Running Head: DEREGULATION OF ELECTRICITY SECTOR ...

Running Head: DEREGULATION OF ELECTRICITY SECTOR IN NIGERIA
Deregulation of Electricity Sector in Nigeria
[Name of the writer]
[Name of the institution]
Abstract
Constant electricity supply is the bedrock of a developed economy. A nation whose electricity need is erratic in supply suffers development and drive away potential international investors. The energy industry around the world has witnessed an enormous growth in the past few decades. The major characteristic of this growth is the deregulation of the electricity sector from the traditional structure (vertical integrated model) which tends to be monopolistic in nature and wholly owned by the government. With the emergence of democratic government in Nigeria in 1999, the government embarked on the deregulation of the power sector due to lack of maintenance of the sector’s infrastructure, inefficiency and corruption.
Unlike Nigeria, Chilean electricity sector deregulation started in 1980.Although not a smooth process, Chile has recorded remarkable growth in this regard so much that it offers ample opportunity from which Nigeria can learn from. The primary objective of this paper is to discuss how the Nigerian government can learn from the Chilean experience. The paper contends that given that both Chile and Nigeria share the same economic system and environment, the former’s experience offers enormous opportunities for the latter.
Table of Contents
Introduction 4
Literature Review 4
Model Specification 18
Price Function/Equation 19
Average Cost Function 19
Production Function 20
Production Activity 21
Factor Demand Function 23
Household/industrial Demand Function 25
Assumptions of the Partial General Equilibrium Model 27
Methodology 28
Discussion 28
Conclusion 31
References 33

Deregulation of Electricity Sector in Nigeria
Introduction
What lesson from Chile experience, deregulation of electricity sector in Nigeria can have, to achieve this objective, the paper shall be divided into four parts. The first is a review of literature and brief analysis of the Nigerian power sector. The second part shall discuss issues in regulatory and institutional mechanism of deregulation in Nigeria. The third part shall focus on the deregulation process in Chile and the implications of that for Nigeria. The last part summarizes and concludes the paper. Here also, recommendations on how to achieve effective deregulation are proffered.
Literature Review
The electricity industry has witnessed a profound growth in the last few decades across the globe. A noticeable feature of this growth is the deregulation of the sub-sector, which used to be a monopolistic and state owned parastatal to a more vibrant oligopolistic market structure. The pace and magnitude of the trend has been remarkable and, by the end of 1990, the majority of Organisation for Economic Cooperation ...