Power Outages and Production Efficiency of Firms in Africa

Anselm Komla Abotsi
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Anselm Komla Abotsi: Department of Economics, University of Education, P. O. Box 25, Winneba, Ghana.

International Journal of Energy Economics and Policy, 2016, vol. 6, issue 1, 98-104

Abstract: Literature shows that power generation capacity in sub-Sahara Africa is lower than that of any other region in the world and capacity growth has also stagnated. Africa currently faces major electricity shortages with a number of power outages which has the tendency of rendering many firms less efficient in their production. This study therefore seeks to find the impact of power outages on production efficiency of firms in Africa. The source of data is the World Business Environment Survey conducted by the World Bank. The analysis deployed stochastic production frontier and a two-tail Tobit models. The finding shows that the number of power outages experienced in a typical month has a negative impact on the production efficiency of firms in Africa. This call for immense investment projects in new generation capacity in order to ameliorate the negative effect of power crisis on production process of firms in Africa

Keywords: Power Outages; Production Efficiency; Electricity; Africa (search for similar items in EconPapers)
JEL-codes: D22 D24 L94 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2016-01-14

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