TITLE PAGE
THE IMPACT OF NAIRA DEVALUATION ON SMALL AND MEDIUM ENTERPRISES (SME) IN NIGERIA
BY
OHAEGBU HENRY SOMTOCHUKWU
2012034025
A PROJET SUBMITTED TO THE DEPARTMENT OF ECONOMICS, FACULTY OF SOCIAL SCIENCES
CHUKWUEMEKA ODUMEGWU OJUKWU UNIVERSITY (COOU)
IGBARIAM CAMPUS
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE BACHELOR OF SCIENCE (B.Sc.) DEGREE IN ECONOMICS
JULY, 2016.
APPROVAL PAGE
In accordance with the due regulations of Chukwuemeka Odumegwu Ojukwu University, Igbariam Campus, this project work titled “the impact of Naira Devaluation On Small and Medium Enterprises (SMEs) in Nigeria” has been approved and accepted in partial fulfillment of the requirements for the award of Bachelor of Science (B.Sc.) Degree in Economics.
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Dr. (Lady) Onwuteaka I. C. Date
Project Supervisor (1)
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Dr. Oguanobi Chibuike Date Project Supervisor (2)
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Dr. (Mrs.) Mgbemena, Emilia M. Date
Head of Department
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External Examiner Date
CERTIFICATION
I hereby certify that I am responsible for the work submitted in this project. The original work is mine, except as specified in the acknowledgement and references, and that the project has not been submitted to this university or other institution for the award of a Bachelor’s Degree.
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Ohaegbu, Henry Somtochukwu Date
(Researcher)
DEDICATION
This work is dedicated to God Almighty.
ACKNOWLEDGEMENTS
My greatest appreciation goes to the Almighty God for the life, protection, provision and direction he has given me throughout my academic year in the University.
My special thanks goes to my supervisors Dr. (Lady) Onwuteaka, Ifeoma C. and Dr. Oguanobi Chibuike for supervising this project, and their advice, inspiration and invaluable assistance and suggestions which led to the successful completion of this work.
I also wish to express my gratitude to the Head of department Dr. (Mrs.) Mgbemena E. M., for her great impact in my life through my course of study in the institution. Also to my lecturers; Dr. Akamobi A., Dr. Ezeanyaeji C. I, Prof. Ikpeze N. I., Prof. Onah, Dr. (Mrs.) Maduka, A. C., Dr. Agu A. O., Dr. Obi, C.Y., Lord Nuel Ifebi O., Mr. Ibekilo B., Mr. Ekesiobi C.S. and Mrs. Ugwunna Ogochukwu. who in one way or the other contributed to the successful completion of this work.
I am highly indebted to my parents Mr. and Mrs. Fidelis Ohaegbu, My brothers: Nonso and Ebuka, my sister: Mrs. Ogbonna Chioma, Mrs. Ezeora Uju, Mrs Iwundu Nwamaka, my In-laws’ Mr. Ogbonna Ambrose, Mr. Ezeora Barnabas, Mr. Iwundu Emmanuel and my God father Mr. Amadife Chukwudi for their love support and words of encouragement.
Finally, I acknowledge the efforts of my friends Okoyeagu Blessing, Itulu Chijioke, Obianoyi Arinze, Okpala Johnpaul, Obidiwe Jekwu, Nwosu Nonye, Chukwukekwu Chukwebuka and Okafor Pascal for their unconditional support throughout my stay in the University.
God bless you all!
ABSTRACT
This paper studies the effect of Naira Devaluation on Small and Medium Scale Enterprises in Nigeria. The Study is conducted using time series data that covers the period of 34 years (1980-2014) employing the method of ordinary least square (OLS) and co-integration analysis currency devaluation proxies was regressed on output of Small and Medium Enterprises (SMEs) the result shows that exchange rate Interest rate and export has a positive impact on Small and medium enterprises and while exchange rate and interest rate are insignificant in explaining Small and medium Enterprises, Export is significant. The researcher also found three co-integrating variable. Therefore, the researcher came to the conclusion that Naira devaluation is not effective in encouraging the growth of small and medium Enterprises (SMEs), this is because Nigeria does not produce effectively non-oil expert, policy intervention is needed to balance the effect of exchange rate movement until the economy is transformed from oil driven to other sectors like Agriculture, Manufacturing Iron and Steel Industries etc government expenditure should be geared towards creating social overhead to enable these small firms to thrive. Government trade policy should be in favour of local firms.
TABLE OF CONTENTS
Title Page i
Approval Page ii
Certification iii
Dedication iv
Acknowledgements v
Abstract vii
Table of Contents viii
List of Tables xi
CHAPTER ONE - INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 4
1.3 Research Question 5
1.4 Objective of the Study 5
1.5 Statement of hypothesis 6
1.6 Significance of the Study 6
1.7 Scope of the Study 7
CHAPTER TWO - LITERATURE REVIEW
2.1 Conceptual Review 8
2.1.1 Currency Devaluation 11
2.1.2 Brief History of Currency Devaluation in Nigeria 14
2.1.3 Condition for the Success of Devaluation 16
2.1.4 Impact of Devaluation on Nigerian Economy 18
2.2
