Premium Essay

Power Sector Reform and Nigeria Development

In: Social Issues

Submitted By gentlesammyo
Words 4096
Pages 17
The Effect of Nigeria Power Sector Reform on Private Sector Investment
ONOWA SIMON OWOICHO

BENUE STATE UNIVERSITY, MAKURDI

Abstract Electricity generation, transmission, and distribution are a ubiquitous and integral part of any modern economy. Aside from providing households with all the conveniences of electric power, a modern and reliable electricity sector contributes to efficient overall economic production and plays an important role in determining Nigeria’s competitive advantage. But in addition to its role of providing a source of energy, the electricity sector also contributes to lifting overall Nigerian economic activity and employment through its capital investments in electricity infrastructure. This report assesses the economic impact of Nigerian power sector reform on private sector investment. The methodology used allowed us to calculate economic multipliers—rules of thumb that link new investment in the sector to overall economic activity. The economic multipliers are valuable for planning because they link each dollar of additional investment by the industry to a given dollar value of overall economic output, job creation, and tax revenues. Moreover, this report links the occupational requirements of these increases to capital spending—highlighting the number of workers and skills to put in place future electricity generation, transmission, and distribution capacity.
1

Introduction
The availability of reliable Electric Power to the homes and businesses of our citizens has been one item in our national life that we have approached with so Much hope and yet experienced so much frustration over the past decades. Various regimes, in the distant past, paid little attention to the sector but in the recent decades, subsequent regimes have put in billions of naira to reverse the neglect and mismanagement which has characterised the sector. The...

Similar Documents

Premium Essay

The World

...ELECTRICITY IN NIGERIA The problem is not new. Nigeria's power supply has been stagnant for 30 years. During the tumultuous 1990s there was no investment despite surging demand. Since then, generation capacity has risen by half but distribution is so dysfunctional that actual supply has remained flat. One result is a laughably small manufacturing sector, about 4% of GDP. There have been reform attempts in the past. The Power Holding Company of Nigeria (PHCN), the monopoly supplier, is known to consumers as Please Have Candle Nearby. Five years ago it replaced the National Electric Power Authority (NEPA), nicknamed Never Expect Power Again. Mischarging and other sins continued. “I just got a bill for the last four months but had no lights for three,” says a doctor 20 miles (32km) outside the capital, Abuja. To survive, many Nigerians have their own power plants, creating the world's highest concentration of small-scale generators. Two-thirds of all electricity is produced in basements and backyards, at a cost of $13 billion a year. Generator merchants say the government is their best client. Some have set up steel plants to keep up with demand. One has 3,000 workers assembling the grunting machines. All this could change if the privatisation scheme succeeds. It aims to raise $3.5 billion a year and boost the power supply 13-fold over a decade. The government is offering to guarantee some bank loans and may cap the interest at 7%. At a recent conference in Abuja Mr Jonathan......

Words: 2177 - Pages: 9

Premium Essay

New Growth Theory

...European Union Nigerian Energy Support Programme (NESP) The Nigerian Energy Sector An Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification 2nd Edition, June 2015 Implemented by 2 Acknowledgements This report on the Nigerian energy sector was compiled as part of the Nigerian Energy Support Programme (NESP). NESP is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and funded by the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ). The authors would like to thank the GIZ Nigeria team for having entrusted this highly relevant subject to GOPA-­ International Energy Consultants GmbH, and for their extensive and dedicated inputs and guidance provided during implementation. The authors express their gratitude to all project partners who provided particularly valuable and interesting insights into ongoing activities during the course of the project. It was a real pleasure and a great help to exchange ideas and learn from highly experienced management and staff and committed representatives of this programme. How to Read Citations Bibliography is cited by [Author; Year]. Where no author could be identified, we used the name of the institution. The Bibliography is listed in Chapter 10. Websites (internet links) are cited with a consecutive numbering system [1], [2], etc. The Websites are listed in Chapter 11. 3 Imprint Published by: Deutsche......

Words: 64608 - Pages: 259

Free Essay

Nigerian Civil Service

...INTRODUCTION Nigeria, officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast in the south lies on the Gulf of Guinea on the Atlantic Ocean. The three largest and most influential ethnic groups in Nigeria are the Hausa, Igbo and Yoruba. In terms of religion Nigeria is roughly split half and half between Muslims and Christians with a very small minority who practice traditional religion. The people of Nigeria have an extensive history. Archaeological evidence shows that human habitation of the area dates back to at least 9000 BCE. The name Nigeria was taken from the Niger River running through the country. This name was coined by Flora Shaw, the future wife of Baron Lugard, a British colonial administrator, in the late 19th century. Since 2002 there has been a spate of clashes in the north of the country between government forces and the Boko Haram militant group which seeks to establish Sharia law. Nigeria is the most populous country in Africa, the seventh most populous country in the world, and the most populous country in the world in which the majority of the population is black. It is listed among the "Next Eleven" economies, and is a member of the Commonwealth of Nations. On October 1, 1960, Nigeria gained its......

Words: 4248 - Pages: 17

Free Essay

Corruption

...omKennesaw State University DigitalCommons@Kennesaw State University Dissertations, Theses and Capstone Projects 4-1-2013 A Case Study of Corruption and Public Accountability in Nigeria Chinelo Okekeocha Kennesaw State University Follow this and additional works at: http://digitalcommons.kennesaw.edu/etd Part of the Public Administration Commons Recommended Citation Okekeocha, Chinelo, "A Case Study of Corruption and Public Accountability in Nigeria" (2013). Dissertations, Theses and Capstone Projects. Paper 566. This Thesis is brought to you for free and open access by DigitalCommons@Kennesaw State University. It has been accepted for inclusion in Dissertations, Theses and Capstone Projects by an authorized administrator of DigitalCommons@Kennesaw State University. A Case Study of Corruption and Public Accountability in Nigeria Chinelo Okekeocha A Practicum Paper Submitted in Partial Fulfillment of the Requirements for the Master of Public Administration Kennesaw State University May 2013 A Case Study of Corruption and Public Accountability in Nigeria Executive Summary In 2011, Nigeria was ranked 143th out of 182 countries surveyed by the Transparency International in its corruption perception index indicating the level of corruption in the country as compared to other countries. Although this came as an improvement from the previous years, it did not result from an improved system of governance, rather it was due to an......

Words: 13127 - Pages: 53

Premium Essay

Capital Market and Manufacturing Sector Financing in Nigeria

...CAPITAL MARKET AND MANUFACTURING SECTOR FINANCING IN NIGERIA Ewa, Efa Okoi Department of Business Management University of Calabar, Nigeria +234-8037-796-936 efa_ewa@yahoo.com Abstract This paper discusses mainly the role of the capital market in financing the manufacturing sector in Nigeria. The discussion centered on the state of the Nigerian manufacturers, background, challenges and the imperatives of the capital market meeting the financial and investment challenges of the sector in the face of recent economic reforms and increasing competition posed by globalization. The study sought to determine the extent to which the Nigerian capital market contributes to the development of manufacturing industries. An attempt was made to highlight government intervention in funding the sector and the reality of the country’s manufacturing sector. The study revealed that the Nigerian manufacturing sector has been on the decline owing mainly to government reliance on the oil industry, the decaying infrastructural facilities in the country and non-access to investment fund by local manufacturers. The study concluded that the capital market, despite the problems and challenges it may faced, is a veritable tool in the growth and development drive of the country’s manufacturing sector. 1. Introduction The manufacturing sectors in any country of world rely on medium and long-term fund to carry out its productive activities. Equity capital alone is never adequate and......

Words: 5321 - Pages: 22

Premium Essay

The Effect of Globalisation on the Nigerian Economy

... INTRODUCTION An economy refers to the full network of distributers, producers and consumers of goods and services within local, regional or national communities. Globalization refers to the process of the increase in economic, political, social and ethnic relations across international boundaries. Globalization is aimed primarily at the constant theories that shape the political and socioeconomic development of nations across the globe. It looks at the continued increase in the collapse of trade barriers and increased world trade and integration; globalization can be seen as an extension that regularly restructures the way nations interact amongst themselves by breaking down their individual barriers in areas of culture, commerce, finance, communication, and several other fields of struggle. This on-going change can be seen from its thrust of legitimate governance, liberal democracy, gender equality, environmental stability, and free market economy among other aggregate values for people of the member states. Globalization creates a compelling inclination for the systematic development in the modern world today as a result of the problems it poses to the states in the form of challenges. This essay looks at the definition of globalisation, the concept of the process of globalization, and how it affects the Nigerian economy. OKECHUKWU DIYOKE DIOKC81 | 22/08/11 2 THE CONCEPT OF GLOBALISATION Many theories have been put forward as to the explanation of......

Words: 3758 - Pages: 16

Premium Essay

Mmonetary and Fiscal Policy in Support of Inclusive Growth

...The Monetary & Fiscal Policies in Support of Economic Transformation and Inclusive Growth in Nigeria Abubakar M. G 1. Department of Economics, Umaru Musa Yar’adua University, Katsina 2. Central Bank of Nigeria, Katsina. Phone: 08032838408 and 08023563415 Central BanEmail: gazayks@yahoo.com and magarzali@cenbank.org 1.1 Abstract There is a plethora of literature on Monetary/Fiscal Policies - economic development nexus. This has prompted renewed interest in inclusive Growth. This probably explains why governments and policy makers are now tinkering with ways to situate and develop a permanent solution to the widened gap in broad range of financial services which of course are necessary for inclusive growth. Financial inclusion otherwise known as “inclusive growth” can be seen as the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society.  Due to incessant desire to incorporate disadvantaged segment of the society into financial net, both monetary and fiscal authorities have embarked upon a robust strategy toward addressing the gap. The former (monetary authority) had set out a visible road map necessary for direct effect on savings, investment, rate of interest, pension and general form of financial services. While the later (fiscal authority) have been making a remarkable effort toward achieving sustained economic growth especially in rural areas, this would translate accelerated and friendly society......

Words: 2761 - Pages: 12

Premium Essay

Capitalization and Consolidation

...The sector was characterized by small sized banks with high overheads; low capital base averaging less than $10million; heavy reliance on government patronage and loss making. Nigeria’s banking sector was still characterized by a high degree of fragmentation and low levels of financial intermediation up until 2004. In the light of the foregoing, banks are compelled by the Central Bank of Nigeria to raise their capital base from N2 billion to 25 billion on or before 31st December, 2005. Most banks resorted to mergers and acquisition as a survival strategy, which saw a reduction in the number of banks from 89 to 25. This study contributes to the concept of bank recapitalization by critically examining the impact of bank consolidation on the performance of banks using a sample of randomly selected Nigerian banks. It is the intention of the researcher to give more validity to empirical evidence that have been obtained by previous researchers on the subject matter. Relevance of the study The earliest set of studies evaluates the effects of bank consolidation through mergers and acquisitions comparing pre- and post- merger performance by measuring performance using either accounting or productive efficiency indicators.The results from both indicators have varied and at sometimes been contradictory. This can be explained by performance-influencing variables like size, brand name, diversification and cost reduction, there is still no reconciliation between these indicators. I......

Words: 6693 - Pages: 27

Premium Essay

Historically the State Has Been the Main Engine of Development

...The concept of the state in relation to development has been analyzed under different theories. First of all the state refers to a modern and western way to operate under a unify authority in each field in order to achieve the interest of the whole society. The state’s principal charge was to accelerate industrialization, modernizing agriculture, providing infrastructure that are necessary for the urbanization and improve living condition (i.e. health, education, welfare). Growth-oriented states pursued their commitment by developing trade and industry with well-designed, consistent, and thoroughly implemented policies. Specific policy measures varied but were generally aimed at easing supply-and-demand constraints faced by private entrepreneurs. Some of these interventions were direct, and others, indirect. On the supply side, for example, the capitalist states helped facilitate the availability of capital, labor, technology, and even entrepreneurship. Thus supply of capital was boosted at times by superior tax collection and public investment, at other times by using publicly controlled banks to direct credit to preferred private firms and sectors, and at yet other times by allowing inflation to shift resources from both agriculture and urban labor to private industrialists. In this essay there will be two ideal-typical historical patterns of how state authority is organized and used in the developing world: neo-patrimonial states and developmental state. Firstly the......

Words: 1287 - Pages: 6

Premium Essay

Dimmed Opportunities in Nigeria's Power Sector:: Will Foreign Players See the Light?

...DIMMED OPPORTUNITIES IN THE NIGERIAN POWER SECTOR: WILL FOREIGN PLAYERS SEE THE LIGHT? Given the World Bank’s declaration that Nigeria needs an estimated $16 billion to cover its energy needs, foreign participation as lenders or project sponsors of the newly reformed electric power sector is crucial for its development. Few local companies can claim to have technological knowledge and competence in any of the facets within the power sector. With clear advantages in the labour force and green field projects as part of the Federal Governments initiative, a closer inspection is needed to fully determine the setbacks and the efforts to attract willing international players in the local electric power market. Companies that commit to long term investments in Nigeria’s power sector may very well benefit from laws, regulations and policies implemented to drive the sector forward. Notwithstanding the practical and legal challenges that are symptomatic of pioneer privatization mechanisms in developing countries, proponents of Nigeria’s reform in the electricity sector have been able to identify clear advantages for long-term investors. The advantages for investors are mapped out in numerous provisions in the Electric Power Sector Reform Act Cap (“The Act”) while other benefits can be found in various tax, environment, finance and customs laws in Nigeria. Committed parties would generally fall into two categories: the direct participants (foreign power companies, their suppliers and......

Words: 5035 - Pages: 21

Premium Essay

Comparing and Contrasting Management in the Public and Private Sectors in Nigeria

...Comparing and Contrasting Management in the Public and Private Sectors in Nigeria Introduction The term ‘management’ is very ambiguous; it is difficult to give a statement that describes the exact meaning of the word. The goal of this paper is to compare and contrast management in the public and private sectors in Nigeria. Instead of discussing only the differences between public and private organizations, this paper discusses the differences in managerial roles in both sectors. We begin by looking at some assorted opinions, after which we discuss the general description of the public and private sectors and the state of these sectors in Nigeria today. We will then discuss similarities between public and private management in Nigeria and three possible arguments that can be used to support the differences between public sector and private sector management. This paper explains the difference in the mangers’ job context; purposes and goals, accountability and autonomy. Finally, we will give a brief summary of the paper in the conclusion. Some Opinions Since the 1800’s, different scholars have given different interpretations of management from their points of view. Mary Parker Follett, an American social worker and management consultant gave a popular definition. She says, “management is the art of getting things done through people” (Tripathi, 2008). George R. Terry, the 16th President of the Academy of Management gave a somewhat more elaborate definition. He......

Words: 2576 - Pages: 11

Free Essay

Investment Opportunities and Roles of Public Relations and Advertising in Investment Promotion in Nigeria

...INVESTMENT PROMOTION IN NIGERIA By Ciboh Comfort Msughter DEPARTMENT OF MASS COMMUNICATION FACULTY OF SOCIAL SCIENCES BENUE STATE UNIVERSITY MAKURDI NIGERIA Nigeria has attractive environment for investment because Nigeria is a large market and the second largest economy in the continent. Investment in real estate The high demand for houses and limited availability of it has led to exorbitant cost of land and houses. This has made real estate investment opportunity more lucrative for investors. Agriculture  The agricultural potential of Nigeria is barely being tapped and investment opportunities exist in seed production and distribution, fertilizer production and distribution, machinery and equipment, livestock and poultry, food processing Solid minerals Opportunities exist for the exploitation and export of natural gas, bitumen, limestone, coal, tin, columbite, gold, silver, lead-zinc, gypsum, glass sands, clays, asbestos, graphite, and iron ore, among others Power sector The power sector reform has moved the sector from the position of government ownership/management to a private-sector driven. Investment opportunities exist for power generation (gas, hydro, coal, wind, solar, etc) for local and foreign investors to build, own and operate and/or transfer independent electricity. Oil and gas sector  Foreign and domestic investors are being encouraged through improved fiscal incentives in the Nigeria oil and gas sector to invest in the......

Words: 576 - Pages: 3

Premium Essay

The Nigerian and Greek Debt Crisis

...The debt crisis of Nigeria and Greece Introduction National debt is a problem that can inflict any country including the developed countries. Almost all countries go into budget deficit one way or the other and end up borrowing money. The most direct effect of the government debt is to place a burden on future generations of taxpayers. When these debts and accumulated interest come due, future taxpayers will face a difficult choice. Inheriting such a large debt cannot help but lower the living standard of future generations. In the 1960s and 1970 some developing countries were encouraged to borrow money to service old debts and also to finance development projects in their country like infrastructure. This has been necessitated by the availability of huge oil earnings deposited by OPEC member countries and were eager to lend at very low rates. Moreover, it is misleading to view the effects of government debt in isolation. Government debt can be divided into two categories namely domestic debt and international debt. The International debt is facilitated by the formation of such institutions like the International Monetary Funds (IMF) the International Bank for Construction and Development (World Bank). Governments borrow money from the private sector and foreign governments if they can't pay for all their spending with taxes and government revenues. A government will issue bonds at bond auctions every so often and market participants will come in and bid for them. Market......

Words: 5178 - Pages: 21

Premium Essay

Entrepreneurial Development Studies

...resources”. Discuss Evaluate the impact of SEEDS in the implementation of MDGs in Nigeria Analyze the impact of Globalization on the economic Development of Nigeria The incidence of the Niger Delta militants groups and its consequences to entrepreneurial development in Nigeria Evaluate the power, composition and functions of NDDC Assess the impact of the multinationals in the Nigerian Economy with regard to FDI and FPI Youths and entrepreneurial Development: Realty or Myth Evaluate the implementation of MDGs and the realization of the objectives by 2015. The effect of entrepreneurial development on poverty reduction The impact of privatization on Nigerian economic development and growth. Evaluate the impact of different reforms in the Nigerian reforms on the Nigeria economy. Women entrepreneurial development (WED) and poverty: what a paradox The impact of women entrepreneurs in SMEs on poverty alleviation Evaluate the cultural factors in Nigeria and entrepreneurial development. Evaluate the financial factors in Nigeria and entrepreneurial development. Evaluate the environmental factors in Nigeria and entrepreneurial development. Gender, entrepreneurship and globalization: Barriers and prospects. Intrapreneurship and achievement of organizational objectives Evaluate intrapreneurship as a motivational concept in an organization Assess the impact of entrepreneurship and youth development. Assess the functions and activities of Nigerian Opportunities......

Words: 1100 - Pages: 5

Free Essay

Epileptic Power Supply in Nigeria

...Nigeria’s Epileptic Power Sector: Matters Arising by: Joseph Umoh It is a known fact that industrialization and availability of social amenities is closely used as a measure of development, thus the classification of some nations as developed, developing and under developed. It is also common knowledge that no nation can be classified as developed without adequate supply of infrastructural facilities aided by adequate supply of electricity and this is accountable for our slow pace of development in Nigeria with our not only poor and inadequate but epileptic power supply that is so common to developing nations like Nigeria, an assumed Giant of Africa. The epileptic nature of power supply in Nigeria is to say the least, neither accidental nor inexplicable neither without solution. This age long issue of power supply has witnessed massive transformations which were designed to boost the power generation in the country and improve the supply of electricity, but the end result of those transforms seem to be mere change of name from its inception name of Electricity Corporation of Nigeria (ECN) to National Electric Power Authority (NEPA) and now to its present name – Power Holding Company of Nigeria (PHCN). These various changes were perhaps measures implemented by various political and ruling class’ to supposedly ameliorate or ‘cure’ the epileptic nature of electricity situation in spite of the huge financial commitments on the part of successive governments into the......

Words: 838 - Pages: 4