EFFECT OF EXTERNAL BUSINESS ENVIRONMENT ON PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN GWAGWALADA, ABUJA

Abstract

This research investigates the effect of external business environment on the performance of Small and Medium-sized Enterprises (SMEs) in Gwagwalada, Abuja. The study aims to unravel the unique challenges and opportunities encountered by SMEs in Gwagwalada, considering the city's rapid development, infrastructural complexities, and the ever-evolving national economy. Data for this study were collected from 100 SMEs in Gwagwalada through surveys and interviews. The research employed regression analysis to explore the intricate relationships between external factors and SME performance, setting a significance level of 0.05. Finding shows that global oil supply patterns were found to have no significant correlation with financial difficulties faced by SMEs. However, inflation and currency rate fluctuations emerged as influential factors, significantly impacting the financial stability of these enterprises. Infrastructural barriers, specifically insufficient power supply and transportation limitations, were identified as substantial obstacles hindering the growth and efficiency of SMEs. Furthermore, the regulatory environment, with a particular emphasis on financing availability, was found to significantly influence the day- to-day operations of SMEs in Gwagwalada. The economic symphony, infrastructural blues, and policy pas de deux collectively shape the narrative of SMEs in this region. Based on the study's insights, it is recommended that policymakers and business leaders in Gwagwalada implement targeted measures to address infrastructural challenges, particularly in power supply and transportation. Additionally, fostering a supportive regulatory environment, with a focus on financing accessibility, can enhance the resilience and efficiency of SMEs in the region.