Internationalization Barriers of Nigerian Manufacturing SMEs

Abstract

This study aims to identify the barriers facing Nigerian manufacturing SMEs during their internationalization. SMEs play a significant role in Nigeria, and their impact can be observed in the country’s macroeconomic performance, making up 96.9% of all businesses in Nigeria, contributing almost half of the country’s Gross Domestic Product (GDP), and accounts for 84% of employment. However, their contribution to exports remains low. This low participation in export activities affects Nigeria’s ability to diversify its economy away from oil, reduce its exposure to external shocks. Adopting a qualitative approach for this study, data was collected from 10 SMEs through the conduct of semi-structured interviews, and we analysed our data through content analysis to identify important themes. Findings reveal that the internationalization barriers faced by Nigerian SMEs are both internal and external. Internal barriers include a lack of finance and access to credit, and poor product quality. External barriers included a lack of market knowledge, and export regulations bothering safety. Our findings also show that SMEs engage the services of export intermediaries to navigate the market and overcome export barriers. We recommend that SMEs should partner with export intermediaries and target regional internationalization. We also recommend that the government should provide access to finance for SMEs, support SMEs with export information through relevant agencies, and promote knowledge and skills development for international trade.