A Critique of the Risk Management Strategy in a major Government Programme in a Developing Economy – The Nigerian Electricity Privatisation Programme


By O. Chima Okereke, PhD

Port Harcourt, Nigeria

Worchestershire, UK

1. Introduction

In discussing risk management in a national government organisation, we could take a cue from enterprise risk management.  From this platform, we may extrapolate our discussions to a nation-wide organisation since the enterprise in this case has a geography which embraces the whole nation. This article should touch on the following topics:

  • Starting from considering an effective enterprise risk management strategy, we examine the necessity for an effective national risk management in a government organisation in a developing economy, with our focus on Nigeria.
  • Necessity for the electricity privatisation programme in Nigeria; what are the challenges and envisaged risks?  What could be the practical consequences of failure to install an effective risk management strategy?
  • An example of risk management strategy in large government establishment in a developed nation.
  • Recommendations on how to achieve an effective national risk management strategy.
  • Concluding remarks

2. Enterprise to National Risk Management Strategy

Enterprise Risk Management (ERM) provides a framework that enables an organisation to understand and respond to its business uncertainties and opportunities. ERM enhances organizational resilience by improving decision making, strengthening governance and supporting a risk intelligent culture. Enterprise risk management enables the systematic identification, balancing and controlling of portfolio of business risks, and the alignment of an organisation’s risk profile with its risk appetite. Executives must first define their organization’s risk appetite: that is the degree of uncertainty they are willing to accept if a project falters or fails, and how much of their investment they can afford to lose if the worst-case scenario occurs.  In the same vein, national risk management for a national government organisation should facilitate its understanding and response to the uncertainties and opportunities it has to grapple with in its operations. The proactive study, planning and implementation of an effective national risk management strategy is intrinsically tied to success in delivery of projects by a large government organisation operating in the risk-prone environment of a developing economy such as Nigeria.

A national risk management strategy should include identifying sources of risks, categorising and analysing the risks, evaluating the risks, and installing effective ongoing procedures for managing and controlling the risks. The procedures and techniques used to manage risks will vary depending upon the nature of the risks and level at which they are being addressed. As a result, general risk solutions can rarely be applied. The recommended approach should be to understand the specific issues impacting on the organisation, then to design bespoke solutions to address the hierarchy of risks [1].

We shall explore this approach as it leads to the robust management of risks throughout all phases of an organisation’s activities.  In effect, for a start, we shall consider the problems of electricity supply and the inherent risks in Nigeria. It is expected that these should present a good business case for the privatisation programme.


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About the Author 

flag-nigeriao-chima-okereke-bioO. Chima Okereke, PhD, PMP 

Port Harcourt, Nigeria 

Worchestershire, UK 

Dr. O. Chima Okereke, Ph.D., MBA, PMP is the Managing Director of Total Technology Consultants, Ltd., based in Port Harcourt, Nigeria and in the UK.  He is an experienced project management consultant. He was previously a chief engineer in Delta Steel Company in Aladja; a project engineer/technical trainer  for Shell Petroleum Development Company in Warri; and Principal Engineer and Section Head for Instrumentation & Control in the National Electric Power Authority  Thermal Power Station, Sapele.  Chima sponsored and founded the potential chapter of the Project Management Institute (PMI®) in Port Harcourt, acting as president from 2003 to 2010.  Dr. Okereke has a Bachelor of Science Degree in Electrical Engineering from the University of Lagos, and a Ph.D. degree, 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)®.  With over 25 years of experience in industrial operations and project management, he has been a registered engineer with COREN in Nigeria since 1983.  Total Technology is 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.

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 and can be contacted at [email protected] and [email protected].