THE IMPACT OF ELECTRIC POWER OUTAGE ON THE PROFITABILITY OF SMALL BUSINESSES IN NIGERIA: A CASE STUDY OF GWAGWALADA TOWN

This study examined the impact of electric power outages on the profitability of small businesses in Nigeria, using 50 randomly selected small businesses in Gwagwalada town as a case study. A Logit regression model was adopted, incorporating a mix of qualitative and quantitative variables. The Maximum Likelihood (ML) estimation method was utilized in estimating the Logit model. Findings from the estimated Logit model showed that electric power outages had a negative impact on the profitability of small businesses in Gwagwalada town, while small businesses' expenses on alternative electricity power supplies had a positive impact on profitability. However, both electric power outages and small businesses’ expenses on alternative electricity power supplies in Gwagwalada town had an insignificant impact on the profitability of the small businesses. Based on the findings of the study, it was recommended, among other things, that the government should undertake a national demand study to determine the exact electricity requirements to meet demand in the short, medium, and long terms. Furthermore, an integrated least-cost system expansion plan should be developed for the efficient deployment of the Nigerian electricity industry in the medium and long terms. There is also a need for diversification of electricity generation to improve the security of supply, as well as the development of capacity to generate electricity closer to demand centers to reduce technical losses. Additionally, the government should explore and develop measures to ensure the long-term supply of gas for electricity generation.