Deregulating the electricity industry in Nigeria: Lessons from the British reform

Abstract

The Federal Republic of Nigeria has set out the modalities for launching a competition policy regime in its electricity industry in 2006. By analysing the factors that may inhibit a smooth transition to contestable regimes in generation (commodity and capacity) and in supply (metering, billing and customer services), this paper lays the foundation for the policy advisors to begin to re-think whether unbundling and deregulation is the best way for Nigeria to improve power supply. The paper concludes that, consistent with some of the other countries in sub-Saharan Africa, implementing a hastily convened competition policy will be a huge transaction cost, and one that will yield the country very little (if any) economic benefit.