iarjbmIARJBMIARJBM2708-5147https://doi.org/10.47310/iarjbm.2021.v02i01.89Small and Medium Scale Enterprises (SMEs) and Economic Growth in NigeriaEmmanuelIsaacJohnWillieEnoEbriUniversitas Krisnadwipayana, Campus Unkris Jatiwaringin PO BOX 7774/Jat CM Jakarta 13077, IndonesiaThis study examined the effect of Small and Medium Scale Enterprises (SMEs) on economic growth in Nigeria using data between 1986 and 2018. Vector Autoregression (VAR) technique was employed in analysing the data collected. The results of the estimation indicated that SMEs output growth rate has a significant positive effect on gross domestic product (GDP) growth rate (a proxy for economic growth). Furthermore, it was found that SMEs contribute 61% of the growth in GDP. Thus, the study concluded that economic growth in Nigeria is driven by SMEs. The study recommended that the Central Bank of Nigeria should ensure that SMEs have increased access to funding at a reduced cost to boost their growth. Also, the federal as well as state governments in Nigeria should ensure that the economy is business/investment friendly for SMEs by adjusting key economic policies such as reduction in tax rate/granting of tax waivers, provision of incentives/grants to SMEs in their domain to help them grow. The aforementioned recommendations are necessary because the growth of SMEs triggers the growth of the economy.