ELECTRICITY IN NIGERIA
The problem is not new. Nigeria's power supply has been stagnant for 30 years. During the tumultuous 1990s there was no investment despite surging demand. Since then, generation capacity has risen by half but distribution is so dysfunctional that actual supply has remained flat. One result is a laughably small manufacturing sector, about 4% of GDP.
There have been reform attempts in the past. The Power Holding Company of Nigeria (PHCN), the monopoly supplier, is known to consumers as Please Have Candle Nearby. Five years ago it replaced the National Electric Power Authority (NEPA), nicknamed Never Expect Power Again. Mischarging and other sins continued. “I just got a bill for the last four months but had no lights for three,” says a doctor 20 miles (32km) outside the capital, Abuja.
To survive, many Nigerians have their own power plants, creating the world's highest concentration of small-scale generators. Two-thirds of all electricity is produced in basements and backyards, at a cost of $13 billion a year. Generator merchants say the government is their best client. Some have set up steel plants to keep up with demand. One has 3,000 workers assembling the grunting machines.
All this could change if the privatisation scheme succeeds. It aims to raise $3.5 billion a year and boost the power supply 13-fold over a decade. The government is offering to guarantee some bank loans and may cap the interest at 7%. At a recent conference in Abuja Mr Jonathan wooed hundreds of investors, including executives from Goldman Sachs and General Electric.
Other African leaders are watching closely, sensing that this may prove to be a test bed for the continent. Some, though not all (see article), are asking what alternatives there are to growing dependence on Chinese investment. Like most of its neighbours, Nigeria is making big infrastructure deals with