FUEL SUBSIDY REMOVAL AND PERFORMANCE OF SMEs IN EDO NORTH

Abstract

The study examined the effect of fuel subsidy removal on performance of SMEs in Edo North. Specifically, the study's objective is to investigate the effects of the hike cost of production, cost of supply chain and cost of finance on market share, profitability and survival rate of SMEs in Edo North. To achieve this objective, the study adopted a descriptive survey research design and a sample of 288 SMEs in Edo North were randomly selected using Cochran’s sample size technique. The data obtained through a structured questionnaire were analysed, using both descriptive statistic and Pearson Product Moment correlation at 5% significance level. The findings revealed that there is positive insignificant relationship between the cost of production and market share of SMEs. The findings further indicated negative correlation between cost of supply chain and profitability of SMEs, while there is a significant negative correlation between the cost of finance and survival rate of SMEs in Edo North. The study therefore among others recommended that SMEs should explore strategies to enhance their market share by implementing efficient production processes, quality improvement, and innovative marketing approaches.