Electricity Supply Instability and Manufacturing Sector Performance in Enugu State: A Cost Analysis (2020 to 2024)

Chronic electricity supply instability remains a defining constraint on manufacturing competitiveness in Nigeria, imposing prohibitive costs on firms that depend on consistent power for production. This study analyzes the cost burden of electricity supply instability on manufacturing sector performance in Enugu State from 2020 to 2024. The study is anchored on the Production Cost Theory, which posits that the efficiency of factor inputs, including energy, directly determines unit production costs and firm-level competitiveness. A cross-sectional survey research design was adopted, targeting manufacturing firms registered with the Manufacturers Association of Nigeria (MAN) Enugu Branch. From a population of 320 registered firms, a sample of 175 respondents was drawn using stratified random sampling. Structured questionnaires and energy expenditure audit records were the principal instruments. Findings indicate that self-generated power via diesel generators constituted an average of 32 percent of total operating costs among the surveyed firms, with smaller firms bearing a disproportionately higher energy cost burden relative to revenue. Over 67 percent of firms reported scaling down production volume in response to escalating energy costs between 2022 and 2024. The study concludes that electricity supply instability constitutes a systemic cost crisis for Enugu State's manufacturing sector. It is recommended that the Enugu State government pursue an integrated energy transition strategy, including facilitated access to solar power installations and advocacy for improved national grid allocation to the state's industrial corridors.

Keywords: Electricity supply, manufacturing costs, production cost theory, Enugu State, energy crisis