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Power Sector Reform Policy And Economic Development In Nigeria A Case Study Of T by sprojectng: 11:45am On May 13, 2019

Title page

Approval page




Table of content



1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study




3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis



4.1 Introductions

4.2 Data analysis


5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation















Constant power supply is the hallmark of a developed economy. Any nation whose energy need is epileptic in supply, prolongs her development and risks losing potential investors. Nigeria, a country of over 120 million people, has for the past 33 years of establishment of the National Electric Power Authority (NEPA) agency empowered with the electricity generation, transmission and distribution, witnessed frequent and persistent outages. Presently, the federal government has embarked on power sector reforms with the intention of improving the above unpalatable scenario and in turn reduce the scope of monopoly control of the nation’s power industry. This study therefore looks at the overall power sector reforms as well as evaluates the opportunities and challenges there from; while advocating introduction of a demand side management (DSM) electricity distribution companies of Nigeria  (EDCN) as a way of reducing energy consumption among customers with emphasis on energy conservation, energy efficiency and load management.



                                        CHAPTER ONE


1.1 Background of the study

For over two decades, Nigeria has experienced problem in the area of electricity generation, transmission and distribution. The extent of this is underlined by the fact that Nigeria is the largest purchaser of standby electricity generating plants in the world. (Braimoh and Okedeyi 2010) A country where importing of electricity generators has become a traditional norm in the society shows the level of problem the Nigerian Government is facing. Recent reports show that highly placed political figures are behind the importation of electricity generators to Nigeria.  The Nigerian power sector is primarily responsible for generating electricity for the country’s industrial activities to boost economic development. Right from the colonial era, the sector has remained strategically important and has continued to attract massive financial investments from government. The First National Development Plan considered electricity as a priority with second ranking in allocation of 14.8% after 21.7% for transport. Regrettably, the sector is characterised by crisis of ineptitude and perceptional errors of the monopolistic government provider as social- rather than economicdriven enterprise. The problems orchestrated by epileptic power supply to industrialists and multinational corporations, for example, have forced many companies out from Nigeria to nearby Ghana, where power is more stable (Ezeani, 2008). Thus, many policy steps have been designed and implemented to reposition Nigeria’s energy sector but it has remained ailing, attracting national and international concern and support. Nigeria’s National Assembly, in an effort to contribute in revitalising the sector, has not only carried out investigations on the sector but also tried to articulate power sector reform and ways of energizing the sector into efficient and competitive electricity industry, which provides a continuous supply of electricity to consumers at an affordable price (Federal Ministry of Information, n.d.). Thus, the National Assembly sponsored a bill mandating oil companies registered in Nigeria to pay 2% of their profit for improving energy sector in the country (Salem, 2010). The sector draws sympathy and assistance also from many international bodies like the World Bank and African Development Bank. All the efforts to revitalise the sector seemed to have gone into drain-pipes such that the government in 2000 formulated and approved a power policy in 2001 to kick-start the reform. Thus, the Electric Power Sector Reform Bill was passed in February 2005 and signed into law as the Electric Power Sector Reform Act (EPSRA) by President Obasanjo on 11 March 2005. The EPSRA repealed the National Electric Power Authority (NEPA) and the Electricity Act. It provided the legal backing for the reform process. These efforts worsened the collective anxiety of many informed Nigerians as over $10bn was spent by the regime without commensurate result (Akomolafe, 2013). The Nigerian Television Authority (NTA) recently reported that the Federal Government plans to eradicate and minimize the importation of generators. This potential eradication is tied to improving the current energy sector, although we can point out that the Government is more concerned with the effect of pollution and other hazardous harm the generators cause to the society. However, eradicating or minimizing generator importation is mainly not the solution to Nigeria’s electricity problem. The Federal Government of Nigeria should gather resources and focus more on tackling the problem that leads to the importation of generators, which is POWER SUPPLY. In addition, the Federal Government of Nigeria should subsidies other alternative energy sources such as SOLAR, WIND POWER, HYDRO POWER, which can easily address pollution concerns. The key point is focusing on solution, not fringe issues that will not benefit the Nigerian society. Political instability has also hindered any possibility of progression in the energy sector, with the sacking of numerous high profile figures that have the interest of the Nigerian masses at heart.  The history of electricity production in Nigeria dates back to 1896 when electricity was first produced in Nigeria, fifteen years after its introduction in England (Niger Power Review, 1985). The total capacity of the generators used then was 60KW. In other words, the maximum demand in 1896 was less than 60 kW. In 1946, the Nigerian government electricity undertaking was established under the jurisdiction of the public works department (PWD) to take over the responsibility of electricity supply in Niger Delta. In 1950, a central body was established by the legislative council which transferred electricity supply and development to the care of the central body known as the Electricity Corporation of Nigeria (ECN). Other bodies like Native Authorities and the Nigerian Electricity Supply Company (NESCO) had licenses to produce electricity in some locations in Nigeria. There was another body known as the Niger Dams Authority (NDA), which was established by an act of parliament. The Authority was responsible for the construction and maintenance of dams and other works on the River Niger and elsewhere, generating electricity by means of water power, improving navigation and promoting fish brines and irrigation (Manafa, 1995). The electricity produced by NDA was sold to ECN for distribution and sales at utility voltages. In April 1972, the operation of ECN and NDA were merged in a new organization known as the National Electric Power Authority (NEPA). Since ECN was mainly responsible for distribution and sales and the NDA created to build and run generating stations and transmission lines, the primary reasons for merging the organizations were (Niger Power Review, 1989): It would result in the vesting of the production and the distribution of electricity power supply throughout the country in one organization which would assume responsibility for the financial obligations. The integration of the ECN and NDA should result in the more effective utilization of the human, financial and other resources available to the electricity supply industry throughout the country.


Nigeria is now the largest economy in Africa with a 2013 GDP estimate of US$ 510.0 billion, recently surpassing South Africa after rebasing the GDP calculations. Nigeria’s growth, however, continues to be severely constrained by an insufficient supply of reliable electricity. In a 2009 study, 97% of all Nigeria’s firms experienced, on average, 196 hours of outages per month, which is equivalent to approximately 8 days. As a result, almost all firms and upper income households operate their own generators to mitigate the effects of outages. Nigeria has an installed on-grid generation capacity of 6,800 MW, but only generates a daily average of 3,600 MW due to gas supply constraints and seasonal hydro. In contrast, South Africa–with less than a third of Nigeria’s population of 168.8 million–has an installed generation capacity of more than 40,000 MW or 0.78 kW per capita. It is in view of this that the researcher intend to examine power sector reform policy and economic development in Nigeria with emphasis on Niger Delta.


The main objective of this study is to examine power sector reform and economic development in Nigeria with emphasis on Niger Delta, but to aid the completion of the study, the researcher intend to achieve the following specific objective;

i) To examine the impact of power sector reform on Nigeria economic development in Nigeria
ii) To ascertain the effect of power sector reform on power generation and supply in the Niger Delta region
iii) To examine the role of power sector reform on power supply in the Niger Delta region

iv) To examine the relationship between power sector reform and economic development of Nigeria.

The following research questions were formulated by the researcher to aid the completion of the study

i) Is there any significant relationship between power sector reform policies and Nigeria’s economic development?
ii) Does power sector reform play any role on power supply in the Niger Delta region?
iii) Is there any effect of power sector reform policies on power generation and supply in the Niger Delta region?

iv) Is there any impact of power sector reform policies on Nigeria economic development in Nigeria?

It is believed that at the completion of the study, the findings will be useful to policy makers in the power sector as the study seek to explore the effect of the reform on policy formation and implementation so as to bluster economic growth in the Niger Delta region and Nigeria at large, the study will also be of great importance to the federal ministry of power as the study will aid them in strategizing on the way forward in improving their quality of service in the region. The study will also be of significance to researchers who intend to embark on a study in a similar topic as the findings will serve as a pathfinder to further research. Finally, the study will be of great importance to students, teachers, academia’s and the general public as the study will contribute to the pool of existing literature on the subject matter.


The scope of the study covers power sector reform policy and economic development in Nigeria with emphasis on Niger Delta region of the country, but in the cause of the study there are some factors that limited the scope of the study;

(a)Availability of research material: The research material available to the researcher is insufficient thereby limiting the study.

(b)Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c)Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.


 Power sector

The Electricity sector in Nigeria generates, transmits and distributes megawatts of electric power that is significantly less than what is needed to meet basic household and industrial needs.

Economic development

Economic development is the process by which a nation improves the economic, political, and social well-being of its people. The term has been used frequently by economists, politicians, and others in the 20th and 21st centuries.


Reform means the improvement or amendment of what is wrong, corrupt, unsatisfactory, etc. The use of the word in this way emerges in the late 18th century and is believed to originate from Christopher Wyvill’s Association movement which identified “Parliamentary Reform” as its primary aim


A policy is a deliberate system of principles to guide decisions and achieve rational outcomes. A policy is a statement of intent, and is implemented as a procedure or protocol. Policies are generally adopted by a governance body within an organization.


This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study




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