Impact of Power Outage On the Performance of Manufacturing Industries in Nigeria.

Chapter One 1. Introduction World Bank (1991:31) defined development as “a sustainable increase in living standard that encompasses material consumption, education, health and environmental protection”. Social scientists, particularly economists and sociologists, have for centuries been preoccupied with the subject matter of development. The economists have traditionally considered an increase in per capital income to be a good indicator of development (Hewick and Kindleberger, 1984; Kayode, 2002; Obadina, 2004). They assumed that growth in per capital income induced by growing productivity is the engine of development. As regards the sociologists, development refers to qualitative and quantitative changes in the structure and performance of the forces of production through eradication of poverty, disease, hunger, inequality and unemployment among other social problems (Offiong, 2001; Isamah, 2002). Considering the position of the economists, a critical question that arises is: what drives productivity? The answer according to the World Bank (1991) lies in the industrial development and technological infrastructure. Industrial development is a process by which a nation acquires a competence in the manufacturing of equipment and products required for sustainable development. Technology is considered the prime factor in this regard; industrial development and technological development are interdependent and interrelated, yet, they both depend on adequate energy supply. Empirical evidence reveals that manufacturing firms in Nigeria have for long been facing serious challenges leading to their unsatisfactory performance. Selected indicators of manufacturing performance show that percentage average share of manufacturing sector in Gross Domestic Product (GDP) from 1980 to 2005 was 7.2%, while percentage average share in total export was below one percent. In the same vain, capacity utilization was below 50%, with share in the total import over the same period being over 70%. The outcome of most researches deduced that infrastructural collapse 2 – particularly poor electricity supply being the greatest- have been the major problem confronting manufacturing sector in Nigeria (Adenikinju, 2005; Anyanwu, 2000).