EFFECT OF SMALL AND MEDIUM SCALE BUSINESSES ON EMPLOYMENT GENERATION IN NIGERIA

Abstract

This paper centers around the connection between small and medium scale enterprises and employment generation in Nigeria. The high level of unemployment in Nigeria has been detrimental to the level of economic progress in the country. The main objective of the study, is thus, to assess the effect of SMEs on job creation in Nigeria. The paper covered the period between 1994 to 2021. The Co-integratyion and its Error Correction Model (ECM) framework was used in analyzing the data. The result revealed that the output of SME has a positive and significant impact on the level of employment. The real exchange rate has a positive impact on employment. The interest rate has a negative impact on employment. The findings enable us to recommend the setting up of clusters of SMEs that produces similar product which will have positive impact on employment generation amongst others.