EFFECT OF ELECTRICITY POWER ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN KADUNA METROPOLIS

Abstract

The study examined the effect of electricity power on the performance of SMEs in Kaduna Metropolis. The study specifically examined the effect of electricity power on the productivity, profitability and cost-competitiveness of SMEs in Kaduna Metropolis. The study selected 70 SMEs in Kaduna North and South LGAS within Kaduna Metropolis, in which 60 SMEs responded. The study made use of structured questionnaire to collect data from selected SMEs in the study area. Analysis of data was carried out using the descriptive statistics and chi-square technique. The results showed that the respondents disagreed that electricity power has improved their level of productivity, cost-competitiveness and profitability. The results of the chi-square tests indicated that electricity power exerts significant impact on the productivity (Chi=9.158; P=0.027<0.05), profitability (Chi=7.423; P=0.024<0.05) and cost-competitiveness (Chi=5.494; P=0.031<0.05) of SMEs in Kaduna Metropolis. The study therefore maintained that electricity supply has strong influence on SMEs performance in Kaduna Metropolis. The study suggested that government should invest massively in alternative sources of energy. Moreover, foreign investment should be encouraged and pre-paid meters should be distributed to all households. This will help improve electricity situation in Nigeria.