Electricity Access and the Performance of Micro and Small Enterprises: Evidence from West Africa

Although it is widely accepted that electricity access is important for enterprise performance, the empirical evidence on the subject is mixed. In addition, evidence is scarce for micro and small enterprises operating in the informal sector. On the basis of a representative sample of informal firms in seven West African cities, we do not find evidence of a systematic, significant contribution of electricity access to enterprise performance. However, concentrating on a more homogeneous sample of tailors in Ouagadougou, we find that electricity can potentially exert a positive influence on performance, with electricity contributing to the uptake of modern machinery and business operation. Our findings are another illustration of the heterogeneity of the informal sector, which needs to be taken into account when policy interventions intend to overcome the growth constraints of firms operating in this segment of the economy.