Evaluation of the Impact of Insecurity on the Growth of Nigerian Small and Medium Enterprises (SMEs)

Abstract: This study evaluates the Impact of Insecurity on the Growth of Nigerian Small and Medium Enterprises (SMEs) using Autoregressive Distributed Lag as the methodology. The study makes use of secondary data from annual observations sourced from the Central Bank of Nigeria adding Global Terrorism Index (GTI), Corruption Perception Index (CPI), Domestic Private Investment (DPI) and Government Capital Expenditure (GCE). Findings from the study reveal that insecurity and government spending on security have a significant impact on Small and Medium Scale Enterprises (SMEs) in Kogi State. For the state’s SMEs to thrive, government expenditure and fiscal policies need to be anchored on transparency and integrity, ensuring that public resources are used effectively to enhance national security. In a country like Nigeria, where public spending constitutes a large portion of the economy, increasing such spending, particularly in security can enhance the environment for SMEs by fostering stability and providing a level playing field for the private sector. Therefore, the study recommends that the government should ensure that security expenditure is effectively managed to enhance the security environment in the state and the government should promote a collaborative approach to security and development by engaging the private sector, civil society, and local communities.