THE IMPACT OF INFLATION ON SMALL SCALE BUSINESS IN YOBE STATE ECONOMIC DEVELOPMENT (A STUDY OF DAMATURU LOCAL GOVERNMENT)

ABSTRACT This study explores the impact of inflation on small-scale businesses in Damaturu, Yobe State, focusing on how rising costs affect operational expenses, profitability, and the coping strategies employed by business owners. Utilizing a descriptive survey research design, data was collected from 100 small-scale businesses through structured questionnaires. Key findings reveal that inflation has significantly increased input and labor costs, leading the majority of businesses to raise prices to sustain profitability. However, increased borrowing costs and limited access to credit continue to challenge financial sustainability. Many businesses have also reported a decline in profitability, primarily due to heightened operational costs and reduced customer purchasing power. The study concludes that small-scale businesses in Damaturu are highly vulnerable to inflationary pressures, which impact their ability to operate profitably and sustainably. It highlights the need for financial support, training in cost management, and improved access to affordable credit to assist these businesses in coping with inflation. Recommendations include establishing lower-interest loan programs, providing subsidies, and enhancing financial literacy to help smallscale businesses navigate economic challenges more effectively.