Effect of Inconsistent Economic Policy on Small and Medium Enterprises in Sub Saharan Africa

Abstract

In emerging markets and developing economies (EMDEs), particularly in Sub-Saharan Africa (SSA), small and medium-sized businesses (SMEs) play a crucial role in generating employment and economic growth. For instance, SMEs make a significant contribution to the GDP of the continental economy through employment, revenue generation, and the development of technical and entrepreneurial skills, even though most of this is not recorded. Notwithstanding their significance, SMEs frequently encounter difficulties as a result of inconsistent government economic policies. These policies may result in lower investor confidence, higher operating expenses, and uncertainty in business planning. This study examines the connection between SME success and inconsistent economic policy, emphasizing important areas of impact.
Using mixed method research approach, we aim to focus our study to examine the impact of economic policy inconsistency on SMEs, which are the engine of SSA economies, as opposed to our previous study, which examined fiscal policy uncertainty and its effects on businesses in emerging market economies.
The growth and sustainability of SMEs are seriously hampered by inconsistent government policies, such as erratic taxation, shifting government expenditures, inconsistent trade laws, and unstable monetary policies. One important finding is that inconsistent economic policy seriously impairs long-term business planning, corporate operations, investment and growth. This study looks at how these policy discrepancies affect SMEs, with particular attention on their operational efficiency, access to finance, access to market and long-term sustainability and viability. There is also discussion of policy reform recommendations to lessen these difficulties.