Article section

Article title
Contributor
Abstract
About article
DOI
Citation style
Copyright
Open access
References
Research Article

Examining The Effects of Load Shedding on The Operational Performance of SMEs: A Case Study of Zambia

Authors

  • Hendrix Nkhuwa School of Humanities and Business, Information and Communications University, Lusaka, Zambia
  • Peter Silwimba School of Humanities and Business, Information and Communications University, Lusaka, Zambia https://orcid.org/0000-0001-6663-1866

    silwimbap47@gmail.com

Abstract

This study investigated the effects of load shedding on the operational performance of Small and Medium Enterprises (SMEs) in the rural context of Zambia. Employing a descriptive survey design with a mixed-methods approach, primary data were collected from 100 SMEs selected via stratified random sampling, supplemented by qualitative interviews. Quantitative data were analysed using STATA, incorporating descriptive statistics, cross-tabulations, and Analysis of Variance (ANOVA). The findings revealed that load shedding imposes a severe financial burden, with 85% of businesses incurring significant additional monthly costs. A one-way ANOVA confirmed a statistically significant relationship between the level of these expenses and the severity of operational impact (F (3, 96) = 12.456, p < 0.001). Revenue disruption was catastrophic, with 90% of SMEs experiencing profit declines and 40% suffering a drop exceeding 50%. A further ANOVA showed a significant difference in revenue impact across business types (F (5, 94) = 4.873, p = 0.0005), indicating sector-specific vulnerabilities. SMEs primarily employed reactive, low-cost coping strategies like adjusting operating hours. However, reliance on costly generators was often counterproductive, creating a paradox where the cost of coping exacerbated financial strain. A final ANOVA found no significant difference in the perceived effectiveness of these strategies across business types (F (5, 82) = 1.27, p = 0.286), underscoring a universal failure to find effective solutions. The study concludes that load shedding systematically undermines rural SME performance by depleting financial resources and disrupting operations. It recommends targeted government subsidies for renewable energy adoption, investment in rural grid infrastructure, and SME training in energy resilience and business continuity planning to break this detrimental cycle.

Keywords:

Coping Strategies Load Shedding Operational Performance SMEs Zambia

Article information

Journal

Journal of Economics, Business, and Commerce

Volume (Issue)

2(2), (2025)

Pages

158-169

Published

01-11-2025

How to Cite

Nkhuwa, H., & Silwimba, P. (2025). Examining The Effects of Load Shedding on The Operational Performance of SMEs: A Case Study of Zambia. Journal of Economics, Business, and Commerce, 2(2), 158-169. https://doi.org/10.69739/jebc.v2i2.1090

References

Adanlawo, E. F., & Vezi-Magigaba, M. (2021). Electricity outages and its effect on small and medium scale enterprises (SMEs) in Nigeria. The Business & Management Review, 12(1), 98-105.

Adenikinju, A. (2005). Analysis of the cost of infrastructure failures in a developing economy: The case of the electricity sector in Nigeria. African Economic Research Consortium Research Paper, 148, 1–38.

Agrawal, S., Gupta, R., & Singh, P. (2023). Energy insecurity and small business resilience in emerging economies. Energy Policy, 172, 113–128.

Amoah, J., Belas, J., Dziwornu, R., & Khan, K. A. (2022). Enhancing SME contribution to economic development: A perspective from an emerging economy. Journal of International Studies, 63-76.

Avordeh, T. K., Salifu, A., Quaidoo, C., & Opare-Boateng, R. (2024). Impact of power outages: Unveiling their influence on micro, small, and medium-sized enterprises and poverty in Sub-Saharan Africa-An in-depth literature review. Heliyon, 10(13).

Ayyagari, M., Beck, T., & Demirguc-Kunt, A. (2011). Small and medium enterprises across the globe: A new database. World Bank Economic Review, 19(3), 415–441.

Banda, C., & Mwansa, J. (2021). Coping with power outages: Evidence from Zambian SMEs. Journal of African Business, 22(4), 567–584.

Beck, T., & Demirguc-Kunt, A. (2006). Small and medium-size enterprises: Access to finance as a growth constraint. Journal of Banking & Finance, 30(11), 2931–2943.

Beck, T., Demirguc-Kunt, A., & Maksimovic, V. (2005). Financial and legal constraints to firm growth: Does size matter? Journal of Finance, 60(1), 137–177.

Braun, V., & Clarke, V. (2021). One size fits all? What counts as quality practice in (reflexive) thematic analysis? Qualitative Research in Psychology, 18(3), 328–352.

Brown, L., & Patel, K. (2021). Electricity reliability and SME performance in sub-Saharan Africa. Energy Economics, 96, 105–118.

Chanda, M., & Njobvu, T. (2019). The impact of load shedding on SMEs in Lusaka. Zambian Journal of Economics, 7(2), 45–61.

Chen, Y., & Alvarez, R. (2022). Rural enterprise vulnerability to energy insecurity. World Development, 150, 105–122.

Chisanga, B., & Banda, C. (2020). The socio-economic effects of load shedding on Zambian households and SMEs. Zambia Social Science Journal, 9(1), 55–72.

Dawadi, S., Shrestha, S., & Giri, R. (2021). Mixed-methods research: A discussion on its types, challenges, and criticisms. Journal of Practical Studies in Education, 2(2), 25–36.

Enaifoghe, A. (2023). Enhancing the role and contributions of small and medium enterprises (SMEs) in a globalized and innovative economy: challenges and opportunities.

Escribano, A., Guasch, J. L., & Pena, J. (2010). Assessing the impact of infrastructure quality on firm productivity in Africa. World Bank Policy Research Working Paper, 5191.

Fetters, M. D., & Molina-Azorín, J. F. (2021). Utilizing a mixed methods approach for conducting business and management research. Oxford Research Encyclopedia of Business and Management.

Foster, V., & Steinbuks, J. (2009). Paying the price for unreliable power supplies: In-house generation of electricity by firms in Africa. World Bank Policy Research Working Paper, 4913.

Hallberg, K. (2000). A market-oriented strategy for small and medium-scale enterprises. World Bank Discussion Paper, 40.

Hardy, M., & McCasland, J. (2021). It takes two: Experimental evidence on the determinants of technology diffusion. Review of Economics and Statistics, 103(1), 1–14.

Hermes, N., & Meesters, A. (2022). Energy insecurity and SME financing constraints. Small Business Economics, 59(2), 345–362.

International Energy Agency (IEA). (2021). Africa energy outlook 2021. IEA Publications.

Johnson, P., & Lee, H. (2022). Power outages and firm productivity: Evidence from African enterprises. Journal of Development Studies, 58(6), 1023–1040.

Kabwe, M., Tembo, S., & Kunda, J. (2021). Energy insecurity and SME competitiveness in Zambia. African Journal of Economic Policy, 28(3), 77–95.

Khandker, S. R., & Samad, H. A. (2021). Energy poverty and enterprise development in Africa. Energy for Sustainable Development, 65, 1–12.

Kumar, R., & Singh, A. (2023). Perishable goods and electricity insecurity: Implications for SMEs. Journal of Agribusiness in Developing Economies, 13(2), 245–261.

Lyons, M., Papagiannis, G., & Zanoni, D. (2023). Coping with energy crises: SME strategies in developing economies. Energy Research & Social Science, 98, 103–118.

Moya, D. (2021). The hidden costs of unreliable electricity: Evidence from SMEs. Energy Policy, 149, 112–124.

OECD. (2017). Enhancing the contributions of SMEs in a global and digitalised economy. OECD Publishing.

Papagiannis, G., Zanoni, D., & Lyons, M. (2023). Fragmented resilience: SMEs and energy insecurity. Journal of Cleaner Production, 382, 135–147.

Rosenberg, D., & Arman, T. (2022). The financial burden of electricity outages on SMEs. International Journal of Energy Economics and Policy, 12(4), 56–67.

Schreiner, J., & Gupta, A. (2023). Voltage fluctuations and SME equipment damage. Energy Systems, 14(1), 89–107.

Smith, J., & Zhao, L. (2021). Coping with unreliable electricity: Evidence from SMEs. Small Business Economics, 57(3), 1123–1145.

Steinbuks, J., & Foster, V. (2010). When do firms generate? Evidence on in-house electricity supply in Africa. Energy Economics, 32(3), 505–514.

Tapang, R. (2023). Load shedding and SME competitiveness in sub-Saharan Africa. African Development Review, 35(1), 77–95.

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.

Tembo, S., & Kunda, J. (2021). Adaptive strategies of SMEs under energy insecurity. Zambian Journal of Business Studies, 5(2), 33–49.

United Nations Economic Commission for Africa (UNECA). (2022). Energy access and resilience in Africa. UNECA Publications.

United Nations Industrial Development Organization (UNIDO). (2020). Industrial development report 2020: Industrializing in the digital age. UNIDO.

World Bank. (2020). Doing business 2020: Comparing business regulation in 190 economies. World Bank Group.

World Bank. (2022). Africa’s pulse: An analysis of issues shaping Africa’s economic future. World Bank Group.

Zanoni, D., Lyons, M., & Papagiannis, G. (2023). Renewable energy adoption among SMEs in Africa. Energy Policy, 174, 113–129.

Zulu, P. (2022). Energy insecurity and SME revenue losses in Zambia. Journal of African Development, 24(2), 145–163.

Downloads

Views

0

Downloads

0