Government Support and Performance of Small and Medium Enterprises in Lagos State,

Nigeria
KOMOLAFE OYINDAMOLA OLUFEMI, KOMOLAFE OYINDOLAPO OLABISI,
OKORO OBINNA JEREMIAH (DR.)
Department of Information Resources Management, Babcock University, Ilisan Remo, Ogun State, Nigeria

Abstract

The study investigates the influence of government support on performance of small and
medium enterprises in Lagos State, Nigeria. Survey research design was adopted to determine
the influence of government support on performance of SMEs in Lagos State, Nigeria. Study
population was derived from 42,067 SMEs in Lagos State, Nigeria. A sample size of 380
respondents was determined through Krejcie Morgan (1970) sample size determination table
while the Purposive sampling technique was used to select SMEs from the different local
governments of Lagos State in study. The researcher developed a self-structured questionnaire
and administered 40 copies as pre-test to SMEs in Ogun State. The response rate of the
questionnaire was 86.1%. Study’s findings revealed that the extent of government support was
high and low respectively. Also, government support has a positive significant influence on
performance of SMEs in Lagos State, Nigeria. The study recommends that business owners
should push for the provision of business development services tailored to the need of SMEs this
includes training, mentoring, technical assistance, and access to market information.

Keywords: government support, performance, small and medium enterprises (SMEs)

Word Count: 173

Introduction
Small and medium enterprises (SMEs) are businesses that employ few staff with a small amount
of capital compared to large businesses. They can be described also, as businesses that have
revenues, assets, or employees below a certain threshold such as 10-500 staff and up to $500
million in annual earnings. SMEs are described differently by each country according to some
specific metrics or guidelines across industries. The Central Bank of Nigeria (2017) also
ascertain that small and medium enterprise are businesses with less than N150m in total assets,
less than N150m per annum turnover, and employing less than ten people. SMEs contribute to
economic growth by providing job opportunities for rural and urban development, innovation
and by ensuring adequate supply of products and services in the economy. SMEs have been
established as the gateway to industrialization for both developing and developed nations.

With the rise of globalization, cross-border collaboration in innovation has become more crucial
for getting innovation's inputs (ideas, funding, skills, and technologies) and for utilizing its
outputs (products and services, patents, licenses, etc.) in foreign markets. Numerous reports
reveal that 84% of the people employed in Nigeria are in SMEs (SMEDAN, 2020). SMEs
contribute a major source of wealth generation and employment creation. While the citizens’
benefit in terms of employment and income expansion. Despite the wide acknowledgement of
the importance of SMEs as an economic driver in the world, performance of SMEs has been on
the decline. SMEs around the world have been plagued with incessant poor performance. For
example, a survey showed that 80% of SMEs in the country folded up before their fifth year
anniversary (Aminu, 2018). The performance of SMEs in Nigeria has been below expectation in
terms of contributing meaningfully to the country's GDP. Despite constituting more than 90% of
Nigerian businesses, SMEs have underperformed, contributing only about 1% to GDP. The
performance of SMEs in Nigeria has called for concerns. This means that SMEs have not played
the anticipated important function in stimulating economic output and growth in Nigeria
(Adebayo et al., 2013). This situation is disheartening to all stakeholders in the SME industry
vis-à-vis the operators, practitioners, government, citizenry, concerned individuals and organized
private sector groups.

Despite the key role of SMEs in national development, their contribution to economic growth in
Nigeria has remained at a low rate due to several factors such government support. It is
important that the government improves current infrastructural facilities in Nigeria to support the
development of SMEs in the country (Abdullahi et al., 2016; Tob-Ogu et al., 2018; Zafar &
Mustafa, 2017). . In Lagos State, Nigeria, small and medium enterprises (SMEs) play a
significant role in the economy. The government has implemented several initiatives to support
the growth and development of SMEs, such as providing access to financing, training programs,
and business development services. Government supports are programs developed to facilitate
and stimulate success of business activities of SMEs (Shamsuddoha & Ali, 2006; Awojide,
2015). It is significant to highlight that different governments' venture support strategies and
programs account for varying degrees of success in different nations around the world. For
instance, it was discovered that government support programs in Korea were crucial to the
growth of the SME sector and the industrialization of the nation. In addition, as a result of the
economic reform in 1979, SMEs in China helped lift approximately 200 million people out of
extreme poverty (World Bank Group). In the instance of Singapore, SMEs supplied 70% of all
employment while accounting for more than 50% of economic production (Government
Enhances Support). According to Fatoki (2014), SMEs have slow growth due to a lack of
financial and human resources. As a result, government support programs are essential to
overcoming some of these obstacles. This is particularly difficult because SMEs are frequently
recognized as a key tool for generating economic value and because of the growing importance
of their social and environmental effects. Government programs for venture development are a
key tool needed to vigorously encourage the expansion of SMEs. However, the unstable
economic climate and a lack of infrastructure in Nigeria have had a negative impact on SMEs. In
many developed countries, driving SME development programs is regarded as a key strategic
task. SME development programs are given prominence in part because they contribute to
national wealth by generating new markets, industries, jobs, technology, and net increases in
productivity that result in more equitable income distribution and a higher standard of living for
the populace (Jahanshahi et al., 2013). In Nigeria, agencies like CAC, NAFDAC, SON, NDLEA,
FIRS and Customs are the bureaucratic bottle neck that affect the performance of SMEs. For
instance, getting NADFAC approval for food item or drug can take years. Sometimes, you spend
five times the official price to facilitate the approval. Government agencies have however been
found to impact the activities of SMEs negatively contributing to the poor performance of the
SMEs sector (Chabchitrchaidol et al., 2018). SMEs are subject to so many taxes and levies from
local government to federal government. So many agents are involved in the collection of taxes
and levies. The impact of this on the operational costs of SMEs cannot be overemphasized.
These regulations have contribute the high mortality rate of SMEs in Nigeria (Chabchitrchaidol
et al., 2018).

Nigeria desired to promote SMEs to reduce unemployment and poverty. Consequent upon this,
several specialized financial institutions in charge of micro credit and policy instruments were
established to enhance development of SMEs. They include: Nigeria Agricultural CO-operative
and Rural Development Bank (NACRDB), National Economic and Reconstruction Funds
(NERFUND) and other banks which are now replaced by Micro Finance Institution (MFI). Other
policy oriented institutions include; Small and Medium Enterprise Development Agency
(SMEDEN), Entrepreneurship Development Policy (EDP) run by the National Directorate of
Employment (NDE), National Association of Small Scale Industries (NASSI), Small and
Medium Enterprise Equity Investment Scheme (SMEEIS). These institutions were established to
offer financial and technical support to SMEs.

There are several indicators that can be used to measure the performance of small and medium
enterprises (SMEs) in terms of government support such as; provision of policy formulation,
intervention funding, provision of trainings by government agency and the provision of
infrastructure. The provision of training by a government agency is an indicator of government
support for SMEs, as it shows that the government is willing to invest resources in helping small
businesses improve their skills and knowledge. Such training can take various forms, including
workshops, seminars, mentorship programs, and online courses. The training can cover a wide
range of topics, such as financial management, marketing, sales, human resource management,
and legal compliance. By providing this training, governments are not only helping SMEs to
overcome their specific challenges, but they are also empowering them to become more
competitive and sustainable in the long term. Additionally, the provision of policy formulation
can be considered an indicator of government support for small and medium enterprises (SMEs)
because it demonstrates that the government is actively working to create an enabling
environment for SMEs to thrive. Policies designed to support SMEs can include financial
incentives, streamlined regulatory frameworks, and initiatives to promote innovation and
entrepreneurship.

One of the primary forces driving economic growth is access to intervention funding. Financing
from venture capital firms supplements or replaces credit facilities that traditional banks are
hesitant to provide. The fund provider may lend the money at first, but expressly with the
intention of turning the debt capital into equity at a later stage in the business. The provision of a
supportive business environment, the dissemination of appropriate policies, the formulation of
suitable schemes, the provision of valuable incentives, institutional support, and the successfully
implementation of programs that have been designed are therefore expected to be the primary
roles played by governments agencies. For SMEs, infrastructure plays a vital role in their
success. For example, a well-maintained road system can help SMEs transport their products
efficiently, while a reliable power supply can enable them to operate their equipment and
machinery consistently. Good infrastructure also helps to attract and retain businesses in a
region, providing job opportunities and economic growth. When a government invests in
infrastructure, it demonstrates its commitment to creating an environment in which SMEs can
thrive. This investment can come in many forms, such as building new roads, upgrading existing
infrastructure, or improving access to basic services. Considering the SMEs sector's huge
potentials and despite the recognition of its enormous contribution to sustainable economic
growth, its performance in many developing nations continues to fall short of expectations
(Okonkwo & Obidike, 2016). This indicates that despite the availability of numerous SMEs
support programs that give SMEs support, they nevertheless have a significant failure rate (Ihua
& Siyanbola, 2012; Kehinde, Abiodun & Adegbuyi, 2016).

Statement of the Problem

In both industrialized and developing nations, small and medium-sized businesses (SMEs) have
been identified as key drivers of economic expansion and societal advancement. Because they
create jobs, generate value, and foster innovation, SMEs are important to national economies all
over the world. SMEs in Nigeria have not been doing well because of the alarmingly high rate of
business failure, with only a few companies lasting more than a few months after opening. A key
factor to the growth and sustainability of SME is the supports rendered by government such as
encouraging good and conducive business environment through policy formulation, granting
loan to traders with low interest rate among others.

Objective of the Study

The general objective of the study is to investigate the influence of government support on
performance of small and medium enterprises in Lagos State, Nigeria.
Research Questions

1. What is the level of performance of small and medium enterprises in Lagos State,
Nigeria?
2. What is the extent of government support on small and medium enterprises in Lagos
State, Nigeria?
Research Hypotheses

Considering the objectives of the study and the research interest, the following hypotheses have
been postulated for the study and will be tested at 0.05 significance level.

Ho1: Government support will not have a significant influence on the performance of SMEs in
Lagos state, Nigeria;

Scope of the Study

This study focused on government support and performance of the SMEs in Lagos State,
Nigeria. Government support was measured using policy formulation, invention funding,
provision of training by government agency and provision of infrastructure.

The study adopted the survey research method and was focused on SMEs in Lagos State,
Nigeria. The reason for this is because Lagos State is one of the major cities in Nigeria popularly
regarded as the commercial hub of the nation.

Review of Related Literature

SMEs play very significant roles in both developed and developing economies. In fact, in a
developing economy like Nigeria, for example, SMEs form a very large part of and contribute
very significantly to the economy. They dominate majority of the business enterprises which
refers them as the bedrock of the economy. Small and medium businesses (SMEs) were defined
by the National Council on Industry at its 13th Council meeting in July 2001 as follows: an
industry qualifies as small-scale if it employs between 11 and 100 people or if its total cost
including working capital but excluding the cost of land is less than N50 million. While a
medium-scale industry is one that employs between 101 and 300 people and has an annual
expenditure that includes working capital but excludes land of at least N50 million (Oluwaseun
& Moruf, 2018).
SMEs are often considered the backbone of any economy, as they provide a significant number
of jobs and contribute to the growth of the economy. They are also known for their ability to
adapt and innovate, which can lead to the development of new products and services.
Furthermore, SMEs are considered to be more flexible and responsive to the needs of their
customers, as they are not bound by the bureaucratic processes and regulations that larger
companies often have to navigate. A report has indicated that Nigeria’s SMEs contribute nearly
50% of the country’s GDP and account for over 80% of its employment (PwC, 2020). These
different studies cited and others further emphasize that the relevance and importance of vibrant
SMEs in any economy cannot be overemphasized, especially in Nigeria. It is therefore very
important to create a business-friendly and enabling environment in which people can be
confident to invest in businesses and in which SMEs can thrive. In this study, growth, perceived
profitability and innovation shall be considered as measures for SMEs performance.

The government support policies for SMEs vary from country to country and from advanced
nations to developing countries due mainly to the level of industrialization, cultural differences
and business context (Eniola & Entebang, 2015; Quy, 2016). Government support are the
regulations, incentives and provisions made available for the progress and development of
institutions and establishment both in the public and private sector of a nation in a bid for
economic development of the nation (United Nations Development Programme, 2015).
According to Wu et al. (2023), companies receiving government assistance can send out a
favorable signal to market-based financiers. They are able to attract more outside investment as a
result than their competitors who lack such assistance. Additionally, extra financing sources from
the government can help businesses have more resources in the context of scarce resources.
Therefore, businesses with government support will increase their R&D spending, enhancing
both their performance and ability to survive (Wu, 2016).

Despite the fact that this study is significant to the SMEs development in Nigeria, there are,
however, limited studies that investigate the moderating effect of government support towards
SMEs performance. Lee et al. (2011) assessed the extent to which government assistance enables
women’s participation in entrepreneurship in Korea, concluding that present levels of
government support for women’s ownership are insufficient. The role of the government and
other institutional assistance in Zimbabwe’s manufacturing sector was the subject of research by
Zindiye et al. (2012). Using the chi-square method, the study discovered that government support
has a positive impact on SME ownership in Zimbabwe. Ntiamoah et al. (2016) studied the
agriculture sector in Ghana and discovered a positive relationship between SME ownership and
government support. In other words, the ownership structure of SMEs in Ghana was influenced
by government support. Feng et al. (2020) investigated the impact of capital on the ownership
structure of SMEs in China, discovering that capital has a significant impact on the ownership
outlook of listed real estate enterprises in the country. Abramov et al. (2017) found that private-
equity firms were more productive than state-owned structures in a sample of 114 top companies
in Russian cities. The study concluded that the variations in the effects of government control on
ownership were relatively small, using private ownership to represent rural SMEs and public
ownership to represent urban SMEs.

Methodology

Survey research design was adopted for the study. Population was drawn from 42,067
undergraduates in public universities in Lagos State, Nigeria. A sample size of 380 was
determined using Krejcie & Morgan (1970) Sample Size Determination Table. Purposive
sampling technique was used to select respondents. However, structured and validated
questionnaire was used to collect data. The research instrument was subjected to reliability and
validity test. The cronbach’s alpha reliability coefficients for the construct values greater than 0.7
while the return rate of 86.1% of the research instrument was achieved. Data were analyzed
using descriptive and inferential statistics. The inferential statistics comprised of simple and
multiple.

Data Analysis, Results and Discussion of Findings

Research Question One: What is the level of performance of SMEs in Lagos State, Nigeria?

Table 1: Level of performance of SMEs in Lagos State, Nigeria

SMEs performance Very High High Low Very Std.

low Mean
(4) (3) (2)
(1)
Innovation 2.718 0.481
The management style in my 0 301 26 0 2.92 0.271
business supports new ideas (92.0%) (8.0%)
 from my employees
My business formulates 0 251 76 0 2.77 0.423
advertising strategies that give (76.8%) (23.2%)
the business competitive
advantage
My business renews 0 276 25 26 2.76 0.583
procedures that satisfies (84.4%) (7.6%) (8.0%)
customers’ needs
My business adopts new 0 200 127 0 2.61 0.488
distribution channels to deliver (61.2%) (38.8%)
our products and services to
our customers
My business use new 0 200 101 26 2.53 0.640
marketing strategies for the (61.2%) (30.9%) (8.0%)
promotion of new products
.
Growth 2.32 0.525
The services rendered in my 26 250 26 25 2.85 0.665
business are (8.0%) (76.5%) (8.0%) (7.6%)
My business finds new ways or 0 200 102 25 2.54 0.635
method to creating new (61.2%) (31.2%) (7.6%)
products
There is increase in the 0 150 151 26 2.38 0.629
customers’ patronage of my (45.9%) (46.2%) (8.0%)
business
The level of our business assets 0 102 225 0 2.31 0.464
is (31.2%) (68.8%)
There is increase in the number 0 26 276 25 2.00 0.396
of business outlets my business (8.0%) (84.4%) (7.6%)
have
There is increase in the number 0 0 276 51 1.84 0.363
of staff in my business (84.4%) (15.6%)
Perceived profitability 2.23 0.434
The cost of our business 0 301 0 26 2.84 0.542
operation is (92.0) (8.0%)
The regular cash flow in my 0 77 250 0 2.24 0.425
business enterprise is (23.5%) (76.5%)
Payment of staff salary is 0 51 276 0 2.16 0.363
consistent and timely (15.6%) (84.4%)
The rate of returns in my 0 51 250 26 2.08 0.480
business is (15.6%) (76.5%) (8.0%)
The profit margin in my 0 0 227 50 1.85 0.360
business is (84.7%) (15.3%)
Grand Mean 2.42 0.481
Source: Researcher’s Field Survey, 2023
Decision Rule: 1.0-1.74 = Very low; 1.75-2.49 = Low; 2.50-3.24 = High; 3.25-4.0 = Very
High
The result of Table 1 indicated a low level of performance of small and medium enterprises in
Lagos State Nigeria (¯x=2.42, SD = 0.481), on a Likert-type scale of 4. The low level of
performance was in terms of growth (¯x=2.32, SD = 0.525) and perceived profitability (¯x=2.23,
SD = 0.434), but it was high in respect of innovation (¯x=2.718, SD = 0.418). The table revealed
that there is low increase in the number of staff and business outlets of SMEs in Lagos state, this
affects the growth. This low level of performance in SMEs could be as a result of irregular cash
flow in SMEs and low rate of returns in the SMEs performance analysis. The standard deviation
of 0.481 meaning that the responses were varied around the mean response. It suggests that the
responses were varied among the participants.

Research Question Two: 1.What is the extent of government support on small and medium
enterprises in Lagos State, Nigeria?

Table 2: Extent of government support on small and medium enterprises in Lagos State,
Nigeria
Government Support Very High High Low Very Std.
Extent Extent Extent low Mean
Extent
(4) (3) (2)
(1)
Policy formulation 3.33 0.648
Business registration procedure 301 0 0 26 3.76 0.813
have effects on my business to (92.0%) (8.0%)
a
Rigid government policies have 251 50 26 0 3.69 0.612
positive effects on my business (76.8%) (15.3%) (8.0%)
to a
Poor educational background 251 50 26 0 3.69 0.612
have effects on my business to (76.8%) (15.3%) (8.0%)
a
Frequent change in tax policies 276 0 25 26 3.61 0.933
affects my business to a (84.4%) (7.6%) (8.0%)
Rigid government policies have 0 0 301 26 1.92 0.271
negative effects on my business (92.0%) (8.0%)
to a
Intervention Funding 2.34 0.771
lack of access to fund has 200 101 26 0 3.53 0.640
hinder my business growth to a (61.2%) (30.9%) (8.0%)
The high interest charges from 200 101 0 26 3.45 0.853
the government has affects my (61.2%) (30.9%) (8.0%)
business to a
Formalization process to access 0 76 101 150 1.77 0.801
funds have improve my (23.2%) (30.9%) (45.9%)
business to a
My business have direct access 0 76 50 201 1.62 0.839
to financial services from the (23.2%) (15.3%) (61.5%)
government to a
My business have access to 0 50 0 277 1.31 0.721
funds that enables me to expand (15.3%) (84.7%)
my business to a
Provision of Infrastructure 1.98 0.775
Capital spending on 201 50 26 50 3.23 1.121
infrastructure serves as (61.5%) (15.3%) (8.0%) (15.3%)
challenge to my business
growth to a
Poor access to infrastructure 0 200 101 26 2.53 0.640
have negatively affect growth (61.2%) (30.9%) (8.0%)
of my business to a
Possession of large scale of 50 0 51 226 1.61 1.076
infrastructural facilities serves (15.3%) (15.6%) (69.1%)
as advantage to my business to
a
The government provides 0 26 51 250 1.31 0.613
infrastructural support for my (8.0%) (15.6%) (76.5%)
business to a
Access to the necessary 0 0 77 250 1.24 0.425
infrastructural facilities have (23.5) (76.5%)
helps my business to grow to a
Provision of training by the 1.95 0.605
Government Agencies
Lack of financial supports has 251 50 26 0 3.69 0.612
deprive growth of my business (76.8%) (15.3) (8.0%)
to a
Provision of trainings and 0 76 101 150 1.77 0.801
financial support have help me (23.2%) (30.9%) (45.9%)
to increase the level of my
business to a
The training from the 0 0 177 150 1.54 0.499
governments’ support to my (54.1%) (45.9%)
business needs have enable
growth in my business to a
Provision of infrastructural 0 0 151 176 1.46 0.499
support have enable my (46.2%) (53.8%)
business to thrive to a
 The government sends 0 26 50 251 1.31 0.612
representatives to consult my (8.0%) (15.3%) (76.8%)
business occasionally to a
Grand Mean 2.40 0.6998
Source: Researcher’s Field Survey, 2023

Decision Rule: 1.0-1.74 = Very low; 1.75-2.49 = Low; 2.50-3.24 = High; 3.25-4.0 = Very
High

Table 2 showed the low extent of government support in SMEs in Lagos State Nigeria with an
average mean score of ( x=¿ 2.40, SD = 0.6998), on a Likert-type scale of 4. Table 2 shows the
low extent of government support in terms of policy formulation, intervention fund,
infrastructure provision and provision of training by the government agencies. In relation to
policy formulation, the extent of the impact of business registration procedures on businesses is
rated as very high ( x=¿ 3.76). This suggests that the ease and efficiency of the registration
process have a substantial effect on business operations. Rigid government policies (positive
effects): Businesses perceive that rigid government policies have a positive effect on their
operations, rating it as very high ( x=¿ 3.69). This indicates that businesses believe that strict
regulations and policies can contribute positively to their growth and stability. Businesses rate
the extent to which the provision of infrastructural support has enabled their business to thrive as
very low ( x=¿ 1.46). This suggests inadequate and lack of infrastructural facilities quality,
provided by the government that hinders the growth of their businesses. Businesses rate the
extent to which government representatives consult their business occasionally as very low ( x=¿
1.31). This implies that businesses did not appreciate the involvement of government
representatives in understanding their needs and challenges, which can lead to more effective
support and policies. In general, the extent of the government's provision of infrastructure is
rated as low ( x=¿ 1.98) which suggests that businesses perceive challenges or deficiencies in the
availability and quality of infrastructure provided by the government.

Hypothesis One: Government support will not have a significant influence on the performance of
SMEs in Lagos state, Nigeria.
Table 3: Influence of Government support on performance of SMEs
Simple linear regression analysis of Government support and performance of SMEs
 Variables B Std. Beta T Sig. R2 Adj. F p
Error (β) R2
(Constant) 24.343 1.634 14.897 .000 0.6197 0.626 435.123 0.000
Government 5.964 0.676
.595 8.817 .000
support
Dependent Variable: performance of SMEs
Predictor: Government support
DF (F-Statistics) = 1, 327
DF (T-Statistics) = 326
Source: Field Survey Results, 2023

Table 3 presents the results of linear regression analysis on the influence of Government support
on performance in SMEs in Lagos State, Nigeria. Table 3 reveals that government support has a
positive and significant influence on performance in SMEs in Lagos State Nigeria (R2 = 0.6197,
β=0.595, t(326) = 48.243, p < 0.05). The t value of 48.243 confirms that the regression
coefficient for government support is statistically significant. The coefficient of determination
was 61.97% (R2 = 0.6197) implying that government support explains 61.97% of the variation in
performance in SMEs in Lagos State, Nigeria. Overall, regression result presented in Table 3
indicate that government support has a positive influence on performance in SMEs in Lagos
State, Nigeria. The regression coefficient of government support was 5.964, implying that an
increase in government support by one unit leads to an increase in performance in SMEs by
5.964 units. Results further indicate that government support and performance in SMEs had a
positive and significant relationship. Therefore, the null hypothesis (H 03) which states that
government support has no significant influence on performance in SMEs in Lagos State Nigeria
is hereby rejected.
Discussion of Findings

Research question one sought to find out the level of performance of SMEs in Lagos State,
Nigeria. The result revealed that the level of performance of small and medium enterprises in
Lagos State, Nigeria was low. In line with this study, Eyanuku (2021) who assessed the impact
of strategic management and organisation structure on the performance of SMEs in Lagos,
Nigeria found that both variables have positive and significant effects on SMEs performance,
and suggests that SMEs should be proactive, innovative, and strategic to improve their
performance. Makinde et al. (2016) examined the relationship between the use of strategic
planning and performance in SME sector in Lagos, Nigeria. They reported that there is a
significant relationship between the use of strategic planning and SME performance, and that
strategic planning accounts for about 36.5% of the variance in SME performance. They
recommend that SMEs should embrace the use of strategic planning as a tool to achieve
organisational performance.
Research question two investigated the extent of government support on small and medium
enterprises in Lagos State, Nigeria. Generally, the extent of government support on small and
medium enterprises in Lagos State, Nigeria was low. The result showed that the government
support is of high extent in areas such as policy formulation, business registration procedure,
positive effects of rigid government policies, and the effects of poor educational background.
However, there are some areas where the support is perceived to be of low or very low extent,
such as access to funds for business expansion, provision of infrastructure, and the government's
provision of infrastructural support. Businesses acknowledge the positive impact of certain
government policies and support, such as favorable regulations and funding opportunities.
Businesses highly value the provision of training and financial support from government
agencies. They recognize the positive impact of these initiatives on their growth and
development. Additionally, businesses perceive the significance of infrastructural support and
government consultations in enabling their success. The finding supported the report of
Musabayana et al. (2022) who assessed the impact of the government policies on the
performance of SMEs in Zimbabwe. They found that the government policies were poorly
communicated and implemented, and had a highly insignificant effect on SMEs performance.
They suggest that the government should develop a new strategic framework that involves all the
stakeholders in the SME sector.

Conclusion
The study analyzed the influence of government support on the performance of SMEs in Lagos
State, Nigeria. The result of this study provided both empirical and statistical evidences on the
influence of government support (policy formulation, intervention funding, provision of training
by government agency and provision of infrastructure) on performance (perceived profitability,
growth and innovation) in SMEs in Lagos State, Nigeria. The extent of government support on
small and medium enterprises in Lagos State, Nigeria is very low. The study concluded that
government support individually and jointly influenced performance in SMEs in Lagos State,
Nigeria.

Recommendations

The study revealed the low extent of government support in SMEs in Lagos State, Nigeria. Out
of the four indicators, provision of training by the government agencies was the least practiced.
In this case, the study recommends that business owners should push for the provision of
business development services tailored to the need of SMEs. This includes training, mentoring,
technical assistance, and access to market information. Also, collaborate with public and private
stakeholders to offer capacity-building programs and networking opportunities.

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