EFFECT OF NAIRA REDESIGN POLICY ON THE PERFORMANCE OF SELECTED SMALL-SCALE BUSINESSES IN GWAGWALADA AREA COUNCIL,FCT-ABUJA.

Abstract

This study examined the effect of Naira redesign policy on the performance of selected small-scale businesses. The main the objective is to investigate the effect of cash crunch and counterfeit on the performance of selected small -scale businesses, proxied by profit margin, and customer patronages. This study adopted descriptive survey research design. The population of this study was based on selected small-scale businesses in Gwagwalada area council, Abuja. The population consists of 240 managers and employees of selected small-scale businesses. Sample size of 180 was determined using Taro Yamane (1967) formula. Simple random sampling technique was employed and questionnaires was administered as instrument of data collection. Cronbach’s alpha was used for validating the instrument. Cronbach reliability was used to determine the internal consistency of the constructs in the study. Simple percentages, mean and standard deviation were used as descriptive statistics while Regression was used for testing the formulated hypotheses at a 5% level of significance. The findings revealed that cash crunch during Naira redesign has significant effect on profit margin of selected small businesses in Gwagwalada area council, Abuja. This suggests that there is a meaningful and substantial influence on the businesses' profitability. It indicates that the financial constraints arising from the Naira redesign policy have tangible and adverse consequences on the ability of these businesses to maintain healthy profit margins. Based on these findings, the study concluded that counterfeits and network outage has significantly impact small scale businesses in Gwagwalada area council, by affecting margin profit and customer patronage. Therefore, the study recommend that small businesses should emphasize robust financial planning to navigate the challenges posed by the cash crunch