An appraisal of macroeconomic policies’ influence on small business development in Nigeria: A study of Kano State (2000–2020).
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Background of the Study:
Macroeconomic policies in Nigeria—including fiscal adjustments, monetary regulation, and exchange rate management—have long been central to creating an enabling environment for small business development. In Kano State, small enterprises are a vital engine of economic activity, contributing significantly to employment and local innovation. Over the period under review, various policy measures such as interest rate stabilization, tax reforms, and public expenditure adjustments were introduced with the intent to stabilize the economy and boost consumer and investor confidence (Adeyemi, 2023). These policies affected credit availability, cost of capital, and overall market stability, which in turn influenced the operational capacity of small businesses. However, inconsistencies in policy implementation and external economic shocks have often resulted in an unpredictable business environment, thereby complicating growth prospects for entrepreneurs (Umar, 2024). Recent analyses reveal that while some policy interventions have improved access to finance and reduced inflationary pressures, others have inadvertently increased operational costs and uncertainty. Thus, a critical evaluation of the interplay between macroeconomic policies and small business development is essential to identify both the enabling factors and the constraints facing entrepreneurs in Kano. Such an analysis provides valuable insights for policymakers aiming to refine strategies to foster sustainable small business growth (Bello, 2025).
Statement of the Problem:
Despite the intention behind macroeconomic reforms to stabilize the economy and encourage entrepreneurship, small businesses in Kano State continue to face numerous challenges. Fluctuating interest rates, inconsistent fiscal measures, and external economic shocks have contributed to an unstable operating environment, hampering the growth of small enterprises (Adeyemi, 2023). This instability leads to reduced investment, limited access to credit, and higher operational costs, which together undermine small business development. The study seeks to identify the critical weaknesses in current macroeconomic policies that hinder small business growth and to propose strategies for policy improvements that can better support the sector (Umar, 2024; Bello, 2025).
Objectives of the Study:
• To evaluate the influence of macroeconomic policies on the growth and sustainability of small businesses in Kano State.
• To identify key policy-related challenges that impede small business development.
• To propose policy recommendations that enhance the entrepreneurial environment.
Research Questions:
• How do current macroeconomic policies affect small business development in Kano State?
• What are the main challenges faced by small businesses due to policy inconsistencies?
• Which policy interventions can improve the growth prospects of small enterprises?
Research Hypotheses:
• H1: Stabilized macroeconomic policies significantly boost small business development in Kano State.
• H2: Policy inconsistencies negatively affect the operational performance of small enterprises.
• H3: Targeted fiscal reforms can improve credit access and reduce operational costs for small businesses.
Significance of the Study:
This study provides critical insights into the relationship between macroeconomic policies and small business development in Kano State. The findings will inform policymakers and stakeholders on effective policy designs that support sustainable entrepreneurship. By addressing policy gaps and enhancing economic stability, the study aims to contribute to a more robust small business sector, which is essential for inclusive economic growth (Adeyemi, 2023; Umar, 2024).
Scope and Limitations of the Study:
This study is limited to examining the impact of macroeconomic policies on small business development in Kano State, focusing solely on policy implementation, credit conditions, and business performance indicators.
Definitions of Terms:
• Macroeconomic Policies: Government strategies related to fiscal and monetary management aimed at stabilizing the overall economy.
• Small Business Development: The growth and sustainability of small-scale enterprises in terms of employment, revenue, and innovation.
• Economic Stability: The consistency of an economy in maintaining growth, low inflation, and steady employment levels.
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