Electricity Energy Access and Profitability of Micro and Small Enterprises in Ghana

Abstract

Over the years, empirical investigations have focused on exploring drivers of the profitability of enterprises in emerging economies. However, there is a dearth of quantitative literature examining how access to electricity energy affects the growth of small businesses. In this quantitative survey design research, two-stage stratified and convenience sampling techniques were used to sample 50 owner-managers of micro and small enterprises in Kaneshie, Accra. Descriptive and inferential statistics were used to analyse the field results. The study found that the national grid electricity supply for the operations of small businesses in Accra is inadequate. An alternative source of electric energy significantly reduces the profit of businesses. The article, therefore, concludes a positive significant relationship between electric access and profitability of small and micro enterprises in Ghana. The study recommends that electricity supply agencies should ensure greater stability in electricity supply. Stakeholders should begin exploring alternative cheaper sources of electricity such as mini-solar panels and backup generators or renewable energy capacity to relieve small business owner-managers from the high cost of electricity.