HomeIndustry SectorsGenerationNigerian president determined to see-through power sector privatisation

Nigerian president determined to see-through power sector privatisation

Nigeria President
Goodluck Jonathan
By Antonio Ruffini

12 April 2012 – Nigeria’s president Goodluck Jonathan has warned officials within his government that he will not tolerate any further delays or a shift in the timeline for the conclusion of the planned privatisation of power utilities hived off from the Power Holding Company of Nigeria (PHCN).
This was after the revision of the PHCN privatisation timetable by eight months by the National Council on Privatisation. Jonathan is determined to ensure no further time slips occur and that Nigeria’s underperforming power sector continues its reformation. The government’s willingness to take decisive action was demonstrated when a number of high ranking power utility officials were recently fired by minister of power professor Barth Nnaji for demonstrated deficiencies in their management of the sector.
Jonathan announced plans to reform the power sector 20 months ago but privatisation has been slow due to political wrangling, union disputes and government concerns over raising electricity prices. Africa’s most populous nation of more than 160 million is the continent’s biggest oil producer, but is blighted by persistent electricity outages, as the country generates a mere 4,000 MW. This forces businesses and individuals who can afford them to rely on diesel generators.

Nigeria plans to privatise the bulk of six power generation plants and 11 distribution firms, which supply end users, but it has yet to clarify a new tariff structure due to fears of a public backlash against higher prices.

Companies won’t buy state assets until a tariff system guarantees competitive electricity prices. Given that most people currently receive only sporadic power it will be a universally unpopular step, although necessary for the long-term future of the country’s electricity sector.

One of the factors enhancing the power supply problems in Nigeria is the shortage of gas supply to the PHCN. Nnaji says that the shortage of gas supply coupled with the low quantity of rainfall last year has worsened Nigeria’s power supply problems.
According to the Nnaji a number of Nigeria’s gas power plants face gas supply constraints and some are receiving no supply at all. He also said that the power plant at Shiroro dam was only operating for three hours a day due to low water levels.