Electric power supply strategies and productivity in selected manufacturing industries in Nigeria

Abstract

Poor reliability of electric power supply has led some manufacturing firms in Nigeria to adopt alternative electricity supply options such as onsite generation to displace or supplement the national grid's supply. This study was designed to examine these options as they affect the production performance of such enterprises. The data for the study were collected from a sample of 11 randomly selected small, medium, and large firms that engage in metal and agro-allied products. The data were analysed using descriptive statistics and engineering economy methods. The results of the study revealed that these firms have acquired electricity generating sets because the services of the country's electric utility company, NEPA (National Electric Power Authority) are unreliable. Frequent power outages cause a reduction in the quality and quantity of total production output and consequently erode the profit margin of the industrial sector. This study shows that the estimated economic costs of electricity supply interruptions from the national grid to these firms ranged between 18%–82% of the firms’ total revenue. Policy recommendations that will ensure constant and reliable supply of electricity to manufacturing companies in the country are suggested.