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Privatization and National Development in Nigeria: A Case Study of Nigeria’s Power Sector


Title Page





Table of Contents

List of Acronyms




  • Introduction/ Background to the study
  • Statement of the Problem
  • Research Questions
  • Research Objectives
  • Research Methodology
  • Scope and Limitations
  • Research Hypothesis



  • Privatization
  • The Concept of Development
  • Privatization and Commercialization in Nigeria
  • Privatization, Liberalization and National Development
  • The Concept of Underdevelopment
  • The Concept of Economic Growth
  • Privatization and Liberalization in Global Perspective
  • Privatization of Enterprises in Nigeria
  • Accountability in the Power Sector and Nigeria National Development
  • Privatization of PHCN and National Development in Nigeria
  • Challenges of Power Generation and Nigeria’s Socio-Economic Development
  • Nigeria’s Power Sector Reform
  • The Alternative Energy Option
  • Theoretical Framework


  • Research Methodology
  • The Study Population
  • Sampling Techniques

3.3.1  Stratified Sampling

3.3.2  Simple Random Sampling

3.3.3  Cluster Sampling

  • Research Instrument and Delimitation
  • Method of Data Analysis
  • Quota Sampling
  • Purpose or Judgmental Sampling



  • Data Presentation, Analysis and Interpretation
  • Testing of Hypothesis
  • Discussion of Results
  • Conclusion/Inferences


  • Summary
  • Conclusions
  • Policy Recommendations



PHCN:        Power Holding Company of Nigeria

PWD:          Public Work Department

NESCO:     Nigerian Electricity Supply Company

ECN:          Electricity Corporation of Nigeria

NDA:          Niger Dams Authority

NEPA:        National Electric Power Authority

IMF:           International Monetary Fund

WB:            World Bank

SAP:           Structural Adjustment Programme

NEEDS:      National Economic Empowerment and Development Strategy

GNP:          Gross National Product

MDG:         Millennium Development Goals

ICPC:          Independent Corrupt Practices Commission

EFCC:        Economic and Financial Crimes Commission

AR:             Aso Rock

ND:             National Development

NIPP:          National Integrated Power Project

NDPHC:     Niger-Delta Power Holding Company

AIT:            Africa Independent Television

NASS:        National Assembly.



Nigeria’s public policy thrusts over the years towards the socio-economic and political growth, development and sustainability of the system is largely bereft with abject lack of direction and vision. Hence, this research attempts a plethora of Privatization and National Development vis-à-vis Nigeria’s power sector reform. 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 Nigeria’s public space in relations to the welfare of the people at large. The submission of this research is that the present administration’s bid to restructure the power sector does not seem to have the required answer to incessant power outage in Nigeria. Hence, the nuclear energy option remains the available mechanism for effective and efficient power supply in Nigeria. The research sums up with conclusion and policy recommendations for improved performance of the already comatose power sector in Nigeria’s Fourth Republic and beyond.





The Nigerian political economy is bereft with abject lack of policy focus, development, progress, stability, efficiency, accountability, participation and responsiveness on the part of state actors in the socio-economic scheme of things. This is against the backdrop of poor governance arising from lack of political will by the elite or ruling class who have literally sabotaged the ailing Nigerian economy to a stand still. Inspite of very many economic measures put in place to cushion the harsh realities of our time, the various policies of government have grossly remained at the level of rhetorics without corresponding outcome. Consequent upon the foregoing, there seem to be no closer remedy geared towards revamping the Nigerian chequered economy, while infrastructures are decaying, value orientation of both the elite and the governed are diminishing at an alarming rate. Corruption through the art of siphoning billions of public funds meant for major infrastructural development (including the embattled power sector) are diverted into private pockets with impunity. All of these clearly define the sorry state of the present Nigerian economy as part of the problems of underdevelopment. Things however, are falling apart in the affairs of governance in the Nigerian state while the centre can no longer hold. However, it is interesting to note that one of the most critical aspect of good governance and social responsibilities on the path of the state system is the provision of goods and services as well as ensuring efficient service delivery of such existentials for the overall interest of its people. However, the capacity and the capability of the nation-state to cater for the teeming population clearly defines who gets what, when and how. At the same time, the majority interest becomes the core priority of government and its agencies in the distributive processes of the wealth of nations. However, such acts of distributive policies would only enhance the quality of lives of the people only through such measures that fosters equity, fairness, national integration, peace and tranquility, distributive justice, to mention but a few. The aforementioned therefore becomes a veritable instrument for national cohesion, stability and cooperation, socio-economic and political growth, development and sustainability. All these are crucial as they are critical in policy frameworks of nation-states in the present era of globalization. Policy objectives of a nation-state directly or indirectly affects the direction of its internal and external growth and development. Thus, the Nigerian privatization policies as it affects power sector reforms is a function of its socio-economic and political growth process. While this assertion is true, the policy and policy directions of government shape as well as reinforces the level and direction of change in the Nigerian political system as a whole. Privatization of the Nigerian power sector constitutes an all-important area of government economic reform strategy aimed at propelling Nigeria’s growth to greater heights in the 21st century and beyond.


The thrust of this thesis is to expouse on the concept of privatization and its impacts on the Nigeria’s power sector as well as examine the various situational constraints that follows such policy actions in relation to the overall well-being of Nigerian citizens. The thesis also considers the nuclear energy option as a veritable means of sustainable power generation and distribution in Nigeria.


For the purpose of clarity, there is the need to trace the ecology of the Nigerian power sector from history and examine how it became transformed to the present status of Power Holding Company of Nigeria (PHCN) today. The history of the Nigerian power sector is as old as colonialism itself. Power generation in Nigeria could be traced as far back as 1896 with the installation of the pioneer power station in Lagos under the auspices of the then Public Works Department. The process of transmutation then continued via the activities of stakeholders in the sector, namely, the Lagos State Municipal Authority. However, the emergence of the Nigerian Electricity Supply Company (NESCO) latter in 1929 witnessed an extension and diversification of the power sector through the construction of the famous Kurra Falls near the present Jos, capital of Plateau state.


The establishment of the Electricity Corporation of Nigeria in 1951 marked a turning point in the power supply process in Nigeria with the first capacity generation to the tune of 132kv watt. Late in 1962, the Ijora power station in Ibadan was also put in place to enhance further generation in Nigeria.


It is interesting to note that the Niger Dams Authority was established in 1962 with the mandate to further develop and enhance the hydropower potentials of the country. However, the merger between the Electricity Corporation of Nigeria and Niger Dams Authority gave rise to the abrupt change of nomenclature to the contentious National Electricity Power Authority (NEPA) in 1972 (Cole, 1972).


Interestingly, however, the enabling Decree No. 24 of 1972 gave the necessary impetus to the merger of both the ECN and NDA, the essence of which the procedure defines the critical economic, technological and social development of the Nigerian state as a whole. From the foregoing, therefore, electricity consumption in Nigeria has become one of the most crucial indices of growth, development and sustainabilities of both government institutions and the people at large. Thus, a deliberate and carefully planned effort by government to institutionalize a good maintenance culture, due process, efficiency and productivity in the power sector informs the present attempt to relieve the pressures on the public sector, and hence place the responsibilities of generation and distribution of energy in private hands. The primacy of this research therefore highlights key areas of concern aimed at revitalizing the ailing power sector for an enhanced socio-economic growth, development and sustainability of the Nigerian economy, in all its ramifications (Ekpo, 1997).



The relevance and usefulness of any piece of research is determined to a large extent by its ability to address fundamental problems of society (Nigeria inclusive). Thus the Nigerian electricity dilemma during the post-colonial era has been a major constrain to socio-economic and political development and sustainability. Thus, abject lack of electricity supply has largely institutionalized the culture of absolute poverty, deprivation, want, unemployment, high cost of generating sets, crippling of infant industries, down-turn of medium and small scale enterprises, corruption, ineptitude, inequality, lack of transparency and accountability, lack of responsiveness, money laundering, total blackout, high maternal and infant mortality, lack of economic growth, development and sustainability, sudden change from public sector to private-sector driven economy with its attendant consequences, to mention but a few. The fundamental questions to ask for the purpose of seeking answers or solutions to the problem under review are: why has Nigeria not been able to solve her problems of persistent power outage while she is busy brandishing her big-brother status before other African countries like Niger, Togo and Benin? What positive impact can privatization of the power sector bring to the Nigerian economy? Why is there lack of participation of Nigerian citizens in the privatization exercise? Why has the privatization of the power sector being skewed towards the interest of few wealthy Nigerians to the detriment of majority of the Nigerian masses. What could be the environmental effect of nuclear energy option adopted by Mr President and why? Why has there been massive cases of vandalization, illegal connection, theft of PHCN power installations, corruption and the like? Why is it that there is absolute lack of faith and hope on the current investigation on the power sector by Nigerians? what is responsible for lack of public participation, among others. These are major problems demanding solutions as far as this study is concerned. It is in the interest of the aforementioned that the research is focused, hence, geared towards the possibilities of enhancing power supply to all Nigerians in the 21st century and beyond.



For the purpose of this study, the following set of research questions will be considered:

  1. Does privatization of Nigeria’s power sector impact positively on national economic development?
  2. What is the extent of civil society participation in the privatization of Nigeria’s power sector?
  3. What are the global implications of privatization of Nigeria’s power sector?
  4. Has the efficiency of Nigeria’s power sector any link with privatization and divestiture of the sector?
  5. Is the lack of competition and enabling environment in Nigeria responsible for the poor state of power supply?
  6. Privatization of Nigeria’s power does not imply express national development in Nigeria.



Essentially, this research attempts to produce a theoretical explanation of the privatization policy in relation to Nigeria’s power sector and how it affects national development. The following research objectives shall be considered:

  1. To clearly define the relationship between privatization and the socio-economic well-being of the Nigerian society.
  2. To fully understand the major challenges on the part of the Nigerian power reform as well as define appropriate measures out of the dilemma.
  • To ascertain the environmental cost implications of privatizing the energy sub-sector in relation to the Nigerian political economy.
  1. To examine the implications of the global dynamics of privatization, deregulation and di-vestment policies in Nigeria and Africa at large.
  2. To evaluate the efficacy and commitment of the present administration in her bid to probe public power funds that are being misappropriated by public officials in Nigeria.
  3. To examine the environmental impact of nuclear energy option in an attempt by the federal government to profer lasting solution to epileptic power supply in Nigeria.



Thus the researcher adopts the use of both primary and secondary sources of data for a better understanding of the issue being researched. Primary sources of data therefore includes the use of questionnaires and observation as well as face-to-face contacts with the respondents. The secondary source of data collection for the research involves the use of information sources to include, among others, government publications, journals, periodicals, research papers, magazines, papers presented on similar topic by scholars, to mention but a few. This is to enhance the efficacy of the study. The result of the sample will also be subjected to further empirical test through the use of chi-square, goodness-of-fit to enhance viability and scientific outlook of the research.



This research seeks to look at the policy underpinnings of privatization of Nigeria’s power sector and its implications on the nation’s development process within the Obasanjo’s regime (1999 – 2007). Essentially, Nigeria’s socio-economic policies in the 21st century attaches primacy to the issues of privatization, liberalization, divestment and deregulation which are concepts and practices akin to the Bretton wood system of the IMF/World Bank. Thus, the thesis exposes the researcher into further evaluation of the aforementioned as well as assessing the level of significance on the political, socio-economic and cultural lives of the people and the Nigerian nation state.


By extension, however, the limitations and constraints of this study encountered are enormous. Of utmost importance is the time factor, finance, inadequacy of documented materials for research, to mention but a few. All these are major encumbrances on the path of the researcher in the process of carrying out this onerous task.



The following hypotheses were drawn to guide this research.

  • There is a relationship between national development and privatization of Nigeria’s power sector.
  • Privatization of the power sector does not have the potential of enhancing efficiency of power supply in Nigeria.

All the above mentioned hypotheses shall be tested through the use of quantitative analysis to accept or reject them.



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