ABSTRACT

It has been widely accepted among developing nations that economic development can be accelerated with active industrial sector. In the same vein it is the power and energy sector that drives industrialization. Nigeria, as a typical developing country that is anxious to grow has failed in the provision of domestic energy to her citizenry and industries. In her recent efforts to fulfill this obligation, Nigeria chose to privatize her electricity supply unit in pursuit of greater market efficiency. Unfortunately, the effort has not yielded the desired result. Homes, government establishments and industries have suffered a great deal of power outage. This has questioned the economic rationale behind the pursuit of profit at the expense of very huge loss in welfare.

In this paper, an attempt has been made to estimate the impact of privatizations on business development in Nigerian and to examine the effect privatization has had on the pattern of private sectors and public sectors. Privatization broadens and deepens the power sector resulting from increased listings consumer size. Privatization has also provided opportunity for risk diversification, enhanced professionalism and increased government attention. The implementation of the first and second round privatization has resulted in a tremendous boost to the total power supply, and consumer price index.

This paper posits that; in a primitive undeveloped private sector, utilities such as energy and power cannot be privatized without jeopardizing the development motives of the nation. Standard econometric methods were used to show that the structure of supply of electrical energy is different in the hands of undeveloped private sector and inimical to the overall development of the nation.   In spite of the identified shortcomings, the privatization program has enhanced the development of the Nigerian power sector.

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