ECONOMIC IMPLICATIONS OF CONSTANT POWER OUTAGES ON SMES IN NIGERIA
International Centre for Basic Research, 20 Limpopo Street, FHA, Abuja College of Engineering and Engineering Technology, Department of Electrical and Electronic Engineering, Michael Okpara University of Agriculture, Umudike, Abia State been identified . A particular finding revealed the high cost of providing back-up energy (partly infrastructural) for SMEs which sometimes is as critical as three times the cost of publicly supplied electricity , . In Nigeria and perhaps generally, SMEs classification is done on the basis of capital investment and employed labour force while other criteria could be the annual ...view middle of the document...
Ordinarily, it should mean that only an average Nigerian suffers directly, and only, the burden of this inefficiency, whereby electricity supply to power both household and commercial appliances becomes unpredictable. Yet, further studies have revealed that there is almost no other sector that this ineptitude does not impact indirectly, especially as adverse economic consequences. GDP per Capita versus electrical energy production data for Nigeria and selected countries for the year 2004 served as input parameters which underwent research validation. Small and medium scale enterprises (SMEs) were a case study in this paper. In the end, submissions are that apart from the internal devastating effect on SMEs, constant power outages have a major connection with the recent trends of big companies closing or relocating from Nigeria. To sum up, measures were suggested for improvement. 1. INTRODUCTION
There are quite a large number of resources that find a common ground for comparing energy and SMEs both locally and internationally. However, few of these which somehow have directly highlighted aspects of this present work will suffice in due course. In the interim, a lot has equally been said with regards to the appalling state of Nigeria’s epileptic power sector . Energy consumers do not get electricity supplied to them because the local utility companies do not get power transmitted to them from the electric grid. The managers of electric transmission are quick to accuse the generating stations of insufficient generating MW capacity. And as if trading of blames has become routine with each of these sectors, the generating stations either claim they do not get enough gas to power their plants or they turn around and claim that the transmission companies themselves cannot boast of a strong transmission backbone to transmit what is being generated. Indeed, modern energy services can impact on the development of SMEs to a great extent. Issues that can affect the development of SMEs such as gross undercapitalization, decrepit infrastructural services, high start-up costs, corruption, government indifference, have
SME contribution to employment and GDP (median values) Source: World Bank
In moving from an earlier study which demonstrated empirically that no matter how novel the policies or incentives to drive the industrial sector are, if the electricity problem is not fixed, the policy objective of accelerating the
growth of the industrial sector may not be realized . In the same vein, this study is conducted with an aim to chart a new course for SME operators in Nigeria to seek alternative sources of energy generation as a means to fight the prevailing economic inhibition that seems to have it webbed in. It is also anticipated that the federal government will tap into the vital information provided by this research on the overall economic development to set up working mechanisms for the promotion of SMEs. Another important...