Impact of Government Ease of Doing Business Policies on SME Performance in Oyo State, Nigeria

Azeez Olawale Ajayi and Olatunji Alaba Hassan
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Azeez Olawale Ajayi: Department of Management and Accounting Lead City University, Ibadan Oyo State, Nigeria
Olatunji Alaba Hassan: Department of Management and Accounting Lead City University, Ibadan Oyo State, Nigeria

Lead City Journal of the Social Sciences (LCJSS), 2025, vol. 10, issue 2, 5-20

Abstract: This study examines the impact of government Ease of Doing Business (EoDB) policies on the performance of SMEs in Oyo State, Nigeria, focusing on business registration reforms, financial accessibility, and taxation. This study addresses a critical gap in research on localised policy implementation by employing institutional theory and the resource-based view to analyse the regulatory effects on SMEs. A mixed-methods approach was employed, combining surveys from 450 stratified-randomly selected SMEs with qualitative interviews, evaluated through hierarchical regression and thematic analysis. Key findings reveal that while registration reforms reduced processing times (68% completed within 14 days compared to 42% before the reforms), operational efficiency remained static. Only 18% of respondents secured loans, with rural SMEs disproportionately disadvantaged (7% approved versus 32% for urban SMEs). Tax compliance costs constituted 14.2% of income, whereas 87% of respondents faced unauthorised fees, leading to an 18% decline in productivity. The analysis indicates that current policies inadequately address structural imbalances, disproportionately affecting micro and rural enterprises. Recommendations include structured formalisation initiatives, enhanced financial inclusion, and rigorous actions against exorbitant fees to foster equitable growth of SMEs.

Keywords: Government Policies; SME Performance; Access to Finance and Business Registration Reforms (search for similar items in EconPapers)
Date: 2025
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