Saturday, November 2, 2013

Nigeria: Is privatizing power the answer?

Is privatizing power the answer to Nigeria's deadly cancer? 120 million Nigerians are currently without electricity. This amounts to about 75% of Nigerians. It is a very sad that present day and in this age. Africa's most populous country and its 160 million citizens have to live and work on no more than 4,000 megawatts of generated electricity, a large percentage of which is even lost in the process of transmission.
Nigeria: Is privatizing power the answer?

Friday, Nigeria began handing over the power distribution and generation to new investors. 14 to be precise.

In what appears to be the emergence of a new dawn in the power sector, a handful of people would question if privatizing power is the answer to the 53 year old chronic power cuts and failures in Nigeria. The breakthrough news had been negotiated earlier this year and the federal government yesterday physically transferred the ownership of power distribution of the Power Holding Company of Nigeria to the foreign companies under the privatization plan.

The event which held in different parts of the country was carried out by Vice President Namadi Sambo.
Represented by different officials, Vice President Namadi Sambo formally presented certificates which transferred the ownership of the distribution companies of the PHCN to the private companies.

He added that the privatization plan would promote competition and higher generation of power through the provision of more effective power stations and improvements in electric power distribution, in the areas of billing, collection and transmission.

“Today’s handover marks the concluding stage of the transaction for the four generation companies and 10 distribution companies. The challenges facing the electricity sector in Nigeria are enormous, but we are equally convinced that the opportunities in the sector are enormous.''

‘’Therefore, the federal government is committed to creating the enabling environment that would incentivise private sector investors to take on these challenges and the opportunities to ensure quality and cost effective service delivery to the Nigerian electricity consumers.”

He added that “This administration is indeed committed and is determined to keep its promise of taking Nigeria out of its perennial darkness within the shortest possible time’’.

Also, the federal government has pledged to sanction operators that fail to deliver on the performance agreement that guides operations the nation’s Electricity Generation Companies, GENCOs and Electricity Distribution Companies, DISCOs as it handover the privatised firms nationwide.

Sambo said the government would continuously monitor the activities of the GENCOs and DISCOs. 

Truth be told, I'm so happy Nigeria has finally embraced the privatization of electricity and the changes will be reflected in the upcoming years. The question of how much the subscribers would pay will be debated in my subsequent post as breakthrough becomes visible. As a matter of fact, the government should ensure Nigerians are not ripped through unfair charges from these new investors. Nigerians are prepared to pay for quality service if it is rendered and fairly priced.


  1. I think it's a bad move by the government. An important sector to the lives of citizens should not be left to private companies. How many countries sell their electricity companies to private hands? It only underlines government's failure in its fight against corruption. Not to talk of the price which may be unaffordable for poor Nigerians, some are even complaining already and it's going to get higher very soon..

  2. I love your writing so so much! I believe this is a breakthrough news for Nigeria considering the failures of NEPA and PHCN. The new plan will help stabilize electricity in Nigeria and like you rightly said, it comes with a cost.