancement, expansion, and promotion affect SSE performance and economic growth in Nigeria. The research contributes to various theoretical models, including the Organizational Theory of Innovation and the Schumpeterian Theory of Innovation. These models serve as the foundations for innovation performance, competitive advantage and organizational strategic management. It also promotes ethical decision-making in terms of policies, progress, expansion, promotion and enterprise/company performance. We used survey based research approach. . The study sampled a valid respondents of 250 to make a generalization using Yaro Yamane formulae. The study used Cronbach's Alpha, Pearson's Correlation, Durbin-Watson, ANOVA, and OLS Regression.. The results reflects the level of significant impact of the regressed variables on the SSEs and economic growth at 10%, 1%, 5%, and 1%, significant P-values. This indicate that SSE progress, expansion and promotion are significant factors or elements that can impact positively on SSE development and economic growth (EG). We accept all hypotheses in this study due to their relevance to the measured variable. Effective government policy boosts SSE performance and economic growth. We agree that good government policy for SMEs is vital to most economies' long-term growth and prosperity. Effective government policies affect SSEs' long-term viability. The correlation analysis connected all variables positively. These issues may affect SSE's performance and economic growth. Effective government policies, SSE advancement, expansion, and promotion are combined efforts between the government and entrepreneurs. It will help firms or organizations to expand, find new possibilities, and improve. Besides, the ability of entrepreneurs to continue to develop and offer services depend on having access to financial resources to expand their businesses is a means to contribute to economic growth and development because the continual function of these SSEs will create employment, reduced unemployment and generate revenue through taxes for development intervention. Hence, a need for government to create the enabling environment for small scale business activities to thrive. This research informs the government to strengthen policies to support the private sector growth in Nigeria and elsewhere around the globe.