PRIVATIZATION OF POWER IN NIGERIA. Isnt Nigerias power privatization a case study for Ghana? They seem to have put a lot of thought and preparation into the process. I wonder how it is going for them. Here are the highlights of an old but relevant article from TheGuardian. On 30th September 2013, the president of Nigeria handed over share certificates and licences to the purchasers of electricity generation and distribution companies. This is a critical step forward for Nigeria, making more difference to the lives of ordinary people than any other in the past decade. According to the president of the Manufacturers Association of Nigeria (MAN), Chief Kola Jamodu, 40% of the production cost of manufacturers goes into the provision of electricity, compared to 5-10% in other similar economies. Annual public sector investment averaging US$2bn has only led to a limited increase in supply, so the Government took the logical decision to privatise the bulk of its power sector assets as one of the key steps in finally delivering an improved service to Nigerians. This is only one step on the way to an adequate supply of electricity in Nigeria — it is not an answer in itself. Much work over a number of years has been required to make the Nigerian power sector commercially viable and ready to receive private sector investment. The tariff regime has been radically changed, such that the companies can raise sufficient revenue to finance their activities. Provision has been made for subsidisation of the poor though lifeline tariffs. The government has supported a commercial framework of contracts to improve incentives for power supply — for example by covering gas supply and power purchase agreements — and is providing credit support for the time being. Historical liabilities are ring-fenced in a government liability management vehicle. Labour disputes have been resolved. A competitive and viable market structure for the procurement of electricity has been established. Much of this critical work has been supported by the Nigeria Infrastructure Advisory Facility (Niaf), a DfID initiative implemented by Adam Smith International. In his speech at the handover ceremony, the minister of power, professor Chinedu O. Nebo, singled out Niaf for its instrumental role in power reform and praised the invaluable technical and resource support they provide to the power sector of Nigeria. A new wholesale market in electricity is to commence in January 2014, which will lead to more efficient utilisation of power generation. For Nigeria, the final improvement in electricity supply will depend on a massive investment programme, estimated at around US$70bn to reach the equivalent level of supply in countries, such as Brazil and South Africa. Kathleen Addy Theo Acheampong H Kwasi Prempeh John OK Lloyd Amoah Elaine Thompson Stanley Adom Yeboah Guy Foxx Bright Simons Kwame Kyei-baffour Kwame Twum
Posted on: Tue, 05 Aug 2014 21:09:10 +0000
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