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An appraisal of government regulatory policies and their impact on small business growth in Nigeria: Evidence from Kano State

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Background of the study :
Government regulatory policies significantly shape the environment in which small businesses operate, impacting their growth, competitiveness, and sustainability. In Kano State, Nigeria, regulatory frameworks covering business registration, taxation, labor laws, and environmental standards have evolved between 2000 and 2020. These policies are designed to promote fair competition, protect consumer rights, and ensure quality standards; however, they can also impose high compliance costs and bureaucratic delays on small enterprises (Oladele, 2023). Recent studies indicate that excessive regulation may stifle innovation and discourage entrepreneurial activities, while streamlined and transparent policies tend to foster business expansion and job creation (Adeniyi, 2024). The interplay between regulatory burdens and market opportunities is particularly pronounced in Kano State, where a vibrant small business sector is critical to local economic development. An examination of policy changes over the past two decades reveals that inconsistent implementation and frequent amendments often lead to uncertainty among business owners. Furthermore, regulatory inefficiencies may hinder access to finance and technology, thereby constraining growth prospects. This study integrates quantitative business performance data with qualitative insights from small business owners and regulatory officials to critically evaluate the impact of government policies on small business growth. By doing so, it aims to provide a comprehensive understanding of how regulatory environments can be optimized to support entrepreneurial development and enhance economic resilience (Ogunleye, 2025).

Statement of the problem
Despite well-intentioned reforms, Kano State’s small business sector continues to struggle with regulatory challenges. Excessive paperwork, inconsistent policy enforcement, and high compliance costs have created a climate of uncertainty and hindered entrepreneurial expansion. These challenges have led to underinvestment in innovative ventures and limited market competitiveness, contributing to slower overall growth in the small business sector. Moreover, regulatory ambiguity has discouraged potential investors and contributed to an uneven playing field where larger firms may better navigate the system. Addressing these issues is critical for ensuring that regulatory frameworks support, rather than stifle, small business growth. This study seeks to bridge the gap in understanding how specific regulatory policies affect small business performance and to propose strategies for creating a more enabling environment (Oladele, 2023).

Objectives of the study:

  • To evaluate the impact of regulatory policies on the growth of small businesses in Kano State.
  • To identify key regulatory challenges hindering small business development.
  • To recommend policy reforms that can enhance the small business environment.

Research questions:

  • How do current regulatory policies affect small business growth in Kano State?
  • What are the main regulatory challenges faced by small enterprises?
  • What policy changes could improve the operational environment for small businesses?

Research Hypotheses:

  • H₁: Stringent regulatory policies negatively impact small business growth.
  • H₂: Inconsistent enforcement of regulations contributes to market uncertainty.
  • H₃: Policy reforms that streamline regulations will enhance small business performance.

Significance of the study
This study is significant as it offers critical insights into how government regulatory policies influence small business growth in Kano State. The findings will help policymakers and business leaders understand the implications of current regulations and identify areas for reform. By proposing targeted policy improvements, the research aims to foster a more dynamic and competitive small business sector, ultimately contributing to broader economic development and job creation (Adeniyi, 2024).

Scope and limitations of the study:
This study is limited to examining the impact of government regulatory policies on small business growth in Kano State only.

Definitions of terms:

  • Government Regulatory Policies: The rules and guidelines established by the government to regulate business operations.
  • Small Business Growth: The increase in scale, productivity, and market reach of small enterprises.
  • Kano State: A northern state in Nigeria characterized by its diverse small business sector.




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