EFFECT OF CLIMATE CHANGE RISKS ON SMALL BUSINESS CONTINUITY IN NIGERIA: EVIDENCE FROM ABUJA, LAGOS, AND KANO

Small and Medium Enterprises SMEs constitute 96% of businesses and 84% of employment in Nigeria, yet their operational continuity is increasingly threatened by climate change (SMEDAN, 2024). This study examines the effect of climate change risks — flooding, extreme heat, rainfall variability, and drought — on SME continuity across three climate zones in Nigeria: Abuja, Lagos, and Kano. Using a convergent mixed-methods design, we surveyed 320 SME owners/managers and conducted 15 key informant interviews with SMEDAN, NEMA, and business association officials between June and August 2025. Climate data from the Nigerian Meteorological Agency NIMET 2000–2025 and disaster records from NEMA 2015–2025 were integrated to quantify exposure. Results indicate that 67.2% of SMEs experienced at least one climate-related disruption in the past five years. Flooding dominated in Lagos 58.1% and Abuja 41.3%, while extreme heat and drought dominated in Kano 63.4%. The average revenue loss per flood event was ₦1.18 million ± ₦340,000. Heat days >35°C reduced labor hours by 23% and monthly revenue by 12%. Only 14.4% of SMEs had written business continuity plans, and insurance adoption was below 5%. Ordinary Least Squares regression shows that flood exposure reduced Business Continuity Index BCI by 0.248 points, p < .001, while having a continuity plan increased BCI by 0.273 points, p < .001. The study concludes that climate risk is a present threat to SME continuity and recommends climate-informed SME policy, micro-adaptation finance, and localized early warning systems.