The Nigerian government is privatizing the electricity business, hoping the move will quadruple electrical output over the next few years and usher in a new era of security and prosperity. Critics say corruption, cronyism, and scared investors could undermine the project.
Lack of power impacts almost every aspect of life in Nigeria. Power shortages create insecurity, health problems, unemployment and crush attempts at development and economic growth. Most people have no electricity and those who do have it, have it sporadically, often for a few hours a day.
When told the government is working on a plan that would quadruple available electricity, Abayomi and David, both young Nigerian men, laugh. “I’m just keeping my fingers crossed you know, I’m just waiting," said Abayomi. “We are hoping it will come to a reality. We are hoping it will come to a reality, but you say, four times better than now? We hope so," David added. "We pray so.”
The chairman of the Nigerian Electricity Regulatory Committee, Sam Amadi, says energy development has been neglected for decades but that is about to change.
He says Nigeria currently has an installed capacity of 3,800 megawatts, but almost a fourth of that energy often gets lost because of dilapidated transmission lines. Amadi says in the next three or four years the government plans to privatize the industry, opening the door for both foreign and local businesses to thrive.
"Given Nigeria’s level of industrialization, Nigeria would need at least about 22 to 25,000 megawatts to sustain a middle level industrial operation as well as homes, Amadi explained. "So the demand-supply gap is huge."
Amadi says 50 private companies have already been licensed to produce power, and the government is currently courting new investors.
The director general of the Energy Commission of Nigeria, Abubakar Sani Sambo, says if the privatization plan works, Nigeria’s reputation for under-development could soon become a thing of the past.
"The entire country will improve right from the industry sector, to the household sector to the services sector," Sambo stated.
Sambo says the process may move slower than planned because investors are being scared off by the continuing bombings and kidnappings in Nigeria. Security threats, he adds, are partially due to the lack of electricity that cripples the economy and leaves many young men out of work.
Member of parliament Yakubu Umaru Barde says the government needs to provide for all current electricity sector employees before privatization can possibly work. He says many employees at the national power company were hired for political reasons, and as many as 40 percent may lose their jobs.
“What’s happening today is that there are saboteurs even within the power-holding company. They don’t want to privatize," Barde said. "And I think it’s not good for us. But the government can address that.”
Barde says if fired power-sector employees could be guaranteed compensation and pensions, the transition to private energy companies could be successful in the long run. But, he says, sacrifices will have to be made along the way.
Critics say even cautious optimism is unrealistic when it comes to power in Nigeria. Shehu Sani, president of the Civil Rights Congress, says President Goodluck Jonathan’s current electricity plan, which includes a recent $10 billion deal with General Electric, will adds to the billions of dollars Nigeria has spent on improving electrical output since it transitioned to civilian rule in 1999. He says most of the money in the past was lost to corruption.
"In most cases most of the money that is allocated for electricity ends up in private pockets," Sani noted. "It ends up with companies set up by people in government for their own personal benefit."
Sani says back in 1999, Nigeria ran on 3,000 megawatts as ambitious new energy plans were announced. Since then, he says, there has not been significant expansion.