Nnadiebube Journal of Education

This study endeavors to find out the potential role of SMEs output in GDP growth for Nigeria considering some macroeconomic variables. While using data from 1991 to 2022, ARDL bound testing approach has been used to incorporate the dynamic perspective in the study. In model estimation, the GDP growth rate has been taken as a dependent variable, whereas, output of small scale industry, inflation rate, interest rate, credit availability to small scale industry have been included as independent variables. The estimation findings of the model confirmed the positive and significant association between output of SMEs and GDP growth in Nigeria. However; the sector still requires a policy design to overcome the challenges of the sector. These policies require a strategy that can cater more growth of the economy through progress of SMEs. It is recommended that there is need for supporting and strengthening the SMEs sector by provision of credit at low interest rate and the government should a conducive environment for these SMEs to thrive.

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