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Full Project – Diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria

Full Project – Diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria

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Full Project – Diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria

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ABSTRACT

This research work empirically explored diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria. The objectives of this study were to understand the rationale behind the privatization of the Electricity sector, analyse the effect of privatization of electricity on electricity distribution in Nigeria, analyse the pre and post privatization effect of electricity distribution on energy sustainability in Nigeria. The research design used for this study is survey, the population targeted for this study consists of residents in Nigeria.  400 residents from Abuja and Lagos was used as sample size and cluster sampling technique was applied. Instrument used for this study is the questionnaire. Data collected were collected from primary sources. From the analysis of the data, the findings shows privatization of electricity have significant effect on electricity distribution in Nigeria, there are pre and post privatization effect of electricity distribution on energy sustainability in Nigeria, some of which are sustainability, reliability. Following the findings, it was recommended that measures should be devised to competence among private companies in charge of electricity distribution in Nigeria, electricity distribution in Nigeria should ensure energy sustainability is maintained. The study concludes that privatization of electricity distribution in Nigeria is necessary

Keywords: product strategy, electricity distribution, privatization, energy sustainability, Nigeria.

 

CHAPTER ONE

INTRODUCTION

1.1. Background to the Study

Economic effects of every strategic decision on national economy level of individual national economy are important aspect of total economic policy and are strong determinant of generating future economic prosperity and aggregative development. The ultimate goal of any credible and legitimate government is to ensure sustained improvement in the standard of living of the citizenry. To achieve this, the government usually evolves development plans that will facilitate effective mobilization, optimal allocation and efficient management of national resources (Ariyo and Jerome, 2004). Thus, Public Enterprises were established basically in Nigeria like other economies to propel developmental plan (Ojo and Fajemisin, 2010).

However, since their establishments, the actual performance of the public enterprises leaves much to be desired. It is clear that many of them are not responding to the dynamics of the economy. The level and quality of personnel are sometimes mediocre and reflect the worst traditions and rigidities of the civil service (Alabi, Ominisi and Christian, 2010). Privatization, a method of reallocating assets and functions from the public sector to the private sector, appears to be a factor that could play a serious role in the quest for growth. Megginson and Netter (2001) identified some major benefits that spur governments to privatize including; to increase revenue for the country, to stimulate market competition through an open market, increase public share ownership and boost economic development. To this end, a large number of countries in all regions have been involved in privatization at one point or the other. This trend is not different in Africa.

In recent history, privatization has been adopted by many different political systems and has spread to every region of the world. Along with creating strong incentives that induce productivity, privatization may improve efficiency, provide fiscal relief, encourage wider ownership, and increase the availability of credit for the private sector. The last three decades have witnessed pervasive reforms in the electricity power sector across both developed and developing countries. A number of reasons are advanced by scholars. While Hartley (2012) posits that shared fundamental changes, such as, technology in the industry, is primarily responsible for the reforms, some attributed it to the sector overall poor performance as a result of its vertical monopolistic nature, inadequate power generation, poor transmission and distribution of electricity insufficient investment, ineffective regulation amongst others (Heddenhausen, 2007, REEP/UNIDO, 2008 Ajumogobia and Okeke 2015). Interestingly, World Bank (2004) asserts that power sector reform is meant to be of immense benefits for socio-economic and industrial growth in a mutually beneficial manner to both private and public sectors of the economy.

The power sector in Nigeria have undergo series of reform among which is privatization of the power sector. Privatization directly shifts the focus from political goals to economic goals which leads to development of the market economy (Poole, 1996). By Privatizing, the role of government in the economy is reduced thus there is less chance for the government to negatively impact the economy (Poole, 1996). In Nigeria, power sector privatization lingered for almost two and half decades (1989-2013) before it was concluded (Onoche, Egware and Eyakuvanor, 2015). However, the incumbent minister of Power, Road and Housing, Fasola Babatunde, averred that deliverable gains of the post privatization appear not to be profound as one would have expected and has failed Nigerians (The Punch, 2017).

This study, therefore, is posed to assess the diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria.

 

1.2. Statement of the Research Problem

Public enterprises are vital tool for the development of a country’s economy, more especially developing countries like Nigeria. However, decades after its existence, the public enterprises had grown too large and bedevil with some fundamental economic problems such as excessive bureaucratic bottleneck, inappropriate technology, gross misconduct, massive corruption and nepotism. This problem led to inability of government to provide basic social services.

Despite the proliferation of privatization in Africa, the results have been mixed as no African country can claim to be entirely successful in terms of economic growth and performance after embracing the privatization reform, energy sustainability problems still persist.

Quite a number of empirical studies have researched on the gains of privatization. Most of the researches have shown that privately owned firms are more productive and profitable in comparison to state-owned firms. (D’Souza and Megginson, 1999; Boubakri and Cosset, 1998; Dewenter and Malatesta, 1997). However, the consequences of privatization in developing countries especially in Africa have remained controversial (Shirley and Walsh, 2001).

Most developing countries like Nigeria have weak institutions which makes the privatization phenomenal non-beneficial to its citizen in some sectors. Therefore, this study is carried out to determine the effect of privatization of Electricity Distribution Company on energy sustainability in Nigeria.

 

1.3. Objectives of the study

The aim of this study was to investigate diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria. The specific objectives are to:

  1. understand the rationale behind the privatization of the Electricity sector.
  2. analyse the effect of privatization of electricity on electricity distribution in Nigeria.
  3. analyse the pre and post privatization effect of electricity distribution on energy sustainability in Nigeria.

 

1.4. Research Questions

This study will be guided by the following research questions:

  1. What is the rationale behind the privatization of the Electricity sector?
  2. What are the effect of privatization of electricity on electricity distribution in Nigeria?
  3. What are the pre and post privatization effect of electricity distribution on energy sustainability in Nigeria?

 

1.5 Research Hypothesis

The study is guided by the following hypothesis:

H0:    Privatization of electricity have no significant effect on electricity distribution in Nigeria.

H0:    pre and post privatization of electricity distribution does not have significant effect on energy sustainability in Nigeria.

 

1.6. Significance of the Study

The study will enable relevant agencies concerned with electricity distribution and energy sustainability in Nigeria to know the implications of privatization of electricity on the electricity industry. Empirically, this study is carried out to investigate diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria. This study will be of utmost importance to investors, government and the researchers because it will provide policy recommendations to the various Nigeria stakeholders taking adequate measures in the electricity industry for rapid capacity investment and sustainability.  The changing character of the power sector has affected the industry in recent times and will push studies on the effect of privatization of electricity distribution companies on energy sustainability in Nigeria to new evidence(s). It will contribute to existing literature on the subject matter. This study will be of benefit to;

The Academia: members of the academia will find the study relevant as it will also form basis for further research and a reference tool for academic works.

Government: this study will reveal to the government happenings in the industry. Formulation and implementation of policies based on this findings would ensure development in the industry.

Investors: this study shall also be valuable to the investors especially those who may have research interest as it shall guide their private investment decisions.

 

1.7. Scope of the Study

This study is intended to examine diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria with particular emphasis on individuals and corporate bodies with access to electricity in 2020.

 

1.8. Operational Definition of Terms

The following terms have been defined operationally.

  • Strategy: an elaborate and systematic plan of action. Here it implies the strategy used in electricity distribution.
  • Diagnosis: identifying the nature or cause of some phenomenon.
  • Privatization: changing something from state to private owned. Here it implies changing power sector from being a public enterprise to private enterprise.
  • Sustainability: the ability to be maintained at a certain rate or level, avoidance of depletion.

 

1.9. Organization of the Study

This study is divided into five chapters. Chapter one is introduction which consists of the background to the study, statement of problem, research questions, research  hypotheses,  objectives  of  the study, the  significance  of  the  study,   the scope  and  limitations  of  the  study  and  finally the  organization of the study. Chapter two deals with the literature review which consists of the conceptual literature, theoretical literature, empirical literature, theoretical framework. Chapter three gives the research methodology including research design, population of study, sample size, sampling technique, method of data collection, instrument of data analysis, method of data analysis, validity/reliability of instrument.  Chapter four is presentation and analysis of data, discussion of findings. Chapter five gives the summary, conclusion and recommendations.

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Full Project – Diagnosis of product strategy on privatization of electricity distribution companies for energy sustainability in Nigeria

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