Project Case Study
Supporting the privatisation and regulatory reform of the Nigerian power sector
Addressing the obstacle that inadequate power supply presents to Nigerian businesses
Nigeria, a country of 170 million people, produces less than one tenth as much grid electricity as South Africa. This has both humanitarian and economic consequences, as investment stalls in a country where according to the World Bank, more than 80% of the population live on less than $2 per day. Primary school enrolment has fallen in the past decade. Life expectancy, at 52 years, is below the average for Africa, and the economy has failed to diversify away from oil exports.
The Department for International Development’s NIAF project, which we implement, has been providing technical, organisational, financial and legal assistance to support the transformation of the electricity sector since 2007. By building close relationships with key institutions such as the Ministry of Power, the Bureau of Public Enterprises, the Transmission Company of Nigeria and the Nigerian Electricity Regulatory Commission, NIAF has been able target its interventions to achieve maximum impact.
In 2013 NIAF was given a seat on the board of the Presidential Task Force in recognition for its central role in the sector. Specific areas of involvement have included: supporting the privatisation of distribution and generation companies, encouraging investment by independent power producers, establishing a competitive electricity market, and introducing a new tariff structure.
Many challenges still remain for the sector but the outlook is much more positive than in 2007. After decades of neglect generation and distribution companies are now under new private management and ownership. The first independent power producers in Nigeria are under construction, and power output has risen from less than 20,000GWh in 2008 to approximately 30,000GWh in 2013. Such improvements represent significant gains in the electricity sector, which can only help attract investment and help to bring the Nigerian people out of poverty.
NIAF won the British Expertise Development Project of the Year Award in 2011.
"I was in Nigeria last week, and as I saw for myself - sometimes in the dark - power cuts are a huge obstacle to business, to creating jobs and raising incomes. Higher economic growth will contribute to lifting over 100 million people out of extreme poverty in Nigeria. I was very pleased to see that the government is making progress, and that the UK is able to help. [...] This award is recognition of the role played by our programme, implemented by Adam Smith International."
Stephen O'Brien MP, Parliamentary Under Secretary of State for International Development, at the British Expertise Awards 2011