Abstract
The poor quality electricity supply has been recorded as a major problem hampering the operations of SMEs in developing countries, and is more prevalence in Sub-Saharan African countries and some part of the Middle-East. In recent times, access to reliable electricity supply and associated high tariffs is creeping to the top spot of SMEs challenges in Ghana, with SMEs in the country losing over US $686.4 million sales annually since the beginning of 2009. Considering the significant contributions SMEs made towards the socio-economy of countries, if care is not taken to assess the effect of the intermittent power outages on the running of businesses so as to create the awareness to policy formulators in other to find a lasting solution to this canker, then, the demise rate of SMEs will be on the higher pedestal. Against this backdrop, the researchers assess the impact of the power insecurity on the growth of SMEs with a particular study on cold-store operators in Asafo Market of Kumasi in Ghana, since previous researchers have not zoom on small sectors and also did not used case study approach. The research findings indicated that, power outages had a negative effect on SMEs growth, while the cost of operating businesses saw a significant increase under the power outages. Cost of alternative sources of power also significantly pushes the operation cost of businesses high.
Highlights
Access to electricity and its accompanied high tariffs poses a greater challenge to SMEs growth in lower income countries, as compared with those in higher income countries.This assertion is confirmed in a research by [1] which reveals that, the proportion of SMEs in high-income countries (HICs) citing electricity as a major constraint is half of their counterparts in the Sub-Saharan African and Asia countries
The study went on to establish that the absence of reliable electricity supply to most SMEs in low income countries and its high tariffs to SMEs was becoming the number one challenge to SMEs in most developing countries [1]
Based on previous research finding using a population of over 4 million SMEs in Ghana with a sample size 1250, micro businesses were the most affected by the electricity problems, recording a loss of around UD $2.2 Million daily, which represented over 50% of their daily sales
Summary
Access to electricity and its accompanied high tariffs poses a greater challenge to SMEs growth in lower income countries, as compared with those in higher income countries. This assertion is confirmed in a research by [1] which reveals that, the proportion of SMEs in high-income countries (HICs) citing electricity as a major constraint is half of their counterparts in the Sub-Saharan African and Asia countries. Cost and time spent on acquiring electricity were higher in the Less Developed Countries compared with that of High-Income Countries (HICs). Based on previous research finding using a population of over 4 million SMEs in Ghana with a sample size 1250, micro businesses were the most affected by the electricity problems, recording a loss of around UD $2.2 Million daily, which represented over 50% of their daily sales
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