TRAJECTORY OF SME DEVELOPMENT: A CRITICAL ANALYSIS AND PROSPECTIVE INSIGHT INTO DIVERSIFICATION PROGRESS IN NIGERIA

Abstract

The pivotal role of small and medium enterprises (SMEs) in fostering economic diversification has been widely acknowledged as crucial for achieving inclusive growth and development. Recognising this, the Nigerian government has outlined the Strategic Roadmap and Action Plan (SRAP 2021–2024), aligning with the National Digital Economy Policy and Strategy (NDEPS) and the National Development Plan (NDP), 2021–2025. This initiative seeks to establish an ecosystem for innovation-driven enterprises (IDE) and empower SMEs to embrace emerging technologies, a crucial aspect of technological catching-up in developing economies. This paper utilised qualitative research approach to critically analysed the perspective of SMEs development and its role in advancing economic diversification in Nigeria, an emerging economy within Sub-Saharan Africa (SSA), particularly in the context of technological catching-up. However, the introduction of policies such as SRAP has shown promise in encouraging SMEs to leverage technology for enhanced innovation, providing a pathway for these enterprises to catch up technologically in the broader context of developing economies. Additionally, our paper identifies infrastructure deficits as a critical factor impeding SME development, contributing significantly to the country's low ranking on the global Ease of Doing Business (EoDB) index. In light of these findings, we recommend a comprehensive and effective implementation of policies to boost SME performance, generate employment opportunities, and alleviate poverty, thereby contributing to technological catching-up and broader national development in the context of developing economies.