Impact of Macroeconomic Variables on the Performance of Micro and Small Enterprises in Southeast Nigeria

Micro and Small Enterprises (MSEs) are fundamental to Nigeria's economic fabric, yet their performance is persistently hampered by macroeconomic instability. This study empirically investigates the impact of interest rates and central bank exchange rate policies on the performance of MSEs in Southeast Nigeria. Adopting a descriptive survey research design, data was collected from 322 owners and managers of MSEs using a structured questionnaire, and the hypotheses were tested using multiple linear regression analysis. The findings revealed that the macroeconomic variables jointly have a significant and detrimental effect on MSE performance, with the model being statistically significant F(2, 319) = 252.511, p = .000) and explaining 61.3% of the variance in performance (Adjusted R² = .611). Both central bank exchange rate policies (β = .417, t = 8.983, p = .000) and interest rates (β = 368, t = 7.931, p = .000) were found to be significant predictors of MSE performance. The study concludes that unfavourable interest and exchange rate environments are critical impediments to the viability and growth of small businesses in the region. The study thus recommends that policymakers need to formulate a more stable and supportive macroeconomic framework, including targeted credit facilities and transparent foreign exchange mechanisms, to foster resilience and enhance the contribution of the MSE sector to the national economy.