Keyword

Small Scale Businesses, Deficient Electricity, Private Provision, Economic Development, North East Nigeria

Abstract

Electricity supply in Nigeria is often erratic. Consumers of electricity (residential, commercial and industrial consumers) suffer untold hardships as the State Owned Enterprise; the Power Holding Company of Nigeria (PHCN) has been unable to supply reliable power. This is despite massive injections of funds by the Federal Government into the operations of the company over recent years. The failure has significantly impacted negatively on the operations of the business sector especially the small scale subsector that operates with little capital and are thus in most cases unable to afford a back-up facility to ensure un-interrupted power supply for their operations. The study examined the impact of deficient electric power supply on the operations of small scale businesses operating in north east of Nigeria. From the population of small scale businesses, a sample was selected through the use of stratified random sampling to ensure the effective representation of the population of small scale businesses in north east Nigeria. Results from data analysis indicates the severity of electricity supply outages and the costs imposed by power supply outages on the operation of this class of businesses in the region. The paper therefore recommends the need for policy attention towards revitalizing the electricity sector of Nigeria for enhanced supply of electricity to the national economy. When this is achieved, the small business sub-sector will be in a position to effectively lead i


Full Text : PDF

References
  • ADB, 2009, Annual Report 2009 as cited by Oseni M O and Pollit M, 2013. Economic Costs of Unsupplied Electricity: Evidence from back up Generation among Firms in Africa. EPRG Working Paper no 1326, 2013
  • Adenikinju, A., 2005.  An Analysis of the Cost of Infrastructure Failure in a Developing Economy: The Case of Electricity Sector in Nigeria. AERC Research Paper 148, African Economic Research Consortium, Nairobi February 2005
  • Ajanaku, L., 2007. ‘Battling with Darkness, Tell, May, 28-31
  • Ajayi, G.A., 1995.  Cost-Benefit Analysis of Captive Power Generation by Manufacturing Industries in Nigeria. Unpublished PhD thesis, Department of Economics, University of Ibadan, Ibadan.
  •  Ariyo, D. (2006). Small firms are the backbone of the Nigerian economy. Retrieved September 14, 2006.    www.afbis.com/analysis/small.htm as cited in Essien  B.S., 2014. Nigerian Business Environment and Growth    Constraints of Micro and Small Scale Manufacturing Industries. American International Journal of Social Science3(6) 2014
  • Bental, B., and Ravid, S. A., 1982. “A Simple Method for Evaluating the Marginal Cost of
  •              Unsupplied Electricity,” The Bell Journal of Economics, 13, 1, 249-253.42, 2, 79–119.
  • Beenstock, M., Goldin, E., and Haitovsky, Y., 1997. “The Cost of Power Outages in the Business
  •              and Public Sectors in Israel: Revealed Preference vs. Subjective Valuation,” Energy Journal, 18, 2, 39- 61.
  • Caves, D.W., Herriges, J.A., and Windle, R.J., 1992. “The Cost of Power Interruptions in the
  •              Industrial Sector: Estimates Derived from Interruptible Service Programs,” Land Economics, 68, 49- 61.
  • DOE, 2003. A Framework and Review of Customer Outage Costs: Integration and Analysis of  Electric Utility Outage Cost Surveys.  US Department of Energy.
  • Eberhard, Antonne, Vivien Foster, Cecilia Briceño-Garmendia, Fatimata Ouedraogo, Daniel Camos, and Maria Shkaratan. 2009.―Underpowered: The State of the Power Sector in Sub-Saharan           Africa. AICD Background Paper 6, Africa Region, World Bank, Washington, DC   as cited in Foster V and Pushak N., 2011. Nigeria’s Infrastructure: A Continental Perspective. World Bank Policy Research Working Papers no5686.
  • Ekpo, A. H. (2009). ‘The Global Economic Crisis and the Crises in the Nigerian Economy’, Presidential Address to the 50th Conference of the Nigerian Economic Society, September, Abuja-Nigeria.
  • Fan, Q. (2003). Importance of SMEs and the role of public support in promoting SME develoopment.World Bank as cited in Essien B.S., 2014. Nigerian Business Environment and Growth Constraints of Micro and Small Scale Manufacturing Industries. American International Journal of Social Science 3(6) 2014
  • FGN, 2008. Investment Opportunities in the Nigerian Power Sector and Investors’ Comforts guide. A publication of the Federal Ministry of Power, Abuja 2008
  • FGN, 2010. Roadmap to Power Sector Reform. Presidential Speech at the Unveiling of the Government Power Sector Reform Roadmap, held at the Eko Hotel and Suites Lagos August 2010
  • Foster V and Pushak N., 2011. Nigeria’s Infrastructure: A Continental Perspective. World Bank Policy Research Working Papers no5686.
  • Foster,V and Steinbuks, J., 2008. Paying the Price of Unreliable Power Supplies; In- House Generation of Electricity in Africa. Africa Infrastructure Country Diagnostic Working Paper      No 2
  • Hairs, FJ, Anderson, ER, Tatham, LR and Black CW., 1998. Multi Variate Data Analysis. 5th Ed. Prentice Hall.
  • Ibrahim, U., 2008. An Analysis of the Strategic  Factors that Affecting the Performamcne of Small and Medium Industries. An unpublished Phd Thesis Submitted to Sant Clement University
  •  Iwayemi, A., 2008 Nigeria Dual Energy Problems; Policy Issues and Challenges. International Association of Energy Economists
  • Iyanda, O., 1982.  “Cost and Marketing Implications of Electric power Failures on high Income  Households in Lagos”. The Nigerian Journal of Economic and Social Studies, 24(2): 169–84.
  • Lawal, L., 2008. Nigeria; a Case Study in Power Shortages. Published in the Punch Newspaper April 10, 2008
  • Lee, Kyu Sik and Anas, A., 1989. Manufacturers’ Responses to Infrastructure Deficiencies in Nigeria Private Alternatives and Policy Options. Infrastructure and Urban Development Department,          The World Bank,
  • Lee, K.S. and A. Anas. 1991. “Manufacturers’ responses to infrastructure deficiencies in Nigeria: Private alternatives and options”. In A. Chibber and S. Fischer, eds., Economic Reform in Sub-Saharan Africa. A World Bank Symposium . Adenikinju, A., 2005.  An Analysis of the Cost of Infrastructure Failure in a Developing Economy: The Case of Electricity Sector in Nigeria. AERC Research Paper 148, African Economic Research Consortium, Nairobi February 2005
  • Lee, K.S and A. Anas. 1992. Impacts of Infrastructure Deficiencies on Nigerian Manufacturing: Private Alternatives and Policy Options. Infrastructure and Urban Development Department Report No. 98. World Bank, Infrastructure and Urban Development Department, Washington, D.C.
  • Lee SK,Verma, S and Murray M,1996. Why Manufacturing Firms Produce Some Electricity                Internally. World Bank Policy Research Working Paper, 1605.
  • MAN, 2007. Economic Review 2003-2006. A publication of the Manufacturers Association of Nigeria
  • Olugbeng, K. T., Jumah, A., and Phillips, D.A., 2013. Current and Future Challenges of Electricity  Market in Nigeria in the face of Deregulation Process. African Journal of Engineering Research    1(2).
  • Onuaha, K.C., 2010. The Electricity Industry in Nigeria: What are the Challenges and Options           Available to Improve the Sector? Centre for Energy, Petroleum and Mineral Law and Policy – University of Dundee.
  • Oseni M O and Pollit M, 2013. Economic Costs of Unsupplied Electricity: Evidence from back up Generation among Firms in Africa. EPRG Working Paper no 1326, 2013.
  • Osotimehin, K. O.; Jegede, C. A.; Akinlabi, B. H., and Olajide, O. T., 2012. An Evaluation of the Challenges and Prospects of Micro and Small Scale Enterprises Development in Nigeria. American Journal of Contemporary  Research.
  • Reinikka, R., & Svensson, J., 2002. Coping with Poor Public Capital. Journal of Development Economics, 69, 51 – 69.
  • Uchendu, O.A ., 1993. “The economic cost of electricity outages: Evidence from a sample study of industrial and commercial firms in the Lagos area of Nigeria”. CBN Economic and Financial Review, 31.
  • Uda, E. N., 2010. Industrial Development, Electricity Crisis and Economic Performance in Nigeria. European  Journal of Economics, Finance and Administrative Sciences. Issues 18, 2010
  • Ukpong, I.I., 1973. “The Economic Consequences of Electric Power Failures”. The Nigerian
  •  Journal of Economic and Social Studies, 15(1): 53–74.
  • World Bank , (2004) Manufacturing and Investment in the Sub-Saharan Africa. Washington D.C: The World Bank Publication