Analysis of the Relationship Between Electricity Supply and Manufacturing Sector Output in Kogi State

Reliable electricity supply is a critical input for manufacturing firms, and examining its relationship with manufacturing output in Kogi State provides evidence for understanding how power deficits constrain industrial development in North Central Nigeria. This study analysed the relationship between electricity supply reliability and manufacturing sector output among firms in Lokoja, Okene, and Anyigba Local Government Areas, Kogi State. A survey of 120 manufacturing firms was conducted. Data covered electricity supply hours per day, generator fuel costs, production downtime due to power outages, output levels, and employment. OLS regression was applied with output as the dependent variable. Results showed that firms received an average of 7.2 hours of grid electricity daily. Generator fuel costs averaged 18.4 percent of total operating costs. Each additional hour of daily grid electricity supply was associated with a 1.9 percent increase in firm output. Firms experiencing more than 16 hours of daily power outage operated at only 42 percent of installed capacity. Energy costs were cited as the primary reason for downsizing operations in 34 percent of cases. Small firms were disproportionately burdened by generator costs relative to revenue. The study concludes that electricity supply deficiency significantly constrains manufacturing productivity in Kogi State. Recommendations include prioritising the Kogi State electricity supply improvement, providing industrial estate rental subsidies for manufacturing firms, and establishing a state energy access fund for SME-scale solar energy adoption.

Keywords: electricity supply, manufacturing output, Kogi State, energy costs, industrial development