ABUJA Dec 14 Nigeria's parliament is resisting
an attempt to underwrite the private companies that run the
country's power sector with public money, saying they need to
improve the "abysmal" service they provide.
The West African nation, long crippled by blackouts,
privatised its electricity sector in 2013 in an effort to
improve supplies and attract new investment, neither of which
In a public hearing on Tuesday, lower house Speaker Yakubu
Dogara criticised the plan by the state-backed Nigerian Bulk
Electricity Trading Company to issue a 309 billion naira ($983
million) bond to pay monies owed to the firms that took over.
"The whole essence of the ... reform was to bring about
efficiency to the Nigerian electricity industry," Dogara said.
"Since the transfer to privately-operated companies, we have not
had a good report. The statistics show an abysmal situation."
Chronic power shortages are one of the biggest constraints
on investment and growth in Africa's largest economy.
Despite the privatisation, Nigeria still produces just a
tenth of the 40,000 megawatts a day needed to guarantee supply
to its 180 million people, and the system continues to bleed
The bulk trading company was set up to guarantee payments to
generators from distributors but, with many consumers leaving
bills unpaid, is now running a deficit of around 700 billion
naira that is growing by 25 billion naira a month, Dogara said.
After privatisation, the government said it would review
tariffs as more power was generated and upgrade the transmission
network to give more people access to the grid. But tariff
reviews have not kept pace with rising costs, worsened by a 30
percent devaluation of the naira currency in June, analysts say.
In August, the power firms warned they would shut down
supplies unless the government paid bills due from
The central bank has provided a 213 billion naira loan to
allow them to access credit and keep the system afloat, but an
oil price slump that began in 2014 has forced the OPEC member
state to tighten the purse strings as state revenues have
With the slump also having hammered the naira, Nigeria is in
its worst economic crisis in 25 years.
The government planned a record 6.06 trillion naira budget
for this year to kick-start a recovery but has struggled to fund
($1 = 314.50 naira)
(Writing by Chijioke Ohuocha; Editing by Alexis Akwagyiram and