The Impact of Fuel Subsidy Removal and Foreign Exchange Harmonization on SMEs in Nigeria

This rapid systematic review synthesizes emerging evidence on the impact of Nigeria’s 2023 dual economic reforms, fuel subsidy removal, and foreign exchange harmonization on Small and Medium Enterprises (SMEs). Employing a PRISMA-guided methodology, we analyzed 32 academic, institutional, and industry studies from 2015 to 2025. The findings reveal that the reforms have triggered hyperinflation, soaring operational costs, foreign exchange scarcity, and prohibitive borrowing rates, severely undermining SME profitability, production capacity, and survival rates. Sectoral analysis indicates disproportionate impacts on import-dependent manufacturing SMEs, while technology and service-oriented enterprises exhibit greater resilience. Despite short-term disruptions, the reforms also present long-term opportunities for efficiency, innovation, and foreign investment. The study proposes an integrated theoretical framework combining institutional theory, resource-based view, and Schumpeterian creative destruction to explain differential firm-level outcomes. It was concluded that evidence-based policy recommendations, including targeted FX windows, credit guarantees, digital grants, and localization support, are needed to mitigate adverse effects and foster SME sustainability in Nigeria’s evolving macroeconomic landscape.