Does Electricity Access Relate to Stakeholders’ Satisfaction? Empirical Evidence from Small and Medium Enterprises in North-West, Nigeria

Abstract

Several scholarly studies have been conducted to establish relationships of electricity access to business financial performance. Nonetheless, little is known about energy-stakeholders' satisfaction relationships. The few studies that do exist on the topic often lack control variable. Thus, this is the motivation behind the present study. Therefore, this paper provides an empirical analysis of the effect of controlling firm characteristics in the energy-stakeholders' satisfaction relationships. A multiple linear regression model is applied to primary data collected through structured questionnaire in five-point rating scale format to test the hypothesis via SPSS version 23. Results based on cross-sectional survey data from 245 sampled SMEs operating in the city of Kaduna, Kano, Katsina and Sokoto state in manufacturing, hotel & restaurant and wholesale & retail sector show evidence of a strong positive statistically significant relationships between electricity access and SMEs stakeholders' satisfaction with electricity access t (245) = 9.138, p < 0.001; firm age t (245) = 4.404, p < 0.001. Subject to appreciable effect on stakeholders' satisfaction, this study recommends an urgent need to step up electricity supply to SMEs in order to accelerate satisfaction level of firms' stakeholders. Increasing electricity access should involve optimal production and utilization of generation capacity and/or reduction of transmission and distribution losses. Above all, SMEs villages/clusters should be built to promote industrial activities on the basis that access to reliable electricity supply is collectively and affordably provided by the relevant host authorities to investors and operators.

Effect of renewable energy development on sustainable development of small and medium enterprises potentials in Nigeria

“…This goes alone with the study ofIbe and Obodoechi (2019) which discovered that improving the implementation of energy efficiency measures by SMEs could lead to momentous benefits. Finally, the finding that RE utilization has significant effect on the sustainable development potential of SMEs in Nigeria is in line with the findings ofBabatunde et al (2019) that RE guarantees clean energy for farming businesses save energy and finances and further development; andSabo and Lekan (2019) that there is a strong positive relationship between SMEs growth, electricity supply, firm age, firm size, and leverage.…”

“…The limited study area and the methodology used called for further research with a robust methodology. Sabo and Lekan (2019) examined the effect of firm characteristics in the energy-business growth relationships using the quantitative methodology, questionnaire data from 197 SMEs operating in the city of Kano, Katsina and Jigawa state, Nigeria, and a multiple linear regression model. The result shows that there is a strong positive relationship between SMEs' growth, electricity supply, firm age, firm size, and leverage.…”

“…Evident shows that about 40% of Nigeria's population is connected to the energy grid mostly from hydro whilst power supply difficulties are experienced around 60 to 70% of the supply time with an average daily power supply of four hours at best (Aliyu et al, 2013;PWC. 2016;Sabo and Lekan, 2019). Every sector and section of the country lacks access to sufficient energy or power supply which does not only distort and crippled business operations but also absorbed a huge part of the business expenses.…”