Effects of Electricity Crisis on Small Scale and Medium Sized Enterprises in Uganda: A Case Study of Kawempe Division

Abstract

This study was conducted in Kawempe Division. The purpose of the study was to assess the effects of electricity crisis on SMEs in Uganda using Kawempe Division as a case study. The objective of the study was to assess the effects of electricity crisis on productivity of small and medium enterprises, the effects of electricity crisis on sales of small and medium enterprises and the strategies that can be used to manage electricity crisis in Kawempe Division. The research methodology for the study was cross-sectional research design. The sample size was 625 SME owners and purposive sampling combined with stratified sampling was applied in selecting the SME owners who were included in the sample.The researcher used questionnaires to collect data and data was analysed SPSS version 20.The study findings indicated that the majority of SME owners were females (57.4%) and the rest being males meaning that females are more involved in SME appropriation than males and 24.2% of the respondents were aged 36 – 40 years, followed by 21.0% who were aged 31-35 years and the least of them (6.0%) were aged 41 – 45 years and 46.8% of the respondents were using between 20,000 and 39,000 shillings and 24.9% of the respondents were using 40,000 and above. The study findings also indicated that the following existing effects were statistically significant at 95% level of significance and with strong correlation values, for example respondents agreed that their business can produce and avail to their customers at any time the products are needed (r=0.616, p=0.000) and results from the study indicated that majority of the effects on sales are statistically significant at 95% level of significance like respondents agreed to the assertion that their sales have increased due to steady power supply (r=0.499, p=0.020). Study findings indicated that 55.0% of the respondents strongly agreed that reducing on costs of electricity would help to manage electricity crises by SME owners. The study concluded that out that electricity crisis significantly affects sales and productivity of Small and Medium Enterprises in various ways. Most of the existing effects on productivity had a significant relationship with productivity and sales. The study recommended the use of energy saving alternatives like solars and generators should be promoted as it has shown a relationship with sales of Small and Medium Enterprises.