EFFECT OF MACRO ECONOMIC CHALLENGES ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES) IN MAIDUGURI METROPOLIS

This study investigated the effect of macroeconomic challenges on the performance of Small and Medium Enterprises (SMEs) in Maiduguri Metropolis. SMEs are widely recognized as critical drivers of economic growth, job creation, and innovation. However, their performance is highly susceptible to the prevailing macroeconomic environment. In Nigeria, and specifically in a region like Maiduguri which faces unique socio-economic pressures, these challenges are particularly acute. The study adopted a descriptive resarch design, and data was primarily collected through structured questionnaires administered to a sample of 150 SME owners and managers across various sectors within the Metropolis. The data was analyzed using descriptive statistics and multiple regression analysis to determine the relationship between key macroeconomic variables (specifically inflation, exchange rate volatility, and high-interest rates) and SME performance indicators (measured by profitability and business growth). The findings revealed a significant and negative relationship between these macroeconomic challenges and SME performance. Inflation was identified as the most debilitating factor, eroding profit margins and diminishing purchasing power. Exchange rate volatility increased the cost of imported raw materials and equipment, while high-interest rates severely constrained access to affordable credit for expansion and working capital. The study concludes that the prevailing macroeconomic environment poses a severe threat to the sustainability and growth of SMEs in Maiduguri Metropolis. It is recommended, therefore, that policymakers prioritize taming inflation, stabilizing the Naira, and developing targeted financial intervention schemes to provide SMEs with affordable credit. Furthermore, SME owners are advised to adopt strategic financial management practices and explore local sourcing to mitigate these external shocks.