ABSTRACT
This
study is a critical evaluation of the Impact of Electricity Power Supply on the
Performance of Small and Medium Scale Enterprise
in Nigeria Enterprise Enterprise
CHAPTER ONE
INTRODUCTION
1.1 Background of
the Study
Access to a reliable electricity supply is widely considered to be vital
to the operations of most small and medium-scale businesses (World Bank
Enterprise Surveys, 2013). The analysis of Enterprise Survey data according to
Foster and Steinbuks (2008), in middle and lower income countries, firms
themselves consider access to electricity to be one of the biggest constraints
to their business.
Inadequate
electricity services can constrain business operations because a supply of
electricity may simply be unavailable and, if it is available, securing a
connection may be difficult and the supply unreliable, even before its cost is
considered. High quality and accessible infrastructure encourages productivity,
business growth and investment, but when it is poor and unreliable, businesses’
productivity and growth suffer.
An
unreliable electricity supply can affect several aspects of business operations.
The most significant impacts to productivity can be due to forced and
unexpected halts in manufacturing processes, including running assembly lines,
using machine tools, or producing textiles. Communications, delivery times,
lighting and refrigeration are also affected by electricity insecurity, with
consequences for the routine operation of businesses and their ability to
ensure delivery times (Adenikinju, 2005).
Many
small and medium-scale enterprises invest in their own stand-by generators to
ensure an electricity supply, but these are often expensive compared to
electricity from the grid. Generators also require some technical expertise as
well as reliable supplies of fuel and spare parts. Yet, in sub-Saharan Africa and elsewhere own-generation by firms is reported
to have increased in recent years.
Empirical
studies have shown that the small and medium scale industries (SMEs) have in
many state enhanced greater employment
opportunities per unit of capital invested and aided the development of local technology. This explains the deep interest which developing nation has shown in the
promotion of small and medium scale
industries since the 1970s (Moyo, 2012).
1.2 Statement of Research Problem
There are various factors affecting the
performance of small
and medium scale enterprise sub sector ranging from inadequate capital to unfavourable tariff policy,
however, the poor state of power supply in Nigeria
Despite series of investments made by past
government over the years on the power sector to improve the poor state power
situation in the country, the entire nation still suffers power shortage and
black out (Godwin, 2015). The privatization of the power sector was meant to
improve the power insecurity of the country but the national power grid has
been on the decline from about 4000 megawatts in 1999 to 1300 megawatts in 2014
(Amadi, 2010).
The equity and quality of a country’s
electricity power supply determines its ability to create competitive
industries. Since the performance of SMEs In any state is greatly influenced by
the electricity supply. Given the pathetic state of electricity power supply in
Nigeria it is no wonder that the contribution of the development the state,
manufacturing sector and the economy general is very negligible or unsupported
by the government.
Power supply has remained unreliable and
power out-ages load shedding and rationing has become very frequent. Power
supply has been erratic and unreliable that many businesses have resorted to
purchasing private generator at a very high cost. The substantial investment in
private generating plants is estimated to be of capacity of over 250mm, which
is almost half of power holding company of Nigeria (PHCN) available capacity.
1.3 Research
Questions
The study would therefore provide answers to the following fundamental questions.
i)
What is the
impact of electricity power supply on the productivity of SMEs in Nigeria
ii)
How does commercial Bank credit impact the
productivity of SMEs?
1.4 Objective of
the Study
The objectives of this research study are to
provide a clear picture on the activities of effects of power on the performance of small and medium scale industries. The specific
objectives of the study are:
(i)
To examine
the impact of Electricity power supply on the performance of SMEs in Nigeria
(ii)
To examine the impact of commercial Bank credit on the performance of
SMEs in Nigeria
1.5 Hypotheses
1. H0: Electricity Power Supply does not have any
significant impact on the productivity of SMEs in Nigeria
H1: Electricity Power Supply has significant
impact on the productivity of SMEs in Nigeria
2. H0 Commercial Bank credit does not have any
significant impact on the productivity of SMEs in Nigeria
H1 Commercial Bank credit does
significant impact on impact of SMEs in Nigeria
1.6 Significance of the Study
The outcome of this study will assist government parastatals and it
agencies like the Ministry of power, who are the policy makers and regulatory
bodies and also the electricity
distribution company scattered across the country for decision and policy
making as regards improving the state of small and
medium scale enterprise.
This study will create awareness to the
government to see the extent to which neglect of infrastructural facilities
such as electricity is hampering the performance of SMEs in meeting the
potentials of providing employment per unit investment capital,
facilitating the development
of indigenous entrepreneurships,
enhancing local resources
utilization and value added,
expanding non-oil exports
at competitive prices,
improving balance of payment position and bring about overall growth and development of the state economy.
It will add to the available literature on the areas of study while also providing the platform
for other researchers to further this study.
1.7 Scope of the Study
The research work is concerned basically with
the roles to lay emphasis on power
supply and the performance of small and medium scale enterprise in the state and will cover those SMEs in state that
have electricity as relevant
infrastructure for their production process. The analysis covers the period of 1980-2014.
1.8 Definition of Terms
- Electricity Power Supply
- Small and Medium
Scale Enterprises (SMEs)
- Productivity or
Performance of SMEs
- Commercial Bank
Credit to SMEs
1.9 Electricity Supply
According
to Energy Networks Association ‘ENA’ (2008), Customer Guide to Electricity
Supply (2008),the physical process of electricity
supply is divided into three broad stages; generation, transmission, and
distribution. Power generation, transmission and distribution involve flow of
currents with heat losses in conductors. These losses can be reduced through
better design, construction and maintenance. In addition to the physical
aspects, there is a commercial overlay involving the trading of electricity
between generators and retailers or, in some circumstances, generators and
large electricity users.
SMEs: These are non
subsidiary independent firms which employs fewer than a given number of
employees of not less than 10 employees and not more than 250. Commercial Bank
credit to SMEs in the case of SMEs, bank credit or loan is the major
alternative of external funding (James & Ashamu 2014) the findings shows
that Bank Credit to SMEs have significant effect of Nigeria
Performance of SMEs: SMEs
all over the world have seen playing a crucial role in promoting economic
development as well as industrial production in a developing economy such as
Nigerian. SMEs are considered as a
living force for a sustainable economic development because of generating
employment improving local technology output diversification developing
indigenous entrepreneurship and forward integration with large scale
industries. (A.O. Adaramola)
================================================================
Item Type: Project Material | Attribute: 55 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
================================================================
No comments:
Post a Comment