Fuel Subsidy Removal and Small and Medium Enterprises’ Growth Constraints: Evidence from Business Owners in Rural Communities in Edo State, Nigeria

Victor Osadolor; Ph.D.

doi:10.56201/wjeds.v10.no9.2025.pg49.60

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Fuel Subsidy Removal and Small and Medium Enterprises’ Growth Constraints: Evidence from Business Owners in Rural Communities in Edo State, Nigeria

Victor Osadolor, Ph.D.

Abstract

This study examined into how the removal of fuel subsidies impacted Nigerian small firms' operational costs and growth constraints. Regression, correlation, and descriptive analyses were performed on a sample of 112 respondents using a structured questionnaire. Findings indicate that the removal of fuel subsidies greatly increased the cost of transportation, raw materials, energy, inflation, and overall operational costs. These cost constraints resulted in lower profit margins, lower sales turnover, fewer job opportunities, difficulties finding fairly priced raw materials, and greater threats to corporate viability. While regression results showed that fuel subsidy removal accounts for 44.7% of the variance in growth constraint (R2 = 0.447, ? = 0.668, p < 0.001), correlation analysis showed a significant positive relationship between fuel subsidy removal and growth constraints (r = 0.668, p < 0.01). The study concludes that small business survival is severely impacted by the policy change, despite the fact that it is economically strategic to sustain national fiscal stability. In order to mitigate the negative effects on small businesses, policy solutions include a strong emphasis on focused cushioning measures, easy access to capital, and supportive infrastructure. Key words: Fuel subsidy removal, survival, growth, constraints and rural communities.

Keywords

Fuel subsidy removalsurvivalgrowthconstraints and rural communities.

References

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Fuel Subsidy Removal and Small and Medium Enterprises’ Growth Constraints: Evidence from Business Owners in Rural Communities in Edo State, Nigeria

Abstract

Keywords

References

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