Assessment Performance of Public Utility in Nigeria: a Study of Nepa
CHAPTER ONE
GENERAL INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Utility as defined by the oxford advanced learners dictionary is a service provided for the public. It is a service used by everyone.
Utility services covers a wide range of activity including electricity, water, transportation and Telecommunication. These services impact greatly on a country’s economic growth and the living standards of the people. They affect the ability of the local industries to produce products that can compete favourably on the international market.
The provision of these services in Nigeria as in many developing countries has been left in the hands of state owned i.e public enterprises. It was argued that in some cases, government is the only organ seemingly capable of raising the needed capital to start up such enterprises (Yesufu, 1996 P. 339). Furthermore, public enterprises were better for stimulating and accelerating national economic development than private capital (Obasanjo, 1999p.1).
However, judging by the experiences of many African countries, Kerf and Smith (1996.p.2) opined that public enterprises have established a reputation for poor performance. Such enterprises often have poorly defined and conflicting objectives which are political rather than economic. They are faced with weak or perverse incentives for efficient performance since managers are not accountable for their actions. They employ excessive labour, who are often unqualified for the task they are entrusted with and engage in investment decisions, that do not provide positive economic contributions.
The power sector has suffered under the worst criticisms of public utility enterprises. The organization responsible for electricity production and supply in Nigeria, the National Electric Power Authority has been nicknamed-‘Never Expert Power Always’ by the public because of too frequent power supply interruptions. A large proportion of the population, about sixty per cent (60%) does not have access
GENERAL INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Utility as defined by the oxford advanced learners dictionary is a service provided for the public. It is a service used by everyone.
Utility services covers a wide range of activity including electricity, water, transportation and Telecommunication. These services impact greatly on a country’s economic growth and the living standards of the people. They affect the ability of the local industries to produce products that can compete favourably on the international market.
The provision of these services in Nigeria as in many developing countries has been left in the hands of state owned i.e public enterprises. It was argued that in some cases, government is the only organ seemingly capable of raising the needed capital to start up such enterprises (Yesufu, 1996 P. 339). Furthermore, public enterprises were better for stimulating and accelerating national economic development than private capital (Obasanjo, 1999p.1).
However, judging by the experiences of many African countries, Kerf and Smith (1996.p.2) opined that public enterprises have established a reputation for poor performance. Such enterprises often have poorly defined and conflicting objectives which are political rather than economic. They are faced with weak or perverse incentives for efficient performance since managers are not accountable for their actions. They employ excessive labour, who are often unqualified for the task they are entrusted with and engage in investment decisions, that do not provide positive economic contributions.
The power sector has suffered under the worst criticisms of public utility enterprises. The organization responsible for electricity production and supply in Nigeria, the National Electric Power Authority has been nicknamed-‘Never Expert Power Always’ by the public because of too frequent power supply interruptions. A large proportion of the population, about sixty per cent (60%) does not have access
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