ENERGY SECTOR REFORM IN NIGERIA

Change Management In The Public Sector: The Case Of Energy Sector Reform In Nigeria



Change Management in the Public Sector: The Case of Energy Sector Reform in Nigeria

Introduction

The reform that is taking place in the Electricity sector is increasing rapidly and the nature of the reforms that are being adopted is becoming more sophisticated. Many large Countries like China and very small countries like Bolivia have adopted earlier reform models according to there own needs and circumstances. (Benbow, 2003) Both developed and developing countries have embarked on a program of liberalizing and reforming their power sectors. A number of authors have described the principle driving forces behind the need for the reform movement. (Inugonum, 2005)

Some of the reasons include the following: • The poor performance of the state - run electricity sector in terms of high cost, inadequate expansion of access to electricity services for the population, and /or unreliable supply.

• The inability of the state -owned sector to finance the needed expenditures on new investment. (Obadan, 2003)

In many countries in Africa especially some West African countries, all these factors have been present at the same time with the exception of some developed countries. Although, some state-owned utilities have performed well, there was awareness during the 1980s that a lengthy period of state ownership, without the forces of competition or the incentives of the profit motive to improve performance, will eventually result in excessive costs, low services quality, poor investment decisions and lack of sensitivity in supplying customers. (Akpan, 2002) Rapid changes in technology have occurred in both the generation of electricity and in the computing systems used to meter and dispatch power. These changes have made new industrial structures possible, and state utilities have been too slow in adopting these modern changes. The private sector offers many new approaches to providing power at lower cost, especially to consumers with low levels of demand through innovations in customer service and cost recovery mechanisms. The desirability of reforms focuses on the consequences of the unsatisfactory performance of the economy or sector for those who have political influence e.g failure to provide rural electrification would be seen as undesirable by large number of rural dwellers in many developing countries. These groups are usually weak politically and unable to persuade the government to change policies at the energy sector level. The picture is more complex as poor macroeconomic performance may indeed persuade the government to undergo sector reforms. However, for reform to be embraced, it is likely that the sector itself would need to be underperforming in some crucial ways-both in terms of the delivery of energy to important groups of users and in terms of its financial claims on government. (Ayo, 2002) A utility that can provide electrical energy to customers on demand at reasonable price is not likely to be seen as a high priority for reform, unless the motivation is solely to solve a short-term problem of public finances through the asset ...