Teaching Comparative

Details on the new Nigerian government and electricity

A few details on the new Nigerian government from The Economist. See also A cabinet in Nigeria

And these questions for your students: Privatization and structural adjustment was designed to promote more investment. Has this happened? What are the political ramifications? Is this a threat to the Nigerian regime? What of national planning? Or regional planning? What about nationalism?

A government, finally

"The Nigerian president, Umaru Yar'Adua, has finally named his new cabinet... The size of the 39-strong cabinet is hardly surprising, given the constitutional requirement that each of the country's 36 states provide at least one minister so as to guarantee fair representation. However, it is hardly an encouraging symbol for a country where bureaucracy is a major obstacle to doing business, and where one of the main stated aims of economic policy is to reduce the size of the federal government.

"Mr Yar'Adua is doubling up on one position, however, in that he will retain overall control of the energy portfolio (although he has named junior ministers in charge of petroleum and gas). This is a crucial ministry, both because hydrocarbons account for more than 90% of the country's export earnings, and because addressing the inadequacies of the electricity sector is probably the new administration's greatest challenge (and the greatest failing of its predecessor). Relatively quick progress on this front would not only make a visible difference to businesses and the everyday lives of individuals but would also give a huge boost to the overall reform effort. By identifying himself with the task so clearly, Mr Yar'Adua hopes to send a positive signal about his reformist intentions...

"[P]rogress may be slower than in recent years. Many of the easier reforms have now been completed, and the next wave—such as resolving the electricity crisis, improving insecure property rights, and reforming the weak judicial and education systems—will be harder to implement and will in many cases yield only long-term gains. Moreover, progress will continue to be impeded by deeply entrenched vested interests, pressure to adopt more nationalistic economic policies, the weak civil service, and confusion caused by overlaps and contradictions between local, state and federal government actions. It may also be hampered by the speed at which a working relationship can be developed between the president and the National Assembly..."

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To illustrate the severity of the electrical generation problem (referred to above), the New York Times published Michael Wines' assessment on Sunday, 29 July.

Toiling in the Dark: Africa’s Power Crisis

"Power blackouts... are hardly novel in sub-Saharan Africa, where many electricity grids remain chewing-gum-and-baling-wire affairs. Even so, this year is different. Perhaps 25 of the 44 sub-Saharan nations face crippling electricity shortages, a power crisis that some experts call unprecedented.

"The causes are manifold: strong economic growth in some places, economic collapse in others, war, poor planning, population booms, high oil prices and drought have combined to leave both industry and residents short of power when many need it most...

"The implications go beyond candlelight suppers and extra blankets on beds. The lack of reliable power has already begun to hamper the region’s development, clipping more than 2 percent off the annual growth rates of the worst-hit African economies, according to the World Bank...

"In Nigeria... virtually all businesses and many residents run private generators to supplement faltering public service, saddling economies with added costs and worsening pollution...

"The gravity of this year’s shortage is all the more apparent considering how little electricity sub-Saharan Africa has to begin with. Excluding South Africa, whose economy and power consumption dwarf other nations’, the region’s remaining 700 million citizens have access to roughly as much electricity as do the 38 million citizens of Poland...

"Moreover, some grids are so poorly maintained that electricity suppliers get paid for as little as 60 percent of the power they generate. The rest is either stolen or lost in ill-maintained networks.

"[S]ub-Saharan nations are adding about a thousand megawatts of generating capacity each year, World Bank experts say, but need up to twice that to keep pace with demand.

"Some governments privatized chunks of their power industry in the early 1990s when free-market solutions to public-sector problems were in vogue, leaving it unclear who is ultimately responsible for providing power...

"Nigeria, Africa’s most populous nation. Only 19 of 79 power plants work, the government said in April. Daily electricity output has plunged 60 percent from its peak, and blackouts cost the economy $1 billion a year, the Council for Renewable Energy in Nigeria says...

"The World Bank says its financing of power projects in sub-Saharan Africa is ballooning, from $250 million five years ago to $660 million last year to $1 billion in 2007.

"But many plans remain just that. Issues like creditworthiness, lax regulation, domestic politics and the sheer difficulty of sending power over rundown grids to the customer make outside investments in power stations tougher than they appear, said Tore Horvei, the chief operating officer of CIC Energy Corporation, which is based in South Africa..."

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Labels: concepts, economics, Nigeria, politics

posted by Ken Wedding @ 6:17 PM