CLIMATE RISKS AND SMES SUSTAINABILITY IN BAUCHI AND GOMBE STATES. DOES EARLY WARNING SYSTEM SERVICE MATTERS?

Abstract

Small and medium-sized enterprises (SMEs) have continuously been at the forefront of supporting inclusive and sustainable economic growth in both developed and developing economies. However, SMEs are more vulnerable to climate risks due to their limited resources and low resilience capability. Despite the vulnerability, there are limited empirical studies regarding the impact of some particular hazards on the sustainability of these enterprises in Sub-Saharan Africa. This paper explores how floods, droughts, and heatwaves impact the sustainability of SMEs in the Northeast of Nigeria, Bauchi and Gombe State, and evaluate whether Early Warning Systems (EWS) moderate the linkages.  The data were collected using structured questionnaires from 380 SMEDAN-registered SMEs and analysed based on structural equation modelling (SEM) with AMOS 26.0. Findings indicate that heatwaves (β = −0.610, p < 0.01), droughts (β = −0.451, p < 0.01), and floods (β = −0.228, p < 0.01) significantly undermine SME sustainability, with the model explaining 68% of variance (R² = 0.680). The results of moderation indicate that EWS have a significant negative effect on drought (= -0.233, p = 0.01) and heatwaves (= 0.608, p = 0.01), but not floods (CR = -1.336, p = 0.182), indicating that the EWS alleviates the impact of negative weather but not floods. Basing this research on the theory of Climate Change Adaptation and Sustainable Livelihoods Framework, EWS is found to be more effective in response to certain hazards. It advises that SMEs should consider weather warnings as strategic intelligence and policymakers should develop hazard-specific warning systems.