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Nigeria flicks off switch on contract

Joe Brock and Felix Onuah Abuja

Nigeria had terminated a $24 million (R210m) electricity contract with Canada’s state-owned Manitoba Hydro, the presidency said yesterday, in a setback for plans to privatise a moribund power sector that is holding back economic growth.

The hiring of Manitoba to manage the national power transmission network had been seen by industry experts as a major step forward for the reform process.

The presidency gave no reason for President Goodluck Jonathan’s decision to annul the deal, which could add to fears about political interference that analysts say are holding back badly needed foreign investment into power.

Africa’s most populous nation of more than 160 million holds the ninth-largest gas reserves but is blighted by power cuts which last several hours a day, forcing businesses and individuals who can afford them to rely on diesel generators.

Economists say a successful power privatisation could push growth in the economy into double digits, from around 6.5 percent now. Yet critics question the integrity of the process, which looks set to leave much of the sector in the hands of powerful local oligarchs with scant experience.

“Mr President has cancelled the Manitoba power contract with immediate effect,” presidential spokesman Reuben Abati said, without giving a reason, adding that the Power Ministry would make a statement later in the day.

Choosing a firm to manage transmission took more than five years, in a process supported by the World Bank.

Manitoba was supposed to start work in September but transmission is still in control of the government. Sources within the privatisation process say the Ministry of Power is unhappy handing over to Manitoba. – Reuters

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