Assessment Performance of Public Utility in Nigeria: a Study of Nepa

Topics: Electricity generation, Power station, Electric power transmission Pages: 38 (9684 words) Published: April 17, 2011
CHAPTER ONE

GENERAL INTRODUCTION

1.1BACKGROUND 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 to electricity (Imoke 2001 P.I; Mbendi 2001 P.I.). Industries and affluent households as a result have resorted to self provision often at high cost. A non technical and bill collection losses of over forty percent (Afro News, 8 June 2004,Pg 1) and transmission and distribution losses in excess of thirty per cent (Mbendi, 2001 P.1) are reported. The government has also estimated that the nation lost some eight hundred million U.S dollar ($800m) to NEPA’s inefficiency alone (Barsky, 1999 p.1.). Further, this organization is heavily dependent on subsidies and government funding of capital projects. The inadequacy of NEPA to provide uninterrupted power supply needed for enhancing industrial and economic growth is all too glaring.

1.2 PROBLEM STATEMENT
Successive governments, in appreciation of the problems faced by NEPA and indeed other parastatals, have introduced a number of reforms in an attempt to improve their performance. While many public enterprises including those in banking, insurance and manufacturing have been privatized, utility enterprises such as NEPA and NITEL were commercialiased. This effort the government soon found out was not enough to solve NEPA’s problem. The enterprise is still unable to satisfy electricity demand, state of electricity remained poor, pointing to the need for more drastic reforms. Thus, government has been preparing NEPA and other utilities for privatization.

What is responsible for this continued level of inefficiency despite commercialization and other reforms, and how can private sector participation bring about the desired positive change in performance are the questions focused in this study.

1.3 PURPOSE OF THE STUDY
The main aim of this study is to make/conduct an assessment on the performance of public utility enterprises in industrial development: A case study of the national Electric Power Authority. Also in answering the questions...

Bibliography: Anyebe, A.A. (2003). Privatization of Public Enterprise: Global Perspective. Department of Business Administration Ahmadu Bello University Zaria Retrieved July 21, 2004, from http//www.freewebs.com / bizadmin/publications.htm. Pp 1-8
Barsky, J
Bureau of Public Enterprises (1999). What You Should Know About Privatization. Retrieved July 21, 2004, from http://www.nopa.net /useful_information/privatization/faq..htm
Fobes Newsletter (2004) Average Daily Electricity Usage in 2002
Imoke, L. (2001). Investment Opportunities in the Power Sector: NEPA Today: Nigeria: National Electric Power Authority. Pp 1- 10.
Johnansen, L. (1965|). Public Economics North Holland Publishing Co. Pp. 2-4.
Johnson, Elias (2003), Nigeria Country Analysis Brief. Washington D.C; Energy Information Administration April 7 2003. retrieved from http://www.eia.doe.gov/emeu/cabs/nigeria.html p.1
Kerf, M
Mbendi Information Services (2001). Nigeria Electrical Power-Overview Retrieved July 21, 2004 from
http://www.mbendi.co.za/indy/powr/ng//p.0005.htm pp
National Electric Power Authority. (2002). Corporate Profile. Nigeria; Author. Pp. 1-3. 10-11.
Nellis, R. (1991). Reform of Public Enterprise. In: V. Thomas, A. Chihibber, M. Dailami & Jaimede Melo E. (Eds)., Restructuring Economics in Distress, Policy Reform and The World Bank. Washington D.C: IBRD / The World Bank. Pp. 108-130.
NEPA News & Review (Oct-Nov, 2003). Public Affairs Sub-sector, NEPA Headquarters Abuja, Nigeria.
NEPA (May 5, 2004), NEPA reaps N48.817 billion. Retrieved July 21, 2004 from www.nopa.net p.1.
Obadan, M.I. (2000). Privatization of Public Enterprises in Nigeria: Issues and Conditions for Success in the Second Round. Nigeria: NCEMA monograph series. No. 1 pp. 45-48.
Obadina, T. (1998|). Nigeria Unveils New Privatization Plan. The IMF is pleased but critics worry about job losses and social inwqualities. (electronic version). Africa recovery 12 (3), p.4.
Otobo, E.E. (2004). Privatization and Regulation in Africa: Some Key Policy Issues DPM Bulletin_Retrieved July 21 2004, from
http://www.dpmf.org/privaitization_regulation_ejeviome.html
Staff Writer. (2004) Nigeria Electricity Utility Needs US$3.4 billion’. Afrol News. June 8, Retrieved July 21, 2004 from http://www.worldenergy.org/wecgeis/publicationdefault/tech_papers/17th _cong.../1_4_01 as pp. 1-11.
Ugbana, O. (n.d). never Electric Power Always “NEPA”: The Engineering Political and Economic Challenges Facing the Nigerian Electricity Industry. Retrieved July 21, 2004, from
http://www.gamji.com / NEWS 3668.htm
World Bank. (2000). Africa Development indication 2000.
World Bank Group (Aug. 17, 2001) World Bank Supports Power
Sector Reform in Nigeria
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • A Study of Nigeria Essay
  • Essay on The Economic Impact of Privatization and Commercialization of Public Enterprises in Nigeria (a Case Study of Power Holding (Nepa) Plc
  • Essay on The History of Public Utilities
  • An Assessment on the Importance of Public Personnel Management as a Field of Study Research Paper
  • Essay about Public Utility
  • Evolution of Public Relation in Nigeria Research Paper
  • Utility Study Essay
  • The Relationship Between the Environmental and Financial Performance of Public Utilities Essay

Become a StudyMode Member

Sign Up - It's Free