The Electricity Industry in Nigeria: What are the Challenges and Options Available to Improve the Sector?

Abstract

The hallmark of a developed country is providing basic amenities to its citizenry. An epileptic energy supply prolongs the development of a nation, as well as risk the participation of potential investors in the sector. Nigeria a country of over 140 million people, has for the past 38 years of the establishment of the National Electric Power Authority (NEPA) agency (renamed Power Holding Company of Nigeria, PHCN in 2004) empowered with the generation, transmission and distribution of electricity, been witnessing constant power outages and system breakdown. Presently, the government has carried out some reforms with the aim of improving the pitiable power situation that has plagued both the economy and people of Nigeria. This has prompted the research into those challenges that have crippled the power sector and the options available to improve it. A comparative cost analysis will be carried out to evaluate the costs of a stable and reliable power supply to running a generator set. The paper thus, concludes that privatization may be the way out of the electricity crisis in Nigeria but better understanding of the system will help to foster a lasting solution.