The effects of load shedding on the viability of small and medium enterprises in Chainda compound.

Abstract

Zambia in the recent past witnessed an increase in economic activities, which has led to an increased demand for energy. The increased demand for energy has exceeded the hydroelectric power generating capacity for ZESCO, which has since reduced the supply of power to the various sectors of the economy. This has prompted ZESCO to institute a national world load shedding schedules which last up to eight (8) hours daily. This development has a potentially far-reaching economic effect on the operations of the national economy, which also includes the Small and Medium Enterprises (SMEs) This study used a non-experimental research design because there was no control nor intervention group. This was quantitative research that aimed at determining the relationship between the dependent and independent variables of the variability of Small and Medium Enterprises. A semi-structured questionnaire was used in the study. Stata software was used for data analysis. Univariate analysis was performed to describe the background characteristics of Small and Medium Enterprises in the study. Bivariate analysis chi-square test was conducted to determine whether a statistical relationship exists between the dependent and independent variables. It was observed that welding/carpentry working were 64.7% not viable, seconded by services with 61.8% not viable. Whole/retail trading and Agro-processing had unviability of 56.9% and 51.6%, respectively while manufacturing had 46.7% unviability. The results also showed no statistical relationship between the nature of enterprise and viability with a P-value of 0.783. It was also observed that enterprises with generators had 58.9% unviability while those that depended on ZESCO had 56% of them not been viable. Those that were using solar panels had 53.8% of not been viable. The results show no statistical relationship between the alternative source of power supply and viability with a P-value of 0.767. This study has established that the incidence of load shedding led to adverse disruptions in the operations of most Small and Medium Enterprises in the study area. It is recommended that Government puts in place initiatives that promote business formalization and insurance schemes. Once formalized, it will be easy for Small and Medium Enterprises to access support such as credit to access alternative sources of energy and insurance schemes.