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An Analysis of the Electricity Industry in Nigeria: One Year after Privatisation

FEATURED PAPER

By O. Chima Okereke, PhD

UK and Nigeria
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Introduction

On Monday, September 30, President Goodluck Jonathan handed over share certificates and licences in Abuja to representatives of the local investors and their foreign partners who took over the ownership of 15-state-owned electricity companies. It was the climax of a $2.5 billion privatisation process involving the transfer to the new owners of 10 distribution companies (DISCOs) and five generating companies (GENCOs). The president sounded a very optimistic note, saying: “To the Nigerian people, who have demonstrated such great patience and confidence, putting up often with darkness, noisy power generating sets, the related pollution and the daily disruption in their lives, I say better days are coming.” [1]

The objective of this paper is to present an analytic report on the status of the electricity industry after one year of privatization, and it comprises the following:

  1. To investigate the performance of the industry since privatisation
  2. To explore suggestions for improvement of the industry by the practitioners
  3. To analyse the performance and make recommendations
  4. To make concluding remarks
  1. Performance of the industry

At privatisation, Nigeria had an average generation capacity of about 3,200 MW. This figure shows the very low electricity generation capacity of Nigeria with a population of about 170 million when it is compared with 40,000 MW capacity generation capacity of South Africa which has a population of about 53 million. It has been observed that one year after a reportedly successful privatisation, 30 million households in Nigeria are still without access to electricity and some problems have been observed in various parts of the country [2].

On a brighter note, on August 30, 2014, Professor Chinedu Nebo, the Minister for Power, was quoted as follows: “I would say we rejoice that for the first time in a long time we have been averaging over 4,500 MW when we include nearly 300 MW of spilling reserve which is always put there to make sure that the reliability and stability of the grid is ensured at all time”[3]. In other words, one year after privatisation, the generating capacity has increased to 4,500 MW. The main drawback is that this is not consistent. It is predicated on the availability of natural gas.

This inconsistency and other problems in the industry were discussed at the 4th Annual World stage National Electricity Power Conference held on Thursday, October 23, 2014, at the Lagos Lagoon Restaurant. The conference brought together the main players in the electricity industry and government officers. It provided an opportunity for them to discuss the performance of the industry, one year after privatisation and to suggest solutions to the major problems [2].

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About the Author

o-chima-okereke-bioChima Okereke, PhD, PMP flag-nigeria

Hereford, UK

Dr. O. Chima Okereke, Ph.D., MBA, PMP is the Managing Director and CEO of Total Technology Consultants, Ltd., a project management consulting company working in West Africa and the UK. He is a multidisciplinary project management professional, with over 25 years’ experience in in oil and gas, steel and power generation industries. Before embarking on a career in consulting, he worked for thirteen years in industry rising to the position of a chief engineer with specialisation in industrial controls and instrumentation, electronics, electrical engineering and automation. During those 13 years, he worked on every aspect of projects of new industrial plants including design, construction and installation, commissioning, and engineering operation and maintenance in process industries. Chima sponsored and founded the potential chapter of the Project Management Institute (PMI®) in Port Harcourt, Nigeria, acting as president from 2004 to 2010.

Dr. Okereke has a Bachelor of Science Degree in Electrical Engineering from the University of Lagos, and a PhD and Masters in Business Administration (MBA) degree from the University of Bradford in the UK. He also has a PMP® certification from the Project Management Institute (PMI®) which he passed at first attempt. He has been a registered engineer with COREN in Nigeria since 1983. For many years, Total Technology has been a partner for Oracle Primavera Global Business Unit, a representative in Nigeria of Oracle University for training in Primavera project management courses, and a Gold Level member of Oracle Partner Network (OPN). In the UK, the company is also a member of the Herefordshire and Worcestershire Chamber of Commerce. He is a registered consultant with several UN agencies. More information can be found at http://www.totaltechnologyconsultants.org/.

Chima is the publisher of Project Management Business Digest, a blog aimed at helping organizations use project management for business success. Dr. Okereke is also an international advisor for PM World. He can be contacted at [email protected]  or [email protected].