Public Infrastructure and Private Domestic Firms’ (MSMEs) Performance in Nasarawa State, Nigeria

Abstract

This study investigates the impact of public infrastructure on the performance of Micro, Small and Medium Enterprises (MSMEs) in Nasarawa State, Nigeria. Using primary data from 282 firms and a logistic regression framework, the analysis reveals a differentiated relationship. Public water supply significantly enhances firm output and capacity utilisation, while public transport services positively affect sales. Conversely, public electricity demonstrates an inconsistent and largely insignificant impact, attributed to endemic issues of unreliability and high costs. The findings underscore that effective public infrastructure is a critical driver of MSME performance by reducing transaction costs. The study further found that despite government initiatives, MSMEs face significant constraints, with infrastructure deficit being a primary bottleneck. The study concludes with targeted policy recommendations, including sector-specific infrastructure investments and public-private partnerships for reliable utilities, to foster a more enabling environment for domestic private investment and sustainable local economic development.