Revised Introduction and Table of Contents

Table of contents

1.     Introduction

1.1.Background

1.2.Aims/Objectives

1.3.Methodology Adopted

2.     Literature Review

2.1.Electricity Reform

2.1.1.              Competition

2.1.2.              Regulation

2.1.3.              Government

2.2.Economic Outcome

2.3.Social Outcome

3.     The Nigerian Electricity Sector

3.1.The History of the Power Sector

3.2.The Structure of the Power Sector

3.3.The previous reform done in the Power Sector

3.4.The current state of the Power sector

4.     Electricity Reforms in Other Countries

5.     Possible Solutions to the Power Sector in Nigeria

Conclusion

References and Biblography

Introduction

1.1.     Background

The Country in question is Nigeria, accordingly to the CIA World Factbook, 2011; Nigeria that is a developing country gained its independence in 1960. It is the most populous country in Africa with the population being 155,215,573 (July 2011 est.) with Lagos being the most populous city in Nigeria and Abuja being the Capital. In terms of their government structure, Nigeria is a democratic nation, the constitution used today was adopted on 5^th of May 1999 and it became effective on the 29^th May 1999. Nigeria has been suffering from corruption since the military rule where the mode of transmission of power has been through coup d’état and this has affected so many sectors in Nigeria notably the power sector. The power section in Nigeria has been in a very bad state that has resulted to lack of constant electricity throughout the country. Since the first power outage that occurred in the 1960s, Nigeria has been in the situation of lack of constant electricity. This problem has hindered growth in the country with businesses, offices, industries and even the regular residential consumers resorting to buying fuel-run generator sets that cost a lot to operate. Because of this situation, whatever that is to be made as profit, most of it has gone into the acquisition of electricity through these means and because of this, some industries have not been able to cope and has packed up. The people most affected by this is the people living in rural areas, they how have a mind-set that they have been neglected, they hardly see electricity in their households and most of them are poor and cannot afford generator sets to aid their electricity problems. This is a serious problem in Nigeria and there are so many negativities this problem has brought, as well as the economic loss and social discomfort, there is also the environmental problem. With an average of a generation per house, the carbon emissions from these generators are high with big companies and industries emit more carbon to the atmosphere which in turn cause global warming and with the way the world is today, everybody is worried about the environment as well as trying to promote sustainable development.

There has been a call for electricity reform in Nigeria and in 2005; a kind of reform came about. The then government owned electricity company NEPA was unbundled into 11 generation and 6 distribution companies collectively known as PHCN. This was to enable IPPs in the country and attract investors to the Nigeria Power sector as well as resolve the power problems in the country. This helped a little but, there was little bit more power produced but the problem with PHCN was, it was another monopoly run by the government. After a while, the power situation went back to being the same and in some parts of Nigeria, people there would say, it became worse. With the transition of new governments and the corruption in the country, the population is worried that the power sector will never be reformed, although in recent years and the present administration, there have been signs that the peoples worries can be reduced. There has been a plan for the privatization of PHCN and so far, there have been bids from 331 companies worldwide to come and invest in the electricity sector with the hope of providing an extra 6000 megawatts by 2014 and a total of 40,000 megawatts in 2020 for the vision 2020 dream to compete with world markets.

The intent is highly welcome by the people of Nigeria but the worry still remains, would they achieve their goal of vision 2020? Would they finally finish a project that has been started with the rate of corruption in the country? Even if there is progress, Nigeria has a history of bad maintenance, so, would they change their habits and invest in maintaining equipment? All these questions go on in every Nigerian’s head but still hopes for a better tomorrow. This paper will talk on the electricity reform, relate it to the reforms done in several places in the world, it would discuss the factors involved to achieve this reform and also how to maintain this reform, it would discuss the economic issues on this reform, the parties involved in the reform. The paper would then discuss the present condition in Nigeria and several solutions to this problem.

1.2.     Aims/Objectives

The aim of this paper is to show what electricity reform is, how is can be achieved, the different types of reforms that are in place and the best one that will correct the electricity crisis in Nigeria. Use various countries as examples in how this reform can be achieved. Indicate the benefits of a successful electricity reform and also, outline several solutions to this electric sector in Nigeria

There are several objectives for this paper and they are:

·      Finding different ways to achieve a successful electricity reform

·      Using various countries are baseline in knowing what they went through in their electricity reform

·      Knowing the entire present state of the power section in Nigeria

·      Knowing the people of interest in Nigeria to achieve a successful electricity reform

·      Deciphering the effects of the reform in an economic perspective

·      Researching other ways in which the country can go to achieve the vision 2020 of 40,000 megawatts

1.3.     Methodology to be adopted

This is a research paper; it would not require lab work, just consultation from specified sources as well as extensive research on the topic. For this paper, books would be looked at, journals will be read, research done by others will also be looked at with the date of the research indicated to show the timeline the electric reform has gone over the years. Blogs would be looked at as well as newspapers to see recent developments in the electricity sector. A situation where a person is to be met in order to get more information, an appointment would be booked and there would be a meeting between both parties. Website would be checked and if more information is needed, contact the organization to whom the website belongs to by phone or e-mail. All these are to ensure that the paper is authentic and carries present information and data.