Fuel Subsidy Removal and Small and Medium Enterprises (SMEs) in Ondo State
Keywords:
Fuel Subsidy, Subsidy Removal, Small and Medium Enterprises, ProfitabilityAbstract
This paper assesses the effect of Fuel Subsidy Removal on Small and Medium Enterprises in Ondo State, Nigeria as study area. It is an empirical study that uses both primary and secondary source of data. The main objective is to assess the effect of Fuel Subsidy Removal on Small and Medium Enterprises in Ondo State, Nigeria. The study adopted rational choice theory as framework of analysis. It is a survey research whose data analysis was done quantitatively. Descriptive and Survey research design were adopted. The hypotheses were tested using Regression Analysis. Results from statistical analysis showed that; fuel subsidy removal significantly increases SMEs operational costs, SMEs performance has deteriorated since the removal of fuel subsidy and the correlation results reveal strong relationships among variables. The study concluded that the removal of fuel subsidy has had a profound negative effect on the operations and performance of SMEs in Ondo State. The study recommended that Nigerian government should introduce intervention funds, tax incentives, and subsidized loans should be provided to help SMEs cushion the effect of rising operational costs.
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