Nigeria’s Energy Sector Privatization: Reforms, Challenges and Prospects

Abstract

The Nigeria's energy sector has undergone series of policy reforms to address the inefficiency and mal-administration that have bedeviled it for several years. The government deregulated electricity supply in 2005 by privatizing and concessioning major national power assets. In addition, the legal frameworks to guide activities in the sector and institutions to manage and regulate the post-privatisation electricity supply industry have been established. This paper gives a historical overview of the Nigeria's electricity supply and observes that challenges still faced by investors in the sector include: gas shortages, insecurity of power assets, high cost of operation, lack of adequate capital for consistent performance and the inactivity of some licensed firms. The study recommends the institution of correct electricity supply tariffs that reflect prevailing market conditions, reduction in the number of unmetered electricity users, diversification of the sources of power generation in the country and sustained investment in transmission infrastructure by the government.