Impact of government infrastructural facilities, taxation and security policy on the performance of small and medium scale enterprises in FCT, Abuja

Abstract

The various government policies is always perceived to influence the performance of small and medium enterprises (SMEs). Therefore, there is the need to examine and establish the effects of the government infrastructural facilities, taxation and security policy (external business environment) on SMEs so as to contribute to existing studies, as well as to disseminate findings to enhance the general government policies in FCT, Abuja. The study employed survey design. The study population comprised SMEs registered with Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) in FCT, Abuja with the total of 2690. The Krejcie & Morgan (1970) formula was used to obtain a sample size of 336. The owners of these SMEs were selected through a multi-stage sampling technique which involves the cluster, proportionate, and simple random sampling method. The instrument was validated using the Cronbach Alpha coefficient. Results through the application of descriptive and inferential methods of data analysis revealed that infrastructural facilities have a significant and positive effect on SME’s performance of the SMEs service quality. The government taxation policy has no significant and positive effect on performance of the SME’s sales revenue. The analysis of security policy as performance measure also shows a positive and significant effect of security on SMEs market growth potentials. In conclusion, infrastructural facilities, and security had a significant effect on service quality and market growth respectively, taxation policy support has no significant effect on sales revenue. It was recommended that in order to enhance overall performance, government should be aware of the changes and fluctuations on the policy of infrastructure and security because it has a very strong relationship with the SMEs performance in FCT, Abuja.