Electricity Tariff And Smes Performance In Calabar Municipality Local Government Area, Cross-River State

The recent hike in electricity tariff in Nigeria point to a growing negligence of small and medium enterprises (SMEs) in Nigeria; in the absence of considerable pricing, the survival and the coping abilities of SMEs. This study examined the effect of recent electricity tariffs segmented into bands A, B, C, and D, on SME performance in Calabar metropolis and also examined whether differences in business profitability are associated with the cost of the new electricity tariff or an alternative source of power generation. Using a survey design, a sample of 400 questionnaires was distributed to SMEs in Calabar to gather feedback on current performance and coping mechanisms after implementing the new electricity tariff. The logistic regression and the independent samples t-test were employed to compare the mean of either paying the new electricity tariff or using alternative sources of power supply. The study established that there are higher odds for new tariffs to impact SME performance. Also, it was established that businesses relying on generators and other power generation sources are experiencing a mild increase in cost burden, with potential profitability impacts. Based on these findings, the study recommends that policymakers should review the new electricity tariffs to ensure that they do not burden SMEs, having known that a cost-tariff balance should be pursued to prevent limiting enterprise growth. Also, a high investment should be made in improving the reliability of public electricity. Word count: 233