1.1 BACKGROUND OF THE STUDY
The ultimate goal of any credible and legitimate government is to ensure sustained improvement in the standard of living of the citizenry. Towards this end the government usually evolves development plan, that will facilitate effective mobilization, optimal allocation and efficient management of national resources in such efforts, priority is usually given to the provision of development is usually given to the provision of development facilitators, such as electricity (power), communication, transportation as well as social overhead such as education and health.
Prior to the enactment of the electric power sector reform Act (EPSRA); 2005, the federal government of Nigeria was responsible for policy formulation, regulation, operation and investment in the Nigerian power sector.
Regulation of the sector was done through the federal ministry of power (FMP) with operations through the national electric power authority (NEPA) a wholly state owned enterprises responsible for power generation, transmission and distribution.
Unfortunately, since the inception of NEPA, the majority of the Nigerian has no access to electricity and the supply to hose provided is not regular. It is this backdrop that led the federal government to embark on aggressive power sector reforms which yielded to the adoption of National Electric power policy in 2001 and the EPSRA in 2005. The National Electric Power Policy specifies the reform agenda while EPSRA provides the legal bases for the unbundling of NEPA, the formation of successor companies and the privatization of the latter.
Consequently, FGA, established the power holding company of Nigeria (PHCN) and subsequently unbundled it into eighteen (18) successor companies. This arrangement is expected to encourage private sector investment particular in generation and distribution and pave way for the entity of independent power producing (IPP) given the criticisms that have trailed the implementation of the privatization programs in other sector, it appears timely to evaluate the privatization process of the unbundled firms of the PHCN.
1.2 STATEMENT OF THE PROBLEM
Over the years, the lack of steady electric power supply in Nigeria has been a constant source of concern to the FGN and the Nigeria public in particular. This inadequate and erratic power supply has proved to be a significant handicap to the growth of the country’s commercial and manufacturing sectors for a few years now.
Though there is need for efficiency in the management of natural resources and better service delivery, the extension of wholesale privatization program to the power sector had of recent been of concern to the development analysis and concurred groups of stakeholder. It is n the light of creating a capitalist economy at the expense of eh poor in on society that this research work seeks to evaluate the implications of the privatization program.
1.3 OBJECTIVE OF THE STUDY
The main objective of this research work is to analyze the implications of the privatization program in Nigeria. The prospective new owners of the unbundled firms of the power holding company of Nigeria, (PHCN) under the aegis of roundtable of distribution companies (RDC) are private companies looking for profit and their objectives may diverge from the public interest.
In view of the above statements, I intent to found out the following:-
1.4 SIGNIFICANCE OF THE STUDY
Privatization of public sector enterprise is not new in Nigeria, but the power sector is too important to the economy and development of the country to be toyed with, it is a statement of fact that the prospective new owners of the unbundled firms of the PHCN are profit driven and this would undermine the rights of the population to basic amenities in the absence of adequate protection. This study shall not only evaluate the success of privatizing PHCN which is efficient service delivery but also examine the process in the light of the poverty alleviation progarmmes of the government.
1.5 SCOPE OF THE STUDY
In other to reduce the difficult which might be encountered on the process of carrying out the study, the scope of this study will be limited to the effect of privatizing PHCN on Nigeria economy and development. It does not cover the technical implementation of privatization program. The area of coverage of this study will be PHCN Enugu district.
1.6 RESEARCH HYPOTHESIS
Ho: Privatizing the unbundled companies of the PHCN will not lead to better service delivery, improved productivity, efficient management and adequate utilization of organizations resources.
Hi: Privatizing the unbundled companies of the PHCN will lead to better service delivery, improved productivity, efficient management and adequate utilization of organizational resources.
1.7 DEFINITION OF TERMS
(a) Electricity:
This is a form of energy from charged elementary particles, usually supplied as electric current through cables, wires etc. for lighting, heating, etc.
(b) Power Sector: This is the area of the Nigeria economy that is primarily concerned with the generation, transmission, distribution and control of electricity in the country.
(c) Privatization: This is the process of transferring government owned enterprises to private ownership and control. It is the transfer from government to private owned entity.
(d) Public: This means the citizens of a country or the ordinary people in society in general.
(e) Public Enterprises: This means corporation, board, company or parastatal established by or under any enactment in which the government of a federal has ownership on equity interest.