Nigeria to privatize power sector

ABUJA, Nigeria, Aug. 30 (UPI) -- Nigerian President Goodluck Ebele Jonathan has announced plans to tackle the country's notoriously inefficient and corrupt power sector.

Jonathan provided journalists in Lagos his Power Sector Road Map project, which he stated would both create significant employment while reviving Nigeria's moribund economy.

During his Lagos presentation of his plan Jonathan noted, "We need a revolution in the power sector," adding that the private sector would be crucial in the country's "journey of national transformation," Radio France Internationale reported Friday.

Under Jonathan's proposal, his government will privatize both electrical generating capacities and the national grid's distribution facilities while increasing natural gas deliveries to fuel new plants. If Jonathan's scheme is implemented, six state-owned power generation companies and 11 distribution companies will be offered for sale in one of Africa's biggest privatizations. While the Nigerian government will continue to own the national grid, private companies will be brought in to manage it.

The proposed reforms have already created concerns among state power sector workers, with employees of the state-owned Power Holding Co. of Nigeria calling a one-day strike Wednesday to protest the changes.

Seeking to quell such concerns, Jonathan promised during his presentation that his government would set aside financing both to underwrite wage promises and finance severance packages and pensions when the proposed privatization goes into effect.

The business sector strongly supports Jonathan's proposed reforms, as it is of the opinion that an improved power infrastructure will provide Nigeria with a more productive and competitive economic climate. Lagos-based Opinion Research and & Communications analyst Chuks Osuji remarked that currently government control of major industries is "one of the banes of Nigerian society. That type of entanglement causes a lot of mismanagement and a lot of corruption."

Jonathan's proposals include construction of what he described as "a super transmission network of 7,000 kilovolts, the procurement and design will commence next year," along with an additional 5,000 megawatt generating capacity to the national grid within the next three years from both new and existing independent power plants. The private sector will also be encouraged to invest in expanding and exploiting the country's potential in generating power from hydroelectric, nuclear and coal-fired facilities, especially using indigenous coal reserves in Gombe, Enugu, Kogi and Benue states over the next two years.

Highlighting the current system's inefficiency Jonathan observed that "the sector's challenge to effective electricity delivery in Nigeria include the absence of sustained policies and deliberately deploying long term power development strategy, the absence of and low implementation of reforms to fast track all issues pertaining to the power sector."