Effect of Political Environment on the Performance of Small and Medium Scale Enterprises in FCT

Abstract This study investigates the effect of the political environment on the performance of Small and Medium Scale Enterprises (SMEs) in FCT. The study adopted a survey design method. Primary sources of data were mainly used. The total population of the study is limited to 1109 selected Small and Medium Scale Enterprises (SMEs) operating within FCT. A sample size of 294 respondents was determined using the Taro Yamane formula (1967), as modified by smith (2008). The ordinary least square method of regression analysis was employed. From the analysis tested, the study found that government intervention programmes have a significant effect on the financial performance of Small and Medium Scale Enterprises (SMEs), government policies have a significant effect on the profitability of Small and Medium Scale Enterprises (SMEs), trade restriction has a significant effect on the income level of Small and Medium Scale Enterprises (SMEs, and that political stability has a significant effect on the level of output of Small and Medium Scale Enterprises (SMEs). The study concluded that the political environment has a significant effect on the performance of Small and Medium Scale Enterprises (SMEs) in FCT. The study recommends that the government should create an enabling environment that would be conducive for business organizations to thrive, policies should be properly defined, the government should offer tax holidays to SMEs and empower them to access and get credits from the commercial banks and the benefits and need for the sound political environment through education, training, innovations or inter-firm linkages should be emphasized