Why privatising NEPA did not work
Why privatising NEPA did not work. Source: Stears Business

Privatising the power sector wasn’t a bad idea; the process was just flawed.

It’s been nearly eight years since the government privatised electricity distribution and generation companies. Over this period, there have been calls and arguments for ownership to be handed back to the government.

If you live in Nigeria, you can understand the rationale. Privatisation was supposed to fix the electricity sector’s problems, but they’ve stayed the same and, in some ways, even gotten worse. Does that mean it's time to go back to government ownership? Not quite.

As you will see in my analysis, the argument isn’t as simple as privatisation vs non-privatisation.
 

Some takeaways:
 

  • Even though older Nigerians like to romanticise the good old days, the power sector before privatisation was characterised by high losses and frequent power cuts.

  • Not much has changed since then under privatisation. But privatisation was a good policy by the government; the problem was faulty implementation from inaccurate data collection to selecting incompetent investors.

  • We still have a chance to change the narrative in the power sector, but we will need to restart the process with new investors.

 

Older Nigerians love to reminisce about the good old days when there was better electricity, and the naira was worth more than the dollar. The issue with these nostalgic thoughts is that they tend to ignore reality. The $1 = ₦1 fallacy ignores the fact that Nigeria’s highly demanded non-oil exports in the past became more expensive and reduced demand for Nigerian products worldwide. In a similar way, the days of the National Electric Power Authority (NEPA) were characterised by debt and losses. But, many Nigerians don't seem to remember this part.

You could argue that things were better if you define a functioning power sector as keeping the lights

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Noelle Okwedy

Noelle Okwedy

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