EFFECTS OF POWER SECTOR PRIVATIZATION ON THE QUALITY OF ELECTRICITY SUPPLY IN THE FEDERAL CAPITAL TERRITORY (FCT), NIGERIA

Abstract

Reliable electricity supply is fundamental to economic growth, industrial development, and improved living standards. In Nigeria’s Federal Capital Territory (FCT), Abuja, electricity demand has increased significantly as a result of rapid urbanization, population growth, and expanding commercial and industrial activities. In response to persistent challenges of power instability, the Nigerian government introduced major reforms in the electricity sector, most notably the Electric Power Sector Reform Act (EPSRA) of 2005 and the subsequent privatization of the Power Holding Company of Nigeria (PHCN). This study examines the effects of power sector privatization on the provision of quality electricity supply in the Federal Capital Territory. Both primary and secondary sources of data were employed, while Rational Choice Theory was adopted as the theoretical framework. The theory is relevant in explaining the government’s decision to privatize the power sector, as it assumes that policymakers engage in cost–benefit analysis to determine the most efficient course of action. The findings reveal that despite privatization, several factors continue to hinder effective power supply in the FCT. These include generation-related challenges such as low generation capacity relative to national demand, gas supply disruptions and pipeline vandalism affecting gas-fired power plants, poor maintenance of existing facilities and the underutilization of renewable energy sources (solar, hydro, and wind) despite Abuja’s significant potential. The study recommends the immediate and full implementation of the Meter Asset Provider (MAP) scheme to ensure widespread prepaid metering, reduce estimated billing, and curb the sector’s growing debt profile. Additionally, it emphasizes the need to urgently address broader challenges relating to power generation, transmission constraints, distribution inefficiencies, financial sustainability, regulatory and policy weaknesses, as well as socio-economic and demographic pressures affecting electricity supply in the FCT.

Key Words: Privatization, Policy, Implementation, Power Sector, Federal Capital Territory