POWER INSTABILITY AND THE PROFITABILITY OF SMALL AND MEDIUM ENTERPRISES (SMES) IN NIGERIA: A STUDY OF INDUSTRIAL SMES IN TRANS-AMADI PORTHARCOURT

Nigeria, like most African countries, lack most basic infrastructure like electricity, water and accessible roads etc. The Nigerian government has employed different policies to improve this situation however the problem of electricity is yet to show any significant improvement power generation has remained relatively same for the past 16 years, unreliable and unstable. This power instabilitys effect on businesses have been a major cause for concern to the Nigerian populace. The 2016 global oil crisis renewed the Nigerian governments quest to diversify the oil-dependent economy. The manufacturing sector which, among other things, is viewed as a medium to speed up diversification is highly electricity-dependent which has led to renewed interests on the effects of power shortages on manufacturing companies. This research assesses the effect of power instability on the profitabilityof industrial SMEs in Trans-amadi industrial area of Portharcourt, Nigeria. Out of the 150 companies sampled, the 112 that had audited records were studiedover a 4-year period (2015-2018) and using Eviews 10 to test the multivariate regression models, this study found that the natural log of cost of alternative power does not significantly affect operating profit and that power supply ratio does not have significant effect on the net profit of the SMEs within the study period.