Relationship Between Government Support Initiatives and Sustainability of Small Businesses in Lagos State, Nigeria

Abstract

This paper examines the effect of government support on the sustainability of small-scale businesses in Lagos State, Nigeria. SMEs are crucial in their contribution to economic growth, creation of employment and stimulation of innovation especially in the developing countries. However, these enterprises are confronted with multiple challenges which include lack of access to finance, poor infrastructure and barriers such as regulations which prevent them from fostering growth and sustainability. It is the government assistance in the form of financial assistance, infrastructure development, training facilities and tax benefits, necessitated in overcoming these challenges and facilitating a friendly ambience for small businesses to grow. Methodology The study adopted a correlational research design surveying 174 Small Business owners, representing 20 local government areas of Lagos State, through a structured questionnaire to examine the influence of government support on business sustainability. Descriptive statistics are used in the study to describe the characteristics of the respondents and Pearson's Product-Moment Correlation (PPMC) is used to find the relationship between government intervention and small business sustainability.

We find a positive correlation (r = 0.30, p = 0.04) between government support initiatives and sustainability of small businesses in Lagos State such that, firms that access government support are more likely to be sustainable. It was discovered that business support programs and capital injection by government will have a positive impact on small businesses operational effectiveness, ease of access to the market, and its long-term survival. In particular government tax incentives and building of capacity had a lot of positive impacts on business in relation to sustainability of business practices, 67.8% of respondents indicated. Second, 55.2% of the surveyed firms admitted that government programmes had assisted them to cut their operational costs, enabling them to compete more effectively. These insights indicate that policy interventions can play a role in strengthening the resilience of small businesses and help drive their success in the long run. The study highlights the importance of continued commitment to the provision of infrastructure, finance and skill-building programs to support the sustainability of small businesses in Lagos State.

Keywords: Government Support, Small Businesses, Sustainability, Lagos State, Economic Growth