Nigeria’s electric power sector requires substantial reform if the country’s
economic development and poverty alleviation programme is to be realized.
Currently, the country faces serious energy crisis due to declining electricity
generation from domestic power plants which are basically dilapidated, obsolete,
and in an appalling state of disrepair, reflecting the poor maintenance culture in
the country and gross inefficiency of the public utility provider. The government
encouraged the private sectors to invest into the electricity industry so that, the
monopoly created by the NEPA could be demolished and at the same time, some
independent power producers could enter into the electricity sector. This
understanding is behind the introduction of the Power Sector Reform Act 2005
which was recently initiated by the Nigerian government with the goal of
privatizing the National Electric Power monopoly, NEPA.
Age long principles of democratic governance, of sovereignty belonging to the
people, the people’s entitlement to participate in their governance and most
importantly from the point of view of the topic of this paper, that security and the
welfare of the people are the principal aim of government, form the theme of the
provisions of section 13 of the 1999 Constitution.
In Section 16 of the same Constitution, the second aim of government of
ensuring the welfare of the citizens seems to be pointedly enjoined as the state is
mandated therein to harness national resources and promote national prosperity
and an efficient, dynamic and self-reliant economy which it shall control to secure
maximum welfare, freedom and happiness of the citizens and without truncating
the rights of individuals to participate in the major economic areas.
Building on the analysis of the introduction of the Reform Act, this long essay
intends to present the central issues that led to d enactment of the Reform Act, the
key objectives of the Reform Act. This includes the legal reforms, the Act, the
essential sections, licenses and tariffs, tariff regulation, consumer’s protection, the
impact of the reform, the shortcomings of the reform, the innovations and the
consequence of the reform.
This steady decline in the Nigeria Electric Power Sector has led to a near
complete failure of the system at the onset of the present civilian regime in 1999.
The Reform program also led to the establishment of the Nigerian Electricity
Regulatory Commission in 2005 which was made responsible for the regulation
of tariffs. This long essay will therefore also examine the role of NERC as a
sector regulatorS and its impact so far in establishing a licensing regime that will
be attractive to potential investors.
As Nigeria implements its national utility privatization program, it is hoped that
this legal review will benefit policy makers and emerging managers and providers
of electric service in the country.