Assessing the effects of load shedding (dumsor) on SMEs and the coping strategies used to survive load shedding in Madina, Accra

Thesis submitted to the Department of Business Administration, Ashesi University College, in partial fulfillment of Bachelor of Science degree in Business Administration, April 2016The availability of electricity is an important factor for the improvement of any economy. However, the unreliable supply of electricity in Ghana, has led to several periods of electricity load shedding. This negatively affects the operations of businesses, especially Small and Medium Scale Enterprises (SME). In Madina, a suburb of Accra, businesses seem to be surviving the effects of the current load shedding exercise (called “dumsor” in the local Twi language). The objectives of this study were to investigate the effects of the recent load shedding exercise on SMEs in Madina and what they are doing to cope with the effects. The research design employed was explorative and used quantitative and qualitative data obtained through the purposive, non-probabilistic sampling of 31 SMEs located in Madina. Content and graphical analyses were used to analyse the data. Results indicated that the load shedding of electricity negatively affects the operations and growth of SMEs. The negative effects included increase in operating cost; loss of production time; loss of revenue; decrease in productivity; damage to plant equipment; increased expenditure; reduction in labour force and overnight work. The coping strategies businesses adopted to minimize the negative effects included: electric generators, reduction in labour force, early closure, solar power, uninterrupted power supply, power banks, inverters and voltage stabilizers. Given the contribution of SMEs to the economy and the significant negative impact load shedding has on their operations, Ghana’s growth will be stifled if the problem of load shedding is not permanently resolved.Ashesi University Colleg