Teaching Comparative Government and Politics

Monday, September 17, 2012

Reform stumbles in Nigeria

If you wander around abandoned industrial sites in Nigeria, you're likely to find the foundations of electrical generation plants. Sometimes large pieces of generation machinery, still on their delivery pallets, sit on the ground inside chain link fences. If you could check the financial records, you'd probably find that a local company had been paid for building a functioning generation facility. The company probably went out of business shortly after getting the final payment from the government.

What's going on? It's part of the way things often work in Nigeria. Owners and bureaucrats (often the same people) walk away with wads of cash and the country is starved for energy. Now, it seems, the government is suffering from a different setback.

Reforming electricity in Nigeria: A bright spark is extinguished

ALTHOUGH Nigeria has almost as many inhabitants as Brazil, it produces only 5% of the electricity. Many Nigerian leaders have tried to boost the state’s power supply, but many more have become rich by obstructing it, earning fees from private generation and stealing official funds meant for new power plants. When he was elected last year, President Goodluck Jonathan promised to make electricity reform his big thing, hoping to transform the lives of millions of Nigerians who have spent decades in the dark.

Nnaji

But the resignation of his power minister on August 28th over a conflict of interest has exposed the rot in a process that seemed to be running relatively smoothly. Bartholomew (“Barth”) Nnaji, a respected technocrat who had been minister of power since last year, was meant to sell six generating companies and 11 distribution companies. Months ago he declared that a firm in which he owns shares held in a trust was involved in the bidding. It is not unusual for Nigerian politicians to engage in business overseen by their office; what is unusual is for any of them to resign.

Mr Nnaji’s supporters say that opponents of privatisation belatedly and unfairly engineered his departure…

The minister had certainly made enemies. He took on trade unions opposed to mass job cuts. A key aspect of privatisation is unbundling the Power Holding Company of Nigeria, a bloated and ill-managed monopoly, with thousands of “ghost” workers on the payroll. Two-fifths of the staff are apparently listed as drivers…

Mr Nnaji also warred with the vice-president, Namadi Sambo, who owns companies with interests in the public power sector, oversees the government’s national privatisation council and heads a programme to build ten new state power stations that Mr Nnaji hoped to privatise. This may have hastened his departure…

According to the government, the power sector needs $10 billion of investment a year for at least a decade. Mr Nnaji’s resignation is troubling investors who feel he brought expertise to a process that had previously been paralysed by corruption…