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Should Nigeria be Restructured in the Same way NEPA was Restructured?
February 3, 2016

Should Nigeria be Restructured in the Same way NEPA was Restructured?

Once upon a time in a country called Nigeria, there was a big-for-nothing government owned corporation called NEPA.

NEPA was a public owned corporation set up by the Nigerian government to provide electricity for the people of the country. Because Nigeria practiced a unitary ‘feeding bottle’ system of government, NEPA was centralized making its activities an exclusive fiscal duty of the federal government. Private participation was forbidden.

Billions of Dollars was pumped into this corporation, yet little progress was made. Despite the fact that this corporation was designed to provide electricity for the the most populous country in Africa, it regularly declared loss. The corporation was inefficient, unproductive, lacking creativity and dubious. There had to be a solution.

How do we fix this big-for-nothing Nigerian owned corporation?
Few years ago, the Federal government came up with an idea of privatization, unbundling and decentralization! What does this mean? It simply means that while government admits that building power plants is quite expensive and that Nigerians are too poor to afford to pay the ‘world standard’ rates for electricity, the business of power generation can obviously not be done alone by the private sector. For this reason, the FG was going to continue investing in power generation but the entire administration of distribution, tariff collection and reinvestment was going to be done by the private guys. The corporation was finally restructured into eleven Local Distribution Companies (LDC) and each LDC was designed to focused on providing electricity among specific regions of Nigeria.

That was how NEPA/PHCN was restructured into becoming a productive, profitable, efficient and serious organization. That was how corruption ended in the corporation and that was how electricity improved in this country called Nigeria. The plan of decentralization worked!

Mind you, during the process of privatization, unbundling and decentralization of NEPA, some regions and people of Nigeria kicked against it. Some even went to court to get retrogressive injunctions to stop the process, but at the end, NEPA/PHCN was restructured and today everybody can see improvement and innovation in how the new owners run and manage the business unlike the way it was during the days of government ownership.

Decentralization is the key to making Nigeria a great country. The lazy and corrupt civil servants that nearly killed NEPA/PHCN until the corporation was restructured have now become productive and creative in their new companies. Competition has come in and the various distribution companies are now making progress.

We also need to unbundle, decentralize #RestructureNigeria into #TrueFiscalFederalism so that the country and its people as a whole can make real productive progress.



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