AN EXPLORATION OF CENTRAL BANK INTERVENTIONS AND SME PERFORMANCE IN South West Nigeria

Abstract

The Central Bank of Nigeria (CBN) implements foreign exchange (forex)
intervention policies to promote the growth of small and medium enterprises
(SMEs) in the South West region of Nigeria. This study explored the complex
relationship between foreign exchange interventions by the CBN and the
performance of SMEs in South West Nigeria. Thematic analysis was employed to
analyse semi-structured interviews with SME owners and managers in Lagos,
Osun, and Oyo State. The study identified five areas seeking to identify the factors
underlying changes in government objectives towards forex interventions which
include; volatile capital inflow, exposure to liquidity shocks, interconnected
markets, forex hedging by exporters, and interest rate policy. The findings of this
study assist SMEs and policymakers in prioritizing sustainable development
indicators and making informed decisions to enhance their sustainability
performance.