However, this demand, alone, will not attract the investments required to unlock the potentials of the power sector. Using the political economy approach, it argues that the privatization of the power sector in nigeria is based on. In addition, privatization of public enterprises is being pursued with scant regard to the laws of the country. Nigerias power sector is unbundled and largely privatelyowned. The nigerian power sector power generation capacity falls short of preprivatization target nigeria has more than 190 million people the largest in africa including large industrial and commercial ventures scatter unevenly across the country. In the same year, the japanese government staked over 1. The epsr act set the pace for power privatization in nigeria and the resultant incorporation of the power holding company of nigeria plc phcn, which was the initial holding company that assumed. Nigerias electric power sector requires substantial reform if the countrys economic development and poverty alleviation program is to be realised. Has nigeria benefitted from privatisation of the power. Nigerians had thought that the privatisation of the sector would be like that of the telecommunications sector, which worked well. Electric power sector reform act 2005 and incorporation of power holding company of nigeria plc and the initial 18 successor companies that are being privatized. The economic rationale behind privatization includes efficiency. In hindsight, the overly optimistic and quite unrealistic assumptions by all stakeholders was an indication that there was very little knowledge of a.
This study therefore examines the justifications for privatization side by side the actual experiences sequel to the policy implementation in the. Role of the bureau of public enterprises and the electric power sector reforms. Privitisation of power sector and poverty of power supply. Privatization of the power sector in nigeria a case. The assumption of free market presupposes that the market operates in a competitive environment. Operational generation capacity has dropped by 33 percent only 23 percent of the cost of electricity. The act outlined the framework of the reform as follows.
Nigeria is able to generate only 126kwh per capita, and this makes the country to lag far behind many of the other developing countries in as far as gridbased electricity consumption is concerned. Privatization and nigeria economy a case study of phcn abstract privatization of state owned enterprises has emerged globally as a public policy aimed at reversing the appalling trend of public and social services provisioning. Fgn power reform agenda fgs reform of power sector is gingered mainly by the need to reduce the cost of doing business in nigeria in order to attract new investment through provision of quality and dependable power supply to the economy for industrial, commercial and sociodomestic activities. Get free research paper on impact of privatization policy on the performance of public sector organizations in nigeria. Problems and prospects of privatization in nigeria. The impact of privatization of power sector in nigeria. The advantages of privatization from the governments perspective included.
The hope was that the entry of investors into the sector would improve power generation and. Many efforts have been made to close this gap including privatization. Reflections on nigerias power sector privatization. In the power sector, there are elements of monopoly. The importance, how to, effect causes relationship, comparison, history, role, solutions are discussed. Pdf privatization of nigeriaspower sector from the. Introduction during the launch of power africa in 20, president barack obama declared access to electricity is. The national electric power policy 2001 and the resulting electric power sector reform act 2005 removed the. He was also involved in the drafting and negotiation of the lease agreements concession of the over 24 ports terminals in lagos, warri, calabar and port harcourt.
You cannot cure government failure by privatising because privatisation is built upon some basic framework for public good. With an installed generating capacity of about 7,500mw and operating capacity of. Electric power policy nepp in 2001, which was the precursor of the electric power sector reform act the epsr act enacted in 2005. Age profile percentage of population age distribution % 014 years 43. Using the political economy approach, it argues that the privatization of the power sector in nigeria is based on capitalist values, ideology, orientation and assumption. To determine the effect of project monitoring and evaluation in power sector reforms on electricity growth in nigeria. Governments power sector reform is to improve efficiency, encourage private sector participation and strengthen the power sector as nigeria s engine for development.
The main objective of privatization of the nigeria s power sector was to attract private investment and higher efficiency in service delivery. But a wholesale change to the market, designed under reformist president obasanjo and pushed forward by president jonathan, promised greater efficiencies and investment guided by privatesector principles including widespread privatization, pricing. The effect of control measures in the power sector reforms. Nigeria commenced a comprehensive reform of the sector, in a privatization move that was proclaimed to be one of the boldest power reform initiatives globally, with proceeds from divested assets estimated at c.
The nigerian services sector has shown impressive gains. Nigerian power sector is there light at the end of the. Government involvement in the power sector dates back to 1896, when the firstever diesel firing plant in nigeria, with capacity to produce 20 mw of electricity, was installed in ijora, lagos, followed by. Nigerias power sector is unbundled and largely privately owned. Privatisation in the power sector 3 introduction nigerias power sector reform has proceeded as scheduled. Imagine a situation where the distribution of power for the entire rivers and bayelsa states, are. Deregulation of the nigerian power sector on performance. Nigeria power sector has been frosty to say the least. Private sector seems, however, inseparable from public sector as viable public sector serves as guide for the private sector.
The bureau of public enterprises is the secretariat and implementation arm of the national council on privatization, a body set up by the federal government of nigeria saddled with sector reform and privatization of state owned or public enterprises. Nigerias power sector was unbundled and partially privatized to establish a competitive market intended to improve management and efficiency, attract private investment, increase generation, and provide reliable and costefficient power supply. The good news is that the government is taking steps and committing resources to ensure that the sector is commercially viable. Sam amadi, says the privatisation of the countrys power sector was not the solution to the power sector challenges. The privatisation of the power sector was meant to break the control of electricity generation and distribution from government, to ensure adequate, regular and stable supply of electricity to the. For instance, attempts were made to privatize nepa when the law that sets it up prohibits private ownership of electric company in nigeria. Privatization of the electric power sector a market trading design and new rules, codes and processes 11 in march 2005 the national assembly passed the electric power sector reform act epsra. Constant and adequate power supply is an important condition for industrialization. Privatization and commercialization of public enterprises. However, the increase in numbers and size of generating, distribution and transmission companies and its attendant ability to improved power generation is presently not been felt. Consequently in 2005, the electric power sector reform epsr act was enacted by the nigerian national assembly, and thus culminated in the privatisation of electricity generation and distribution in the country which actually began in november, 20. In a broader sense, privatisation refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement wikipedia, 2008. Has nigeria benefitted from privatisation of the power sector.
It is expected that this work may assist the power policy makers and regulators to come up with abetter framework for the full realization of the. Issues and challenges in the privatized power sector in. To have set the nigerian power sector on an irreversible path to selfsustaining mode equivalent to telecom sector operation today to have available power of up to 8,000mw by 20 and,000mw by 2015 2016 2020. In this publication we look at some of the milestones that have been crossed and explore the next steps in the sale of 17 federal government power assets.
The primary goal of the privatization in nigeria is to reduce the dominance of the public sector in. An overview of the power sector reforms in nigeria, a presentation by prof. Pdf the impact of privatization and commercialization in. In the case of the power sector, it is an abysmal failure. Nigeria power sector privatization program appraisal. Nigeria faces a range of challenges implementing the power sector reform roadmap, and providing comfort for private sector investment into its privatised power market is one of the main challenges. The principle for privatization in nigeria commenced in 1999 with the aim to diversify totally or. The history of its power sector was one of inefficient monopolies, missteps, and corruption.
A summary of the existing power sector in nigeria, current key initiatives, and opportunities and challenges for developers, investors and lenders. The thesis argues that social responsibility is an integral aspect of good governance and must be so guided with caution in the management of the affairs of nigerias public space in relations to the welfare of the. The nigeria n power sector privatizati on is reputed to be one of the bo ldest pri va tis ation initiatives in the global power sector over the last decade, with the transaction cost of about. Deregulation was observed to have the potential to increase power supply in nigeria. There have been historical challenges to the growth of the sector including prolonged fg presence at commanding heights, consistent underinvestment since the early 80s and. The former chairman of the nigerian electricity regulatory commission, dr. The nigerian power market to have reached stability for willingbuyer, willingseller mode. It goes on to reason that a decaying public sector would give rise to inefficient private sector. The privatization process in nigeria is a fragment abuse of this provision of the constitution. Following the passage of the electric power sector reform act 2005, the sector was unbundled into six generation companies gencos, eleven distribution companies discos and the transmission company of nigeria tcn. Problems and prospects of privatization in nigeria is topical not because its leaders are playing politics with privatization and the process has become a never ending one, but because the policy was a good one which was intended to cut waste of scarce resources, bring good governance closer to the people and lessen the economic hardships of citizens.
Opportunities and challenges for investment in 2016. The federal government of nigeria launched a farreaching set of power sector reforms in 2001 that led to the unbundling and subsequent privatisation of electricity generation and distribution. The government should create an environment favorable for private economic activity. These infrastructure reform efforts and nigerias large consumer market have made the country very attractive to foreign investment. This understanding is behind the reform programme recently initiated by the nigerian government with the goal of privatising the national electric power authority nepa monopoly. Privatisation in the power sector navigating the transition. This paper discuses the impact of privatization of power sector in nigeria.
Solving the liquidity crunch in the nigerian power sector. Following privatization, the power sector was expected to evolve in four stages but the reforms are still at the second, transitional electricity market tem, stage. Update privatization issues federal ministry of power. Privatization aims to increase electricity generation in nigeria by catalysing private sector investment and commercial financing in nigerias power sector through the provision of partial risk guarantees prgs.
Various attempts by successive nigerian governments at industrialization and rapid economic growth have been hampered by energy infrastructure deficit gap. Privatization and commercialization in nigeria will be a mirage unless institutional reforms take place. The 2015 elections marked, for the first time in nigerias. Nigerians have not benefitted from the privatisation of the power sector.
396 574 1431 1035 628 1323 518 1127 430 1499 1522 187 895 868 1389 1167 1183 1539 714 319 5 81 1005 1556 294 1014 460 1028 561 238 481 916 856 1094 1427