Effects of Electricity Supply on the Performance of SMEs in Zambia: A Case Study of Chifubu Trading Area

This study examined the effects of electricity supply on the performance of small and medium enterprises (SMEs) in Chifubu Trading Area, Zambia, using sales volume, sales value, and the cost of doing business as indicators. A descriptive research design was adopted, and primary data were collected using a structured questionnaire. Data were analysed using descriptive statistics and inferential statistics, including hypothesis testing (Mean versus Hypothesized Value) and ANOVA. The findings revealed that electricity supply significantly affects SME performance. Sales volume revealed that 54% of SME experienced a positive or significantly positive effect on sales volume. These results corresponded with the hypothesis test result of (t=-4.04, p = 0.0002), showing a statistically significant relationship. Similarly, sales value recorded a 52% SME response rate, confirming a positive or significantly positive effect on sales value, with a statistically significant result of (z = -2.29, p = 0.0215). Additionally, 74% of respondents reported a reduction in the cost of doing business with a stable electricity supply, while the hypothesis test also established a statistically significant effect of a decrease in the cost of doing business (z = -5.23, p = 1.65 × 10⁻⁷). Therefore, it was established that electricity supply reliability is vital for improving SME performance through increased sales volume, sales value, and reduced business operating costs. Henceforth, the study recommends increased investment in electricity infrastructure, development of affordable alternative energy sources by policymakers and government agencies, and increased financial and technical support to enable SMEs to adopt sustainable energy solutions.