Electricity outages and its effect on small and medium scale enterprises (SMEs) in Nigeria

Abstract

Constant electricity supply enhances smooth running and performances of SMEs. However, electricity outages in Nigeria have been identified as one of the factors hindering SMEs’ performance. This study aimed at exploring the impact of electricity outages on the operations and contributions of SMEs to Nigeria economy. Hence, the study evaluated the impacts of electricity supply on the growth of SMEs in Nigeria. It analysed the hindrances that deficient electricity supply could have on the growth and development of SMEs. Survey method was employed to administer structured questionnaires to 110 SMEs operators in three local government areas of Mainland, Shomolu and Agege in Lagos state, Nigeria. Descriptive statistics was utilised to analyse the collected data. A chi square method was used to test the formulated hypothesis. Findings revealed that electricity outages have significant effects on SMEs in Nigeria. The study recommends among other things that, state and local governments should join hands with federal government in generating electricity to ensure stable electricity supply; cost-benefit back-up generating plant is also recommended to keep business operative.