AbstractThis thesis investigated the combined effects of Trade and Financial market liberalisation on the development and survival of manufacturing small and medium sized enterprises (SMEs) in Nigeria. This came after the implementation of the Structural Adjustment Programme (SAP) in 1986. The SAP was prompted by the economic downturn experienced in the early 1980s and formed the basis for the liberalisation of trade and financial markets. The ensuing liberalised trade necessitated the removal of import and export restrictions in order to encourage competition, improve efficiency and exports of locally manufactured goods. The liberalisation of the financial markets on the other hand, prompted the deregulation of interest rates, exchange rates and the licensing of new banks to stimulate competition for the supply of investible funds for easy access for SMEs.
The study applied quantitative and qualitative methods to gather primary data from 500 SMEs operating in Lagos state of Nigeria. The data were combined with panel data from the Central Bank of Nigeria to explore the impact of the policies on SMEs.
The result of the analysis using SPSS 16.0 and the application of return on investment (ROI) model on the survey and semi-structured interview data respectively reveals that although financial market liberalisation improved the availability of funds in Nigeria, it did not reduce the cost of accessing finance nor did it solve the problems of access to funds for SMEs. This study also found that the trade liberalisation did not improve SMEs’ efficiency to compete favourably with firms based abroad or export their products due to the absence of necessary infrastructure needed for efficient production process.
The government needs to regulate the financial market to protect it from speculative interests that have made interest rates very high in Nigeria. In addition, the necessary infrastructure needed for efficient production has to be in place before SMEs can compete effectively.
|Date of Award
|17 Dec 2009
|Nerys Fuller-Love (Supervisor) & Kelum Nishanta Jayasinghe (Supervisor)